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EXHIBIT G
FORM OF REA
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
CITY OF SAN MATEO
Housing Division
330 W. 20th Avenue
San Mateo, CA 94403
Space Above This Line Reserved for Recorder’s Use
Exempt from Recording Fee Per
Government Code Section 27383 and 6103
AGREEMENT OF EASEMENTS,
COVENANTS AND RESTRICTIONS
FOR
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TABLE OF CONTENTS
AGREEMENT OF
EASEMENTS, COVENANTS AND RESTRICTIONS
FOR
ARTICLES PAGES
ARTICLE 1 RECITALS..................................................................................................................1
1.1. PROPERTY SUBJECT TO AGREEMENT .................................................................1
1.2. DEVELOPMENT OF PROPERTIES ...........................................................................2
1.3. INTENTION OF AGREEMENT ..................................................................................2
1.4. NO COMMON INTEREST DEVELOPMENT ............................................................2 ARTICLE 2 DEFINITIONS ............................................................................................................3 ARTICLE 3 EASEMENTS .............................................................................................................8
3.1. DRIVEWAY AND PARKING EASEMENTS .............................................................9
3.2. PEDESTRIAN INGRESS AND EGRESS ..................................................................12
3.3. EASEMENT FOR UTILITIES....................................................................................13
3.4. MAINTENANCE EASEMENTS ................................................................................13
3.5. STRUCTURAL SUPPORT EASEMENT ..................................................................13
3.6. GENERAL ENCROACHMENT EASEMENT ..........................................................13
3.7. COVENANTS REGARDING EASEMENTS ............................................................14 ARTICLE 4 MANAGEMENT AND MAINTENANCE ..............................................................15
4.1. MAINTENANCE OF SEPARATE IMPROVEMENTS ............................................15
4.2. SHARED GARAGE MAINTENANCE AREAS .......................................................15
4.3. ALTERATIONS TO PARKING STRUCTURE AND GARAGE .............................17
4.4. SELF HELP MAINTENANCE REMEDIES ..............................................................17
4.5. MECHANICS’ LIENS ................................................................................................18 ARTICLE 5 SHARED EXPENSES ..............................................................................................18
5.1. COVENANT TO CONTRIBUTE TO SHARED EXPENSES ...................................18
5.2. COLLECTION OF SHARED EXPENSES.................................................................20
5.3. ENFORCEMENT OF MONETARY OBLIGATIONS ..............................................23 ARTICLE 6 INSURANCE AND INDEMNITY ..........................................................................26
6.1. CONSTRUCTION PERIOD INSURANCE ...............................................................26
6.2. POST CONSTRUCTION INSURANCE BY INDIVIDUAL OWNERS ...................26
6.3. INSURANCE BY MANAGING OWNER .................................................................28
6.4. MINIMUM INSURANCE REQUIREMENTS ...........................................................28
6.5. RECIPROCAL INDEMNITIES ..................................................................................28
6.6. DAMAGE AND DESTRUCTION OF GARAGE IMPROVEMENTS .....................29 ARTICLE 7 INTENTIONALLY DELETED ...............................................................................31 ii
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ARTICLE 8 AMENDMENTS, DEFAULT, AND ENFORCEMENT .........................................31
8.1. AMENDMENTS .........................................................................................................31
8.2. EVENTS OF DEFAULT .............................................................................................31
8.3. REMEDIES FOR DEFAULT......................................................................................32
8.4. ALTERNATIVE DISPUTE RESOLUTION ..............................................................32
8.5. REMEDIES CUMULATIVE ......................................................................................32
8.6. NONWAIVER .............................................................................................................32
8.7. ESTOPPEL CERTIFICATES .....................................................................................33 ARTICLE 9 MORTGAGEES AND GROUND LESSOR ............................................................33
9.1. GROUND LESSOR AS PARTY ................................................................................33
9.2. MORTGAGEE/GROUND LESSOR RIGHTS AND PROTECTIONS .....................33
9.3. RESTRICTIONS ON AMENDMENTS TO AGREEMENT .....................................34
9.4. MISCELLANEOUS RIGHTS OF MORTGAGEES AND CITY ..............................35 ARTICLE 10 MISCELLANEOUS PROVISIONS .......................................................................36
10.1. TERM OF AGREEMENT ...........................................................................................36
10.2. CONSTRUCTION OF PROVISIONS ........................................................................36
10.3. AGREEMENT IS BINDING ......................................................................................36
10.4. SEVERABILITY OF PROVISIONS ..........................................................................36
10.5. JOINT AND SEVERAL LIABILITY OF COMMERCIAL PROPERTY OWNERS.....................................................................................................................36
10.6. GENDER, NUMBER AND CAPTIONS ....................................................................36
10.7. EXHIBITS ...................................................................................................................36
10.8. CONFLICT ..................................................................................................................36 1 660\14\4184108.5
AGREEMENT OF
EASEMENTS, COVENANTS AND RESTRICTIONS
FOR
THIS AGREEMENT OF EASEMENTS, COVENANTS AND RESTRICTIONS FOR _______________________________ (“Agreement”) is made this _____ day of ______________, 20 ___, by and among ____________________ , a __________________ (“[Commercial Lot 1 Owner]”), ____________________________ (“[Commercial Lot 5 Owner]” ____________________________ (“ [Commercial Lot 6 Owner]” and collectively with the Commercial Lot 1 Owner and the Commercial Lot 5 Owner, the “ Commercial Property Owners”), the City of San Mateo (“City”), and, for the limited purposes described in Section ____, as set MOORE TALBOT PARTNERS, LP, a California limited partnership, as fee owner of Commercial Lot 1, as defined herein (the “ Commercial Lot 1 Fee Owner ”).
Commercial Lot 1 Owner, Commercial Lot 5 Owner, Commercial Lot 6 Owner, City, Commercial Lot 1 Fee Owner, and any future Residential Property Owner as defined herein are referred to herein individually as a “Party” and collectively as the “Parties.” ARTICLE 1
RECITALS
This Agreement is made with reference to the following facts:
1.1. PROPERTY SUBJECT TO AGREEMENT:
1.1.1. Commercial Lot 1: Commercial Lot 1 Owner is the ground lessee of that certain land, and owner of the Improvements thereon, commonly known as 415 and 445 South B Street, in the City of San Mateo, County of San Mateo, State of California, being Lot 1 of Commercial Property as described in Exhibit A attached to this Agreement (“Commercial Lot 1”), pursuant and subject to that certain ground lease between Commercial Lot 1 Fee Owner, as Lessor, and Commercial Lot 1 Owner , as Lessee, dated ________________________, a memorandum of which was recorded on ________________________, as Document No. __________________, in the Official Records of the said County (“Commercial Lot 1 Ground Lease”).
1.1.2. Commercial Lot 5: Commercial Lot 5 Owner is the owner of that certain real property commonly known as 302 E. 4 th Avenue, in the City of San Mateo, County of San Mateo, State of California, being Lot 5 of the Commercial Property described in Exhibit A attached to this Agreement (“Commercial Lot 5”).
1.1.3. Commercial Lot 6: Commercial Lot 6 Owner is the owner of that certain real property commonly known as 407 South B Street, in the City of San Mateo, County of San Mateo, State of California, being Lot 6 of the Commercial Property described in Exhibit A attached to this Agreement (“ Commercial Lot 6” and collectively with Commercial Lot 1 and Commercial Lot 5, the “Commercial Property”).
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1.1.4. Residential Property: City is the fee owner of that certain land, and owner of the Improvements thereon, located in the City of San Mateo, County of San Mateo, State of California, described in Exhibit B attached to this Agreement (“Residential Property”).
1.1.5. The Properties: The Commercial Property and the Residential Property are referred to herein collectively as the “Properties.”
1.2. DEVELOPMENT OF PRO PERTIES. The Commercial Property Owners intend to develop the subterranean shared Parking Structure and Garage on both the Commercial and Residential Properties, to develop the Commercial Building on the Commercial Property , and to hold and operate the Commercial Property as an office and retail project. City intends to enter into a ground lease (“ Residential Property Ground Lease ”) of the Residential Property with an affordable housing developer, to be referred to herein as the “ Residential Property Owner,” for the purpose of development and operat ion of an affordable residential apartment project on the Residential Property . The two separate projects are to be served by a central subterranean Parking Structure and Garage, as defined herein.
1.3. INTENTION OF AGREEMENT . By this Agreement, the Parties , with the consent of the Commercial Lot 1 Fee Owner , intend to grant and reserve reciprocal easements for circulation within the Garage and to establish a plan for the operation, maintenance and cost sharing with respect to the Shared Maintenance Areas as defined in this Agreement . To accomplish this, the Parties desire to impose on the Commercial Property and the Residential Property these mutually beneficial easements, covenants and restrictions under a comprehensive plan of improvement and development for the benefit of the Commercial Property and the Residential Property.
1.4. NO COMMON INTEREST DEVELOPMENT : Neither the Commercial Property nor the Residential Property, nor the Properties combined, is or shall be considered a common interest development within the meaning California Davis -Stirling Common Interest Development Act (California Civil Code Section 4000 et seq.) or the California Commercial and Industrial Common Interest Development Act (California Civil Code Section 6500 et seq.).
NOW, THEREFORE, with reference to the foregoing recitals, in consideration of the premises, covenants and agreements set forth in this Agreement and for other good and valuable consideration, receipt of which is hereby acknowledged, each of the Parties and Commercial Lot 1 Fee Owner agree that the Properties are subject to the provisions of this Agreement. The Commercial Property and Residential Property shall each be held, improved, developed, sold, conveyed, hypothecated, encumbered, leased, rented, used, operated and occupied subject to the easements, covenants, and restrictions stated in this Agreement. The provisions of this Agreement shall run with and burden the Commercial Property and the Residential Property, and each of them, shall be binding upon and, as applicable, inure to the benefit of the Properties and each Person having or acquiring any right, title or interest in the Properties or any part thereof, or any Improvements thereon, and upon and to the benefit of their respective successors and assigns.
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ARTICLE 2
DEFINITIONS
Unless the context clearly indicates a different meaning, the terms used in this Agreement shall have the meanings specified in this Article. Definitions of term relating specifically to Article 7 are set forth in Section 7.1
“ADR” means the alternative dispute provisions and procedures set forth in Exhibit D. “Additional Charges” has the meaning ascribed to it in Section 5.3.6. “Agreement” means this AGREEMENT OF RECIPROCAL EASEMENTS, COVENANTS AND RESTRICTIONS FOR _______________________________ and any amendments hereto.
“City” means the City of San Mateo, County of San Mateo, State of California. “City Parking Agreement ” means the agreement entered into , or to be entered into , by and between the City and the Commercial Property Owners whereby the Commercial Property Owners has granted or will grant to the City a non -exclusive access for use of certain parking spaces within the Commercial Parking Area during specified days and times. “Commercial Building” means the commercial office and retail building constructed or to be constructed on surface of the Commercial Property, and all related Improvements, including elevators, elevator equipment room, elevator shafts, stairwells, trash chutes, and trash receptacles that extend from the building to and from the Garage Level. The Commercial Building shall also be deemed to include all structural components of the Garage and other Improvements within the Commercial Property.
“Commercial Lot 1” has the meaning ascribed to it in Section 1.1.1. “Commercial Lot 1 Fee Owner ” means MOORE TALBOT PARTNERS, LP, a California limited partnership , its successors and assign, and any successor owner of the fee interest in Lot 6 or any portion thereof.
“Commercial Lot 1 Ground Lease” has the meaning ascribed to it in Section 1.1.1. “Commercial Lot 5” has the meaning ascribed to it in Section 1.1.2. “Commercial Lot 6” has the meaning ascribed to it in Section 1.1.3. “Commercial Parking Area ” means th ose areas of the Garage that are not the Residential Parking Area.
“Commercial Property” means, collectively, Commercial Lot 1, Commercial Lot 5 and Commercial Lot 6, as defined in Exhibit A, and all Improvements thereon. 4 660\14\4184108.5
“County” means the County of San Mateo, State of California. “Dispute” has the meaning ascribed to it in Section 8.4. “Eligible Holder” means a Mortgagee or Ground Lessor who has delivered to both the Residential Property Owner and the Managing Owner a written notice (a) containing its name and address, (b) identifying the Property or portion thereof encumbered by its Mortgage or Ground Lease, and (c) requesting delivery to it of written notices under this Agreement. “Fixed Contribution Expenses” is defined in the definition of “Shared Expenses” in this Article.
“Flex Parking Hours” has the meaning ascribed to it in 3.1.5. “Garage” means the area bounded by the interior unfinished surfaces of the foundation, structural walls, structural columns and structural ceiling (Podium) of the Parking Structure, and includes all non-structural Improvements therein, including the surface of the Garage Ramp and all drive aisles, parking areas, non-loadbearing walls, utility rooms, mechanical rooms, fire pump rooms, entry and exit doors, stairwells, all as shown on the Garage Level Site Plan. “Garage Level ” means that subsurface portion of the Properties located below the structural Podium, as depicted on the Garage Level Site Plan. “Garage Ramp” means the vehicular ramp connecting the Garage to the South Railroad Avenue right-of-way at grade level, including sidewalk and curb cut . The Garage Ramp is located within the Residential Property, except for the southeasterly six feet, more or less, which is located within the Commercial Property, as more particularly shown on the Garage Level Site Plan.
“Garage Level Site Plan” means the Garage Level S ite Plan attached to this Agreement as Exhibit C and incorporated herein by this reference. “Ground Leases ” means, collectively, the Residential Property Ground Lease and the Commercial Lot 1 Ground Lease.
“Ground Lessor ” means, as the context applies, either the City, its successor s and assigns, as fee owner and ground lessor under the Residential Property Ground Lease , or MOORE TALBOT PARTNERS, LP, a California limited partnership, its successors and assigns, as fee owner and g round lessor under the Commercial Lot 1 Ground Lease, as applicable . The term “Ground Lessor” shall also include any future fee owner and ground lessor, from time to time, under any ground lease of any lot or parcel within the Residential Property or the Commercial Property.
“Garage Reserves” means reserves to cover the replacement of material components of the Shared Garage Maintenance Areas upon the expiration of their estimated useful lives, including but not limited to commonly used HVAC and fire pump systems in the Garage. “Improvements” means buildings, facilities, ramps, drives, walls, paving, wires, utilities, 5 660\14\4184108.5
grading, fixtures, all other structures, and all other works of improvement constructed or to be constructed upon or within the Properties, excluding only those Improvements or portions thereof which are dedicated to the public or a public or quasi -public entity or utility company, and accepted for maintenance by the public or by such entity or utility company. “Invitee” means any person whose presence within the Properties is approved by or is at the request of a particular Owner or its Tenants, including, but not limited to the family, guests, licensees or invitees of Owners or their Tenants.
“Main Entry Gate” has the meaning ascribed to it in 3.1.5(a). “Main Entry System” has the meaning ascribed to it in 3.1.5(a). “Managing Owner” means the Commercial Lot 1 Owner, its successors and assigns, and any Property Manager to which it shall have assigned or delegated any of its rights or duties under this Agreement. For any successor or assignee of the “Managing Owner” to be deemed the “Managing Owner” under the terms of this Agreement, the then Managing Owner shall record in the County an assignment designating such successor or assignee as “Managing Owner,” together with an assumption by the new “Managing Owner” of the obligations of the Managing Owner under this Agreement.
“Monetary Obligation” has the meaning ascribed to it in Section 5.3. “Mortgage” means any duly recorded mortgage, deed of trust, assignment of rents, issues and profits or other proper instrument given as security for the repayment of a loan or other financing which encumbers an Owner’s Property, made in good faith and for value. “Mortgagee” means a mortgagee under any duly recorded mortgage, beneficiary under any duly recorded deed of trust, and any assignee under an assignment of rents, issues and profit or other proper instrument, where such mortgage, deed of trust or assignment is a “Mortgage” as defined herein.
“Owner” means, individually, each of the Commercial Lot 1 Owner, the Commercial Lot 5 Owner, the Commercial Lot 6 Owner and the Residential Property Owner , their successors and assigns under the applicable Ground Lease, and any successor owner of the applicable fee or ground leasehold interest in either the Residential Property or the Commercial Property, or any portion thereof. Without limiting the foregoing, the Ground Lessor under and Ground Lease of a Parcel reserves for itself the right, by written notice to the Owner s of the other Parcels, to have the Ground Lessee under such Ground Lease be considered the “Owner” of such Parcel for purposes of this Agreement rather than the Ground Lessor; provided, however , such designation shall not impact the burdens or benefits of any of the easements granted and/or reserved in this Agreement.
“Parking Structure ” means the structural components of the subterranean parking structure and podium constructed by the Commercial Property Owners on the Properties, from the bottom of the foundation to the upper surface of the podium supporting the surface Buildings on the Properties.
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“Person” means a natural individual or any legal entity recognized under California law.
When the word “person” is not capitalized, the word refers only to natural persons. “Property” means either (i) the Residential Property, or (ii) each lot or parcel comprising the Commercial Property, as the context indicates.
“Property Manager ” means the person or entity appointed or hired by an Owner to manage and operate Residential or Commercial Building on such Owner’s Property. “Proportionate Share” means the following:
Residential Property: 30%
Commercial Property: 70%
“Residential Building” means the multi -family residential building constructed or to be constructed on Parking Structure podium within the Residential Property, and all related Improvements, including elevators, elevator equipment room, elevator shafts, stairwells, trash chutes, and trash receptacles that extend from the building to and from the subterranean Garage level.
“Residential Fixed Contribution Amount ” has the meaning ascribed to it in Section
5.1.5. “Residential Flex Spaces” has the meaning ascribed to it in 3.1.5. “Residential Gate” has the meaning ascribed to it in Section 3.1.6. “Residential Parking Area ” means that area shown on the Garage Level Site Pla n as area of the Garage dedicated to the exclusive use for parking by the Residential Property Owner, its Tenants and Invitees.
“Residential Parking Encroachment ” means that portion of the Garage Level consisting of the northeasterly 6 feet of Commercial Lots 5 and 6 from the interior unfinished surface of the northwesterly wall of the Garage to northwesterly edge of the Garage Ramp, as shown on the Garage Level Site Plan.
“Residential Placed -in-Service Date ” means the first day of the first calendar month following the date upon which a temporary or final certificate of occupancy is issued for all or any portion of the Residential Building.
“Residential Property” has the meaning ascribed to it in Section 1.1.4. “Residential Property Ground Lease” has the meaning ascribed to it in Section 1.1.4. “Residential Property Ground Lessee ” means the lessee pursuant to the Residential Property Ground Lease.
“Residential Property Ground Lease Possession Date ” means the date upon which the 7 660\14\4184108.5
Residential Property Ground Lessee has the right to occupy the Residential Property pursuant to the Residential Property Ground Lease.
“Residential Property Owner ” shall, until the Residential Property Ground Lease Possession Date, be the City. From and after the Residential Property Ground Lease Possession Date, through the term of the Residential Property Ground Lease, the “ Residential Property Owner” shall be the Residential Property Ground Lessee. The R esidential Property Ground Lessee, by accepting its leasehold interest in and to the Residential Property, shall be deemed to have assumed all of the obligations and liability of the Residential Property Owner under this Agreement arising on or after such Residential Property Ground Lease Possession Date , and the City shall thereupon be released from any obligations or liability under this Agreement arising on or after the Residential Property Ground Lease Possession Date; provided, however, that the City will be deemed to be a consenting fee owner to the terms of this Agreement. “Shared Garage Maintenance Areas” means the following building areas and systems if and to the extent located on the Garage Level s and serving those portions of the Garage located on both the Residential and Commercial Properties:
• the Garage Ramp and other shared drive aisles within the Garage; • Shared Utility Facilities, if any;
• Shared HVAC Systems, if any;
• the portions, if any, of the Garage fire suppression systems, pipes, and fire system control rooms that serve both the Residential Parking Area and the Commercial Parking Area; and
• Garage Stair 016 and Garage Stair 003, as shown on the Garage Level Site Plan. “Shared Expenses” means the cost to the Managing Owner of:
• regular inspection, maintenance, repair and replacement of Shared Maintenance Areas and Improvements therein (“Regular Maintenance Costs”); • reasonable Garage Reserves as deemed appropriate by the Managing Owner or otherwise required pursuant to this Agreement;
• reasonable overhead and administrative charges as allocated to management and maintenance of the Shared Maintenance Areas pursuant to this Agreement, not to exceed fifteen percent (15 %) of Regular Maintenance Costs (“ Administrative Costs”);
• premiums for property insurance maintained by the Managing Owner and reasonably allocated to the Parking Structure and Garage , pursuant to this Agreement; and
• Unforeseen Costs and Extraordinary Expenses associated with maintenance or 8 660\14\4184108.5
restoration of Shared Maintenance Areas;
Regular Maintenance Costs, Garage Reserves and Administrative Costs are referred to in this Agreement as “ Fixed Contribution Expenses.” All other Shared Expenses are referred to in this Agreement as “Variable Contribution Expenses.”
“Shared HVAC Systems ” means heating, air conditioning, air circulation and related systems, if any, serving both the Residential Property and the Commercial Property, to the point of connection to the separate Improvements within each Property, including all associated mechanical equipment, chillers, pumps, motors, air handling units, ducts, fans, insulation, common meters, irrigation or other common water meters, exhaust fans, and such other associated equipment and machinery.
“Shared Utility Facilities” means those portions of any public and private utilities within the Properties that serve both Properties, including but not limited to common water, electric, gas, telephone, telecommunications, cable, information technology facilities, and sanitary sewer, if any. Shared Utility Facilities shall include Garage lighting and electrical systems and control rooms, if any, including common meters (if any), shared electrical panels, conduit and lighting systems, but excluding lighting fixtures except within shared drive aisles and the area of the Garage Ramp.
“Tenant” means shall mean each tenant, lessee, or sublessee, under a lease or rental agreement for space in the Commercial Building or the Residential Building, which lease gives such Tenant the right to use and access to one or more parking spaces in the Garage (whether under a pay-for-use, unbundled or bundled arrangement). ”Vapor Mitigation Plan ” means that certain Vapor Mitigation Plan dated __________________, prepared by ______________________, on file with and approved by the County Environmental Health Department , which includes vapor mitigation strategies, if and as appropriate, that are protective of the occupants of the Parking Structure and Improvements, including post construction monitoring/verification sampling as required by the County Environmental Health Department.
“Variable Contribution Expenses” is defined in the definition of “Shared Expenses” in this Article.
ARTICLE 3
EASEMENTS
Each of the Owners shall be entitled to the benefits of the easements granted and reserved in this Agreement, and such Owner’s respective interest in its respective Property shall be subject to the easements granted and reserved in favor of the other Owners as set forth below.
Each of the easements reserved or granted herein shall be enforceable as covenants running with the land for the benefit of the Owners and their Tenants and Invitees, superior to all other encumbrances applied against the Owners’ interests in their respective Properties. The Owners’ respective easement interests in the Garage shall be appurtenant to, and shall not be separated or separately conveyed from, their respective interests in the Commercial Property and Residential 9 660\14\4184108.5
Property.
3.1. DRIVEWAY AND PARKING EASEMENTS:
3.1.1. Ramp and Drive Aisles on Residential Property: Subject to the terms, conditions and restrictions set forth in this Agreement, the Residential Property Owner hereby grants and conveys to the Commercial Property Owners , and each of them , a non-exclusive easement, appurtenant to the Commercial Property, over and across:
(a) the grade level driveway entry from the public street to the subterranean Garage Level, as shown on the Grade Level Site Plan; (b) the portion of the Garage Ramp located within the Residential Property as shown on the Garage Level Site Plan; and
(c) Garage Level drive aisles within the Residential Property that provide access to Commercial Property parking spaces (not including drive aisles located on the Residential Property side of the Residential Gate), as shown on the Garage Level Site Plan; all for purposes of (i) vehicular and pedestrian ingress and egress by the Commercial Property Owners and their respective Tenants and Invitees to and from those parking areas and other portions of the Garage located within the Commercial Property , and (ii) installation, operation, maintenance, repair and replacement of the Main Entry Gate in accordance with this Agreement.
3.1.2. Ramp and Drive Aisles on Commercial Property: Subject to the terms, conditions and restrictions set forth in this Agreement, including but not limited to those set forth in this Article 3, the Commercial Property Owners, and each of them hereby grant and convey to the Residential Property Owner non -exclusive easements, appurtenant to the Residential Property, over and across:
(a) that portion of the Garage Ramp located within the Commercial Property as shown on the Garage Level Site Plan; and
(b) drive aisles within the Commercial Property providing access to the Residential Gate and to parking areas within the Residential Property; for purposes of vehicular and pedestrian ingress and egress by the Residential Property Owner and its Tenants and Invitees to and from (i) those parking areas and other portions of the Garage located within the Residential Property, and (ii) other parking spaces within the Commercial Property to which the Residential Property Owner, its Tenants and Invitees are allowed access by easement or license under this Agreement.
3.1.3. Residential Parking Encroachment: The Commercial Property Owners, and each of them, hereby grant and convey to the Residential Property Owner an exclusive easement, appurtenant to the Residential Property, over and across the area of the Residential Parking Encroachment for purposes of access to, use and maintenance of residential parking spaces (including mechanical stacking systems) and pedestrian ingress and egress, and for purposes of installation, operation, maintenance, repair and replacement of the Residential Gate 10 660\14\4184108.5
as set forth in Section 3.1.7.
3.1.4. License for Residential Flex Parking: Effective upon the Residential Placed-in-Service Date, the Commercial Property Owners hereby grant to the Residential Property Owner an irrevocable license for non -exclusive access and use by the Residential Property Owner, its Tenants and Invitees of the [twenty -five] parking spaces in the Commercial Parking Area identified on the Garage Level Site Plan as parking space numbers ___________________________ (the “Residential Flex Spaces ”), which access and use shall be limited to the following times: between the hours of 6pm to 7am weekdays, and 24 hours on Saturdays, Sundays and public holidays recognized by the United States Government and/or the State of California (the “ Flex Parking Hours”). The use of the Residential Flex Spaces by the Residential Property Owner or its Tenants or Invitees shall be subject to the parking restrictions set forth in Section 3.7.3 and such reasonable and non -discriminatory rules and regulations (the “Flex Parking Rules ”) as may be established (with the consent of Residential Property Owner not to be unreasonably denied, conditioned or delayed) and enforced by the Managing Owner.
Use of the Residential Flex Spaces by the Residential Property Owner or its Tenants or Invitees either (i) in violation of this Agreement or the Flex Parking Rules, or (ii) outside of Flex Parking Hours, may be enforced by the Managing Owner or its Manager pursuant to Section 3.7.3(c); provided, however, that the Managing Owner may not cause removal of a Residential Property Tenant’s or Invitee’s vehicle from a Flex Parking Space for violating Flex Parking Hours until placement of a written infraction notice or tag on the same vehicle at least three (3) times for separate violations of the Flex Parking Hours restriction. Where a vehicle remains in a Flex Parking Space after being tagged, each 24-hour period may be treated as a separate violation, and the vehicle may be re -tagged. To ensure this restriction on enforcement is followed by the Managing Owner, the Residential Property Owner shall use commercially reasonable efforts to provide the Managing Owner an accurate list of makes, models and license plate numbers of all vehicles that qualify as Residential Tenant’s vehicles and shall periodically provide the Managing Owner with written updates of the Residential Tenant vehicle list as appropriate.
3.1.5. Main Entry Gate:
(a) The Commercial Property Owners’ easement over and across the Garage Ramp under Section 3.1.1(a), above, shall include the exclusive right to install, maintain, repair and replace a main entry gate on the Garage R amp and near the entry to the Garage (“Main Entry Gate ”), including but not limited to control arms, electrical power for the gate, sensors or other controlled access systems to monitor access to the Garage . The Main Entry Gate may include metering, card systems, or similar technology to enable the Managing Owner to control, monitor and receive payment for use of parking within the Commercial Property (“Main Entry System”).
(b) The Commercial Property Owners or the Managing Owner may employ, at its sole expense and not as a Shared Expense, a commercial parking operator to operate and manage the Main Entry Gate and Main Entry System. At all times, the Commercial Property Owners or their parking operator may restrict access to, or sell or issue permits for, access and use of parking spaces in the Commercial Property portion of the Garage . Nothing stated herein shall allow the Commercial Property Owners to take any action that conf licts with the City Parking Agreement. The Commercial Property Owner sha ll be entitled to all revenue 11 660\14\4184108.5
generated by operation of the Main Entry Gate and Main Entry System. Such revenue shall not be considered in the calculation of or constitute a credit toward the Residential Property Owner’s share of Shared Expenses for the Garage.
(c) The foregoing notwithstanding, the Residential Property Owner and its Tenants and Invitees shall be provided access, without charge, through the Main Entry Gate to and from the Residential Gate and the Residential Property parking areas . The Commercial Property Owner shall issue key cards or provide other means of electronic access, at no charge to the Residential Property Owner , its Tenants or Invitee s, to Persons designated by the Residential Property Owner to be Tenants of the Residential Property Owner or otherwise to be allowed unrestricted access to the Residential Property. (d) The Commercial Property Owners shall bear the full cost of maintenance, repair, replacement and operation of the Main Entry Gate and Main Entry System, and such cost shall not be a Shared Expense under this Agreement. (e) The Managing Owner and Residential Property Owner shall establish reasonable and mutually acceptable procedures to address instances in which the Main Entry Gate and/or the Main Entry System does not properly operate to ensure the Residential Property Owner and its Tenants and Invitees shall have continuous access to and from the Residential Gate and the Residential Property Parking Area, which procedures shall include the ability of the Residential Property Owner to override the Main Entry System and manually open the Main Entry Gate if the Main Entry Gate is inoperable for more than two (2) consecutive hours after Residential Property Owner has notified Managing Owner that the Main Entry Gate is inoperable. The Residential Property Owner shall have no liability to the Managing Owner, any Commercial Property Owner and/or any Tenant or Invitee for leaving the Main Entry Gate open during any period in which the Main Entry Gate is inoperable.
3.1.6. Residential Gate:
(a) The Residential Property Owner’s easement for the Residential Parking Encroachment under Section 3.1.3 shall include the exclusive right to install, maintain, repair and replace a residential garage entry gate within the Residential Parking Encroachment as shown on the Garage Level Site Plan (“ Residential Gate”), including but not limited to control arm or gate mechanisms, electrical power for the gate, and sensors or other controlled systems to monitor access to the portion of the Garage located in the Residential Property . The Residential Gate may include metering, card systems, or similar technology to enable the Residential Property Owner to control, monitor and receive payment for use of parking in the Residential Area, and to provide for security for the residential portion of the Garage (“Residential Entry System”).
(b) The Residential Property Owner shall bear the full cost of maintenance, repair, replacement and operation of the Residential Gate and Residential Entry System, and such cost shall not be a Shared Expense under this Agreement.
3.1.7. Vehicle Parking; Parking Automation Systems: Commercial Property Owners and Residential Property Owner , respectively, shall each have the right, at its own cost, 12 660\14\4184108.5
to install and maintain within the portion of the Garage located on its Property (or Residential Parking Encroachment) automated parking stackers, electric vehicle charging stations, charging meters (including time of use meters) and other parking automation systems ( each a “Parking Automation System ”), so long as (a) the installation and maintenance of the Parking Automation System, including electrical systems therefor, do not impede access to the shared drive aisles or impact the structure of the Garage or other Improvements on the Properties and otherwise comply with the architectural and design standards applicable to the Improvements on the Properties; (b) the Party installing the Parking Automation Systems engages a qualified licensed contractor to install the same; and (c) all Parking Automation Systems are properly insured in accordance with all applicable laws, rules and regulations , and (for the Residential Property) the requirements of the Residential Property Ground Lease . The Owner and each successive Owner of a Parking Automation System shall be solely responsible for all of the following: (1) costs for damage to the Parking Automation System or the Garage resulting from the installation, maintenance or repair of the Parking Automation System ; (2) c osts for the maintenance, repair, and replacement of the Parking Automation System until it has been removed and for the restoration of the Garage after removal ; and (3) the cost of electricity associated with the Parking Automation System . If Parking Automation Systems within a Property are not separately metered, the Managing Owner shall have the right to treat power and electricity to Parking Automation Systems as a Shared Expense and to allocate it reasonably based on estimated usage by the Parties. All revenues from Parking Automation Systems shall be the property of the respective Owner thereof.
3.1.8. Temporary Residential Parking Area License: Following completion of construction of the Garage Improvements located on the Residential Property, the Commercial Property Owners shall have an exclusive license over and across the completed Garage and podium surface located on the Residential Property for purposes of parking of vehicles by agents, contractors and Invitees of the Commercial Property Owner , which license shall remain in effect until the earlier of (i) the Residential Placed In Service Date , (ii) thirty (30) days following written notice by t he Residential Property Owner to the Commercial Owners that the Residential Property Owner has elected to take possession of the Garage Improvements located on the Residential Property. Further, the license granted by this Section shall be predicated on the Commercial Property Owners bearing all costs of maintenance and upkeep of the Garage Improvements located on the Residential Property during the term of the license in accordance with Section 4.1 . Notwithstanding the foregoing, Residential Property Owner may access the completed Garage and podium surface located on the Residential Property for pre -construction due diligence, non-destructive inspections of the Residential Property, and other reasonable temporary visits or viewing related to the City's or Residential Property Ground Lessee's future use and occupancy of the Residential Property upon forty-eight (48) hours' notice to Commercial Property Owner. . The Commercial Property Owner s shall exercise its rights under this Section
3.1. in cooperation with the construction activities of the City and Residential Property Owner in constructing the Residential Building, including related construction staging, subterranean facilities, and services appurtenant and necessary for the Residential Building.
3.2. PEDESTRIAN INGRESS AND EGRESS : There is hereby reserved and granted to each Owner a reciprocal non -exclusive easement, appurtenant to each Property, over and across the stairwells connecting the Garage Level to the grade level public rights of way, specifically identified as Garage Stair 003 on the Garage Level Site Plan , for purposes of 13 660\14\4184108.5
pedestrian ingress and egress to and from the Garage by the Owners, their Tenants and Invitees.
The Managing Owner shall have the right to install locks and other security systems to the stairwells provided that permitted access is preserved to the Owners, Tenants and Invitees.
3.3. EASEMENT FOR UTILITIES: There is reserved and granted to each Property a non -exclusive easement for access to, use and maintenance of sewer lines, water , utilities, pipes, conduits, lines columns, structural supports, and foundations, as originally constructed by Commercial Property Owners throughout the Garage Level, as necessary for providing services and utilities to the Residential Building, Commercial Building, Garage and other portions of the Properties.
3.4. MAINTENANCE EASEMENTS: Each Owner, as grantor, hereby grants to the other Owners, their authorized representatives, contractors and agents, as grantee s, a non- exclusive easement, appurtenant to each Property, to enter upon the Garage Level of the grantor Owner’s Property to access all Shared Garage Maintenance Area s as necessary to perform the maintenance duties and obligations of the grantee Owner, and to exercise the rights an d privileges of the grantee Owner (including self -help maintenance rights) , as set forth in this Agreement. Such entry shall be upon reasonable notice under the circumstances and shall be undertaken with as little disturbance and inconvenience to the Tenants and other occupants and patrons of the grantor Owner’s Property as reasonably possible.
3.5. STRUCTURAL SUPPORT EASEMENT: There is hereby reserved and granted to each Owner, appurtenant to its Property , non -exclusive easements and rights in and to all structural members, columns, beams and other supporting elements within and upon the Parking Structure for structural support of the Parking Structure , podium and above -ground Improvements within such Property. No Owner shall take any action which would adversely affect the structural integrity or safety of the Improvements situated on another Owner’s Property.
3.6. GENERAL ENCROACHMENT EASEMENT : Without limiting Section
3.1.3, there is hereby established, reserved and granted in favor of each Property, as dominant tenement, an easement over each adjoining Property, as servient tenement, for the purpose of accommodating any encroachment due to the actual physical location of the Parking Structure and Garage built in accordance with the original design, plans and specifications for the parking Structure and Garage, or due to engineering errors, errors or field adjustments during the course of original construction, settlement or shifting of the Improvements , or similar causes. There shall be valid easements for the maintenance of said encroachments so long as they shall exist, and the rights and obligations of Owners shall not be altered in any way by said encroachment, settlement or shifting; provided, however, that in no event shall an easement for encroachment be created if said encroachment occurred due to the intentional misconduct of the Owner claiming the encroachment easement . In the event the Parking Structure and/or Garage is partially or totally destroyed, and then repaired or rebuilt, the Owners agree that minor encroachments between the Properties shall be permitted and that there shall be valid easements for the maintenance of said encroachments so long as they shall exist. 14 660\14\4184108.5
3.7. COVENANTS REGARDING EASEMENTS:
3.7.1. No Interference: Each Owner’s use of the easements reserved and granted herein shall not unreasonably interfere with or interrupt the operations of the servient tenement, and shall not damage, injure or otherwise adversely affect Improvements on the servient tenement. All due care shall be exercised not to disturb tenants in possession. Further use of all easements shall be subject to the reasonable security, health and safety, requirements of the servient tenement.
3.7.2. Repair of Damage: Except as otherwise set forth herein, each dominant tenement Owner, at its expense, shall promptly repair, replace or restore any and all of the Improvements on the servient tenement which have been disturbed, damaged or destroyed by the dominant tenement Owner or its Invitees in exercising their rights with respect to the easements granted under this Article 3 to substantially the same condition as before such exercise commenced.
3.7.3. Parking Restrictions:
(a) Vehicles shall not be parked anywhere in the Garage except wholly within parking spaces as designated in the Garage. No vehicle that would extend beyond the boundaries of a parking space as marked, shall be parked or stored anywhere in the Garage. No part of the Garage shall be used for repair, construction or reconstruction of any vehicle or any other item or thing except in an emergency as determined by the Owners. (b) The following vehicles are prohibited in the Garage (“ Prohibited Vehicles”) (a) recreational vehicles (e.g., motorhomes, travel trailers, camper vans, boats, etc.); (b) commercial-type vehicles (e.g., tank trucks, dump trucks, and concrete trucks unless actively engaged in construction and/or maintenance activities ) although limousines and other commercial vehicles that the fit within parking spaces shall be allowed; (c) buses or vans designed to accommodate more than ten (10) people (other than in connection with providing resident and/or social services to the Tenants of the Residential Building so long as such vehicle is park exclusively within the Residential Parking Area); (d) vehicles having more than two (2) axles; (e) trailers; (f) inoperable vehicles or parts of vehicles; and (g) aircraft . Prohibited Vehicles may not be parked, stored or kept anywhere within the Garage. (c) The Managing Owner may establish additional rules regarding use of the Commercial Parking Areas, including the Residential Flex Spaces. Parking rules may concern use of the Garage entrance, garage ramps, drive -aisles and/or other areas located in the Commercial Parking Areas , provided any such rules shall not interfere or be inconsistent with the easements reserved and granted herein and other rights of the Residential Property Owner set forth in this Agreement as to such areas of the Garage . In this regard, the Managing Owner shall be entitled to contract with any private security patrol company, carpool or vanpool service or any transportation management association or organization at the sole cost and expense of the Commercial Property Owners and not as a Shared Expense, to administer or regulate parking use of the Commercial Parking Areas, including the Residential Flex Spaces in accordance with rules adopted in accordance with this Agreement. The Managing Owner may take all actions necessary to enforc e parking restrictions set forth in this Agreement and in any reasonable 15 660\14\4184108.5
parking rules and regulations established for Commercial Parking Areas (including Residential Flex Spaces subject to Section 3.1.4), including removing violating vehicles from the Commercial Parking Areas pursuant to California Vehicle Code Section 22658.2 or applicable law.
(d) The Residential Property Owner may establish additional rules regarding use of the Residential Parking Area. The Residential Property Owner shall be entitled to contract with any private security patrol company, carpool or vanpool service or any transportation management association or organization, at the sole cost and expense of the Residential Property Owner and not as a Shared Expense, to administer or regulate parking use of the Residential Parking Area. The Residential Property Owner may take all actions necessary to enforce parking restrictions applicable to the Residential Parking Area, including removing violating vehicles from the Residential Parking Area pursuant to California Vehicle Code Section 22658.2 or applicable law.
ARTICLE 4
MANAGEMENT AND MAINTENANCE
4.1. MAINTENANCE OF SEPARATE IMPROVEMENTS: Except for Shared Garage Maintenance Area s, (a) the Commercial Property Owners shall be responsible for the repair, maintenance, and upkeep of all Improvements located in the Commercial Parking Areas as well as the Garage Ramp located on Residential Property and adjacent sidewalk , and (b) the Residential Property Owner shall be responsible for the repair, maintenance, and upkeep of all Improvements located in the Residential Parking Areas . The foregoing notwithstanding, the Commercial Property Owner s shall be solely responsible for maintenance and upkeep of the Improvements in the Residential Parking Areas until its exclusive license set forth in Section
3.1.8 has terminated , and so long as the Commercial Property owner retains exclusive access thereto under any temporary construction easement entered into between the Commercial Property Owner and the City for purposes of construction of the Garage Improvements. All Garage Improvements shall be maintained in good repair and condition in accordance with the standards set forth in each respective Ground Lease , or in the absence of a Ground Lease, in accordance with commonly accepted maintenance practices for first -class multi -family and commercial projects in the City . The Owners may, but shall not be obligated to, engage maintenance companies or personnel jointly as appropriate for purposes of cost savings and convenience.
4.2. SHARED GARAGE MAINTENANCE AREAS:
4.2.1. In General: The Managing Owner, subject to reimbursement as set forth in this Agreement (if applicable), shall be responsible for the management, maintenance, repair, replacement, and upkeep of the Shared Garage Maintenance Area s. The Shared Garage Maintenance Area s shall be maintained in good repair and operating condition in accordance with all applicable laws, rules, regulations, the provisions of this Agreement, the standards set forth in any Ground Lease, and in accordance with commonly accepted maintenance practices for first class multi-family projects and commercial projects in the City. 16 660\14\4184108.5
4.2.2. Security Cameras: Each Owner acknowledges that security cameras are not a guaranty against criminal activity. Each Owner may, but shall not be obligated to, install security cameras, employ security personnel, or implement other security measures on its own Property. The Managing Owner may, but shall have no obligation to, install and maintain security cameras or place security personnel in the Shared Garage Maintenance Area s, but the same shall not be a Shared Expense unless the Residential Property Owner participates in the decision to employ such security measures and agrees to participate in the cost. Any election to do so does not constitute an agreement to provide security or security services for any portion of the Garage, the Residential Building or Commercial Building. Installation of security cameras and use of security personnel or other security measures shall be done in compliance with the City’s Municipal Code and the requirements and conditions of project development entitlements for the Parking Structure and Garage . Neither the Managing Owner nor any Property Manager, agent, employee, representative or successor of Managing Owner shall have any liability to the Residential Property Owner or the other Commercial Property Owners, their employees, agents, contractors, Tenants, Invitees, successors or assigns for criminal activity undertaken or caused by others within the Properties, whether or not security systems are installed or security personnel are employed.
4.2.3. Vapor Mitigation System: The Managing Owner, shall be responsible for compliance with the Vapor Mitigation Plan, including periodic inspection, testing, monitoring and maintenance of vapor mitigation systems serving and protecting the Parking Structure.
Residential Property Owner shall cooperate with such inspections, testing, monitoring and maintenance.
4.2.4. Management Decisions: The Managing Owner or its Property Manager shall have the right and the obligation to make all day -to-day management decisions relating to maintenance and repair of the Shared Garage Maintenance Area s, subject to (i) reasonable consultation with the other Owners or their Property Managers, and (ii) the self-help rights of the Residential Property Owner as set forth in Section 4.4, below. The foregoing notwithstanding, Major Decisions (as defined below) regarding Shared Garage Maintenance Area s shall require the prior written consent of the Residential Property Owner. A “Major Decision” means a decision to undertake any of the following:
(a) the destruction, elimination or major alteration of a Shared Garage Maintenance Area, or of equipment or fixtures constituting a Shared Garage Maintenance Area; (b) any closure of more than 24 cumulative hours of the Garage within a period of seven days; or
(c) a change in the maintenance or repair program or an unanticipated capital improvement, in either case resulting in an increase in reimbursement obligations beyond the limits established in Section 5.2.7, below.
4.2.5. Regular Inspections: The Managing Owner or its Property Manager shall conduct inspections of the Shared Garage Maintenance Area s periodically to determine the useful life of the common HVAC and fire pump systems in the Garage to re-establish reasonable Garage Reserves for the repair and replacement of the same. 17 660\14\4184108.5
4.3. ALTERATIONS TO PARKING STRUCTURE AND GARAGE: Alterations to the Parking Structure may be made only with the prior written approval of the Managing Owner and any other Owner whose portion of the Parking Structure (including the structural integrity thereof or access thereto) would be impacted by such alterations, which approval shall not be unreasonably withheld or delayed. Any such alterations to the Parking Structure shall be undertaken, in any event, in strict compliance with the applicable provisions of the Ground Leases, and each of them. Each Owner may, without approval of the Managing Owner and the Residential Property Owner, alter the interior of the Garage located on its own Property or Residential Parking Encroachment area, including striping, branding, directional signage and other interior improvements, and each Owner shall be allowed to install, operate and maintain within its own Property and/or Residential Parking Encroachment Area, without prior approval of the other Owner, electric vehicle charging stations, vehicle stacking systems, and other improvements and fixtures relating to the parking and storage of vehicles, so long as the same does not adversely affect the structural components of the Parking Structure and otherwise in accordance with Section 3.1.7 hereof. The foregoing notwithstanding, the Owners acknowledge the importance of aesthetic continuity and the desire that the Garage Improvements support the value of the collective Properties and Improvements. To this end, the Owners agree to utilize a common program of materials specification for any alteration of the Garage, subject to City approval in its regulatory capacity.
4.4. SELF HELP MAINTENANCE REMEDIES:
4.4.1. Rights of Claiming Owner: In the event any Owner (“Claiming Owner”) in good faith believes that (i) any other Owner, including the Managing Owner with respect to Shared Garage Maintenance Areas (“Responsible Owner”) has failed in any material respect to comply with the Responsible Owner’s maintenance responsibilities under this Article 4 , and (ii) such failure to properly maintain the Garage and/or Shared Garage Maintenance Area s is impeding the use and enjoyment of the Claiming Owner’s Property and/or is causing or will cause damage or adversely affect the value or marketability of the Claiming Owner’s Property or Improvements, then such Claiming Owner may give thirty (30) days’ notice to the Responsible Owner that the applicable Garage or Shared Garage Maintenance Area is in need of maintenance or repair; provided, however, that in the event of an emergency, reasonable notice shall be given as the circumstances dictate. If the Responsible Owner or its Property Manager fails to perform the repair or maintenance deemed necessary by the Claiming Owner within such thirty (30) day period (or such shorter period in the event of an emergency which shall include the failure of the Main Entry Gate to properly operate), the Claiming Owner or its Property Manager, representatives or contractors shall have the right to enter upon Garage area or Shared Garage Maintenance Area in question for the sole purpose of performing such work, and the Claiming Owner may obtain reimbursement from the Responsible Owner for the Responsible Owner’s share of the cost thereof in accordance with Section 4.4.4, below.
4.4.2. Rights of Responding Owner: In the event the Responding Owner (including the Managing Owner if the claim involves Shared Garage Maintenance Area s) responds to the Claiming Owner within such thirty (30) day period and indicates its belief that no repair or maintenance work is necessary, or if the Owners cannot agree upon the nature and extent of repair or maintenance work necessary, then any Owner may submit the matter as a Dispute to ADR under Section 8.4 . Nothing herein shall prevent the Claiming Owner from 18 660\14\4184108.5
entering onto the Garage of the other Owner or, if applicable, the Shared Garage Maintenance Areas, after receipt of such notice of disagreement for the sole purpose of correcting, repairing or maintaining a dangerous or emergency situation, subject to an arbitrator’s final determination of whether such correction, repair or maintenance is necessary and whether reimbursement of the Claiming Owner is appropriate.
4.4.3. Licensed Contractors Only: Any repair, maintenance, and/or replacement initiated by a Claiming Owner pursuant to this Section 4.4 shall be performed by an independent, qualified and bonded contractor licensed to do business in California. Maintenance shall be performed with as little damage to Improvements as possible, and all such Improvements shall be restored to their same condition following the maintenance or repair work.
4.4.4. Contribution: Within thirty (30) days after receiving notice from the Claiming Owner performing or contracting the repair, maintenance, or replacement work, that such work has been undertak en under subparagraph 4.4.1, above, the other Owners shall remit and contribute their respective shares of the cost set forth in such notice. Disputes regarding an Owners’ share or the amount of contribution may, at the election of either Owner, be submitted to ADR under Section 8.4 and Exhibit D.
4.5. MECHANICS’ LIENS : If a notice of mechanic’s lien is filed against any Property for, or purporting to be for, labor or material alleged to have been furnished to or delivered for Improvements on such Property, the Owner of such Property shall immediately cause the lien to be discharged by payment, bond or otherwise. If another Owner, including the Managing Owner, is responsible for the existence of the lien, such other Owner shall, immediately upon demand, reimburse the Owner of the Property on which the lien has been filed for the costs of causing the lien to be removed or bonded, and shall indemnify, hold harmless and defend such Owner against any and all costs, expenses, claims and/or liability relating thereto, including but not limited to attorneys ’ fees and the cost of collection of such amounts from the Owner responsible for the existence of the lien. Discharge of a lien may be treated as a Shared Expense (subject to the provisions of section 5.1.5 hereof) if related to costs associated with maintenance, repair, replacement or upkeep of Shared Garage Maintenance Area s other than the Main Entry Gate.
ARTICLE 5
SHARED EXPENSES
5.1. COVENANT TO CONTRIBUTE TO SHARED EXPENSES:
5.1.1. In General: Subject to Section 5.1., each Owner agrees to contribute to and reimburse the Managing Owner for such Owner’s share of funds necessary to defray Shared Expenses. An Owner’s obligation to contribute toward Shared Expenses shall run with the land so that each successive Owner shall in turn become liable for such obligation. No Owner may waive or otherwise escape personal liability from such obligation by non -use of a Garage or by any other attempt to renounce rights in the Garage. No assumption of personal liability by a successor Owner or other Owner (including a contract purchaser under an installment contract) shall relieve an Owner from personal liability for its share of Shared Expenses arising during 19 660\14\4184108.5
such Owner’s ownership of a Property.
5.1.2. Negligence or Willful Misconduct: Maintenance or replacement costs made necessary by the negligence or willful misconduct of an Owner or its Tenants or Invitees shall not be a Shared Expense but shall be borne by that Owner or its insurance ; provided, however, any maintenance or replacement costs in the Shared Garage Maintenance Areas arising from damage caused by the vehicle of a tenant or invitee of an Owner shall not be the obligation solely of such Owner but shall be a Shared Expense in the absence of evidence to a reasonable certainty of the damage having been caused by the vehicle of such Owner’s tenant or invitee.
5.1.3. No Offsets: No offsets against any monetary obligation hereunder shall be permitted for any reason, including, without limitation, any claim that the Mana ging Owner is not properly discharging its duties.
5.1.4. Commencement of Shared Expense Obligation. No Owner shall be required to pay or contribute toward Shared Expenses until the Garage is completed and the earlier of the following dates (the “Shared Expense Commencement Date”): (i) the Residential Placed In Service Date, or (ii) the date the Residential Property Owner takes taken possession of the Garage Improvements located on the Residential Property pursuant to Section 3.1.8 . Until the Shared Expense Commencement Date, the Commercial Property Owners shall be responsible for cost of the maintenance of the Shared Garage Maintenance Areas , subject, however, to Section 5.1.2 . The Residential Property Owner’s obligation to contribute toward its share of Shared Expenses shall commence on the Shared Expense Commencement Date.
5.1.5. Allocation of Shared Expenses. The Owners’ responsibility for Shared Expenses shall be allocated as between the Residential Property Owner and the Commercial Property Owners as follows:
(a) Except in the case of an Extraordinary Expense for which contribution by the Residential Property Ground Lessee is required by Section 5.2.8, below, the Residential Ground Lessee’s responsibility for Shared Expenses shall be equal to the sum of (i) the Residential Fixed Contribution Amount as defined and determined under this Section
5.1.5(a), and (ii) the Residential Property Ground Lessee’s share of Variable Contribution Expenses as determined pursuant to subsection (d) . The Residential Property Ground L essee may at any time send the Managing Owner notice that the Residential Property Ground Lessee or its designee intend to apply for an allocation of federal and/or state low income housing tax credit in connection with the financing of the Residential Building and desires to establish the Residential Fixed Contribution Amount (a “ Tax Credit Application Notice ”). Upon the delivery of the Tax Credit Application Notice the Managing Owner and the Residential Property Ground Lessee shall work in good faith to establish a budget for the Shared Expenses and the Fixed Contribution Expenses. The “Residential Fixed Contribution Amount ” established following delivery of the Tax Credit Application Notice shall be equal to (___%) of the mutually agreeable budgeted Fixed Contribution Expenses. If the Managing Owner and the Residential Property Ground Lessee are unable to agree upon the Residential Fixed Contribution Amount after working in good faith for sixty (60) days after the delivery of a Tax Credit Application Notice, the matter will be submitted to ADR in accordance with Section 8.4 and Exhibit D. The Residential Fixed Contribution Amount for the calendar year in which the Residential Placed -In- 20 660\14\4184108.5
Service Date occurs shall be prorated to the Shared Expense Commencement Date. Within sixty (60) days following the Shared Expense Commencement Date , the Managing Owner and the Residential Property Ground Lessee shall jointly execute, notarize and record a supplement or amendment to this Agreement establishing the Residential Fixed Contribution Amount for that initial calendar year. Commencing with the first calendar year following establishment of the Residential Fixed Contribution Amount , the Residential Fixed Contribution Amount shall increase as of January 1 of each calendar year by two percent (2%) over the Residential Fixed Contribution Amount for the immediately preceding calendar year. Except as set forth in Section
5.2.8, below, the Commercial Property Owners shall be responsible for all Fixed Contribution Expenses that exceed the Residential Fixed Contribution Amount. (b) Except in the case of an Extraordinary Expense for which contribution by the Commercial Property Owner is required by Section 5.2.8, below, the Commercial Property Owner’s responsibility for Shared Expenses shall be equal to the sum of (i) the Fixed Contribution Expenses in excess of the Residential Fixed Contribution Amount , and (ii) the Commercial Owner’s Proportionate Share of Variable Contribution Expenses as determined pursuant to subsection (d).
(c) Subsections (a) and (b) notwithstanding, if the Residential Property is placed into use or service as other than affordable housing , all Shared Expenses shall be deemed Variable Contribution Expenses , to be budgeted and allocated as set forth in subsection (d). If the Residential Property Owner has taken possession of the Garage Improvements located on the Residential Property pursuant to Section 3.1.8, whether or not for affordable housing purposes, Residential Property Owner and Managing Owner shall work in good faith to establish a Shared Expense Budget in accordance with Article 5.
(d) All Variable Contribution Expenses shall be allocated to the Commercial Property Owners and the Residential Property Owner based on their respective Proportionate Shares, pursuant to the approved annual Shared Expense Budget for each year.
5.2. COLLECTION OF SHARED EXPENSES
5.2.1. Shared Expense Budgets. The Managing Owner or its Property Manager shall prepare a budget each year for Shared Expenses (an “Shared Expense Budget”) and shall deliver the same to the other Owner s within thirty (30) days prior to the beginning of each calendar year. Failure to deliver a Shared Expense Budget shall not relieve any Owner from the obligation to reimburse its share of Shared Expenses to the Managing Owner. The Shared Expense Budget shall identify and allocate Fixed Contribution Expenses and Variable Contribution Expenses consistent with this Agreement. At any point in a calendar year, if the Managing Owner or its Property Manager determines that its Shared Expense Budget for Shared Expenses should be adjusted, the Managing Owner or its Property Manager shall submit an updated Shared Expense Budget to other Owners for review and approval pursuant to section
5.2.2 hereof. The Managing Owner shall keep accurate books and records with respect to Shared Expenses. It shall use commercially reasonable efforts to hold Shared Expenses to a reasonable level consistent with the maintenance, repair and replacement costs of similar first -class multi- family and commercial office/retail projects in the San Mateo area . The Managing Owner shall not make any non -discretionary expenditure which materially exceeds the amount contemplated 21 660\14\4184108.5
for such expense in the most recently approved Shared Expense Budget without the prior written consent of the other Owners, not to be unreasonable withheld, conditioned or delayed.
5.2.2. Review of Shared Expense Budget. The Residential Property Owner shall have the right, within thirty (30) days following receipt of the Shared Expense Budget to review the Shared Expense Budget and send written notice to the Managing Owner of its approval or its disapproval of the Shared Expense Budget , provided that any disapproval shall set forth in reasonable detail the reasons for such disapproval and the changes required for approval (“Budget Disapproval Notice ”). Approval of the Shared Expense Budget shall not be unreasonably withheld, delayed or conditioned. If the Residential Property Owner has a reasonable objection to the Shared Expense Budget and delivers a Budget Disapproval Notice , then the Managing Owner shall , within ten (10) business days after receipt of the Budget Disapproval Notice, deliver to the Residential Property Owner either (i) a rejection of Budget Disapproval Notice, together with a reasonable explanation for such rejection, or (ii) a revised Shared Expense Budget addressing the objections in the Budget Disapproval Notice . The Residential Property Owner shall have ten (10) business days from receipt of the revised Shared Expense Budget to respond by written notice in the same manner as provided above with respect to the original Shared Expense Budget . The Residential Property Owner and the Managing Owner shall mutually cooperate in good faith to promptly resolve any disapproved items in a proposed Shared Expense Budget and generate a Shared Expense Budget reasonably acceptable to the Owners.
5.2.3. Resolution of Objections to Shared Expense Budget. The requirement of mutual cooperation in resolving D isputes regarding the Shared Expense Budget pursuant to Section 5.2.1 shall include, if necessary , instituting Dispute resolution procedures under Section
8.4. Until resolution of the Dispute, the Shared Expense Budget for the immediately preceding fiscal year shall continue to be used for the new calendar year , and payments shall be adjusted accordingly when the new Shared Expense Budget is established.
5.2.4. Payment of Budgeted Amounts: The Managing Owner shall reasonably estimate the amount of Shared Expenses, including Fixed Contribution Expenses and Variable Contribution Expenses as applicable , payable by each Owner based on the approved Shared Expense Budget . The Managing Owner shall bill the other Owners for their respective Proportionate Shares in equal amounts for the calendar year. The Owners shall pay the estimated payment, in advance, to the Managing Owner on the first day of each year, half year, calendar quarter or calendar month, as reasonably determined by the Managing Owne r. Payments by each Owner of its Proportionate Share of Shared Expense s shall be held in trust by the Managing Owner for the benefit of the Owners but may be deposited in the general property operating account or accounts of the Managing Owner. Such funds shall be used solely to fund the operation, management, maintenance and repair (including reasonable Garage Reserves) of the Shared Garage Maintenance Areas for which the Managing Owner is responsible.
5.2.5. Reconciliation: Within one hundred twenty (120) days after the close of each calendar year, the Managing Owner shall provide a written reconciliation to the Owners of the actual Variable Contribution Expenses incurred in the past calendar year and the budgeted Variable Contribution Expenses paid by the Owners for such year (the “ Reconciliation”). The difference between the budgeted Variable Contribution Expenses and the Variable Contribution 22 660\14\4184108.5
Expenses actually paid or incurred by each Managing Owner for the year shall be paid by the other Owners or credited to the other Owners , as appropriate, within thirty (30) days after delivery of the Reconciliation ; provided, however, that any reconciliation that includes an increase over estimated Variable Contribution Expenses shall be subject to the limitations set forth in Section 5.2.8. If requested in writing by an Owner, the Managing Owner shall provide invoices or other reasonable documentation of any Shared Expenses incurred with respect to the Shared Garage Maintenance Areas.
5.2.6. Audit Rights: If the Residential Property Owner disputes the amount set forth in any annual Reconciliation provided by a Managing Owner with respect to the Shared Expenses, the Residential Property Owner shall have the right, but not more than once annually, upon written notice given not later than sixty (6 0) days following receipt of such annual Reconciliation and upon the condition that the Residential Property Owner shall first deposit with the Managing Owner the full amount asserted by the Managing Owner to be the Residential Property Owner’s share of Shared Expenses, to cause the Managing Owner’s books and records with respect to Shared Expenses for such calendar year to be audited by an independent certified public accountant (who are not compensated on a contingency basis) selected by the Residential Property Owner and subject to the Managing Owner’s reasonable right of approval. If, as a result of the audit, the Residential Property Owner becomes entitled to a refund or credit in an amount greater than five percent (5%) of the Residential Property Owner ’s share of the Shared Expenses charged by the Managing Owner as stated in the annual Reconciliation, the reasonable cost of the audit shall be borne by the Managing Owner (but in an amount not to exceed $2,500); otherwise the cost of such audit shall be paid by the Residential Property Owner . If the Residential Property Owner does not request an audit in accordance with the provisions of this Section within sixty (60) days after receipt of the annual Reconciliation, the Reconciliation shall be final and binding for all purposes. If a timely objection cannot be resolved, the Dispute may be submitted by either Party to ADR in accordance with Section 8.4 and Exhibit D.
5.2.7. Unanticipated and Extraordinary Expenses:
(a) Unanticipated Shared Expense s that are not within the Shared Expense Budget may arise due to emergency, casualty, unusually extreme weather, unanticipated capital improvements, or other causes that could not be reasonably anticipated at the time the Shared Expense Budget was prepared for the Shared Garage Maintenance Area s (“Unanticipated Costs”). Notwithstanding the foregoing, Unanticipated Costs shall not include (i) increased utility usage resulting from unusually extreme weather, changes in law or other factors, (ii) increased maintenance and/or operating costs due to changes in law, rule and/or regulation, and/or (iii) costs arising from the actions or inactions of the Managing Owner. (b) The Managing Owner shall give the other Owners at least ten (10) days prior written notice (or such shorter period as is reasonable in an emergency) before expending any Unanticipated Cost along with reasonabl e justification thereof. Except as set forth below, t he Managing Owner may seek reimbursement from the other Owners for their respective Proportionate Share s of Unanticipated Cost s, subject to subparagraph (c), below .
Payment of any invoice for Unanticipated Costs shall be made by each Owner within thirty (30) days after receipt.
23 660\14\4184108.5
(c) The foregoing notwithstanding, except for Extraordinary Expenses, without the prior written consent of the Residential Property Owner, which consent shall not be unreasonably withheld or delayed, the Managing Owner may not seek reimbursement for an Unanticipated Cost that would exceed five percent (5%) of the Shared Expense Budget for the calendar year in which the Unanticipated Cost is incurred. “Extraordinary Expenses” include:
(i) an Unanticipated Cost required by an order of a court not arising from (i) a defect in the original construction and/or design of the Garage, or (ii) the negligence or willful misconduct of Managing Owner in connection with its maintenance responsibilities under this Agreement, or (iii) the failure of the Garage to comply with a law which was in effect as of the Residential Placed-In-Service Date; (ii) an Unanticipated Cost made necessary by the negligent act or omission of the Residential Property Owner, its Tenants or Invitees (other than arising from damage allegedly caused by the vehicle of a Tenant or Invitee of the Residential Property Owner unless there exists evidence to a reasonable certainty thereof); and (iii) an emergency Unanticipated Cost incurred to with regard to the Shared Garage Maintenance Area s in order to address or otherwise correct an imminent danger or threat to personal or public safety , other than arising from (i) a defect in the original construction and/or design of the Garage, (ii) the negligence or willful misconduct of Managing Owner in connection with its maintenance responsibilities under this Agreement , or (iii) the failure of the Garage to comply with a law which was in effect as of the Residential Placed -In- Service Date.
5.2.8. Garage Reserves: The Managing Owner may establish and maintain one or more Garage Reserve accounts for the payment of replacement costs as contemplate in this Agreement; provided that Garage Reserves shall be a Fixed Contribution Expense included in the Residential Fixed Contribution Amount.
5.3. ENFORCEMENT OF MONETARY OBLIGATIONS : Any installment of a reimbursement obligation under this Article 5 is delinquent if not paid within thirty (30) days of the due date established by the Managing Owner in accordance with the terms of this Agreement.
All monetary obligations between the Parties under this Agreement (each a “ Monetary Obligation”), shall incur Additional Charges, as defined herein, which shall commence and accrue from the date of the delinquency until paid. Each Owner (“ Delinquent Owner”) vests in the each other Owner that is not themselves delinquent in the payment of Monetary Obligations hereunder (“ Non-Defaulting Owner”) the right and power to bring all actions at law and in equity and exercise such other remedies provided herein against the Delinquent Owner for the collection of Monetary Obligations and Additional Charges. Except for the right of an Owner to institute ADR with respect to any Dispute concerning (A) an Owners’ Proportionate Share or (B) the underlying enforceability of the Monetary Obligation , ADR shall not apply to collection of Monetary Obligations, and the Non-Defaulting Owner may enforce a Monetary Obligation of the Delinquent Owner in any manner provided by law or in equity, including without limitation any or all of the following procedures:
5.3.1. Enforcement by Suit: By commencement and maintenance of a suit at law 24 660\14\4184108.5
or equity against any Delinquent Owner to enforce the Monetary Obligation. S uch suit may be maintained by the Non -Defaulting Owner or the Managing Owner . Any judgment rendered in any such action may include the amount of the delinquency, interest thereon at the maximum legal rate per annum from the date of the delinquency, court costs and reasonable attorneys’ fees in such amount as the court may adjudge against the Delinquent Owner.
5.3.2. Enforcement by Lien:
(a) With respect to any delinquent Monetary Obligation in excess of the statutory limit for small claims actions in California, the Non-Defaulting Owner or Managing Owner may file and record a notice of claim of lien (“ Notice of Claim of Lien”) against the Property of the Delinquent Owner in the office of the County Recorder of the County (except that a Notice of Claim of Lien may only be recorded against the leasehold interest and fee-owned improvements of Residential Property Ground Lessee and not the City’s fee interest ), and the amount of delinquency, plus any Additional Charges, shall be a lien on the Delinquent Owner’s Property and the Improvements located thereon prior and superior to all other liens except (a) all taxes, bonds, assessments and other levies which, by law, would be superior thereto, (b) the fee interest of the Ground Lessor of such Property, and (c) the lien or charge of any Mortgage of record made in good faith and for value. Any Notice of Claim of Lien prepared with respect to any Monetary Obligation levied pursuant to this Agreement shall be a statement under oath and shall describe the amount of the delinquen cy and Additional Charges, the date on which demand for payment was made, a description of the Delinquent Owner ’s Property, the name of the Delinquent Owner, the name and address of the claimant, and a statement that such Monetary Obligation is due and owing under this Agreement. Such Notice of Claim of Lien shall be executed and acknowledged by a person having authority to execute deeds on behalf of the claimant. If the delinquent Monetary Obligation (including Additional Charges ) is paid or otherwise satisfied in full, the Owner recording such notice shall record a notice of satisfaction and release of lien.
(b) The Non-Defaulting Owner or Managing Owner recording such Notice of Claim of Lien may enforce such lien established hereunder in any manner permitted by law, including by filing an action for judicial foreclosure or by recording a notice of default in the form described in the California Civil Code to commence a nonjudicial foreclosure under power of sale. Any non -judicial foreclosure under power of sale shall be conducted in accordance with the requirements of California Civil Code that are applicable to nonjudicial foreclosures of Mortgages, under power of sale, provided that the Owner recording the Notice of Claim of Lien may appoint its attorney, any officer or director, or any title insurance company authorized to do business in California to conduct the sale in the role of trustee. Any Owner, including the Owner recording the Notice of Claim of Lien, may bid on the Property at the sale.
5.3.3. Waiver of One Form of Action Restriction: No Non-Defaulting Owner or Managing Owner shall be limited to any single form of action in enforcing and collecting Monetary Obligations. Each Non-Defaulting Owner or Managing Owner may commence and maintain a lawsuit directly on the debt without waiving its right to enforce its lien against the Owner’s Property for the delinquent Monetary Obligation.
5.3.4. Attorneys Fees: In any action instituted by any Non-Defaulting Owner or 25 660\14\4184108.5
Managing Owner to collect delinquent Monetary Obligation s, the prevailing Owner shall be entitled to Additional Charges, including reasonable attorneys’ fees. The foregoing notwithstanding, in any action in which the City is a named party , attorney fees in total amount not exceeding $5,000 shall be recoverable as costs (by the filing of a cost bill) by the prevailing party in any action or actions to enforce the provisions of this Agreement. The said $5,000 limit is the total of attorney fees recoverable whether in the trial court, appellate court, or otherwise, and regardless of the number of attorneys, trials, appeals, or actions. It is the intent of this Agreement that, in connection with any action or actions between the City and another Party to enforce the provisions of this Agreement , neither the City nor such other Party shall have to pay the other more than $5,000 for attorney fees and costs arising out of such action or actions.
5.3.5. Statement of Lien: Within ten (10) days of a request from an Owner liable for a reimbursement obligation under this Article 5, the Managing Owner shall furnish to that Owner a signed certificate stating the amount of any Monetary Obligation secured by the lien upon such Owner’s Property. A charge, not to exceed the reasonable costs of preparation and reproduction of the certificate, may be levied by the Managing Owner for the issuance of such certificate. The information contained in the certificate shall be presumed conclusively to be correct in favor of anyone who relies upon it in good faith.
5.3.6. Additional Charges: In addition to any other amounts due or any other relief or remedy obtained against an Owner who has failed to comply with a Monetary Obligation under this Agreement, each Delinquent Owner agrees to pay such additional costs, fees, charges and expenditures (“Additional Charges”) as the Managing Owner or other Owners may incur or levy in the process of collecting from the Delinquent Owner . All Additional Charges shall be included in any judgment in any suit or action brought to enforce collection of delinquent sums. Additional Charges shall include, but not be limited to, the following:
(a) Attorneys’ Fees : Subject to section 5.3.4, r easonable attorneys’ fees and costs incurred in the event an attorney(s) is employed to collect any amounts due, whether by suit or otherwise;
(b) Costs of Suit: Costs of suit and court costs incurred as are allowed by the court;
(c) Interest: Interest on all sums not paid when due, including reasonable costs of collection and reasonable attorneys’ fees, in the amount of the lesser of ten percent (10%) per annum or the highest interest rate as may, from time to time, be allowed by law, commencing thirty (30) days after the monetary obligation becomes due; and (d) Other: Any such other additional costs that the Manag ing Owner or any other Owner may incur in the process of collecting delinquent sums.
5.3.7. Limitation of Liability: Notwithstanding anything to the contrary herein, commencing on the Residential Placed in Service Date, and so long as the Residential Property Ground Lease remains in effect or the City otherwise does not have possession of the Residential Property, (i) the City shall not be liable for any defaults or claims related to Shared Expenses , and (ii) Residential Property Ground Lessee shall indemnify City against any and all expenses, 26 660\14\4184108.5
judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any claims and proceeding related to Shared Expenses.
ARTICLE 6
INSURANCE AND INDEMNITY
6.1. CONSTRUCTION PERIOD INSURANCE . During the course of any construction on the Properties, the party engaging in that construction shall at all times procure and maintain or cause to be procured and maintained on its Property and require and verify that its contractor and all subcontractors maintain insurance meeting all requirements stated below:
6.1.1. Builders Risk: Builder’s Risk coverage in an amount at least equal to the amount of the completed value of the project and no coinsurance penalty, at a minimum.
6.1.2. Liability Insurance: Single limit comprehensive general liability insurance comparable to that required by Section 6.2.1 . Construction project exposures, including but not limited to hard cost and construction type should be considered in determining the appropriate limits of insurance. Limits shall be no less than $5,000,000 per occurrence. If a general aggregate limit applies the general aggregate limit shall be twice the required occurrence limit.
Engaging party must ensure contractors procure and maintain the insurance as required by the respective construction agreements.
6.1.3. Automobile Liability: Automobile liability will be on Insurance Services Office Form CA 0001 covering Code 1 (any auto), with limits no less than $2,000,000 per accident for bodily injury and property damage.
6.1.4. Workers Compensation: Workers Compensation Insurance as required by the State of California, with statutory limits, and employer's liability insurance with a limit of no less than $1,000,000 per accident for bodily injury or disease.
6.1.5. Pollution Legal Liability: Pollution Legal Liability with limits no less than $2,000,000 per occurrence or claim, and $4,000,000 policy aggregate. If the service involves lead-based paint or asbestos identification/remediation, the Pollution Liability policy shall not contain lead-based paint or asbestos exclusions. If the service involves mold identification/remediation the Pollution policy shall not contain a mold exclusion, and the definition of Pollution shall include microbial matter, including mold. The party engaging in construction shall require the contractor constructing the Improvements to indemnify the City and name the City as an additional insured on the pollution policy.
6.2. POST CONSTRUCTION INSURANCE BY INDIVIDUAL OWNERS: Each Owner shall carry such insurance as may be required under its respective Ground Lease , as dictated by its respective Mortgagees , and as required by this Article 6 . Without limiting the foregoing, each Owner shall, at a minimum, procure and maintain at all times (or as otherwise indicated below) insurance, in the amounts and with the minimum coverage requirements, set 27 660\14\4184108.5
forth in this Section 6.2. During the term of the Commercial Lot 1 Ground Lease, Commercial Lot 1 Owner, as the ground lessee thereunder, shall name the City as an additional insured on the insurance policies it must obtain pursuant to the Commercial Lot 1 Ground Lease .
Notwithstanding anything to the contrary set forth herein, Residential Property Owner shall have no obligation to maintain any insurance set forth herein prior to commencement of construction of Improvements by the Residential Property Owner unless otherwise required pursuant to the Residential Property Ground Lease.
6.2.1. Liability Insurance: Each Owner shall obtain and keep in force at all times while this Agreement remains in effect, at its sole cost and expense, commercial general liability insurance , in the broadest form available, insuring against any and all claims and liabilities arising out of use of the Garage by the insuring Owner and its tenants and Invitees.
The minimum limit of coverage of such policy shall be in the amount of not less than Three Million Dollars ($3,000,000.00) per occurrence and Six Million Dollars ($6,000,000.00) annual aggregate, or such other greater coverage amounts as may be required by an Owner’s lender(s).
The required liability limits may be satisfied through a combination of commercial general liability and umbrella/excess liability policies. No policy maintained by an Owner under this Section shall be cancelable or subject to reduction of coverage without thirty (30) days prior written notice to the other Owner s (except for nonpayment which shall require not less than ten (10) days ’ notice). Such policies of insurance shall be issued as p rimary policies and not contributing with or in excess of coverage that the other Owner s may carry. Each Owner agrees that provisions of this Section as to maintenance of insurance shall not be construed as limiting in any way the extent to which such Owner may be held responsible for the indemnification of any other Owner or Owners under Section 6.5, below, and such insurance policies shall not exclude claims under such contractual indemnity from coverage.
6.2.2. Property Insurance: Each Owner shall carry property insurance covering all fixtures, equipment and internal portions of the Garage Improvements within such Owner’s Property, in accordance with its respective Ground Lease and the requirements of its applicable Mortgagees, or in the absence of a Ground Lease, to the same standards as set forth in the Ground Leases in effect as of the commencement of this Agreement ; provided, however, that the obligation of the Commercial Property Owners to maintain property insurance on the Commercial Property Improvements may be assigned to and assumed by the Managing Owner.
Without limiting the foregoing, such property insurance meet the following minimum requirements:
(a) The policy shall be all risk form, written on the broadest available special causes of loss form, on a “Replacement Cost " (as defined below) basis in the full amount of the full replacement cost (without deduction for depreciation) of the Improvements on the Owner’s Property with no coinsurance penalty provision. (b) The policy shall include a Full Replacement Cost endorsement and no coinsurance penalty provision.
(c) The policy shall include coverage or endorsements for increased construction costs due to changes in building codes, regulations and similar Laws. 28 660\14\4184108.5
(d) The policy shall otherwise meet the requirements of Section 6.4, below.
6.2.3. Workers’ Compensation Insurance: Each Owner shall carry workers compensation insurance to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof, which workers’ compensation insurance shall cover all persons employed by the Owner performing the development work requiring use of the easement areas granted or reserved in this Agreement , and employer's liability with limits not less than One Million Dollars ($1,000,000).
6.2.4. Automobile Liability: Insurance Services Office Form CA 0001 covering Code 1 (any auto), with limits no less than $1,000,000 per accident for bodily injury and property damage.
6.2.5. Pollution Legal Liability: Each Owner shall carry pollution legal liability no less than $2,000,000 per occurrence or claim and $4,000,000 policy aggregate. If the service involves lead-based paint or asbestos identification/remediation, the Pollution Liability policy shall not contain lead-based paint or asbestos exclusions. If the service involves mold identification/remediation the Pollution policy shall not contain a mold exclusion, and the definition of Pollution shall include microbial matter, including mold.
6.3. INSURANCE BY MANAGING OWNER : Without limiting the requirements of Section 6.2, the Managing Owner shall at all times procure and maintain a policy or policies of all risk property insurance for all insurable portions of the completed Parking Structure, including fixtures and building service equipment that are part of the Shared Garage Maintenance Areas, if any, against loss or damage by fire or other casualty, in an amount equal to one hundred percent (100%) of the current full replacement cost with no coinsurance penalty provision (without respect to depreciation) of the Parking Structure. A replacement cost endorsement shall be part of the policy. The policy shall meet the same requirements as for Owners’ property policies under Section 6.2.2.
6.4. MINIMUM INSURANCE REQUIREMENTS. All insurance policies required hereunder shall meet the following minimum standards, where applicable:
6.4.1. Underwriter: All policies shall be written with a company legally qualified to do business in the State of California and holding a rating of A -VIII or better in the financial category as established by Best’s Insurance Reports, if such a company is available, or, if not available, the best rating possible or its equivalent.
6.4.2. Named and Additional Insured: Such policy or policies shall be for the benefit of Owner and its Mortgagees, as their interests may appear, and shall name the other Owners and their Mortgagees, and the City, as additional insureds. The insurance policies are to contain, or be endorsed to contain, the following provision:
The City, its elected and appointed officials, employees, and agents are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Owner including materials, parts, or equipment 29 660\14\4184108.5
furnished in connection with such work or operations and automobiles owned, leased, hired, or borrowed by or on behalf of the Developer. General liability coverage can be provided in the form of an endorsement to the Developer’s insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
6.4.4. Certificate of Insurance: Provision shall be made for the issuance of a certificate of insurance to the other Owners and their Mortgagees , and the City , which shall specify the amount of such insurance maintained pursuant hereto.
6.4.5. Deductibles: The deductible on any insurance may not exceed $250,000 if available at commercially reasonable rates.
6.4.6. Loss Payee Endorsement: All property casualty policies must include a lender’s loss payable endorsement (CP 1218 or equivalent) naming the Mortgagee of the insuring Owner’s Property as mortgagee or lender loss payee and naming the City . Liabilities policies must name the Mortgagee of the applicable Property as an additional insured. Notice of Cancellation: All policies must provide that at least thirty (30) days advance notice shall be given to the other Owners and their Mortgagee , and the City , as applicable, of any cancellation, non-renewal or modification.
6.4.8. Broader Coverage: If an Owner maintains broader coverage and/or higher limits than the minimums shown above, the other Owners and City shall be entitled to the broader coverage and/or higher limits maintained by that Owner. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the other Owners and City.
6.4.9. Claims made Coverage: If any coverage required is written on a claims- made coverage form, the following is required:
(a) The retroactive date must be shown, and this date must be before the execution date of the contract or beginning of the contract work. (b) Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract work (c) If coverage is cancelled or non -renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective, or stat of work date, the Owner must purchase extended reporting period coverage for a minimum of five (5) years after completion of contract work,
(d) A copy of the claims requirements must be submitted to the other Owner and the City for review.
6.5. RECIPROCAL INDEMNITIES:
Each Owner (as “Indemnitor”) shall defend, indemnify, protect, save and hold harmless each other Owner and its respective managers, officers, members, directors, shareholders, 30 660\14\4184108.5
employees, agents, Property Managers and attorneys, and each of their respective successors and assigns (individually, an “Indemnitee” or collectively, the “Indemnitees”) from and against any and all claims, liability, damages and costs (including reasonable attorneys’ fees and expenses) to the extent arising from personal injury, death or property damage and occurring from the exercise by the Indemnitor or any of its tenants or Invitees of the easement and license rights granted under this Ag reement, or the breach of any provision of this Agreement by such Indemnitor, except to the extent arising from the gross negligence or willful misconduct of the Indemnitee.
Notwithstanding the foregoing, Commercial Lot 1 Owner, Commercial Lot 5 Owner, Commercial Lot 6 Owner, Managing Owner, and , from and after the Residential Property Ground Lease Possession Date, Residential Property Owner (each an “Indemnifying Party”) each (for itself and not on behalf of the other Developer) agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the City, its elected and appointed officials, employees, and agents, from all suits, actions, claims, causes of action, administrative proceeding, arbitrations, enforcement actions, costs, demands, judgments and liens to the extent arising out of such Indemnifying Party's performance or non -performance under this Agreement or any other agreement executed by such Indemnifying Party pursuant to this Agreement, or to the extent arising out of acts or omissions of any of such Indemnifying Party's contractors, subcontractors, or persons claiming under any of the Indemnifying Party’s contractors or subcontractors, except to the extent directly caused by the City's or its elected and appointed officials, employees, and agents willful misconduct or gross negligence. The provisions of this Section shall survive expiration of the term or other termination of this Agreement and shall remain in full force and effect for claims based on events occurring prior to the expiration or termination of this Agreement.
6.6. DAMAGE AND DESTRUCTION OF GARAGE IMPROVEMENTS:
6.6.1. Agreement to Restore: If fire or other casualty damage extends to any portion of the Garage Improvements, the Owner of the damaged portion of the Parking Structure or other Improvements on the Garage Level within such Owner’s Property, subject to the terms of any applicable Ground Lease and the Mortgages encumbering such Owner’s Property, shall be responsible to restore and rebuild the damaged Improvements located within such portion of the Garage; provided, however, that (i) if the Managing Owner is the primary insured party with respect to the Parking Structure property insurance, the provisions of Section 6. 6.3 shall apply , and (ii) provided, further, that the Residential Property Owner shall have no obligation to restore damage prior to the Parking Structure or Garage Improvements prior to issuance of a building permit for, and commencement of construction of, the Residential Building . The term “restore” shall mean repairing, rebuilding or reconstructing damaged Improvements, including Shared Garage Maintenance Areas, to substantially the same condition in which they existed prior to fire or other casualty damage, with each Improvement, to the extent possible, having the same vertical and horizontal boundaries, appearance and location as before, or with such changes or alterations as may be approved by the Owners jointly and as are in conformity with the provisions of the Ground Leases relating to changes or alterations. Lack of funds shall not be deemed a reasonable excuse for either Owner’s failure to commence or complete the rebuilding, except as otherwise may be allowed under the Ground Leases or under the Mortgage or Mortgages encumbering the damaged Property.
31 660\14\4184108.5
6.6.2. Waiver of Election Not to Restore: Each Owner and Commercial Lot 1 Fee Owner acknowledges that the Parking Structure and Garage are critical to the structural and operational viability of the Buildings on the Commercial Property and the Residential Property .
If fire or other casualty damage extends to any portion of the Parking Structure or other Garage Level Improvements, e ach Owner hereby waives, and covenants and agrees that it shall not invoke, any right not to repair and restore the Parking Structure and Garage Level Improvements, unless all Owners, their Mortgagees and Ground Lessors have in fact jointly elected in writing not to restore or repair the damaged or destroyed Improvements on the all of the Properties. This Section 6.6 shall be binding upon the fee interests in the Properties, however acquired, and shall not be subordinated to any Mortgage.
6.6.3. Restoration by Managing Owner.
(a) If the Managing Owner is the primary insured party under the property insurance policy covering the entire Garage and Parking Structure, then in the event of any damage or destruction to the Garage or Parking Structure other than by ordinary wear and tear, whether resulting from an insured or uninsured casualty, the Managing Member shall promptly cause such to be Restored as nearly as may be possible to its condition immediately prior to such damage or destruction. The Managing Owner shall obtain firm bids from two (2) or more responsible contractors to rebuild such damaged or destroyed portion of the Parking Structure or Garage as nearly as possible to its condition immediately prior to such damage or destruction and shall accept the bid it considers most favorable. If a bid is accepted, the Managing Member shall levy a reconstruction assessment (“Reconstruction Assessment”) on all of the Owners to make up any deficiencies between the total insurance proceeds and the contract price for such repair and rebuilding (the “Reconstruction Shortfall”), such reconstruction assessment to be treated as a recoverable Extraordinary Expense under Section 5.2.8. The allocation of the Reconstruction Assessment shall be based on Proportionate Shares. (b) Notwithstanding the foregoing, if the loss, damage or destruction was caused by the intentional or negligent act or failure to act of any Owner its invitees, the cost of such repair shall be the responsibility of such Owner (or its liability insurance carrier) to the extent such loss, damage or destruction is not covered by the property insurance. The insurance proceeds available to the Owner responsible for the damage shall be paid to the Managing Owner and held for the purpose of the Restoration of the Parking Structure and Garage. All insurance monies recovered on account of such damage or destruction, less the cost, if any, of such recovery, shall be applied to the payment of the cost of such Restoration and shall be paid out from time to time by the Managing Owner as such work progresses upon the written certification of the architect or engineer if applicable, or the contractor in charge of such work, stating that the sum requested is justly due to those persons rendering services or furnishing materials in connection with such work.
(c) In the event that the Reconstruction Shortfall exceeds fifty percent (50%) of the budgeted amount of Shared Maintenance Expenses for such Fiscal Year, the Reconstruction Assessment shall not be levied without the Consent of the Owners. If such Reconstruction Assessment is not so approved or if no action is taken with respect to such Reconstruction Assessment within sixty (60) days following the date of such damage or destruction, and in the event either (i) the Garage and/or the Properties cannot be safely occupied 32 660\14\4184108.5
or operated without Restoration of the Parking Structure, or (ii) the Properties or Parking Structure, or any portion thereof, shall be taken by eminent domain by reason of such damage, this Declaration shall terminate under Section 10.1, in which event the Improvements shall be demolished (unless acquired or owned by a single common Owner). In the event of a joint sale of the Properties in eminent domain or under threat of eminent domain due to damage or destruction of the Parking Structure, together with any insurance proceeds or condemnation proceeds received as a result of such damage, destruction or condemnation (collectively, the “Proceeds”), shall be distributed to the Owners in accordance with the condemnation agreement or order, or if such Proceeds are not allocated by the by condemnation agreement or order, then based on the fair market values of the Properties at the time of the condemnation agreement or order.
ARTICLE 7
INTENTIONALLY DELETED
ARTICLE 8
AMENDMENTS, DEFAULT, AND ENFORCEMENT
8.1. AMENDMENTS: This Agreement may be amended only with the written consent of all Owners. Any amendment shall be effective upon the recordation in the Official Records of the County of an instrument setting forth the terms of the amendment, duly executed by all of the parties required for approval of such amendment as set forth herein.
8.2. EVENTS OF DEFAULT: An Owner will be in default under this Agreement if it:
(a) fails to repay the full amount of any Monetary Obligation under this Agreement when due, subject to the delivery to the defaulting Owner of ten (10) days’ notice that such Monetary Obligation has become delinquent; or (b) substantially and materially fails to perform any of its other obligations or covenants pursuant to this Agreement and such failure continues for a period of thirty (30) days after notice of such failure is given by any other Owner; provided, however, that if such failure is of such a nature that it cannot with due diligence be cured within said time period, said failure shall not be regarded as a default hereunder if said Owner shall have commenced the curing of such failure within said thirty (30) day time period and shall thereafter proceed diligently to complete the curing of such failure within one hundred twenty (120) days; and the time within which such failure may be cured shall be extended for such period as may be necessary to complete the same; or
(c) institutes proceedings to be adjudicated a voluntary bankrupt, or consents to the filing of a bankruptcy proceeding against it or files a petition or answer of consent seeking reorganization under the Bankruptcy Code of the United States (11 U.S.C. §101, et seq.) or any similar applicable federal or state law and such decree shall have continued undischarged or unstayed for a period of ninety (90) days; or 33 660\14\4184108.5
(d) Shall have made an assignment for the benefit of creditors, shall have admitted in writing its inability to pay its debts general and concurrently as they become due, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of all or substantially all of its property.
8.3. REMEDIES FOR DEFAULT:
8.3.1. Failure to Pay Monetary Obligations: For all monetary obligations between the Parties under this Agreement, remedies are set forth in Section 5.3.
8.3.2. Self-Help. For events of default relating to the Managing Owner’s failure to maintain Shared Garage Maintenance Areas, the rights and remedies set forth in Section 4.4 shall apply.
8.3.3. Other Rights of Enforcement: Subject to the ADR requirements under Exhibit D, any Owner shall have the power to enforce the other provisions of this Agreement in any manner provided by law or in equity and in any manner provided in this Agreement, including but not limited to injunctive and other equitable relief. Notwithstanding anything to the contrary contained in this Agreement, no Owner shall have the power to cause a forfeiture or abridgment of another Owner’s easement rights as set forth in this Agreement.
8.4. ALTERNATIVE DISPUTE RESOLUTION:
8.4.1. Disputes: It is the desire and intention of the Parties to agree upon a mechanism and procedure under which any claim, controversy, breach or dispute arising out of this Agreement, including, without limitation, the interpretation of any term or provision of a this Agreement, or any claim, controversy, breach or dispute arising out of the work, services or obligations performed under this Agreement (individually, referred to as a “ Dispute”, and collectively referred to as “ Disputes”) will be resolved in a prompt and expeditious manner.
Accordingly, any and all such Disputes, except (i) actions for the collection on Monetary Obligations as set forth in Section 5.3 of the Agreement, and (ii) Disputes involving the City, shall be subject to the ADR procedures set forth Exhibit D, the terms of which are incorporated herein by this reference. Disputes involving the City may be resolved through the mediation procedures set forth in Exhibit D, but not the arbitration procedures.
8.4.2. Waiver of Right to Jury Trial: BY SIGNING THIS AGREEMENT, OR
BY ACCEPTING DEED, GROUND LEASEHOLD OR OTHER INTEREST IN THE
PROPERTIES OR ANY PORTION THEREOF, EACH OWNER , EXCEPT FOR THE CITY,
AGREES TO HAVE ANY AND ALL DISPUTES DECIDED BY ARBITRATION IN
ACCORDANCE WITH THE CALIFORNIA ARBITRATION ACT, AND EACH OWNER
UNDERSTANDS AND ACKNOWLEDGES THAT IT IS GIVING UP ANY RIGHTS IT MIGHT POSSESS TO HAVE THE DISPUTE RESOLVED BY A JURY TRIAL.
8.5. REMEDIES CUMULATIVE : Each remedy provided by this Agreement is cumulative and not exclusive.
8.6. NONWAIVER: The failure to enforce the provis ions of any covenant, condition or restriction contained in this Agreement shall not constitute a waiver of any right to enforce 34 660\14\4184108.5
any such provisions or any other provisions of this Agreement.
8.7. ESTOPPEL CERTIFICATES : Each Owner (“Providing Owner”), within twenty (20) days of its receipt of a written request from any other Owner or any Mortgagee (“Requesting Owner”) shall from time to time provide the Requesting Owner, a certificate binding upon such Providing Owner stating: (a) to such Providing Owner’s knowledge, whether any Owner to this Agreement is in default or violation of this Agreement and if so identifying such default or violation; (b) that this Agreement is in full force and effect and identifying any amendments to the Agreement as of the date of such certificate; and (c) that there is no current outstanding amount owed by such Providing Owner, or to the best of such Providing Owner’s knowledge, owed from any other Owner pursuant to the terms of this Agreement (except as otherwise set forth in the certificate).
ARTICLE 9
MORTGAGEES AND GROUND LESSOR
9.1. GROUND LESSOR AS PARTY : Any Ground Lessor who executes this Agreement as a Party, including (a) the Commercial Lot 1 Fee Owner, and (b) the City (from and after commencement of the Residential Property Ground Lease ), does so solely for the purpose of consenting to and joining in the grant and reservation of various easements established by this Agreement and for other purposes as set forth in this Agreement specifically referencing such Ground Lessor as an obligor. The foregoing notwithstanding, the fee interests of any such Ground Lessor shall be subject and subordinate to the rights, obligations, easements, covenants and restrictions set forth in the Agreement, subject to the Ground Lessor protections set forth in this Article 9 and elsewhere in this Agreement.
9.2. MORTGAGEE/GROUND LESSOR RIGHTS AND PROTECTIONS:
9.2.1. Enforcement of Defaults and Liens: No breach of any covenant and/or restriction, or the enforcement o f any lien provision , contained in this Agreement shall render invalid the lien of any Mortgage made in good faith and for value. Subject to 5.3.6, above, all of the covenants, conditions and restrictions herein contained shall be binding upon and effective against any Owner whose title is derived through termination of a Ground Lease, or by foreclosure, trustee sale, deed in lieu thereof, or otherwise under a Mortgage.
9.2.2. Obligations of Mortgagees; Subordination of Lien:
(a) Nothing contained in this Agreement shall require any Mortgagee to cure any default of a Party hereunder prior to its acquisition of title to a Property pursuant to a foreclosure of its Mortgage or trustee sale thereunder. Upon acquisition of title to a Property by foreclosure or power of sale, such Mortgagee or the purchaser or grantee, as applicable, shall only be liable and responsible for defaults first arising after the date of such acquisition, and neither any Mortgagee nor successor thereof shall be liable for any damages, costs, liabilities or expenses, and such Party’s Property shall not be subject to a lien under this Agreement for any amounts due hereunder, based upon the actions, defaults or violations taken or suffered by any Owner hereunder prior to the date of such foreclosure or trustee sale. 35 660\14\4184108.5
(b) Notwithstanding any provision to the contrary, the liens for Monetary Obligations created by this Agreement shall be subject and subordinate to and shall not affect the Ground Leases or the rights of the holder of any Mortgage made in good faith and for value. Upon termination of a Ground Lease or the foreclosure of any Mortgage on a Property, any lien for Monetary Obligation under this Agreement which became due prior to such Ground Lease termination or Mortgage foreclosure shall be extinguished; provided, however, that after such termination or foreclosure there shall be a lien on the interest of the fee title holder (other than the City or Redevelopment Agency) or purchaser at the foreclosure sale to secure all future Monetary Obligation arising under this Agreement after the date of such Ground Lease termination or foreclosure sale, which lien shall have the same effect and shall be enforced in the same manner as provided herein. For purposes of this Subsection, a Mortgage may be given in good faith or for value even though the Mortgagee has constructive or actual knowledge of the lien provisions of this Agreement.
9.3. RESTRICTIONS ON AMENDMENTS TO AGREEMENT:
Notwithstanding any provision to the contrary contained elsewhere herein, without the prior written consent of the Mortgagees and the Ground Lessor, which consent shall be exercised in good faith and in a timely manner, this Agreement may not be amended so as to change any provision which, by its terms, is specifically for the benefit of Mortgagees or a Ground Lessor, respectively, or specifically confers rights on Mortgagees or any Ground Lessor . Without limiting the foregoing, the written consent of each Eligible Holder shall be required to add to, amend or modify any material provision of this Agreement which establishes , governs or regulates any of the following subjects , where such amendment or modification would directly impact the Property encumbered by the Eligible Holder’s Mortgage:
(a) the priority of liens for Monetary Obligations arising under this Agreement;
(b) allocation of Proportionate Shares with respect to Shared Expenses;
(c) insurance requirements;
(d) obligations for restoration or repair of the Garage after casualty; or (e) this Article 9.
Any amendment to this Agreement regarding any of the foregoing subjects shall not be considered material and need not be approved by Eligible Holders if the amendment or addition is solely for the purposes of correcting technical errors or for clarification. Any Eligible Holder who receives a written request to approve an addition or amendment and who does not deliver or have its response postmarked within sixty (60) days of the date contained within the written request shall be deemed to approve the addition or amendment. All notices or other communications made pursuant hereto shall be in writing and shall be deemed properly delivered, given or served when (i) personally delivered against receipted copy; or (ii) mailed by certified or registered mail, postage prepaid, in either case (i) or (ii) to the parties at their last known address.
36 660\14\4184108.5
9.4. MISCELLANEOUS RIGHTS OF MORTGAGEES AND CITY:
9.4.1. General Rights: In addition to the foregoing, each Eligible Holder shall have the right to:
(a) receive copies of any or all Shared Expense Budget s, Reconciliations or other financial statements concerning the Garage and Shared Expense s prepared by any Owner or its Property Manager in accordance with Article 5, at the same time and in the same manner as the Owners, upon written request therefor to the Managing Owner; (b) to the extent permitted in the applicable Mortgage or Ground Lease, participate in negotiations regarding the value and extent of any loss affecting the Garage:
(i) under a policy of insurance carried by the applicable Owner of the Garage; or (ii) in any proceedings incident to any condemnation affecting such Garage; and (c) Receive copies of all notices of default, Notices of Claim of Lien, given under this Agreement at the same time such notice is given to an Owner.
9.4.2. Effect of Action Without Consent: Whenever the consent of a Mortgagee is required by this Agreement, any action taken without such consent shall not bind such Mortgagee or its successor. Whenever the consent of a Ground Lessor is required by this Agreement or the Ground Leases , any action taken without such consent shall not bind the Ground Lessor or its successor as Ground Lessor under the Ground Leases.
9.4.3. Title by Foreclosure or Termination of Ground Lease: Except to the extent otherwise expressly provided herein, all of the provisions contained in this Agreement shall be binding on and effective against any Owner whose title to any Property or any portion thereof or interest therein is acquired by foreclosure, trustee’s sale, deed in lieu of foreclosure, enforcement of the remedies under the Ground Lease(s) or otherwise.
9.4.4. Right to Cure Default: A Mortgagee and the Ground Lessor shall have the right to cure any default in performance of obligations under this Agreement or delinquency in the payment of reimbursement owed by an Owner of a Property that is subject to the Mortgage or Ground Lease, as applicable. The Mortgagee and Ground Lessor shall each have the right to cure such default or delinquency until: (a) thirty (30) days after the expiration of any cure period given to the defaulting Owner with respect to monetary defaults; and (b) sixty (60) days after the expiration of any cure period given to the defaulting Owner with respect to non -monetary defaults; provided, however, with respect to any non -monetary default that a Mortgagee or Ground Lessor cannot under the terms of its loan document or the Ground Lease cure without obtaining possession of the Owner’s Property, and provided further that the Mortgagee or Ground Lessor has promptly commenced and diligently pursues to completion proceedings to acquire such Owner’s interest in its Property, such Mortgagee’s or Ground Lessor’s cure period shall be extended by the amount of time reasonably necessary for such Mortgagee or Ground Lessor, as applicable, to acquire possession up to an additional six (6) months. 37 660\14\4184108.5
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1. TERM OF AGREEMENT . This Agreement shall (a) be coterminous with the termination of both (but not one) of the Ground Leases; provided, however, that if, upon expiration or earlier termination of the Ground Leases, the Properties are not commonly owned by the same owner(s), then this Agreement shall be automatically extended for successive periods of ten (10) years until the all of the Owners determines by written agreement that this Agreement shall terminate ; and (b) terminate in the event that all of the fee interest in the Properties become owned by the same fee Owner and all of the Properties are merged into a single legal lot or parcel. In the event of such termination under subpart (a), above, and if the fee interests in the Properties are not commonly owned by the same Owner(s), all of the Improvements, including the Garage, are to be razed and demolished.
10.2. CONSTRUCTION OF PROVISIONS: The provisions of this Agreement shall be liberally construed to effect its purpose of creating a uniform plan for the development and operation of the Properties under California law.
10.3. AGREEMENT IS BINDING: This Agreement shall be for the benefit of and be binding upon all Owners, their respective successors, purchasers, tenants, encumbrancers, donees, grantees, mortgagees, lienors and assigns.
10.4. SEVERABILITY OF PROVISIONS : The provisions hereof shall be deemed independent and severable, and the invalidity or unenforceability of any one provision shall not affect the validity or enforceability of any other provision hereof.
10.5. JOINT AND SEVERAL LIABIL ITY OF COMMERC IAL PROPERTY OWNERS: The obligations and liabilities of the Commercial Property Owners pursuant to this Agreement shall at all times be joint and several.
10.6. GENDER, NUMBER AND CAPTIONS : As used herein, the singular shall include the plural and masculine pronouns shall include feminine pronouns, where appropriate.
The title and captions of each paragraph hereof are not a part thereof and shall not affect the construction or interpretation of any part hereof.
10.7. EXHIBITS All exhibits attached to this Agreement are incorporated by this reference as though fully set forth herein.
10.8. CONFLICT: In the event of a conflict, the provisions of this Agreement shall prevail over any Rules adopted by the Owners.
[SIGNATURES ON FOLLOWING PAGES]
Signature Pages
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IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date first above written.
COMMERCIAL LOT 1 OWNER:
,
a
By:
Name (Printed):
Title:
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 )
) ss:
COUNTY OF ______________________ )
On ______________, 20__ before me, _____________________________________________, (insert name and title of the officer),
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]
Signature Pages
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IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date first above written.
COMMERCIAL LOT 1 FEE OWNER:
MOORE TALBOT PARTNERS, LP, a California
limited partnership
By: ,
its General Partner
By:
Name (Printed):
Title:
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 )
) ss:
COUNTY OF ______________________ )
On ______________, 20__ before me, _____________________________________________, (insert name and title of the officer),
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]
Signature Pages
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IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date first above written.
COMMERCIAL LOT 5 OWNER:
,
a
By:
Name (Printed):
Title:
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 )
) ss:
COUNTY OF ______________________ )
On ______________, 20__ before me, _____________________________________________, (insert name and title of the officer),
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]
Signature Pages
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IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date first above written.
COMMERCIAL LOT 6 OWNER:
,
a
By:
Name (Printed):
Title:
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 )
) ss:
COUNTY OF ______________________ )
On ______________, 20__ before me, _____________________________________________, (insert name and title of the officer),
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]
Signature Pages
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IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date first above written.
RESIDENTIAL PROPERTY OWNER
(INITIALLY THE CITY):
THE CITY OF SAN MATEO
By:
Name (Printed):
Title:
APPROVED AS TO FORM
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 )
) ss:
COUNTY OF ______________________ )
On ______________, 20__ before me, _____________________________________________, (insert name and title of the officer),
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]
Exhibit A Page 1
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EXHIBIT A
COMMERCIAL PROPERTY
The “Commercial Property” under this Agreement is that certain real property located in the City of San Mateo, County of San Mateo, State of California, described as follows:
“Commercial Lot 1”
PARCEL 1 AS DESIGNATED ON THAT CERTAIN MAP ENTITLED, "PARCEL MAP NO. 325 LANDS OF MOORE FOR LOT MERGER PURPOSES FOR THE MERGER OF LOTS 1, 7 AND 8, BLOCK 10, AS SHOWN ON THE MAP ENTITLED, ‘MAP OF THE TOWN OF SAN MATEO, SAN MATEO COUNTY, CALIFORNIA’,” WHICH PARCEL MAP WAS
FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA ON FEBRUARY 11, 1991, IN BOOK 64 OF PARCEL MAPS AT PAGE
54. “Commercial Lot 5”
LOT 5, BLOCK 10, AS DESIGNATED ON THE MAP ENTITLED, "MAP OF THE TOWN OF SAN MATEO, SAN MATEO COUNTY, CALIFORNIA", FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY ON JANUARY 24, 1963, IN BOOK 2 OF MISCELLANEOUS RECORDS, AT PAGE 95, AND A COPY ENTERED IN BOOK 1 OF MAPS AT PAGE 45.
“Commercial Lot 6”
LOT 6, BLOCK 10, AS DESIGNATED ON THE MAP ENTITLED, "MAP OF THE TOWN OF SAN MATEO, SAN MATEO COUNTY, CALIFORNIA", FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY ON JANUARY 24, 1963, IN BOOK 2 OF MISCELLANEOUS RECORDS, AT PAGE 95, AND A COPY ENTERED IN BOOK 1 OF MAPS AT PAGE 45.
(Attached)
Exhibit B Page 1
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EXHIBIT B
RESIDENTIAL PROPERTY
The “Residential Property” under this Agreement is that certain real property located in the City of San Mateo, County of San Mateo, State of California, described as follows:
LOTS 2, 3 AND 4, BLOCK 10, AS DELINEATED UPON THAT CERTAIN MAP ENTITLED "MAP OF THE TOWN OF SAN MATEO", FILED FOR RECORD IN THE OFFICE OF THE
RECORDER OF THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, ON JANUARY 24TH, 1867 IN BOOK 2 OF MISCELLANEOUS RECORDS, PAGE 95 AND A COPY ENTERED INTO BOOK 1 OF MAPS, PAGE 45.
EXCEPTING THEREFROM: THAT PORTION OF THE ABOVE DESCRIBED PROPERTY LYING BELOW A DEPTH OF 500 FEET, MEASURED VERTICALLY, FROM THE
CONTOUR OF THE SURFACE OF SAID PROPERTY, AS CONTAINED IN THE DEED
FROM SOUTHERN PACIFIC TRANSPORTATION COMPANY, A DELAWARE
CORPORATION TO CITY OF SAN MATEO, A MUNICIPAL CORPORATION, RECORDED NOVEMBER 27, 1985 IN THE OFFICIAL RECORDS OF THE COUNTY OF SAN MATEO, AS RECORDER'S SERIAL NUMBER 85128380.
(Attached)
Exhibit C Page 1
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EXHIBIT C
GARAGE LEVEL SITE PLAN
(To be Attached)
Exhibit D Page 1
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EXHIBIT D
ALTERNATIVE DISPUTE RESOLUTION (“ADR”) PROVISIONS
1. Introduction. Any and all such Disputes, as defined in the Agreement, between or among the Owners, except actions for the collection of Monetary Obligations as set forth in Section 5.3 of the Agreement, shall be subject to the procedures set forth in this Exhibit D.
2. Mediation. Any and all Disputes between or among the Owners shall be first submitted to non- binding mediation as set forth herein:
a. Selection of Mediator. The parties to the Dispute shall select one (1) mediator. If the parties to the Dispute cannot agree upon a mediator, any party may request a mediator be appointed by JAMS Arbitration, Mediation and ADR Services (“JAMS”) or another dispute resolution service if another can be mutually agreed upon by the parties. No mediator shall have any financial or personal interest in the result of the mediation. Prior to accepting any appointment, the prospective mediator shall disclose any potential or actual conflicts of interest.
b. Mediation Proceedings. The mediator has discretion to conduct the mediation in the manner in which the mediator believes is most appropriate for reaching a settlement of any or all Disputes. The mediator does not have the authority to impose a settlement on the parties to the Dispute.
c. Allocation of Expenses. Expenses of the mediation, including required traveling and other expenses of the mediator, the expenses of any witnesses requested by the mediator, and the cost of any proofs or expert advice produced at the direct request of the mediator, shall be borne equally by the parties to the Dispute unless they agree otherwise.
3. Appealable Arbitration. Any Disputes that remain unresolved after mediation and that do not involve the City as a party to the Dispute shall be determined by Arbitration and as set forth in this section:
a. California Arbitration Act. This agreement to arbitrate shall be governed by the California Arbitration Act (“CAA” or “the Act”) (California Code of Civil Procedure § 1280, et seq.) including, without limitation, issues relating to consolidation and joinder of parties to the arbitration, and notwithstanding any choice of law provision(s) in any other agreement between the Owners. If a conflict exists between the provisions of the Act and this Agreement, the language of this Agreement controls.
b. Demand for Arbitration. Any party a Dispute may serve a Demand for Arbitration (“Demand”) setting forth the allegations against another Owner, and the party served shall serve a Response to Demand for Arbitration (“Response”) setting forth a response to such allegations, including affirmative defenses, if any, within fifteen (15) days of service of the Demand. Any party may serve a Cross-Demand for Arbitration.
These pleadings shall be, in all respects, as required under California law for a Complaint, an Answer, and a Cross- Complaint, respectively.
c. Selection of Arbitrator. The parties to the Dispute shall use their best efforts to agree upon the selection of an arbitrator and/or arbitration service. If the parties are unable to agree upon an arbitrator within fifteen (15) calendar days after service of the Demand, then any party may petition JAMS to appoint an arbitrator. The person so appointed shall be a retired judge or a lawyer experienced in the subject matter of the dispute.
d. Location of Arbitration. The arbitration shall be conducted in San Mateo County, California. An award may be entered against a party to the Dispute who fails to appear at a duly noticed arbitration hearing.
Exhibit D Page 2
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e. Arbitration Rules. Except as otherwise set forth in these dispute resolution procedures, the arbitration and all preliminary proceedings shall be conducted pursuant to the JAMS Arbitration Rules.
f. Applicable law. The arbitrator shall apply California substantive, evidentiary and procedural law to the arbitration proceeding. The arbitrator shall give effect to statutes of limitation in determining any claim.
g. Disputes to be Arbitrated. Any controversy concerning whether an issue is subject to these ADR procedures shall be determined by the arbitrator. The arbitrator shall decide all issues of fact and law submitted by the parties to the Dispute for decision in the same manner as required for a trial by court, including all law and motion matters, ex parte matters and discovery disputes.
h. Demurrers and Motions for Summary Judgment. The parties to the Dispute shall be permitted to file, and the arbitrator shall hear and rule upon, demurrers and motions for summary judgment.
i. Power to Grant Relief. The arbitrator shall have the power to grant all appropriate legal and equitable relief (both by way of interim relief and as a part of its final award), as may be granted by any court of the State of California, to carry out the terms of this Agreement (e.g., declaratory and injunctive relief and damages).
j. Discovery. The parties to the Dispute may conduct any discovery permitted under the California Discovery Act. The arbitrator shall adjudicate any disputes with regard to discovery.
k. Evidence and Expert Testimony. The California Evidence Code shall govern the arbitration. Expert testimony shall be permitted according to the same standard as allowed in a court of law.
l. Court Reporter. A certified court reporter shall report the proceedings at all hearings and, at the request of a party, prepare a certified Reporter’s Transcript. The arbitrator shall maintain all documents normally provided to a court in a Clerk’s Transcript and, upon request, shall prepare an Arbitrator’s Transcript containing all documents that would normally be in a Clerk’s Transcript. All reviewing courts shall treat the Arbitrator’s Transcript as if it were a Clerk’s Transcript.
m. Joinder. Any party to the Dipute, at its sole discretion, may include by joinder persons or entities substantially involved in common question of law or fact whose presence is required if complete relief is to be accorded in arbitration, provided that the party sought to be joined consents in writing to such joinder. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent. The parties grant to any person or entity made a party to an arbitration conducted under this Agreement, whether by joinder or consolidation, the same rights of joinder and consolidation as the parties under this Agreement.
n. Reasoned Arbitrator’s Award. The arbitrator shall hear and determine the matter, and shall execute and acknowledge the award in writing and cause a copy thereof to be delivered to each of the parties to the Dispute. The award shall include factual findings, conclusions of law, and the reasons on which the decision is based. The decision of the arbitrator shall be final, binding, and conclusive, except to the extent the decision may be submitted for judicial review as provided herein. The award of the arbitrator may be confirmed by the Superior Court in San Mateo County, and such Court may vacate, modify, or correct the award in accordance with the prevailing sections of the Act and in accordance with the terms and conditions herein. The decision of the arbitrator may be entered and enforced as a final judgment in any court of competent jurisdiction.
o. Limit on Arbitrator’s Power and Right to Judicial Review. The arbitrator shall not have the power to commit (a) errors of law or legal reasoning, (b) errors of fact, (c) errors with regard to mixed questions of law and fact. In addition, the arbitrator shall not have the power to render an award (d) not based on substantial evidence, (e) based on evidence not presented at the hearing, or (f) not in conformity with the substantive and procedural law of the state of California. The parties to the Dispute unequivocally agree that any of the preceding errors and acts is an excess of arbitral authority that is reviewable by the courts. If the arbitrator exceeds any of the foregoing specific powers, the award may be vacated or corrected by filing a petition pursuant to Exhibit D Page 3
660\14\4184108.5 089642\16883546v13
the Act in the Superior Court in and for the county of San Mateo. In reviewing the award, the Superior Court shall sit as if it were an appellate court, in all material respects, including but not limited to the scope of review and the award may be reviewed de novo for any such error. The decision of the Superior Court is, itself, subject to review by the California appellate courts.
p. Non-Waiver. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party to the Dispute, including the plaintiff, to submit the controversy or claim to arbitration.
q. Allocation of Costs. Costs and fees payable in advance shall be advanced equally by the Parties, subject to ultimate payment by the non-prevailing party in accordance with the Agreement.
r. Cooperation. The parties to the Dispute shall diligently cooperate with one another and the person appointed as arbitrator to resolve each and every Dispute and shall perform such acts as may be necessary to obtain a prompt and expeditious resolution of all such Disputes. If either party refuses to diligently cooperate, and the other party, after first giving notice of its intent to rely on the provisions of this section, incurs additional expenses or attorneys’ fees solely as a result of such failure to diligently cooperate, the Arbitrator may award such additional expenses and attorneys’ fees to the party giving such notice, even if such party is not the prevailing party in the Dispute
4. Severance Clause. In the event that any provision (or any portion thereof) of this Dispute Resolution Process, including, but not limited to the agreement to arbitrate is held to be void, voidable, or unenforceable, the remaining portions shall remain in full force and effect.