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DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
CITY OF SAN PABLO
and
DANCO COMMUNITIES
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TABLE OF CONTENTS
Page
ARTICLE 1. SUBJECT OF AGREEMENT ...............................................................................1
1.1 Purpose of this Agreement ....................................................................................1
1.2 The Site and the Overall Property .........................................................................1
1.3 Parties to this Agreement ......................................................................................2
1.4 Deposit .................................................................................................................. 2
1.5 Definitions.............................................................................................................3
ARTICLE 2. SALE OF THE SITE .............................................................................................5
2.1 Sale and Purchase .................................................................................................5
2.2 Feasibility Period ..................................................................................................5
2.3 Escrow...................................................................................................................8
2.4 Conditions to Closing; Representations ..............................................................10
2.5 Entitlements; Consultation with San Pablo Historical & Museum Society ........13
2.6 Condition of Title ................................................................................................14
2.7 Conveyance of Title and Delivery of Possession ...............................................14
2.8 Form of Grant Deed ............................................................................................15
2.9 Time for and Place of Delivery of Grant Deed ...................................................15
2.10 Payment of the Purchase Pri ce and Recordation of Grant Deed, Affordable Housing Regulat ory Agreement and Reciprocal Easement Agreement ..........................................................................................15
2.11 Title Insurance ....................................................................................................15
2.12 Taxes and Assessments .......................................................................................16
2.13 Condition of the Site ...........................................................................................16
2.14 Preliminary Work by the Developer ...................................................................18
2.15 Submission of Evidence of Financing ................................................................18
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Page
2.16 Project Loan ........................................................................................................19
ARTICLE 3. DEVELOPMENT OF THE SITE ........................................................................21
3.1 Development of the Site by the Developer .........................................................21
3.2 Taxes, Assessments, Encumbrances and Liens ..................................................25
3.3 Prohibition Against Transfer of Site, the Buildings or Structures Thereon and Assignment of Agreement .............................................................26
3.4 Security Financing; Rights of Holders ................................................................26
3.5 Right to Satisfy Other Liens on the Site After Title Passes ................................28
3.6 Certificate of Completion ...................................................................................28
ARTICLE 4. USE OF THE SITE ..............................................................................................29
4.1 Uses; Affordable Housing Regulatory Agreement .............................................29
4.2 Obligation to Refrain From Discrimination ........................................................30
4.3 Form of Nondiscrimination and Nonsegregation Clauses ..................................30
4.4 Effect and Duration of Covenants .......................................................................31
4.5 Reciprocal Easements .........................................................................................32
ARTICLE 5. DEFAULTS, REMEDIES AND TERMINATION .............................................32
5.1 Defaults -- General ..............................................................................................32
5.2 Legal Actions ......................................................................................................33
5.3 Rights and Remedies are Cumulative .................................................................33
5.4 Damages ..............................................................................................................33
5.5 Specific Performance ..........................................................................................34
5.6 Remedies and Rights of Termination Prior to Conveyance of the Site ................................................................................................................34
5.7 City Option to Repurchase, Reenter and Repossess ...........................................36
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Page
ARTICLE 6. GENERAL PROVISIONS ..................................................................................37
6.1 Notices, Demands and Communi cations Between the Parties ...........................37
6.2 Conflicts of Interest.............................................................................................38
6.3 Nonliability of City Officials and Employees ....................................................38
6.4 Enforced Delay: Extension of Times of Performance .......................................38
6.5 Inspection of Books and Records .......................................................................38
6.6 Plans and Data.....................................................................................................38
6.7 Further Assurances..............................................................................................39
6.8 City Approvals and Actions ................................................................................39
6.9 Brokers ................................................................................................................39
6.10 Approvals ............................................................................................................39
6.11 Proprietary and Governme ntal Roles of the City ................................................39
ARTICLE 7. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ...........................40
Attachments
Attachment No. 1 Map of the Overall Property
Attachment No. 2 Legal Description of the Site
Attachment No. 3 Schedule of Performance
Attachment No. 4 Scope of Development
Attachment No. 5 Form of Grant Deed for the Site
Attachment No. 6 Form of Affordable Housing Regulatory Agreement Attachment No. 7 Reciprocal Easement Agreement
Attachment No. 8 Form of Project Loan Promissory Note
Attachment No. 9 Form of Project Loan Deed of Trust
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DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (the “Agreement”) is entered into by and between the CITY OF SAN PABLO, a California municipal corporation (the “City”) and DANCO COMMUNITIES, a California corporation (the “Developer”), as of February 1, 2021 (the “Effective Date”). The City and the Developer hereby agree as follows:
ARTICLE 1
SUBJECT OF AGREEMENT
1.1 Purpose of this Agreement
The purpose of this Agreement is to provide for the sale and development of certain real property located within the City (t he “Site”). Pursuant to this Agreement, the Developer will acquire the Site from the City a nd will develop a mixed-use project on the Site containing not less than one hundred (100) units of affordable rental housing and not less than 7,500 square feet of new ground floor commercial space, plus the renovation/reuse of the Alvarado Adobe Museum building (3,500 square feet ), together with parking and associated amenities (the “Project”). The Project is mo re particularly described in the Scope of Development (Attachment No. 4). The Develo per proposes to finance the Project through a combination of funding sources, including low income housing tax credits, recycled bonds, and a loan from the City’s Low and Moderate Income Housing Asset Fund (“LMIHAF”), all as more fully described herein.
The sale of the Site by the City, the deve lopment of the Project by the Developer, and the fulfillment generally of this Agreement are in the best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements.
1.2 The Site and the Overall Property
The Site is a portion of a larger property consisting of 4.64 acres of land area (the “Overall Property”). The Overal l Property is the former location of the San Pablo City Hall at 13831 San Pablo Avenue, and includes the following historically significant buildings or locations (designated as such by listings as “Buildings of Hist orical Significance” in the San Pablo General Plan 2030 and “Structures of Historical Significance” or “Site Relating to Important Person in History” in the Contra Cost a County Historic Resources Inventory): (a) the Alvarado Adobe Museum; (b) the Blume House Museum and accompanying Bunk House; and (c) the Teixeira House. The Alvarado Adobe Museum is a reconstruction built in 1978; the original building, which had been listed with the theme “Exploration/Settlement” in the 1976 California Inventory of Historic Resources, was torn down.
The City and the Developer intend that the Overall Property shall be divided into a parcel that includes only the Blume House Museum, the Bunk House and the Teixeira House (the “Historic Buildings Parcel”) and a parcel that includes the remainder of the former City Hall property, including the Alvarado Adobe Museum (the “Site”), as generally shown on the Map of the Overall Property, attached hereto as Attachment No. 1. The Historic Buildings Parcel is to be retained by the City, and the Site is to be sold to the Developer pursuant to this Agreement.
Within seven (7) days after the expiration of th e Feasibility Period, the De veloper shall cause to be prepared, at its sole cost and expense, a legal description of the Site that shall be consistent
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with the terms of this Agreement, compliant with applicable law and acceptable to and insurable by the Title Company. The City sh all cooperate as necessary in connection with the preparation of the legal description, and the legal description shall be subject to approval by the City. The approved legal description of the Site shall be attached to this Agreement as Attachment No. 2.
1.3 Parties to this Agreement
1.3.1 The City
The City is a California municipal cor poration. The office of the City is located at 1000 Gateway Avenue, San Pablo, Ca lifornia, 94806. “City,” as used in this Agreement, includes the City of San Pablo and any assignee of or successor to its rights, powers and responsibilities.
1.3.2 The Developer
The Developer is Danco Communities, a California corporation. For purposes of this Agreement, the principal address of the Developer is 5251 Ericson Way, Arcata, California, 95521. Wherever the term “Developer” is used herein, such term shall include any permitted nominee, assignee or successor-in-interest as herein provided.
The qualifications and iden tity of the Developer ar e of particular concern to the City, and it is because of such qualifications and identity that the City has entered into this Agreement. Prior to the issuance of a Certificate of Completion for the Site as set forth in Section 3.6 hereof, no voluntary or involuntary successor-in-interest of the Developer shall acquire any rights or powers under this Agreement, and the Developer shall not assign all or any part of this Agreement without the prior written appr oval of the City, excep t as expressly set forth herein. Any such assignment by the Devel oper in violation of this Agreement shall be void. This Agreement may be terminated by the City pursuant to Section 5.6.2 of this Agreement, or the City may exercise its reme dies under Article 5 hereof, if there is any significant change (voluntary or involuntary) in the membership, management or control of the Developer prior to the issuance of a Certificate of Completion for the Site.
Notwithstanding the foregoing, the City acknowledges that the Developer intends to finance a portion of th e Project with low income tax credits to be purchased by an institutional tax credit investor. For that purpose, the Developer sh all be entitled to transfer and assign the rights under this Agreement, including the right to acquire title to the Site, to a newly formed entity, in which the De veloper, along with a non-prof it entity, shall be the General Partners, and the limited partner shall be the purchaser of the tax credits awarded for the development, provided, however, that any such transfer and assignment shall include the assumption of all of the Developer’s obligati ons hereunder and shall be set forth in an assignment agreement consistent with the terms of this Agreement and satisfactory to the City.
1.4 Deposit
Immediately upon the opening of the escrow for conveyance of the Site from the City to the Developer, the Deve loper shall deliver to the Escrow Agent a deposit in the amount of SEVENTY-FIVE THOUSAND DOL LARS ($75,000.00) (the "Deposit" ) as security for the performance of the obligations of the Developer to be performed prior to the return of the Deposit to the Developer or its retention by the City as liquidated damages. A TEN THOUSAND DOLLAR ($10,000.00) portion of the Deposit shal l be immediately
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nonrefundable, except in the event of a defau lt by the City under this Agreement, or, if applicable, the failure to negotiate a resolution of environmental matters as provided in Section
2.1.2. Promptly following expiration of the Feasibility Period, the Developer shall increase the amount of the Deposit to a sum that equals te n percent (10%) of the Purchase Price, and thereafter the entire amount of the Deposit shall be nonrefundable, provided, however, if this Agreement is terminated by the Developer due to the Developer’s inability to obtain financing for the development of the Site as contemplated herein, after and despite the Developer’s good faith efforts to obtain such financing, the nonrefundable portion of the Deposit shall be limited to either (a) the sum of TWEN TY-FIVE THOUSAND DOLLARS ( $25,000.00) if the termination occurs within sixty (60) days from the date set for the close of escrow in the notice to vacate from the Developer, if the City has begun to relo cate the remaining employees from the Site or (b) the sum of TEN THOUSAND DOLLARS ($10,000.00).
Upon termination of this Agreement by the City as provided in Section 5.6.2 hereof, the nonrefundable portion of the Deposit (including all interest paid thereon, if any) shall be paid to the City as liquidated damages as provided therein.
Upon termination of this Agreement by the Developer as provided in Section
5.6.1 hereof, the refundable portion of the Deposit (including all interest paid thereon, if any) shall be returned to the Developer.
If this Agreement shall not have been cancelled or terminated, the Deposit shall be applied toward the Purchase Price for the Site.
1.5 Definitions
1.5.1 “Additional Encumbrance” is defined in Section 2.2.2 of this Agreement.
1.5.2 “Agreement” shall mean this Dis position and Development Agreement.
1.5.3 “Certificate of Completi on” is defined in Section 3.6 of this Agreement.
1.5.4 “City” is defined in Section 1.3.1 of this Agreement.
1.5.5 “City Conditions Precedent” is define d in Section 2.4.1 of this Agreement.
1.5.6 “City’s Title Notice” is defined in Section 2.2.2 of this Agreement.
1.5.7 “Construction Lender” is defined in Section 2.16 of this Agreement.
1.5.8 “Construction Loan” is defined in Section 2.16 of this Agreement.
1.5.9 “Contamination” is defined in Section 2.13.2 of this Agreement.
1.5.10 “Deposit” is defined in Section 1.4 of this Agreement.
1.5.11 “Developer” is defined in Section 1.3.2 of this Agreement.
1.5.12 “Developer Conditions Precedent” is defined in Section 2.4.2 of this Agreement.
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1.5.13 “Developer’s Title Notice” is defined in Section 2.2.2 of this Agreement.
1.5.14 “Effective Date” is defined in Article 7 of this Agreement.
1.5.15 “Entitlements” is defined in Section 2.5 of this Agreement.
1.5.16 “Environmental Response Actions” is defined in Section 2.13.4 of this Agreement.
1.5.17 “Environmental Response Costs” is defined in Section 2.13.4 of this Agreement.
1.5.18 “Escrow Agent” is defined in Section 2.3 of this Agreement.
1.5.19 “Feasibility Period” is defined in Section 2.2.3 of this Agreement.
1.5.20 “Final Evidence of Fi nancing” is defined in Section 2.15 of this Agreement.
1.5.21 “Force Majeure” is defined in Section 6.4 of this Agreement.
1.5.22 “Hazardous Materials” is defined in Section 2.13.4 of this Agreement.
1.5.23 “Historic Buildings Parcel” is define d in Section 1.2 of this Agreement.
1.5.24 “Historical Society” is defined in Section 2.5 of this Agreement.
1.5.25 “Indemnitees” is defined in Section 2.13.2 of this Agreement.
1.5.26 “Overall Property” is defined in Section 1.2 of this Agreement.
1.5.27 “Permanent Lender” is defined in Section 2.16 of this Agreement.
1.5.28 “Permanent Loan” is defined in Section 2.16 of this Agreement.
1.5.29 “Permitted Exceptions” is defined in Section 2.2.2 of this Agreement.
1.5.30 “Preliminary Documents” is defined in Section 2.2.1 of this Agreement.
1.5.31 “Preliminary Evidence of Financing” is defined in Section 2.15 of this Agreement.
1.5.32 “Project” is defined in S ection 1.1 of this Agreement.
1.5.33 “Purchase Price” is defined in Section 2.1.1 of this Agreement.
1.5.34 “Site” is defined in Section 1.1 and Attachment Nos. 1 and 2 of this Agreement.
1.5.35 “Title Company” is defined in Section 2.3 of this Agreement.
1.5.36 “Title Objections” is defined in Section 2.2.2 of this Agreement.
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ARTICLE 2
SALE OF THE SITE
2.1 Sale and Purchase
2.1.1 Purchase Price
In accordance with and subject to all the terms, covenants and conditions of this Agreement, the City agrees to sell, and the Developer agrees to purchase for development, the Site for the sum of SIX MILLI ON EIGHT HUNDRED THOUSAND DOLLARS ($6,800,000.00) (the “Purchase Price”) plus the amount necessary to retire the outstanding loan for rooftop and carport photovoltaic systems installed at the Site (t he “Solar Loan”) pursuant to the Energy Resources Conservati on and Development Commission and the City. As of the Effective Date of this Agreement, the outstanding balance of the Solar Loan is approximately EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($850,000.00).
2.1.2 No Environmental Conditions Requiring Remediation or Removal The City and the Developer agree that the Purchase Price is based on an assumption that there are no adverse environmenta l conditions at the Site that would require remediation or removal in conn ection with the devel opment of the Projec t. If, during the Feasibility Period identified in Section 2.2, the Developer determines, in its reasonable judgment, that adverse environmental conditions do exist at the Site that must be remediated or removed in connection with the development of the Project , or that there are other material adverse conditions of the Site that woul d require extraordinary Site development costs, the City and the Developer shall negotiate in good faith during th e Feasibility Period to wards an appropriate adjustment to the Purchase Price to reflect the fa ir market value of the Site with such adverse conditions in place. If at the conclusion of the Feasibility Period the parties have not agreed on the appropriateness and amount of an adjustment to the Purchase Price to address adverse environmental or other Site conditions, this Ag reement may be terminated by the Developer as of the end of the Feasibility Period by written no tice to the City and the entire initial Deposit of $75,000, together with accrued interest shall be returned to the Developer.
2.2 Feasibility Period
2.2.1 Delivery of Preliminary Documents by City. The City shall deliver or cause to be delivered to the Developer all documents listed below (“Preliminary Documents”), within fourteen (14) days after the opening of es crow for conveyance of the Site from the City to the Developer:
a. Preliminary Report. A preliminary report (“Preliminary Report”) from the Title Company dated no earlier than thirty (30) days before the Effective Date covering the Site, together with a legible copy (as reason ably obtainable) of all exceptions to title shown in the Preliminary Report.
b. Surveys. Copies of any survey of the Site in the City’s possession or control.
c. Plans. Copies of any exis ting construction dr awings, as-built plans, and specifications for the Site that are in the City’s possession or control.
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d. Materials Related to the Condition of the Site. To the extent that such matters exist and are in the possession or control of the City, copies of any environmental impact reports, “Phase I” or “Phase II” reports , or environmental site assessments concerning hazardous materials on the Site, complaints or notic es of the presence of hazardous materials on the Site, geological surveys, soil tests, engineering reports, inspection results, and any complaints or notices received regarding the safety of the Site.
e. Contracts. Copies of any contracts affecting the use of the Site that are in the City’s possession or control.
2.2.2 Developer’s Approval of Title. The Developer’s obligation to purchase the Site is expressly conditioned on the Developer’s approval of the condition of title of the Site in accordance with the following procedure:
a. Permitted Exceptions. The following exceptions shown on the Preliminary Report are permitted (“Permitted Exceptions”): (a) the standard preprinted exceptions and exclusions of the Title Company, all of which the Developer proposes to remove, at the Developer’s cost, by an extended coverage title insurance policy at the time of Closing; (b) the Reciprocal Easement Agreement, dated October 31, 1974, by and between the Redevelopment Agency of the City of San Pablo and Edbr o California Handyman 307, Inc., affecting a portion of the park ing lot on the Site; and (c) a ny other exception shown on the Preliminary Report, other than exceptions for monetary liens, which the Developer does not object to by written notice to the City within fift een (15) days after delivery of the Preliminary Report (“Developer’s Title Notice”). All excep tions on the Preliminary Report other than the Permitted Exceptions will be “Title Objections.” If the Developer fails to deliver the Developer’s Title Notice within the time specified in this Section 2.2.2, the Developer will be deemed to have objected to each title exceptio n shown in the Prelimin ary Report that is not otherwise a Permitted Exception.
b. Title Objections. With respect to any Title Objection, the City will have ten (10) days after deliver y of the Developer’s Title Notice to give notice to the Developer in writing (“City’s Title Notice”), stating either (a) the manner in which the City will remove or cure such Title Objection or (b) that the City will not remove or cure such Title Objection. If the City fails to deliver the City’s Title Notice within the time sp ecified in this Section 2.2.2, the City will be deemed to have elected not to rem ove or cure such Title Objection. Despite the foregoing, the City agrees to remove all lien s securing the payment of money, if any, that encumber the Site, except that the Developer sh all be responsible for retiring the outstanding balance of the Solar Loan as set forth in Section 2.1.1. c. City Elects Not to Cure. If the City elects not to cure or remove a Title Objection (or is deemed to have so elected ), then the Developer will have ten (10) days after delivery of the City’s Title Notice to deli ver a written notice to the City (“Developer’s Election Notice”) of the Developer’s election either to (a) proceed with th e purchase of the Site, waive such Title Objection, and accept the exception shown in the Preliminary Report as a Permitted Exception, or (b) terminate this Agreem ent. If the Developer fails to deliver the Developer’s Election Notice within the time specified in this Section 2.2.2, the Developer will be deemed to have elected to terminate this Agreement.
d. Additional Encumbrances. If any encumbrance or other exception to title arises or is discovered after the delivery of the Preliminary Report (“Additional
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Encumbrance”), the party discovering such Additi onal Encumbrance must promptly give written notice to the other. No later than ten (10) days after delivery of the notice of such Additional Encumbrance, the Developer will deliver a new Developer’s Title Notice to the City specifying whether the Additional Encumbrance is a Title Objection or a Permitted Exception. If the Developer objects to the Additional Encumbrance, the parties will proceed in the same manner as set forth above for Title Obj ections arising from the Prelimin ary Report. If the Developer fails to deliver the Developer’s Election Notice within the time specified in this Section 2.2.2, the Developer will be deemed to have elected to terminate this Agreement.
2.2.3 Review of Preliminary Documents and Physical Condition of the Site a. Feasibility Period. The Developer’s obligation to purchase the Site is expressly conditioned on its approval, in its sole discretion, of the condition of the Site and all other matters concerning the S ite, including without limitati on economic, financial, and accounting matters relating to or affecting th e Site or its value, and the physical and environmental condition of the Site (inc luding, without limitation, Hazardous Materials Contamination, if any, on, under or above the Site , or any portion thereof, and the soils and seismic condition of the Site, as described in Section 2.13 of this Agreement). The Developer will have one hundred twenty (120) days from th e Effective Date of this Agreement to conduct such investigations as the Developer may choose (“ Feasibility Period”) to determine, in its sole discretion, whether this contingency is met.
The Developer shall have the right, at its sole cost and expense, to engage an environmental consultant to make such investigations of the physical aspects of the Site (including the soils and seismic cond itions of the Site an d Hazardous Materials contamination on, under or about the Site, or a ny portion thereof) that the Developer deems necessary, including Phase I and, if appropriate, Phase II investigatio ns of the Site, and the City shall promptly be provided with a copy of all reports and test results provided by the Developer’s environmental consultant. If the Developer obtains a Phase I environmental assessment and report that indicates the need for a Phase II envi ronmental assessment and report, the City agrees that the Feasibility Period shall be extended fo r the period reasonably necessary to obtain the Phase II environmental assessment and report, and so lely for that purpose, not to exceed in any event an additional sixty (60) days.
As soon as practicable after the completion of the investigations by the Developer and, if applicable, the Developer’s environmental consultant, but in any event not later than the last day of the Feasibility Period, the Developer shall notify the City in writing whether the Developer approves or disapproves a ll physical aspects of the Site (including the soils and seismic conditions of the Site a nd Hazardous Materials c ontamination on, under or about the Site, or any portion thereof). The Developer’s failure to give written notice of approval or disapproval within such pe riod shall be deemed the Devel oper’s disapproval of the physical aspects of the Site. In the event the Developer disapproves th e physical aspects of the Site, then this Agreement shall be deemed to be terminated by the Developer. If remedial work is required and the Developer has not disapproved the physical aspects of the Site as provided herein, then, following the close of escrow, the Developer shall perform, or cause to be performed, without cost or expense to the City, ot her than any negotiated adjustme nt to the Purchase Price as described in Section 2.1.2 hereof, all remedial work, and the Developer shall obtain the issuance of closure lettters from all governmental agencies which have asserted juri sdiction over the remediation of the Site and provide copies of such closure letters to the City. The remedial work shall be performed in accordance with all applicable governmental requirements.
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b. Access to Site. In accordance with Section 2.14 of this Agreement, the Developer and the Developer’s consultants, agents, engineers, inspectors, contractors, and employees (“Developer’s Representatives”) will be given reasonable acce ss to the Site during regular business hours for the purpo se of performing such inves tigation work. The Developer will undertake such investigation work at its sole cost and expense. The Developer agrees to indemnify, defend with counsel reasonably accepta ble to the City, and hold the City harmless from all claims (including claims of lien for wo rk or labor performed or materials or supplies furnished), demands, liabilities, losses, damages, costs, fees, and expens es, including the City’s reasonable attorneys’ fees, costs, and expenses , arising from the acts or activities of the Developer or the Developer’s Re presentatives in, on, or about th e Site during or arising in connection with the Developer’s investigation wo rk on the Site. The Developer will repair any damage caused by its investigation work.
2.2.4 Compliance with Surplus Land Act. Th e City has declared the Site to be “exempt surplus land,” as defined in the Su rplus Land Act (Government Code Section 54220 et seq.) and will provide notice of exemption to the Department of Housing and Community Development (“HCD”) in accordance with HC D’s Surplus Land Act Guidelines (Draft, November 2020; the “Guidelines”). Under the Gu idelines, HCD is to review the notice of exemption and if it does not agre e with the City’s determination, it must provide a notice of violation within thirty (30) days of receipt of the City’s noti ce of exemption. If no notice of violation is received within th e 30-day period, the City may pr oceed to sell the Site to the Developer. If a notice of violation is received within the 30-day period, the City must work with HCD to correct any identified issues, and the Site may not be sold to the Developer until this process is complete. In such event, the City ag rees that the Feasibility Period shall be extended for the period reasonably necessary to complete the process with HCD, and solely for that purpose, not to exceed in any event an additional sixty (60) days.
2.3 Escrow
The City agrees to open an escrow with Commonwealth Land Title Insurance Company, as escrow agent (the “Escrow Agent” and/or “Title Company”), for the conveyance of the Site within the time established in the Schedule of Performance (Attachment No. 3). This Agreement, together with any supplemental es crow instructions prov ided by the parties and consistent herewith, shall constitu te the joint escrow instructions of the City and the Developer, and a duplicate original of this Agreement sh all be delivered to the Escrow Agent upon the opening of escrow. The City and the Devel oper shall provide such additional escrow instructions as shall be necessary and consistent with this Agreement. The Escrow Agent hereby is empowered to act under this Agreement, a nd, upon indicating its acceptance of the provisions of this Section 2.3 in writing, delivered to the City and to the Developer within five (5) days after the opening of the escrow, shall carry out its duties as Escrow Agent hereunder.
The Developer shall deposit with the Escrow Agent the Purchase Price for the Site in accordance with the provisions of Section 2.10 of this Agreement.
The Developer shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly afte r the Escrow Agent has notified the Developer of the amount of such fees, charges and costs, but not earlier than ten (10) days prior to the scheduled date for the close of escrow:
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a. One-half of the documentary transfer tax, escrow, title and recording fees; and
b. The premium for the title insurance policy or special endorsements to be paid by the Developer as set forth in Section 2.11 of this Agreement.
The City shall timely and properly ex ecute, acknowledge a nd deliver to the Escrow Agent the grant deed (in the form required by Section 2.8 hereof) conveying to the Developer fee title to the Site and shall deliver an estoppel certificate certifying that the Developer has completed all acts necessary to entit le the Developer to such conveyance, if such be the fact.
The City shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the City of th e amount of such fees, charges and costs, but not earlier than ten (10) days prior to the scheduled date for the close of escrow:
a. Costs necessary to place the titl e to the Site in the condition for conveyance required by the provisions of this Agreement; and b. One-half of the documentary transfer tax, escrow, title and recording fees.
Upon delivery of the grant deed to the Escrow Agent pursuant to Section 2.9 of this Agreement, the Escrow Agent shall record such deed following the parties’ satisfaction of all of the conditions to closing set forth in Section 2.4 of this Agr eement and when fee title to the Site can be vested in the Developer in acco rdance with the terms and provisions of this Agreement. The Escrow Agent shall buy, affix and cancel any transfer stamps required by law and pay any transfer tax required by law. Any insurance policies governing the Site are not to be transferred.
The Escrow Agent is authorized to:
a. Pay and charge the City and the De veloper, respectivel y, for any fees, charges and costs payable under this Section 2.3 of this Agreement.
Before such payments are made, the Escrow Agent shall notify the City and the Developer of the fees, charge s and costs necessary to clear title and close the escrow;
b. Disburse funds and deliver documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the City and the Developer; and
c. Record any instruments delivered through this escrow, if necessary or proper, to vest fee title in the Devel oper in accordance with the terms and provisions of this Agreement.
All funds received in this escrow shall be deposited by the Escrow Agent with other escrow funds of the Escrow Agent in a gene ral interest bearing escrow account or accounts with any state or national bank doing business in the State of Ca lifornia. Such funds may be transferred to any other such general escrow acc ount or accounts. All disbursements shall be made by check of the Escrow Agent, or by wire transfer if so directed by the party receiving such funds. All adjustments shall be made on the basis of a 30-day month.
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If this escrow is not in condition to close on or be fore the time for conveyance established in Section 2.7 of th is Agreement, any party who then shall have fully performed the acts to be performed before the conveyance may, in writing, terminate this Agreement in the manner set forth in Section 5.6.1 or 5.6.2 hereof, as the case may be, and demand the return of its money, papers or documents. Thereupon all obliga tions and liabilities of the parties under this Agreement shall cease and termin ate in the manner set forth in Section 5.6.1 or 5.6.2 hereof, as the case may be. If none of the parties shall have fully performed the acts to be performed on or before the time for conveyance established in Section 2.7, no termination or demand for return shall be recognized until ten (10) days after the Escrow Agent sh all have mailed copies of such demand to the other party or parties at the addre ss of its or their princi pal place or places of business. If any objections are raised within the 10-day period, th e Escrow Agent is authorized to hold all money, papers and documents with respect to the Site until instructed in writing by the City and the Developer or upon a final ruling by a court of competent juri sdiction. If no such demands are made, the escrow shall be closed as soon as possible. Nothing in this Section 2.3 shall be construed to impair or affect the rights or obligations of the City or the Developer to specific performance or other remedies provided for herein.
Any amendment of these escrow instructions shall be in writing and signed by the City and the Developer. At the time of any am endment, the Escrow Agen t shall agree to carry out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the City or the Developer shall be directed to the addresses and in the manner es tablished in Section 6.1 of this Agreement for notices, demands and communications between the City and the Developer.
The liability of the Escrow Agent under this Article 2 of this Agreement is limited to performance of the obligations imposed upon it under Sections 2.3 to 2.12, both inclusive, of this Agreement.
2.4 Conditions to Closing
2.4.1 City Conditions to Closing. The City’s obligation to proceed with the sale of the Site is subject to the fulfillment (or waiver in writing by the City) of each and all of the conditions precedent set forth in this Section 2.4.1 (“City Conditions Precedent”), which are solely for the benefit of the City, and which shall be fulfilled or waived by the time periods provided for herein:
a. No Default. At the time of close of escrow, the Developer shall not be in default of any of its obligations under this Agreement and all representations and warranties of the Developer contained herein shall be true and correct in all material respects. b. Execution of Documents. The De veloper shall have executed the Affordable Housing Regulatory Agreement (pursu ant to Section 4.1) and any other documents required hereunder and shall have delivered such documents into escrow. c. Payment of Closing Costs. The Developer shall have paid the Developer’s share of all require d closing costs to the Escrow Agent in accordance with Section
2.3 hereof.
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d. Entitlements. The Developer sh all have obtained all Entitlements necessary for development of the Site pursuant to this Agreement, subject only to payment of the appropriate fees.
e. Financing. The City shall have approved the Developer’s financing, equity funding and final construction budget as provided in Section 2.15 hereof. f. Insurance. The Developer shall have provided to the City proof of insurance as required by Section 3.1.8.
g. Approval of Physical Condition of the Site. The Developer shall have provided notice to the City pursuant to Section 2.2.3 that al l physical aspects of the Site (including without limitation Hazardous Materials Contamination, if any, on, under or above the Site, or any portion thereof, and the soils and seismic condition of the Site, as described in Section 2.13 of this Agreement) are acceptable to the Developer. h. Compliance with Surplus Land Act. The City shall have received no notice of violation from the Department of Housing and Community Development (“HCD”) concerning compliance with the Surplus Land Act or , if a notice of viola tion has been received from HCD, the City has been able to satisfactor ily address the issues raised by HCD, as further described in Section 2.2.4 of this Agreement.
2.4.2 Developer Conditions to Closing. Th e Developer’s obligation to proceed with the purchase of the Site is subject to the fulfillment (or waiver in writing by the Developer) of each and all of the conditions precedent set forth in this Section 2.4.2 (“Developer Conditions Precedent”), which are solely for the benefit of the Developer, and which shall be fulfilled or waived by the time periods provided for herein:
a. No Default. At the time of close of escrow, the City shall not be in default of any of its obligations under this Ag reement and all representations and warranties of the City contained herein shall be true and correct in all material respects. b. Execution of Documents. The City shall have delivered the grant deed for the Site, properly executed, and any other documents required hereunder into escrow. c. Entitlements. The Developer sh all have obtained, subject only to the payment of the appropriate fees, all Entitlements necessary for the development of the Site pursuant to this Agreement.
d. Financing. The Developer shall have obtained all financing, including debt and equity funding, needed to pay all costs of acquiring and developing the Site as provided in Section 2.15 hereof within the time set forth in the Schedule of Performance (Attachment No. 3).
e. Title Insurance. The Title Company shall, upon payment of Title Company's regularly scheduled premium, be ready to issue an ALTA extended coverage owner’s title insurance policy, with any endorsements r easonably requested by th e Developer, showing fee simple title to the Site vested in the Developer, subject only to the Permitted Exceptions. f. Approval of Physical Condition of the Site. The Developer shall have determined, within the Feas ibility Period, that a ll physical aspects of the Site (including
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without limitation Hazardous Materials Contamina tion, if any, on, under or above the Site, or any portion thereof, and the soils and seismic cond ition of the Site, as de scribed in Section 2.13 of this Agreement) are acceptable, and there sha ll have been no material adverse change to the condition of the Site since the da te of the Developer’s notice of approval to the City regarding the physical condition of the Site.
2.4.3 City Representations. The City repr esents and warrants to the Developer as follows:
a. Authority. The City is a Calif ornia municipal corporation, has full right, power and lawful authority to convey the Site as provided herei n, and the execution, performance and delivery of this Agreement and the grant deed to the Site has been fully authorized by all requisite actions on the part of the City. b. No Conflict. To the best of the City’s knowledge, the City’s execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the City is a party or by which it is bound.
c. No Claims. To the best of the City’s knowledge, there are no outstanding disputes, claims, or pending or, to the City’s knowledge, threatened legal proceedings or administrative actions of any kind or character adversely affecting the Site or the City’s interest; and to the City’s knowledge, th ere are no easements or rights-of-way which have been acquired by prescription or which are otherwise not of record.
Until the close of escrow, the City shall, upon learning of any fact or condition that would cause any of the warranties and representati ons in this Section 2.4.3 not to be true as of the close of escrow, immediately gi ve written notice of such fact or condition to the Developer. Such exception to a representation shal l not be deemed a breach by the City hereunder, but shall constitute an exception that the Developer shal l have a right to approve or disapprove if such exception would have a materi al effect on the value and/or operation of the improvements to be constructed on the Site. If the Developer elects to close escrow following disclosure of such information, the City’s repr esentations and warranties contained herein shall be deemed to have been made as of the close of escr ow subject to such exception. If, following the disclosure of such information, the Developer elects to not close escrow, then this Agreement and the escrow shall automatically terminate, all money, papers and documents deposited into escrow shall be returned to the party that ma de such deposit, and neither the City nor the Developer shall have any further rights, obligations or liabilities hereunde r, except as otherwise expressly provided in this Agreement.
2.4.4 Developer Representations. The Deve loper represents and warrants to the City as follows:
a. Authority. The Developer ha s full right, power and lawful authority to accept the conveyance of the Site and undertake all ot her obligations as provided herein, and the execution, performance and deliver y of this Agreement by the Developer have been fully authorized by all requisite actions on the part of the Developer. b. No Conflict. To the best of the Developer’s knowledge, the Developer’s execution, delivery and performance of its obligations under this Agreement will
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not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound.
c. No Developer Bankruptcy. The Developer is not the subject of any bankruptcy proceeding, has not made a genera l assignment for the be nefit of creditors, suffered the filing of an involuntary petition by its creditors, suffere d the appointment of a receiver to take possession of substantially all of its assets, suffered the attachment or other judicial seizure of substantially all of its assets , admitted its inability to pay its debts as they come due or made an offer of settlement, extension or composition to its creditors generally.
Until the close of escrow, the Developer shall, upon learning of any fact or condition that would cause any of the warranties and representati ons in this Section 2.4.4 not to be true as of the close of escrow, immediately gi ve written notice of such fact or condition to the City. Such exception to a representation shal l not be deemed a br each by the Developer hereunder, but shall constitute an exception that the City shall have a right to approve or disapprove. If the City elects to close escrow following disclo sure of such information, the Developer’s representations and warranties contained herein shall be deemed to have been made as of the close of escrow subject to such ex ception. If, following th e disclosure of such information, the City elects to not close escrow, then this Ag reement and the escrow shall automatically terminate, all money, papers and documents deposited into escrow shall be returned to the party that made such deposit, an d neither the City nor the Developer shall have any further rights, obligations or liabilities hereunder, except as otherwise expressly provided in this Agreement.
2.5 Entitlements; Consultation with San Pablo Historical & Museum Society a. Entitlements
As used herein, “Entitlements” me ans all land use approvals legally required by the City in its Governmental Capaci ty (as defined in Section 6.11 hereof) or any other governmental authority as a condition of development of the Site and shall include any and all entitlements, licenses, permits or other appr ovals required by the City in its Governmental Capacity or any other governmental authority as a condition to development of the Site, including any conditional use permit, if required, design review approval and any demolition, grading and building permits. Within the tim e set forth in the Schedule of Performance (Attachment No. 3), the Developer shall apply for and obtain all Entitlements, subject only to the payment of applicable fees, and the Develope r shall remit corresponding fees charged by the City or such other governmental authority fo r such Entitlements on a timely basis. The Developer’s application for the Entitlements shall be consistent with the Scope of Development (Attachment No. 4) and the terms and conditions of this Agreement. If the Developer fails to obtain the Entitlements within the time set fort h in the Schedule of Performance (Attachment No. 3), the Developer will be deemed to have elected to terminate this Agreement.
The Developer understands and acknowle dges that the City approvals and related requirements include actions requiring th e exercise by the City of its governmental authority and discretion in its Governmental Capacity, as described in Section 6.11 of this Agreement, to ensure that the development complies with the San Pablo Municipal Code , including as set forth in Chapter 17.16 thereof compliance with the California Environmental Quality Act (“CEQA”; Public Resources Code Section 21000 et seq .), and the guidelines implementing CEQA (“CEQA Guidelines”; Title 14 of the California Code of Regulations,
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Section 15000 et seq.). The Site was the subject of a Mitigated Negative Declaration prepared in connection with the approval of the 2017 Specific Plan Amendm ent/General Plan Amendment that designated the Overall Property as SP2-Mixed Use Center City Hall Site, and that includes mitigation measures regarding biological resources, cultural resources, and geology and soils that must be complied with as part of the Project development. The Developer further understands and acknowledges that (a) the cost of prepari ng a document specifically evaluating the proposed Project development in accordance with CEQA and the CEQA Guidelines is a cost payable by the Developer as part of the application process for the City approvals; (b) that a determination that the proposed development will have signifi cant adverse impacts that cannot be mitigated or reduced to a less than significant level is po ssible and may preclude the proposed Project development proposed in this Agreement; and (c ) that any mitigation measures necessary to mitigate or reduce significant adverse impacts may be required to be incorporated as part of the proposed Project development as part of the City approvals. b. Consultation with San Pablo Historical & Museum Society The San Pablo Historical & Museum Society (the “Historical Society”) was formed in the 1970s to gather and preserve information and materials chronicling the history of the City of San Pablo. Pursuant to an agreement with the City, the Historical Society operated the Alvarado Adobe Museum and the Blume Hous e Museum for viewing by the general public.
Both museums are currently closed due to th e COVID-19 pandemic restrictions. The Alvarado Adobe Museum has been included as a part of th e Site to be conveyed to and repurposed by the Developer. As described in Section 1.2 of th is Agreement, the Alvarado Adobe Museum was built in 1978 and is a reconstruction of the original building, which had been designated as California Historical Landmark No. 512 in 1953 prior to its demolition in 1954. Nevertheless, the reconstructed building is recognized by me mbers of the community as important for its instructional value as an historic reconstruction and as the site of the origin al adobe structure.
Prior to submitting its application for Project design review approval, the Developer agrees to consult with the Historical Society for the purpo se of obtaining the Hist orical Society’s input concerning the use and design of the Alvarado Adobe Museum as part of the Project, in particular, the ability of the Hist orical Society to continue to di splay various historical exhibits from time-to-time in some portion of the Alvarado Adobe Museum building.
2.6 Condition of Title
The City shall convey to the Developer fee simple title to the Site, subject only to the Permitted Exceptions.
2.7 Conveyance of Title and Delivery of Possession
Provided that the Developer is not in default under this Agreement following notice and expiration of any appl icable cure periods, and provide d that all conditions precedent to such conveyance have occurred, and subject to Force Majeure pursuant to Section 6.4 below and any mutually agreed upon extensions of time , conveyance to the Developer of title to the Site shall be completed on or prior to the date specified in the Schedule of Performance (Attachment No. 3). The City and the Develope r agree to perform all acts reasonably necessary to cause conveyance of title in sufficient time for title to be conveyed in accordance with the foregoing provisions.
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Possession shall be delivered to the Deve loper concurrently with the conveyance of title, except that limited access may be permitte d before conveyance of title as permitted in Sections 2.2.3 and 2.14 of this Agreement. The Developer shall accept title and possession on or before the said date.
The Site shall be conveyed free of a ny possession or right of possession by any person except that of the Developer and the Permitted Exceptions. The Developer acknowledges that the Site is currently occupi ed by certain City employees, and agrees that, if the date for the close of escrow is extended due to the award of tax credits for the deve lopment of the Project, the Developer shall give the City not less than one hundred eighty (180) days’ notice to vacate the Site.
2.8 Form of Grant Deed
The City shall convey to the Developer fee title to the S ite in the condition provided in Section 2.6 of this Ag reement by grant deed in substa ntially the form set forth in Attachment No. 5.
2.9 Time for and Place of Delivery of Grant Deed
Subject to Force Majeure pur suant to Section 6.4 below or any mutually agreed upon extensions of time, the City shall deposit the grant deed for the Site on or before the date established for the conveyance of the Site in the Schedule of Performance (Attachment No. 3).
2.10 Payment of the Purchase Price and Recordation of Grant Deed, Affordable Housing Regulatory Agreement and Reciprocal Easement Agreement
The Developer shall deposit the Purchase Price for the Site (less the amount of the Deposit) and other sums require d hereunder with th e Escrow Agent prior to the date for conveyance of the Site, provided that the Escrow Agent shall ha ve notified the Developer in writing that the grant deed, properly executed an d acknowledged by the City, has been delivered to the Escrow Agent and that the condition of title is as required by Section 2.6 of this Agreement. The City and the Developer shall al so deliver to the Escrow Agent their respective counterparts of the Affordable Housing Regul atory Agreement and Reciprocal Easement Agreement, properly executed and acknowledged. Upon the close of escr ow, the Escrow Agent shall file the grant deed, Affordable Housing Regulatory Agreement and Reciprocal Easement Agreement for recordation among the land record s in the Office of the County Recorder of Contra Costa County, shall deliver the Purchase Price to the City, and shall deliver to the Developer a title in surance policy insuring title in conformity with Section 2.11 of this Agreement.
2.11 Title Insurance
Concurrently with recordation of the gr ant deed for the Site, the Title Company shall provide and deliver to the Developer a titl e insurance policy issued by the Title Company, together with such endorsements requested by Developer, insuring th at fee title is vested in the Developer in the condition of title required by Section 2.6 of this Agreement. The Title Company shall provide the City with copies of the title insurance policy. The Developer shall pay for all premiums for title insurance coverage or special endorsements.
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2.12 Taxes and Assessments
Ad valorem taxes and assessments, if any, on the Site, and taxes upon this Agreement or any rights hereunder, levied, as sessed or imposed for any period commencing prior to conveyance of title shal l be borne by the City. All ad valorem taxes and assessments levied or imposed for any period commencing afte r closing of the escrow shall be paid by the Developer.
2.13 Condition of the Site
2.13.1 “As-Is”. Within fourteen (14) da ys after the opening of the escrow for conveyance of the Site to the Developer, th e City shall provide the Developer with all information of which it has actual knowledge c oncerning the physical condition of the Site, including, without limitation, information about any Hazardous Materials, as defined below. The Developer acknowledges and agrees th at it is acquiring the Site “a s is,” in its current physical condition, with no warranties, express or implie d, as to the physical condition thereof, the presence or absence of any latent or patent condition thereon or therein, including without limitation, any Hazardous Materials thereon or therein, any soils and seismic conditions, and any other matters affecting the Site. It shall be th e sole responsibility of the Developer, at the Developer's sole expense, to investigate and de termine the soil conditions of the Site and the suitability of such soil conditions for the improve ments to be constructed by the Developer. If, following the Developer’s approval of the condition of the Site, the Developer determines that the soil conditions are not in all respects entirely suitable for the use or uses to which the Site will be put, then it is the sole responsibility and obligation of the Developer to take such action as may be necessary to place the soil conditi ons of the Site in a condition suitable for the development of the Site.
2.13.2 Indemnity. The Developer agrees, fr om and after the date title to or possession of the Site is delivered from the City to the Developer under this Agreement, to defend, indemnify, protect and hold harmless the C ity and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successo rs and assigns (“Indemnitees”) from, regarding and against any and all liabilities, obligations , orders, decrees, judgments, liens, demands, actions, Environmental Response Ac tions (as defined herein), clai ms, losses, damages, fines, penalties, expenses, Environmental Response Cost s (as defined herein) or costs of any kind or nature whatsoever, together with fees (includi ng, without limitation, reas onable attorneys’ fees and experts’ and consultants’ fees), whenever arising, resulting from, arising out of or based upon the actual or claimed generation, storag e, handling, transportation, use, presence, placement, migration and/or rele ase of Hazardous Materials (as defined herein), at, on, in, beneath or from the Site (sometimes herein collec tively referred to as “Contamination”), and/or arising out of or based upon any soils or seismic issues affec ting the Site. The Developer’s defense, indemnification, protection and hold harm less obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand, at the Developer’s sole cost.
2.13.3 Release and Waiver. The Developer he reby releases and waives all rights, causes of action and claims the Developer has or may have in the future against the Indemnitees arising out of or in connection with any Hazardous Materi als (as defined he rein) at, on, in, beneath or from the Site and/or arising out of or in connection with any soils or seismic issues affecting the Site. In furtherance of the inte ntions set forth herein, the Developer acknowledges
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that it is familiar with Section 1542 of the Civil Code of the State of California, which provides as follows:
“A general release does not extend to claims that the
creditor or releasing party does not know or suspect to exist in his or her favor at the tim e of executing the release, and that, if known by him or he r, would have materially
affected his or her settlement with the debtor or released party.”
The Developer hereby waives and relinquishes a ny right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or non-statutory law of any other applicable jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this Section 2.13.3.
2.13.4 Definitions.
a. As used in this Agreement, the term “Environmental Response Actions” means any and all activ ities, data compilations, prepar ation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, remo val activities, remediation activi ties or responses to inquiries and notice letters, as may be s ought, engendered, initiated or re quired in conne ction with any local, state or federal governmental or priv ate party claims, including any claims by the Developer.
b. As used in this Agreement, the term “Environmental Response Costs” means any and all costs associated w ith Environmental Response Actions including, without limitation, any and all fines, penalties and damages. c. As used in this Agreement, the term “Hazardous Materials” means any substance, material or waste which is (1) defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazar dous waste,” or “restricted hazardous waste” under any provision of California law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U. S.C. Section 1317); (7) defined as a “hazardous waste” pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903); (8) defined as a “haz ardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compen sation, and Liability Act, 42 U.S.C. Section 9601 et seq . (42 U.S.C. Section 9601); or (9) determ ined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property.
2.13.5 Materiality. The Developer acknowledges and agrees that the defense, indemnification, protection and hold harmless obligat ions of the Developer for the benefit of the City set forth in this Section 2.13 are a material element of the considera tion to the City for the performance of its obligations und er this Agreement, and that th e City would not have entered this Agreement unless the Developer’s obligations were as provided for herein.
2.13.6 Developer Precautions After Closi ng. Upon the close of escrow, the Developer shall take all necessary precautions to prevent the releas e into the environment of any Hazardous Materials that are located in, on or under the Site. Such precautions shall include
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compliance with all governmental requirements with respect to Hazar dous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with comm ercially reasonable standards as respects the disclosure, containment, storage, use, removal and disposal of Hazardous Materials.
2.13.7 Required Disclosures After Closing. After the close of escrow, the Developer shall notify the City, and provide to th e City a copy or copies , of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, including notices of violation, notices to comply, citations, i nquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to se lf-reporting requirements and reports filed or applications made pursuant to a ny governmental requirements rela ting to Hazardous Materials.
The Developer shall report to the City, as soon as possible afte r each incident, any unusual or potentially important incidents with respect to the environmental condition of the Site.
2.14 Preliminary Work by the Developer
Prior to the conveyance of title to the Si te from the City, representatives of the Developer shall have the right of access to the Site at all reasonable times for the purpose of obtaining data, making surveys and tests necessary to carry out this Agreement. Promptly following the opening of escrow for conveyance of the Site to the Developer, the City shall provide to the Developer, and the Developer shall have access to, all data and information on the Site available to the City, but without warranty or representa tion by the City as to the completeness, correctness or validity of such data and information.
Any preliminary work undertaken on th e Site by the Developer prior to conveyance of title thereto shall be done only af ter obtaining an encroachment permit from the City’s Public Works Department and any ot her necessary permits from the appropriate governmental agencies, and any such work shall be done at the sole expense of the Developer.
As provided in Section 2.2.3.b of this Agreement, the Developer shall save and protect the City against any claims resulting from any such prel iminary work, access or use of the Site. Copies of data, surveys and tests obtained or made by th e Developer on the Site shall be filed with the City.
2.15 Submission of Evidence of Financing
Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall provide the C ity with a preliminary budget for the construction of the Developer’s improvements on the Site required by this Agreement, including all proposed sources and uses of funds, all “hard” and “sof t” costs and contingencies and reflecting, to the extent possible, firm bids or accepted contracts a nd with evidence of suffic ient funds to meet all budget requirements (the “preliminary evidence of financing”).
Unless otherwise approved by the City, the Developer’s evidence of sufficient funds, as required for the preliminary evidence of financing, must include only the following:
(a) Developer equity; and (b) preliminary loan commitments (subject to standard qualifications and exceptions), in form and content acceptable to the City. Within ten (10) days after the City’s request, the Developer shall provide any additional information requested by the City for evaluation of the actual availabil ity of funds included in such pr eliminary evidence of financing, including without limitation furt her evidence required for clarif ication or audited financial reports.
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Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall provide the City with a comple te and firm budget for the construction of the Developer’s improvements on the Site required by this Agreement, including all proposed sources and uses of funds, all “hard” and “sof t” costs and contingencies and reflecting, to the extent possible, firm bids or accepted contracts a nd with evidence of suffic ient funds to meet all budget requirements (the “final evidence of financing”).
Unless otherwise approved by the City, the Developer’s evidence of sufficient funds, as required for the final evidence of fina ncing, must include only the following: (a) Developer equity; and (b) firm and binding loan co mmitments (subject to standard qualifications and exceptions), in form and content acceptable to the City. Within ten (10) days after the City’s request, the Developer shall provide any additional information requested by the City for evaluation of the ac tual availability of funds included in such final evidence of financing, including without limitation furt her evidence required for clarif ication or audited financial reports.
As a material obligation under this Agreement, the Developer shall ensure that the loan documents comply, in all respects, with this Agreement. The City may reject any commitment if it is based upon sources and uses of funds that are different from those approved by the City for the development of the Site. Th e City may also reject any commitment that requires changes that conflict with this Agreemen t, that requires amendment of this Agreement or that requires the City to enter into agreemen ts with any lender, guara ntor, equity partner or any other third party other than agreements expressly permitted in this Agreement.
The City shall approve or disapprove each such evidence of financing commitments and the construction budget within thirty (30) days of receipt of a complete submission. If the City shall disapprove any such ev idence of financing or the construction budget, the City shall do so by notice to the De veloper stating the reasons for such disapproval and the Developer shall promptly obtain and subm it to the City new evidence of financing. The City shall approve or disapprove such new eviden ce of financing in the same manner and within the same times established in this Section 2.15 for the approval or disapproval of the evidence of financing initially submitted to the City. Any required approval of the City under this Section
2.15 shall not be unreasonably withheld or delayed.
2.16 Project Loan
a. In consideration of the agreements and covenants of the Developer hereunder, the City agrees to loan to th e Developer the sum of TWO MILLION DOLLARS ($2,000,000.00) (the “Project Loan”). Subject to sa tisfaction of all conditions precedent thereto set forth in this Agreement, the Project Loan shall be disbursed to the Developer according to the following schedule:
• Twenty-five percent (25%) of the Project Loan (the “First Disbursement”) shall be disbursed to the De veloper upon the commencement of construction as follows: (a) the Developer shall make a writte n request to the City for disbursement, which request shall include evidence satisfactory to the City that the Developer has commenced construction of the Project; and (b) the City shall deliver the First Disbursement to the Developer within ten (10) days of receipt of the Developer’s satisfactory request.
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• Twenty-five percent (25%) of the Project Loan (the “Second Disbursement”) shall be disbursed to the De veloper upon completion of twenty-five percent (25%) of the Project as follows: (a) the Develope r shall make a written request to the City for disbursement, which request shall include ev idence satisfactory to the City (including a certification from the Developer’s architect that 25% of the Projec t has been completed) that the Developer has completed twenty-five percent (25%) of the Project; and (b) the City shall deliver the Second Disbursement to the Developer within ten (10) days of receipt of the Developer’s satisfactory request.
• Twenty-five percent (25%) of the Project Loan (the “Third Disbursement”) shall be disbursed to the Deve loper upon completion of fifty percent (50%) of the Project as follows: (a) the Developer sh all make a written request to the City for disbursement, which request shall include ev idence satisfactory to the City (including a certification from the Developer’s architect that 50% of the Projec t has been completed) that the Developer has completed fifty percent (50%) of the Project; and (b) the City shall deliver the Third Disbursement to the Developer within te n (10) days of receipt of the Developer’s satisfactory request.
• Twenty-five percent (25%) of the Project Loan (the “Fourth Disbursement”) shall be disbursed to the De veloper upon completion of seventy-five percent (75%) of the Project as follows: (a) the Develope r shall make a written request to the City for disbursement, which request shall include ev idence satisfactory to the City (including a certification from the Developer’s architect that 75% of the Projec t has been completed) that the Developer has completed seventy-five percent (75%) of the Project; and (b) the City shall deliver the Fourth Disbursement to the Developer within ten (10) days of receipt of the Developer’s satisfactory request.
The Project Loan shall be used by the Developer solely for the purpose of constructing the Project and developing the Site as provided in this Agreement. b. The Project Loan shall be evidenced by a promissory note (the “Project Loan Note”) to be executed by the Developer in favor of the City in substantially the form attached hereto as Attachment No. 8. The Project Loan shall bear simple interest per annum at the rate of three percent (3%). Payments on the Project Loan shall be paid from eighty percent (80%) of the residual receipts from the Project, as more fully described in the Project Loan Note.
The outstanding principal and all accrued and unpa id interest on the Project Loan shall be due and payable in full thirty (30) years from the da te of the Project Loan Note, provided, however, that the term of the Project Loan may be increased to fifty-five (55) years by the City Manager upon receipt of satisfactory evidence from the Developer that such longer term is required in order to secure required financi ng for the development of the Proj ect. The Project Loan Note shall be secured by a deed of trust (the “Project Lo an Deed of Trust”) on the Site in substantially the form attached hereto as Attachment No. 9. The Project Loan Deed of Trust shall be subject and subordinate only to the terms of a construction and/or permanent loan, as follows:
(1) The City agrees that the Project Loan Deed of Trust shall be subject and subordinate to the te rms and conditions of a construc tion deed of trust securing a construction loan given by a lender approved by th e City (the “Construc tion Lender”) not to exceed a sum that would cause the total of all permitted liens against the Site, to exceed ninety percent (90%) of the projected Project value in cluding land and construc tion (the “Construction Loan”), provided that the Constr uction Lender agrees to include in its deed of trust or in a
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separately recorded subordination agreement with the City the following conditions: (a) the City shall receive copies of any notices of default issued by the Construction Lender to the Developer; (b) the City shall have the right to cure any default by the Developer within ninety (90) days after a notice of default; and (c) the City shall have the right to exercise any and all remedies under the Project Loan Deed of Trust following the expirati on of ninety (90) days after delivery of notice from the City to the Construction Lender of a de fault under the Project Loan Note or the Project Loan Deed of Trust.
(2) The City agrees that the Project Loan Deed of Trust shall also be subject and subordinate to the terms and conditions of a deed of trust securing a permanent loan given by a lender reasonably approved by the City (the “Permanent Lender”) not to exceed a sum that would cause the total of all permitted liens against the Site to exceed ninety percent (90%) of the Project value including land and improvements (the “Permane nt Loan”), provided that the Permanent Lender agrees to include in its deed of trust or in a separately recorded subordination agreement with the City the conditions described in subparagraph (1) above. c. Prior to the disbursement of any portion of the Project Loan:
(1) The Developer shall have obtaine d and delivered to the City an ALTA Lender's Policy of Title Insurance (the “Title Policy”), insuring the validity and the priority of the lien of the Pr oject Loan Deed of Trust upon the Site, subject only to the Construction and/or Permanent Loan described in Section 2.16.b. above to which the City has agreed the Project Loan will be subordinate and ot her matters of record approved by the City in writing, and showing fee simple title to the Site in the name of the Developer; and (2) The Developer shall have execute d and delivered the Project Loan Note, the Project Note Deed of Trust, the Affo rdable Housing Regulatory Agreement (described in Section 4.1 of this Agreement) and any othe r documents reasonably requested by the City to evidence and secure the Project Loan; and
(3) The Developer shall not then be in default of any of its obligations under this Agreement, the Purchase Money Note, the Purchase Money Deed of Trust, the Project Loan Note, the Project Loan Deed of Trust or the Affordable Housing Regulatory Agreement.
The Developer expressly acknowledge s and agrees that (a) the excl usive source of funds for the Project Loan is LMIHAF monies held by the City, as the successor-in-interest to the former San Pablo Redevelopment Agency, that must be used in accordance with the provisions of Health and Safety Code Section 33334.2, as modified by Health and Safety Code Section 34176.1, for the purposes of increasing, improving and preserving affordable housing in the City of San Pablo and (b) in the event legislation is enacted by the State that reduces or eliminates the amount of LMIHAF monies available to the City for any or all scheduled disbursements of the Project Loan pursuant to this Agreement, th e City’s disbursement obligati on(s) shall be correspondingly reduced or eliminated.
ARTICLE 3
DEVELOPMENT OF THE SITE
3.1 Development of the Site by the Developer
3.1.1 Scope of Development. The Site sh all be developed as provided in the Scope of Development (Attachment No. 4).
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3.1.2 Local, State and Federal Laws. The Developer shall carry out the construction of the improvements on the Site in conformity with all applicable laws, including all applicable federal and state labor standards. The Developer shal l, and shall cause its general contractors to, pay app licable prevailing wages as those wages are determined pursuant to California Labor Code Sections 1720 et seq. and the implementing regulations of the Department of Industrial Relations and comply with the other applicable provisions of California Labor Code Sections 1720 et seq. and implementing regulations of the Department of Industrial Relations.
The Developer shall, and shall cause its general c ontractors to, keep and re tain such records as are necessary to determine that prevailing wages ha ve been paid if and as required by law. The Developer shall, and the construction agreemen ts shall require its general contractors to, indemnify, hold harmless and defend (with counsel reasonably acceptable to the City) the City against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the Developer, its general contractors, and their subcontractors, if any) to pay prevailing wages as required by law or to comply with the other applicable provisions of Ca lifornia Labor Code Sections 1720 et seq . and implementing regulations of the Department of Industrial Re lations in connection with construction of the improvements on the Site.
3.1.3 Preliminary Site Plan. The Developer has prepared and submitted to the City a preliminary site plan for development of the Site. The preliminary site plan is attached to this Agreement as Exhibit A of the Scope of Development (Attachment No. 4). The Site shall be developed as generally shown in the preliminary site plan and related documents except as changes may be mutually agreed upon between th e Developer and the City. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 4).
3.1.4 Construction Plans, Drawings and Related Documents. The Developer shall prepare and submit construction plans, dr awings and related documents in accordance with all applicable City requirements.
3.1.5 Governmental Agency Permits
Before commencement of constructi on or development of any buildings, structures or other work of improvement upon the S ite, the Developer shall secure or cause to be secured any and all permits, approva ls or entitlements which may be required by the City or any other governmental agency affected by such construction, development or work.
It is the responsibility of the Devel oper, without cost to the City, to process, obtain, and maintain all Entitlements to assure that the design, construction, use, operation, maintenance, repair and replacement of the improvements on the Site are carried out in accordance with the provisions of this Agr eement, and are permitted by zoning, all applicable City land use requirements and a ll other governmental requirements. Nothing contained in this Agreement shall be deemed to waive the right of the City to act in its Governmental Capacity (as defined in Section 6.11 hereof) with respect to the consideration and approval of the Entitlements and all other permits, licenses and approvals reque sted by the Developer from time to time in connection with the development of the Site nor sh all it entitle the Developer to any Entitlement or other City approval necessary for the devel opment of the Site, or to the waiver of any applicable City requirements relating thereto, and the failure of the City to issue or approve any Entitlement shall not be a default of the City under this Agreement.
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This Agreement does not (a) grant any land use entitlement to the Developer, (b) supersede, nullify, or amend any condition which may be imposed by the City in its Governmental Capacity in connection with approval of the developm ent of the Site, (c) guarantee to the Developer or any other party any profits from the development of the Site, or (d) amend any governmental requirements of the C ity. Nothing in this Agreement shall be construed or interpreted as committing the City to approve or undertake any action or review process or activities that require the independent exercise of discretion by the City, including any approval of any Entitlement or permit application for which the Developer applies after the date of this Agreement.
This Agreement is not a development agreement as provided in Government Code Section 65864 and, as set fort h above, is not a grant of any entitlement, permit, land use approval, or ve sted right in favor of the Deve loper or the development of the Site.
3.1.6 Cost of Construction. The cost of developing the Site and constructing all improvements thereon shall be borne by the Devel oper. The City and the Developer shall each pay the costs necessary to administer and carry out their respective responsibilities and obligations under this Agreement.
3.1.7 Construction Schedule
a. After the conveyance of title to the Site, the Developer shall begin and complete all construction and development within the times specified in the Schedule of Performance (Attachment No. 3) or such reasonable extension of said dates as may be granted by the City or subject to Force Majeure as provided in Section 6.4 of this Agreement. The Schedule of Performance is subject to revision from time-to-time as mutually agreed upon in writing between the Developer and the City and as necessary to account for Force Majeure. b. During the period of construction, but not more frequently than once a calendar quarter, the Developer shall submit to the City a written progress report of the construction when and as requested by the City. Th e report shall be in such form and detail as may reasonably be required by the City and sha ll include a reasonable number of construction photographs taken since the last report submitted by the Developer.
3.1.8 Indemnification; Bodily Injur y, Property Damage and Workers’ Compensation Insurance
a. Indemnification
The Developer agrees to and sha ll indemnify, protect, defend and hold the City, and its officers, beneficiaries, em ployees, agents, attorneys, representatives, legal successors and assigns (“Indemnitees”), harmless from and against all li ability, loss, damage, costs or expenses (including reasonable attorneys’ fees and court costs) of any kind or nature arising from or as a result of the death of a ny person or any accident, injury, loss or damage whatsoever caused to any person or to the pr operty of any person which shall occur on or adjacent to the Site resulting from or in connec tion with the development, use or operation of the Site by the Developer, its agents, servants or employees or the general contractor or any subcontractor or supplier of or to the Site, including any issues related to the seismicity of the Site, or the Developer’s performance or non -performance under or w ith respect to this Agreement.
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The Developer, for itself and for each and every successor-in- interest, hereby releases and waives all rights, causes of action and claims the Developer, or such successors-in-interest, has or may have in the futu re against the Indemnitees arising out of or in connection with all liability, loss, damage, costs or expenses (including reasonable attorneys’ fees and court costs) of any kind or nature arising from or as a re sult of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person which shall occur on or ad jacent to the Site resulting fr om or in connection with the development, use or operation of the Site by th e Developer, each and every successor-in-interest of the Developer, the Developer’s agents, servants or employees or the general contractor or any subcontractor or supplier of or to the Site, including any issues related to the seismicity of the Site, or the Developer’s performance or non -performance under or w ith respect to this Agreement. In furtherance of the intentions se t forth herein, the Developer, for itself and for each and every successor-in-interest, acknowledges that it is familiar w ith Section 1542 of the Civil Code of the State of California that provides as follows:
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the rele ase and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”
The Developer, for itself and for each and every successor-in- interest, hereby waives and reli nquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or nonstatutory law of any other applicable jurisdiction to the fu ll extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this Section 3.1.8.a.
The Developer, for itself and for each and every successor-in- interest, acknowledges and agrees that the de fense, indemnification, protection and hold harmless obligations of the Developer and its successors-in-interest for the benefit of the City set forth in this Section 3.1.8.a. are a material elem ent of the consideration to the City for the performance of its obligations und er this Agreement, and that th e City would not have entered this Agreement unless the Developer’s and successors’ obligations were as provided for herein. b. Bodily Injury, Property Dama ge and Workers’ Compensation Insurance
Prior to the close of escrow for conveyance of the Site, the Developer shall furnish or cause to be furnished to the City dupl icate originals or appropriate certificates of insurance policies providing the following coverage in not less than the following amounts from insurers reasonably acceptable to the City’s Risk Manager:
(1) General Liability: Bodily injury, personal injury and property damage insurance policies in the amount of at least $2,000,0 00 per occurrence and $5,000,000 aggregate. If Commercial General Liability insurance or other form with a general aggregate limit shall apply sepa rately to the Site and Deve loper’s obligations under this Agreement, the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage;
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(3) Workers’ Compensation and Employers’ Liability:
Workers’ Compensation limits as required by state law and Employers’ Liability limits of $1,000,000 per accident, $1,000,000 policy limit bodily injury by disease, and $1,000,000 each employee bodily injury by disease; and
(4) Builders’ Risk: Completed value of the improvements on the Site.
The above-required insurance policies shall name the City as additional or co-insureds and be endorsed to provide that coverage shall not be suspended, voided, cancelled or reduced in limit except after thirty (30) days prior written noti ce to the City. The Developer shall include all contractors or subcontractors w ith whom it has contracted for the performance of work on the Site as insureds under its policies or shall furnish or cause to be furnished separate certificates of insurance for each contractor or subcontractor. All coverages for contractors shall be subject to all of the requirements listed herein. The Developer shall also furnish or cause to be furnished to the City evidence satisfactory to th e City that any contractor with whom it has contracted for the performance of work on the Site carries worker s' compensation insurance as required by law.
Except as otherwise expressly provided herein, th e obligations set forth in this Section 3.1.8.b. shall remain in effect only until a Certificat e of Completion has been issued as provided in Section 3.6 hereof.
3.1.9 Rights of Access. For the purpose s of assuring compliance with this Agreement, representatives of the City shall ha ve the reasonable right of access to the Site without charges or fees and upon reasonable noti ce and at normal construction hours during the period of construction for the pur poses of this Agreement, including, but not limited to, the inspection of the work being performed in constr ucting the improvements. Such representatives of the City shall be those who are so identified in writing by the City Manager of the City.
3.1.10 Antidiscrimination During Construction. The Developer, for itself and its successors and assigns, agrees that in the constr uction of the improvements provided for in this Agreement, the Developer will not discrimina te against any employee or applicant for employment because of any basis listed in s ubdivision (a) of Section 12940 of the Government Code, as those bases are defined in S ection 12926, 12926.1, and 12926.2 of the Government Code.
3.2 Taxes, Assessments, Encumbrances and Liens
The Developer shall pay when due all real estate taxes and assessments assessed and levied, if any, on the Site for any period subs equent to conveyance of title thereof to the Developer. Prior to issuance of a Certificate of Completion, (a) the Developer shall not place or allow to be placed on the Site any mortgage, tr ust deed, encumbrance or lien unauthorized by this Agreement, and (b) the Developer shall rem ove or have removed any levy or attachment made on the Site (or any portion thereof), or shall assure the satisfaction thereof, within a reasonable time. Nothing herein contained sha ll be deemed to prohibit the Developer from contesting the validity or amounts of any tax, a ssessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto.
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3.3 Prohibition Against Transfer of Site, th e Buildings or Structures Thereon and Assignment of Agreement
Except as expressly permitted by this Agreement, prior to issuance of a Certificate of Completion pursuant to Section 3.6 hereof, th e Developer shall not sell, transfer, convey, assign or lease the whole or any pa rt of its interest in the Site or the buildings or improvements thereon without the prior written approval of the C ity. This prohibition shall not be deemed to prevent the granting of easements or permits, or mortgages or deeds of trust permitted under Section 3.4 hereof, to facilitate the development of the Site or to prohibit or restrict the leasing of any part or parts of a building or structure when said improvements are completed.
In the absence of specific written ag reement by the City, no such transfer, assignment or approval by the City shall be deemed to relieve th e Developer or any other party from any obligations under this Agreement.
3.4 Security Financing; Rights of Holders
3.4.1 No Encumbrances Except Mortgages, Deeds of Trust, Sales and Leases- Back or Other Financing for Development
Notwithstanding Sections 3.2 and 3.3 of this Agreement, mortgages, deeds of trust, sales and leases-back or any other form of conveyance required for any reasonable method of financing are permitted but only for the purpose of securing loans of funds to be used for financing the development of the Site under this Agreement. The Developer shall notify the City in advance of any such mortgage, deed of trust, sale and lease-back or other form of conveyance for financing and the Developer sh all not enter into a ny such conveyance for financing without the prior writ ten approval of the City, not to be unreasonably withheld, conditioned or delayed. The words “mortgage” and “deed of trust,” as used herein, include all other appropriate modes of financing real estate acquisition, construction and land development.
3.4.2 Holder Not Obligated to Construct Improvements
The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion.
Nothing in this Agreement shall be deemed to construe, permit or author ize any such holder to devote the Site to any uses or to construct any improvements ther eon other than those uses or improvements provided for or authorized by this Agreement.
3.4.3 Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure
Whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the De veloper in completion of construction of the improvements, the City shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage , deed of trust or other securi ty interest authorized by this Agreement who has previously made a written reque st to the City therefor. Each such holder shall (insofar as the rights of the City are conc erned) have the right, at its option, within ninety (90) days after the receipt of the notice, to cu re or remedy or commence to cure or remedy any such default and to add the cost thereof to the se curity interest debt a nd the lien on its security interest. In the event there is more than one such holder, the right to cure or remedy a breach or
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default of the Developer under this Section 3.4.3 sh all be exercised by the holder first in priority or as the holders may otherwise agree among themselves, but there shall be only one exercise of such right to cure and remedy a breach or defa ult of the Developer under this Section 3.4.3; provided that such holder shall not have any obligation or duty under this Agreement to construct or complete the improvements. In the event an y holder elects to complete the improvements, it shall only do so in the manner pr ovided in this Agreement as to the improvements to which the lien or title relates and shall, prior to comme ncing such completion, submit evidence reasonably satisfactory to the City that it or its agents or contractors has the qual ifications and financial responsibility necessary to complete the impr ovements. Any such holder properly completing such improvements shall be entitled, upon written re quest made to the Cit y, to a Certificate of Completion from the City.
3.4.4 Failure of Holder to Complete Improvements
In any case where, six (6) months after default by the Developer in completion of construction of improvements unde r this Agreement, the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Site has not exercised the option to construc t, or if it has exercised th e option and has not proceeded diligently with construction, the City may pay off the mortgage, deed of trust or other security interest by payment to the holder of the full amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Site has vested in the ho lder, then the City, if it so desires, shall be entitled to a conveyance of the Site from the holder to the City upon payment to the holder of an amount equal to the sum of the following:
a. The unpaid mortgage, deed of trust or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); b. All expenses with respect to foreclosure;
c. The net expenses, if any (exclusi ve of general overhead), incurred by the holder as a direct result of the subsequent management of the Site;
d. The costs of any authorized improvements made by such holder; and
e. An amount equivalent to the in terest that would have accrued on the aggregate of such amounts ha d all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the City.
3.4.5 Right of City to Cure Mortgage, Deed of Trust or Other Security Interest Default
In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Site prior to the co mpletion of development, and the holder has not exercised it s option to complete the development, the City may cure the default prior to completion of any foreclosure. In such event, the City shall be entitled to reimbursement from the Developer of all costs a nd expenses incurred by the City in curing the
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default. The City shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, deeds of tr ust or other security interests executed for the sole purpose of obtaining funds to de velop the Site as authorized herein.
3.4.6 Reasonable Amendments
In the event a person or persons pr oviding funding to the Developer to finance the development of the Si te requests changes to the provisions of this Section 3.4, or to any other provision of this Agreem ent that affects such funding, the City agrees to negotiate in good faith such proposed amendment(s). Any proposed amendment that would be a substantial change to the provisions of this Agreement may be subject to approval by the City Council, as determined by the City Manager with advice from the City Attorney.
3.5 Right to Satisfy Other Liens on the Site After Title Passes After the conveyance of title to the Site to the Developer and prior to the issuance by the City of a Certificate of Completion pursuant to Section 3.6 hereof, and after the Developer has had a reasonable time to challenge, cure or sa tisfy any liens or encumbrances on the Site, the City shall have the right to satisfy any such liens or encumbrances, provided, however, that nothing in this Agreement shall require the Devel oper to pay or make provision for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site to forfeiture or sale. In such event, the City shal l be entitled to reimburse ment from the Developer of all costs and expenses incurred by the City in satisfyin g any such liens or encumbrances. The City shall also be entitled to a lien upon the Site to the extent of such costs and expenses. Any such lien shall be subject to mortgages, deeds of trust or other security interests executed for the sole purpose of obtaining funds to develop the Site as authorized herein.
3.6 Certificate of Completion
Promptly after completion of all constr uction required by this Agreement to be completed by the Developer upon the Site, the City shall furnish the Developer with a Certificate of Completion upon written request therefor by the Developer. Any Certificate of Completion shall be in such form as to permit it to be recorded in the Office of the County Recorder of Contra Costa County.
A Certificate of Completion shall be, and shall so state, conclusive determination of satisfactory completion of the construction re quired by this Agreement upon the Site (or such portion thereof) and of full compliance with the te rms hereof pertaining to such construction.
After issuance of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site c overed by said Certif icate of Completion shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement pertaining to such construction. Except as otherwise provided herein, after the issuance of a Certificate of Completion for the Site (or such portion thereof), neither the City nor any other person shall have a ny rights, remedies or c ontrols with respect to the Site (or such portion thereof) that it would otherwise have or be entitled to exercise under this Agreement as a result of a default in or breach of any provision of this Agreement pertaining to such construction, and th e respective rights and obligations of the parties with reference to the Site (or portion thereof) shall be as set forth in the grant deed for the Site. Notwithstanding the
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foregoing, the provisions of this Agreement shall not merge but shall surv ive the issuance of a Certificate of Completion as necessary to give fu ll force and effect to th e provisions referring to this Agreement in the grant deed and other documents recorded pursuant to this Agreement.
The City shall not unreasonably withhold or delay any Certificate of Completion.
If the City refuses or fails to furnish a Certif icate of Completion for th e Site (or such portion thereof) after written request from the Developer, the City shall, within thirty (30) days following such written request, provide the Developer with a written statement of the reasons the City refused or failed to furnish a Certificate of Co mpletion. The statement shall also contain the City's opinion of the action the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immedi ate unavailability of specific items or materials for landscaping, the City will issue the Certif icate of Completion upon the posting of a bond by the Developer with the City in an amount representing a fair value of the work not yet completed. If the City shall have failed to provide such written statement within said thirty (30) days, the Developer shall be deemed entitled to the Certificate of Completion.
Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage securing money loaned to finance th e improvements or any part thereof. Such Certificate of Completion is not notice of comple tion as referred to in California Civil Code Section 8182.
ARTICLE 4
USE OF THE SITE
4.1 Uses; Affordable Housing Regulatory Agreement
The Developer covenants and agrees for itself, its successors, its assigns and every successor-in-interest that th e Site shall be devoted to th e development of the mixed-use Project, containing residential and commercial uses, described in this Agreement. The uses shall conform to and be operated and maintained in acco rdance with the applicable provisions of the San Pablo Municipal Code and S an Pablo Avenue Specific Plan , provided, however, that the commercial uses on the Site shall be expressly restricted as follows:
a. The Alvarado Adobe Museum shal l not be demolished but shall be retrofitted and renovated into a full service restaurant or other si milar compatible visitor-serving use with historic character, providing space for museum artifacts and exhibits identified by the San Pablo Historical & Museum Society; the use and design con cept/layout shall be subject to City approval;
b. In addition to uses prohibited by the San Pablo Municipal Code and San Pablo Avenue Specific Plan and/or notwithstanding uses permitted by the San Pablo Municipal Code and San Pablo Avenue Specific Plan, the following uses shall be prohibited on the Site: (1) the selling of cannabis and canna bis products; (2) laundromats; (3 ) liquor stores or businesses primarily selling alcohol and alcoholic beverages, other than beer and wine, for off-premises consumption; (4) gambling and gaming room esta blishments; (5) check-cashing businesses; (6) tattoo shops; (7) pawn shops; (8) smoke shops or other primarily tobacco retailers; and (9) adult- related businesses; and
c. One commercial space in the Project shall be reserved for occupancy by a “local resident business” at a rental rate that is fifteen percent (15%) lower than the market rent
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for space in the Project determin ed at the time the lease for th e space is executed. “Local resident business” shall mean a business that is owned primarily by a resident of the City of San Pablo.
The commercial use restrictions, operati on and maintenance obligations shall be set forth in Grant Deed for the Site.
The Developer further covena nts and agrees for itself, its successors, its assigns and every successor-in-interest that (a) all of the one hundred (100) rental dwelling units constructed on the Site shall be, at a minimum, made available for occupancy by “lower income households,” as defined in Health and Safety Code Section 50079.5 (i.e., total household income is not greater than 80% of area me dian income), at an “affordable rent,” as defined in Health and Safety Code Section 50053, (b) persons currently living or employed in the City of San Pablo shall be entitled to a preference in the rental of the dwelling units constructed on the Site, and (c) these covenants and restrictions shall remain in eff ect for not less than fifty-five (55) years from the date of issuance of the Certificate of Completion for the Site. If a regulatory agreement with the California Tax Credit Allocation Committee (“TC AC”) will also regulate affordability of the rental dwelling units constructed on the Site, a copy of the applicable agreement shall be provided to the City.
To effectuate the affordable housing cove nants and restrictions contained herein, the Developer shall execute and deliver to the Escrow Agent, an “Affordable Housing Regulatory Agreement,” in substantially the form attached hereto as Attachment No. 6, which shall be promptly recorded against the Site at the close of escrow therefor.
4.2 Obligation to Refrain From Discrimination
The Developer covenants by and for itse lf and any successors-in-interest that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 1 2926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation w ith reference to the sel ection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land.
4.3 Form of Nondiscrimination and Nonsegregation Clauses The Developer shall refrain from restricting the rental, sale or le ase of the Site on any basis listed in subdivision (a) or (d) of Secti on 12955 of the Governme nt Code, as those bases are defined in Section 12926, 12926.1, subdivisi on (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Government Code. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
a. In deeds: “The grantee herein cove nants by and for himself or herself, his or her heirs, executors, admini strators and assigns, and all persons claiming under or through them, that there shall be no discrimination agai nst or segregation of any person or group of persons on account of any basis listed in su bdivision (a) or (d) of Section 12955 of the
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Government Code, as those bases are defi ned in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Sec tion 12955, Section 12955.2 and Section 12955.3 of the Government Code, in the sale, lease, sublease, tr ansfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the gran tee himself or herself, or any person claiming under or through him or her, establish or permit a ny such practice or practices of discrimination or segregation with reference to the selection, locati on, number, use or occ upancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
b. In leases: “The lessee herein covena nts by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivisi on (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Sec tion 12955, Section 12955.2 and Section 12955.3 of the Government Code, in the leasi ng, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or he rself, or any person claiming under or through him or her, establish or permit a ny such practice or practices of discrimination or segregation with reference to the selection, locati on, number, use or occ upancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased.” c. In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of any ba sis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivi sion (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Government Code, in the sale , lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall th e transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.”
4.4 Effect and Duration of Covenants
The covenants established in this Agreem ent shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns, and any successor-in-int erest to the Site or any part thereof and shall remain in effect until issuance of the Certificate of Completion or such other date specified in this Agreement, except for the covenants against disc rimination which shall remain in effect in perpetuity.
The City is deemed the beneficiary of th e terms and provisions of this Agreement and of the covenants running with the land for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covena nts running with the land have been provided.
This Agreement and the covenants shall run in fa vor of the City without regard to whether the City has been, remains or is an ow ner of any land or interest therein in the Site. The City shall have the right, if this Agreement or the cove nants are breached, to ex ercise all rights and remedies and to maintain any actions or suits at law or in equity or ot her proper proceedings to
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enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and the covenants may be entitled.
4.5 Reciprocal Easements
Following the sale of the Site to the De veloper, access to the Historic Buildings Parcel will require access through and parking w ithin portions of the Site and appropriate easements therefor; similarly, th e Developer may require utility or other easements on, over, under or through the Historic Buildi ngs Parcel. Prior to the clos e of escrow for conveyance of the Site to the Developer, the City and the Deve loper agree to enter into a Reciprocal Easement Agreement providing (a) for the City, reasonable easements of access, parking, utilities and use on, over, under and/or through the Site appropria te for the access and us e of the Historic Buildings Parcel, and (b) for the Developer, reasonable utility or other easements on, over, under and/or through the Historic Buildings Parcel as may be needed in connection with the development of the Site as prov ided in this Agreement. A copy of the Reciprocal Easement Agreement shall be attached hereto and incorpor ated herein by reference as Attachment No. 7, and shall be recorded against the Site and the Hist oric Buildings Parcel at the close of escrow for the Site.
ARTICLE 5
DEFAULTS, REMEDIES AND TERMINATION
5.1 Defaults -- General
Subject to the extensions of time set fort h in Section 6.4 and any mutually agreed upon extensions of time, failure or delay by any pa rty to perform any term or provision of this Agreement within the times provided herein co nstitutes a default under this Agreement. The party who so fails or delays must cure, correct or remedy such failure or delay within thirty (30) days after receipt of written notic e of default, or if such cure cannot reasonably be effectuated within such 30-day period, the pa rty in default shall commence to cure, correct or remedy such default within said 30-day peri od and thereafter continuously pur sue completion of such cure, correction or remedy with reasonable diligence a nd during any period of cu ring shall not be in default.
The injured party shall give written noti ce of default to the party in default specifying the default complained of by the injure d party. Except as requi red to protect against further damages, the injured party may not institu te proceedings against the party in default until expiration of the cure period provided for above. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.
Except as otherwise expressly provided in this Agreement, any failure or delay by either party in asserting any of its rights or re medies as to any defau lt shall not operate as a waiver of any default or of any such rights or remedies or deprive such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.
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5.2 Legal Actions
5.2.1 Institution of Legal Actions
In addition to any other rights or remedies and except as otherwise provided in this Article 5, either party may institute legal action to cure, correct or remedy any default, or recover damages for any default, or to obtain any other reme dy consistent with the purpose of this Agreement, if such default is not cured by the defaulting party within the time period specified in Section 5.1 above. Such legal actions must be instituted in the Superior Court of the County of Contra Costa, State of Califor nia, in an appropriate municipal court in that County or in the appropriate Federal District Court in the State of California.
5.2.2 Applicable Law
The laws of the State of California, exclusive of choice of laws provisions, shall govern the interpretation and enforcement of this Agreement.
5.2.3 Acceptance of Service of Process
In the event that any legal action is commenced by the Developer against the City, service of process on the City shall be made by personal service upon the City Manager of the City or in such other manner as may be provided by law.
In the event that any legal action is commenced by the City against the Developer, service of proce ss on the Developer shall be ma de by personal service upon any member of the Developer or in such other manne r as may be provided by law and shall be valid whether made within or without the State of California.
5.3 Rights and Remedies are Cumulative
Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of such rights or remedies shall not preclude the exer cise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by any other party.
5.4 Damages
Except as otherwise provided in this Ag reement, if the Developer defaults under any of the provisions of this Ag reement and fails to cure such default following notice from the City and expiration of applicable cure periods, the Developer sha ll be liable to the City for any damages caused by such default. The City shal l have no liability for damages whatsoever under this Agreement. The parties acknowledge and agr ee that it is a material part of the Developer’s consideration to the City that th e City shall not be at risk of liability for money damages relating to or arising from this Agreement. The Developer, for itself and for all successors and assignees, hereby releases the City and al l of its agents, employees, representatives, council members, board members, consultants, and officers of the City from any and all claims seeking to impose money damages on the City as a result of the City’s negot iation, drafting, execution or performance of this Agreement.
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5.5 Specific Performance
Except as otherwise provided in this Agreement, if the Developer or City defaults under any of the provisions of this Agreement and the defaulting party fails to cure such default following notice and expiration of applicable cure periods, the nondefaulting party, at its option, may institute an action for specific performance of the terms of this Agreement.
5.6 Remedies and Rights of Termination Prior to Conveyance of the Site
5.6.1 Termination by the Developer
In the event that prior to the close of escrow for conveyance of title to the Site to the Developer:
a. The Developer Conditions Precedent set forth in Section 2.4.2 have not been satisfied as re quired through no fault of the Developer; or
b. The City does not tender conveyance of the Site or possession thereof in the manner and condition and by the date provided in this Agreement, and any such failure is not cured within thirty (30) days after written demand by the Developer;
then this Agreement may, at the option of the De veloper, be terminated by written notice thereof to the City. Upon such termination, the City and the Developer shall have no further rights against or liability to the others under this Agr eement with respect to the Site, except that the refundable portion of the Deposit shall be returned to the Developer.
5.6.2 Termination by the City
In the event that prior to conveyance of title to the Site to the Developer:
a. The Developer transfers or assigns or attempts to transfer or assign this Agreement or any rights herein or in the Site or the buildings or improvements thereon in violation of this Agreement; or b. There is any significant change in the ownership or identity of the Developer or the parties in contro l of the Developer or the degree thereof in violation of the pr ovisions of Section 1.3.2 hereof, except for a transfer to an affiliate controlled by the Developer; or c. The Developer does not submit evidence that it has the necessary equity capital and mortgage financ ing for development of the Site in satisfactory form and in the manner and by the dates provided in this Agreement; or
d. After satisfaction or waiver by Developer of all the Developer Conditions Precedent, the Developer does not pay the Purchase Price and take title to the Site under tende r of conveyance by the City pursuant to this Agreement; or
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e. The City Conditions Precedent ha ve not been satisfied as required through no fault of the City, including but not limited to HCD’s failure to approve the transact ion for any reason and with no penalty to the City; or
f. The Developer is in breach or default with respect to any other obligation under this Agreement; and
g. If any default or failure referred to in subdivisions c. through f. of this Section shall not be cured within the time period specified in Section 5.1 above;
then, this Agreement, and any rights of the De veloper or any assignee or transferee in this Agreement pertaining thereto or ar ising therefrom with respect to the City, may, at the option of the City, be terminated by the City by written notice thereof to the Developer. Upon such termination, neither the City nor the Developer shall have any further rights against or liability to the other under this Agreement except liquidated damages payable to the City as set forth below.
IN THE EVENT OF TERMINATION UNDER THIS SECTION 5.6.2,
THE NONREFUNDABLE PORTION OF THE DE POSIT SHALL BE PAID TO THE CITY
AS LIQUIDATED DAMAGES AND AS ITS PR OPERTY WITHOUT ANY DEDUCTION, OFFSET OR RECOUPMENT WHATSOEVER. IF THE DEVELOPER SHOULD DEFAULT
UPON ITS OBLIGATIONS MAKING IT NECE SSARY FOR THE CITY TO TERMINATE
THIS AGREEMENT AND TO PROCURE ANOTHER PARTY OR PARTIES TO DEVELOP
THE SITE, THEN THE DAMAGES SUFFERED BY THE CITY BY REASON THEREOF WOULD BE UNCERTAIN. SUCH DAMA GES WOULD INVOLVE SUCH VARIABLE
FACTORS AS THE EXPENSE OF INTERES TING PARTIES AND NEGOTIATING WITH SUCH PARTIES; POSTPONEMENT OF TA X AND OTHER REVENUES THEREFROM TO THE COMMUNITY; AND THE FAILURE OF THE CITY TO EFFECT ITS PURPOSES AND
OBJECTIVES WITHIN A REASONABLE TIME, RESULTING IN ADDITIONAL IMMEASURABLE DAMAGE AND LOSS TO THE CITY AND THE COMMUNITY. IT IS
IMPRACTICABLE AND EXTREMELY DIFFICU LT TO FIX THE AMOUNT OF SUCH
DAMAGES TO THE CITY, BUT THE PART IES ARE OF THE OPINION, UPON THE
BASIS OF ALL INFORMATION AVAILABLE TO THEM, THAT SUCH DAMAGES
WOULD APPROXIMATELY EQUAL THE NONREFUNDABLE PORTION OF THE
DEPOSIT AT THE TIME OF THE DE FAULT OF THE DEVELOPER, AND THE
NONREFUNDABLE PORTION OF THE DEPOSIT SHALL BE PAID TO THE CITY UPON
ANY SUCH OCCURRENCE AS THE TOTA L OF ALL LIQUIDATED DAMAGES FOR ANY AND ALL SUCH DEFAULTS AND NOT AS A PENALTY. IN THE EVENT THAT
THIS PARAGRAPH SHOULD BE HELD TO BE VOID FOR ANY REASON, THE CITY
SHALL BE ENTITLED TO THE FULL EXTEN T OF DAMAGES OTHERWISE PROVIDED BY LAW.
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d.
The amount of any unpaid assessments and liens against the Site.
Upon the City’s issuance to the Developer of a certific ate of occupancy for the residential units to be developed on the Site, th e right to repurchase, r eenter and take possession of the Site under this Section 5.7 shall terminate and be of no further force or effect.
ARTICLE 6
GENERAL PROVISIONS
6.1 Notices, Demands and Communications Between the Parties Formal notices, demands and communications between the City and the Developer shall be in writing and sent to the following addresses, or at any other address as that party may later designate by notice, by one or more of the following methods:
a. Addresses/Fax Numbers
City: City of San Pablo
1000 Gateway Avenue
San Pablo, CA 94070
Attention: City Manager
Telephone: (510) 215-3001
Fax Number: (510) 215-3011
Developer: Danco Communities
5251 Ericson Way
Arcata, CA 95521
Attention: Daniel J. Johnson
Telephone: 707-822-9000
Fax Number: 707-822-9596
b. Methods
(1) Certified mail, return receipt requested, in which case notice shall be deemed delivered five (5) days after deposit, postage prepaid, in the United States mail; or (2) A nationally recognized overnight courier, by prio rity overnight service, in which case notice shall be deemed delivered one (1) day after deposit with that courier; or
(3) Hand delivery with signed receipt for delivery from a person at the place of business of the receiving party and author ized to accept delivery for the receiving party, in which case notice shall be deemed delivered upon receipt; or (4) Facsimile transmission, if a copy of the notice is also sent the same day by United States certified mail, in which case notice shall be deemed delivered one (1) day after the facsimile transmission, provided that a transmission report is automatically generated reflecting the accurate transmission of the noti ce to the receiving party at the fax number specified in paragraph a. above.
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6.2 Conflicts of Interest
No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement which a ffects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested.
The Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.
6.3 Non-liability of City Officials and Employees
No member, official or employee of the City shall be personally liable to the Developer in the event of any default or br each by the City or for any amount which may become due to the Developer or on any obligations under the terms of this Agreement.
6.4 Enforced Delay: Extension of Times of Performance
In addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default where delays or defaults are due to Force Majeure. “Force Majeure” means war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts of terrorism; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governme ntal restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts of another party; acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of the City shall not excuse performance by the City) or any other ca uses beyond the control or without the fault of the party claiming an extension of time to perfor m. An extension of time for any such cause shall only be for the period of the enforced de lay, which period shall co mmence to run from the time of the commencement of the cause. If , however, notice by the party claiming such extension is sent to the other parties more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty ( 30) days prior to the giving of such notice.
Times of performance under this Agreement may also be extended in writing by the City and the Developer.
6.5 Inspection of Books and Records
The City has the right, upon not less than three (3) days’ notice, at all reasonable times, to inspect the books and records of the Deve loper pertaining to the Site as pertinent to the purposes of this Agreement. The City’s notice sh all identify a reasonable justification for the City’s request.
6.6 Plans and Data
Where the Developer does not proceed w ith the purchase and development of the Site, and when this Agreement is terminated pursuant to Section 5.6.2 hereof for any reason, the Developer shall deliver to the C ity copies of any and all plans and data owned by the Developer concerning the Site, and the City shall have th e right to use such plans and data without obligation to the Developer or any other person.
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6.7 Further Assurances
The Developer and the City agree to mutu ally consider reasonable requests for amendments to this Agreement and/or modificati ons to the forms of documents attached hereto or execution of other implementing documents wh ich may be made by any of the parties hereto, lending institutions, or bond counsel or financial consultants to the City, provided such requests are consistent with this Agreem ent and would not substantially alter the basic business terms included herein.
6.8 City Approvals and Actions
Whenever a reference is made herein to an action or approval to be undertaken by the City, the City Manager of the City or his or her designee is authorized to act on behalf of the City, unless specifically provided otherwise or the context requires otherwise. The City Manager shall have the right to seek addi tional authority from the City Council as the City Manager may deem advisable or necessary.
6.9 Brokers
Neither the City nor the Developer shall be liable for any real estate commissions or brokerage fees that may arise herefrom. The City and the Developer each represent that it has not engaged the services of any finder or broker and that it is not liable for any real estate commissions, broker's fees, or finder's fees that may accrue with respect to the sale of the Site from the City to the Developer.
6.10 Approvals
Unless otherwise provided in this Agreem ent, whenever approval, consent or satisfaction (collectively, an “approval”) is requir ed of a party pursuant to this Agreement, it shall not be unreasonably withheld or delayed. Unless provision is made for a specific time period, approval shall be given w ithin thirty (30) days after receipt of written request for approval. If a party fail s to act within the 30 -day period, or other tim e period for approval as may be specified in this Agreement, the party requesting the approval, consent or satisfaction may send a second and final notice, together with a clear statement indica ting that if the other party does not act upon such request within twen ty (20) days following receipt of the second notice, the request shall be deemed approved. Failu re of a party to act w ithin the 20-day period shall be deemed an approval of the request, provided the requesting party has included the statement to that effect in its notice and has pr ovided in a timely manne r all other information required in connection with said request. All approvals (including conditional approvals) and disapprovals shall be given or made in writing. If a party disapproves, the reasons therefor shall be stated in reasonable detail in writing.
This Section 6.10 shall not apply to any a pprovals of the City required in its Governmental Capacity as defined in Section 6.11.
6.11 Proprietary and Governmental Roles of City
Except where clearly and expressly provide d otherwise in this Agreement, the capacity of the City in this Agreement shall be as owner and/or se ller of property only (“Proprietary Capacity”), and any obligations or restrictions imposed by this Agreement on the City shall be limited to that capacity and shall not relate to, constitute a waiver of, supersede or
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otherwise limit or affect the exercise by the City of its governmental authority with respect to any matter related to this Agreement, includi ng the regulation and enti tlement of the Site pursuant to governmental requirements, enacti ng laws, inspecting stru ctures, reviewing and issuing permits and all of the other legislative and administrative or enforcement functions of each pursuant to federal, state or local law (“Governmental Capacity”).
ARTICLE 7
ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
This Agreement is executed in three (3) dupli cate originals, each of which is deemed to be an original. This Agreement comprises pages 1 through 41, inclusive, and Attachment Nos. 1 through 9, attached hereto and incorporated herein by reference, all of which constitute the entire understanding and agreement of the parties. The effective date of this Agreement shall be the date when this Agreement has been signed by the City (the “Effective Date”).
This Agreement integrates all of the terms a nd conditions mentioned herein or incidental hereto, and supersedes all negotiations or previo us agreements between the parties with respect to all or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Ci ty and the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the City and the Developer.
[SIGNATURES ON NEXT PAGE]
January 27, 2021
Attachm
ent No. 1
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ATTACHMENT NO. 1
MAP OF THE OVERALL PROPERTY
Attachment No. 2
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ATTACHMENT NO. 2
LEGAL DESCRIPTION OF THE SITE
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF SAN PABLO,
COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
[TO BE INSERTED]
(APNs:)
Attachment No. 3
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ATTACHMENT NO. 3
SCHEDULE OF PERFORMANCE
Action Date
1. Execution of Agreement. The City Council shall
consider this Agreement and, if authorized, shall
execute and deliver this Agreement to the
Developer.
Within 30 days after this Agreement
is executed by the Developer and
delivered to the City.
2. Opening of Escrow. Th e City shall open an escrow
for conveyance of the Site. (Section 2.3)
Within 5 days of the Effective Date of
this Agreement.
3. Submission -- Deposit. The Developer shall deliver
the Deposit to the Escrow Agent. (Section 1.4)
Concurrently with the opening of the
escrow by the City.
4. Preliminary Documents. The City shall deliver or
cause to be delivered the Preliminary Documents to
the Developer. (Section 2.2)
Within 5 days after the opening of
escrow.
5. Submission -- Preliminary Evidence of Financing.
The Developer shall submit to the City for review
and approval the Developer’s preliminary evidence
of financing necessary for development of the Site,
provided such required evidence shall not include
the anticipated tax credits or purchase of such tax
credits as part or all of Developer’s equity
requirement. (Section 2.15)
Within 60 days after the Effective
Date of this Agreement.
6. Approval -- Preliminary Evidence of Financing.
The City shall approve or disapprove Developer’s
preliminary evidence of financing. (Section 2.15)
Within 30 days after receipt thereof
by the City and prior to the close of
escrow for conveyance of the Site to
the Developer.
7. Feasibility Period. The Developer shall evaluate the condition of the Site and notify the City whether the
Developer approves or disapproves the condition of
the Site. (Section 2.2)
Within 120 days from the Effective
Date of this Agreement.
8. Submission -- Final Evidence of Financing.
Developer shall submit to the City for review and
approval the Developer’s final evidence of
financing necessary for development of the Site,
including any applicable tax credits or other
governmental funding. (Section 2.15)
Not later than 30 days prior to the
estimated date for the close of escrow.
Attachment No. 3
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Action Date
9. Approval -- Final Evidence of Financing. City shall approve or disapprove Developer’s final evidence
of financing. (Section 2.15)
Within 30 days after receipt thereof
by the City and prior to the close of
escrow for conveyance of the Site to
the Developer.
10. Submission -- Certificates of Insurance. Developer shall furnish to the City duplicate originals or
appropriate certificates of bodily injury and
property damage insurance policies. (Section 3.1.8)
Prior to the close of escrow for
conveyance of the Site to the
Developer.
11. City Delivers Grant Deed into Escrow. City shall
have executed and delivered the grant deed for the
Site into escrow. (Section 2.9)
Prior to the close of escrow for
conveyance of the Site to the
Developer.
12. Developer Delivers Purchase Price and Affordable
Housing Regulatory Agreement into Escrow.
Developer shall have delivered the Purchase Price
into escrow and City and Developer shall have
executed and delivered the Affordable Housing
Regulatory Agreement into escrow. (Section 2.10)
Prior to the close of escrow for
conveyance of the Site to the
Developer.
13. Close of Escrow. The City shall convey or cause
conveyance of title to the Site to the Developer, and
the Developer shall accept such conveyance.
(Section 2.7)
As soon as practicable after the
satisfaction of all conditions precedent
to close of escrow, but in no event
later than August 31, 2021, except
that if tax credits are awarded, the
close of escrow shall be no later than
180 days from the tax credit
reservation date provided by TCAC.
14. Commencement of Construction of Developer’s
improvements on the Site. Developer shall
commence construction of the improvements on the
Site. (Section 3.1.7)
Within 30 days after the close of
escrow for conveyance of the Site to
the Developer.
15. Completion of Construction. Developer shall
complete construction of the improvements on the
Site. (Section 3.1.7) Developer shall provide
evidence of compliance with the Local Employment
and Contracting requirements of Section VIII of
Attachment No. 4.
Within 24 months after the
commencement thereof.
16. Issuance -- Certificate of Completion. The City
shall furnish Developer with a Certificate of
Completion. (Section 3.6)
After completion of all construction
required for the improvements on the
Site.
Attachment No. 4
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ATTACHMENT NO. 4
SCOPE OF DEVELOPMENT
I. GENERAL
The Developer agrees that the Site shall be developed and improved in accordance with the provisions of this Agreement and the plans, drawings and related documents approved by the City pursuant hereto, including, in particular, the preliminary site plan and conceptual drawings attached to this Scope of Development as Exhibit A.
II. DEVELOPER IMPROVEMENTS ON THE SITE
The Developer shall construct, or cause to be constructed, on the Site, the mixed-use Project consisting of not less th an one hundred (100) affordable rental dwelling units and 11,000 square feet of commercial space. Specifically, the residential component will consist of forty- eight (48) one-bedroom units, twenty-six (26) two-bedroom units, and tw enty-six (26) three- bedroom units totaling 81,396 square feet, and the commercial co mponent will consist of 7,500 square feet of newly-built ground floor commerc ial space and 3,500 square feet of renovated existing space within the historic Alvarado Ad obe Museum building, together with one hundred seventy-six (176) parking spaces.
The Project amenities will include an exerci se room with free exercise classes for residents of the Project, a community gathering space for events with a full-service kitchen and WiFi, a health and wellness center that will provide guidance for nutrition, relaxation techniques, medication management, food cultivation and res ources, and smoking ce ssation, as well as health and economical meal planning and prepar ation, skill-building classes for financial literacy, computer training, home -buyer education, GED, resume building, ESL, and parenting.
The Project will also include a community pocket park, and a grand courtyard, with a landscaped plaza and decorative fountain.
The layout and configuration of the components of the De veloper’s improvements on the Site are shown on the preliminary site plan (Exhibit A of this Scope of Development).
The Developer shall also construct other infr astructure, as specified and required by the City to support the improvements on the Site, including streets, sidewalks, curbs, gutters, and utilities.
III. ARCHITECTURE AND DESIGN
The improvements on the Site shall be we ll-landscaped, shall be effectively and aesthetically designed and shall conform to the design approved by the City through the design review process. The plans submitted by the Devel oper shall describe in detail the architectural character intended for the Developer's improvements on the Site.
IV. LANDSCAPING
Landscaping shall embellish all open spaces upon the Site to integrate the Developer's improvements with adjacent sites within the area. Landscaping includes such materials as
Attachment No. 4
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paving, trees, shrubs and other plant materials, lands cape containers, plaza furniture, top soil preparation, automatic irrigation, landscape and pe destrian lighting. Landscaping shall carry out the objectives and principles of the City’s desire to accomplish a high-quality aesthetic environment and shall be consistent with the design approved by the C ity through the design review process.
V. SCREENING
Trash areas shall be screened on at least th ree (3) sides and have movable doors or other devices to obscure such areas from view. All fire standpipe s and such other fire related mechanical devices shall be screened with pl ant materials. Rooftop equipment shall be reasonably hidden so as to mitigate views from principal elevations surrounding the development, unless otherwise approved by the City.
VI. APPLICABLE CODES AND REQUIREMENTS
A. Codes. The Developer's improvements shall be constructed in accordance with the California Building Standards Code and the City Municipal Code.
B. CEQA. The Developer’s improvements shall comply with the mitigation measures adopted as part of the approval of the 2017 Specific Plan Amendment/General Plan Amendment, as follows, and any additional mitigation measures approved in connection with approval of the development of the Site:
1. Biological Resources
BIO-1: Future developers of the proj ect site shall comply with City of San Pablo Municipal Code Section 12.16.010 and shall obtain a permit issued by the Director of Public Works prior to trimming or removing orna mental vegetation on the project site. Future developers of the project site shall be responsible for implementing this mitigation measure with oversight by the City of San Pablo. Complian ce with this measure shall be documented and submitted to the Director of Public Works.
2. Cultural Resources
CR-1: Prior to approval of future project development applications, the developer shall submit an evaluation by a qualifi ed historian that the development plans are designed to allow continued public access to the Blume House and Alvarado Adobe Museum.
Plans shall also be designed to harmonize with a visual focus on the City’s nineteenth- and early twentieth-century history to assist with maintaining the significant role of the buildings in maintaining and developing San Pablo’s community identity into the future. The evaluation shall be subject to review a nd approval by the City of Sa n Pablo Development Services Director.
CR-2: Prior to issuance of a demoliti on permit for the existing City Hall buildings, the developer shall co ntract with a qualified historia n to review construction plans and to monitor construction activities to prevent accidental adverse effects to the Blume House, Bunk House, Teixeira Home, and Alvarado A dobe Museum from vibration, dust and debris, and accidental mechanical damage. The historia n’s scope of work and qualifications shall be submitted to the City of San Pablo Developmen t Services Director for review and approval
Attachment No. 4
SPB/OldCityHallDDA Page 3 of 4 012621
prior to issuance of a demolition permit. Th e historian shall submit weekly construction monitoring reports to the Development Services Director with recomm endations for corrective action should demolition activities be shown to be adversely affecting the structures. The developer shall implement corre ctive actions deemed necessary by the Development Services Director.
CR-3: Prior to issuance of a demolition permit for the existing City Hall buildings or a grading permit, whichever co mes first, the developer shall submit an archaeological resources monitori ng and reporting plan and implem ent the plan to ensure any archaeological resources accidentally discovered during the redevelopment process are identified and receive adequate protection. The plan shall be prepared by a qualified archaeologist and shall include, but not be limited to the following components:
a. Timing and duration of demolition, grading, and construction, and when the archaeological monitor is required to be present; b. Frequency of monitoring reports (e.g. weekly, bi-weekly, etc.) to be prepared by the archaeological monitor and delivered to the Development Services Director; c. Measures to be implemented should archaeological resources be discovered during construction activities, which may include, but not be limited to, suspension of construction activities, impact avoidance, pr eservation in place, exca vation, documentation, and/or data recovery.
The archaeological resources monito ring and reporting plan shall be subject to review and approval by the Development Services Director.
CR-4: The developer of any redeve lopment project shall include the following language in all grading, site work, and construction plans to identify required actions in the event of an accidental discovery or recognition of any human remains: “If human remains are found during earth-moving, grading, or construction activities, there shall be no further excavation or disturbance of the site or any nearby area reasonably suspected to overlie adjacent human remains until the coroner of Contra Costa County is contacted to determine that no investigation of the cause of d eath is required. If the coroner determines the remains to be Native American the coroner shall contact the Native American Heritage Commission within 24 hours. The Native American Heritage Commission shall identify the person or persons it believes to be the most likely descendent (MLD) from the deceased Native American. The MLD may then make recommendations to the landowner or the person responsible for the excavation work, for means of treating or disp osing of, with appropriate dignity, the human remains and associated grave goods as provide d in Public Resources Code Section 5097.98.
The landowner or his authorized representative shall rebury the Native American human remains and associated grave goods with appropri ate dignity on the proper ty in a location not subject to further disturbance if: (a) the Native American Heritage Commission is unable to identify a MLD or the MLD failed to make a recommendation within 48 hours after being notified by the commission; (b) th e descendent identified fails to make a recommendation; or (c) the landowner or his authorized repres entative rejects the recommendation of the descendent, and the mediation by the Native Amer ican Heritage Commission fails to provide measures acceptable to the landowner.”
Attachment No. 4
SPB/OldCityHallDDA Page 4 of 4 012621
3. Geology and Soils
GEO-1: Prior to approval of futu re development plans, the developer shall have a licensed soil or geotechnical engin eer prepare a geotechnical report to address hazards from shrink-swell soil potential, as well as address seismic safety and liquefaction concerns, if any. The recommendations of the licensed engineer for design of project improvements to reduce associated hazards shall be incorporated into the design of the project.
Site preparation and cut and fill operations sh all be conducted under the observation of the licensed engineer. The report shall be subject to the review and approval of the Director of Public Works.
VII. SITE CLEARANCE AND PREPARATION
A. On-Site Demolition and Clearance
At its sole cost and expense, the Deve loper shall (1) clear, grub and remove (as may be needed and called for in the approved plans) all on-site pavements, walks, curbs, gutters and other improvements as may be required by the C ity, and (2) remove or plug utilities, such as storm sewers, sanitary sewers, water systems, electrical overhead and underground systems and telephone and gas systems located on the Site, as may be required by the City.
B. Compaction, Finish Gr ading and Site Work
At its sole cost and expense, the Deve loper shall compact, finish grade and do such site preparation as is necessary for the construction of the Developer's improvements on the Site.
VIII. LOCAL CONTRACTING
A. Construction Contracts. Prior to solici tation of bids for contracts for construction of improvements on the Site, the Developer shal l meet with the EDC, and work cooperatively with the EDC to contact local contractors to provide a reasonable opport unity to bid, and shall make commercially reasonable efforts to maximize the use of local contractors, including local trucking firms. The Developer shall make comme rcially reasonable efforts to award separate contracts for discrete portions of constructi on improvements, in order to promote opportunities for local participation. The Developer shall requi re all prime construction contractors that are retaining subcontractors to work cooperatively with the EDC to contact local contractors to provide a reasonable opportunity to bid, and to make commercially reasonable efforts to maximize the use of local contractors, including local trucking firms. Prior to commencement of construction under any prime contract award, the Developer shall provi de the City with a list of contractors and subcontractors to be used in performance of the contract, and whether each listed contractor or subcontractor is a local business.
B. Service Contracts During Construction Ph ase. Prior to solicitation of bids for service contracts to be performed on-site du ring construction of improvements, including contracts for security services, the Developer or its property manager shall work cooperatively with the EDC to contact local contractors to provide a reasonable opport unity to bid on such service contracts, and shall make commercially reasonable efforts to maximize the use of local contractors.
Attachm
ent No. 4
SPB/OldCityHallDDA Exhibit A 012621
EXHIBIT A
PRELIMINARY SITE PLAN
9 10
11 11 10
88 4
13 10
4 6
56 7
7 22
89 22
Commercial &
Museum
Parking
17 Spaces
San Pablo Avenue
Church Lane
Courtyard
New
Plaza
Neighborhood
Park
Commercial
7,500 GSF
Offices, Community
Room & Amenities
Museum Parking
7 Spaces
Residential
Parking
30 Spaces
Residential
Parking
41 Spaces
Residential
Parking
25 Spaces
Residential
Parking
33 Spaces
Units
Units
Units
Units
Units
Units
Main
Entry
Plaza
Existing Parking
and Solar Canopoies
Existing Parking
and Solar Canopoies
Existing
Curb Cut
Existing
Curb Cut
Existing
Crosswalk
Existing
Driveway
(E)
Trees
(E) Tree (E) Tree
(E) Tree
(E) Tree
(E) Trees
(E) Trees
(E) Trees
Patio
Dining
Existing Crosswalk
Wildcat Creek
Alvarado Adobe Museum
3,500 SF
(E) Trees
3,000 SF
2,000 SF
1,500 SF
Blume
House
Museum
Bunk
House
Teixeira
House
(E)Bldg.
(E)Bldg.
Market
Patio
Dining
Guest,
Commercial &
Museum
Parking
23 Spaces
3,180 SF
2,435 SF
2,950 SF
4,240 SF
2,950 SF
6,130 SF
4,600 SF
2nd Floor Area
26,485 SF
32 Units
4,370 SF
3,180 SF
2,435 SF1,670 SF
2,950 SF
4,240 SF
2,950 SF
6,130 SF
6,130 SF
3rd Floor Area
34,055 SF
43 Units
08 . 19 . 2020
Project Number: 22021-P01 K:\2020\22021 - 421 Madison Fairfield\01_Working Files\2020_06_04 Initial Site Concept Study San Pablo Housing
San Pablo, California
1 N
Site Plan
0' 30' 60'
Site Study
Unit Mix and Size TableUnit Mix and Size Table
Unit Type Gross Unit
Area
Net Unit
Area # of Units Total Gross
Unit Area
3 Bed 1,130 1,028 26% 26 29,380 2 Bed 880 798 26% 26 22,880 1 Bed 607 546 48% 48 29,136 Total 100% 100 81,396
Avg Gross Unit Size 814
Total Residential Parking 129 spaces
Parking Ratio 1.29 spaces/unit
Commercial Parking 26 Spaces (4 per 1,000 sf)
Guest & Museum Parking 21 Spaces
Residential Parking 129 Spaces (1.29 per unit)
Total 176 Spaces
New Commercial Space 7,500 sf
Alvarado Adobe Museum 3,500 sf
Blume House Museum 3,000 sf
Bunk House 2,000 sf
Teixeira House 1,500 sf
Total 17,500 sf
Commercial & Cultural Building Summary
Unit Mix and Size Table
Unit Type Gross Unit
Area
Net Unit
Area # of Units Total Gross
Unit Area
3 Bed 1,130 1,028 26% 26 29,380 2 Bed 880 798 26% 26 22,880 1 Bed 607 546 48% 48 29,136 Total 100% 100 81,396
Avg Gross Unit Size 814
Total Residential Parking 129 spaces
Parking Ratio 1.29 spaces/unit
Commercial Parking 26 Spaces (4 per 1,000 sf)
Guest & Museum Parking 21 Spaces
Residential Parking 129 Spaces (1.29 per unit)
Total 176 Spaces
New Commercial Space 7,500 sf
Alvarado Adobe Museum 3,500 sf
Blume House Museum 3,000 sf
Bunk House 2,000 sf
Teixeira House 1,500 sf
Total 17,500 sf
Parking Summary
Unit Mix and Size Table
Unit Type Gross Unit
Area
Net Unit
Area # of Units Total Gross
Unit Area
3 Bed 1,130 1,028 26% 26 29,380 2 Bed 880 798 26% 26 22,880 1 Bed 607 546 48% 48 29,136 Total 100% 100 81,396
Avg Gross Unit Size 814
Total Residential Parking 129 spaces
Parking Ratio 1.29 spaces/unit
Commercial Parking 26 Spaces (4 per 1,000 sf)
Guest & Museum Parking 21 Spaces
Residential Parking 129 Spaces (1.29 per unit)
Total 176 Spaces
New Commercial Space 7,500 sf
Alvarado Adobe Museum 3,500 sf
Blume House Museum 3,000 sf
Bunk House 2,000 sf
Teixeira House 1,500 sf
Total 17,500 sf
4,370 SF
3,180 SF
2,435 SF1,670 SF
2,950 SF
4,240 SF
2,950 SF
6,130 SF
6,130 SF
3,180 SF
2,435 SF
2,950 SF
4,240 SF
2,950 SF
6,130 SF
4,600 SF
2nd Floor Area
26,485 SF
3rd Floor Area
34,055 SF
43 Units32 Units
4,370 SF
3,180 SF
2,435 SF1,670 SF
2,950 SF
4,240 SF
2,950 SF
6,130 SF
6,130 SF
3,180 SF
2,435 SF
2,950 SF
4,240 SF
2,950 SF
6,130 SF
4,600 SF
2nd Floor Area
26,485 SF
3rd Floor Area
34,055 SF
43 Units32 Units
08 . 19 . 2020
Project Number: 22021-P01 K:\2020\22021 - 421 Madison Fairfield\01_Working Files\2020_06_04 Initial Site Concept Study San Pablo Housing
San Pablo, California
2 2nd Floor Plan 3rd Floor Plan
26,485 sf
32 Units
34,055 sf
43 Units
0' 30' 60'0' 30' 60'
Upper Floors
Attachment No. 5
SPB/OldCityHallDDA Page 1 of 6 012621
ATTACHMENT NO. 5
FORM OF GRANT DEED
RECORDING REQUESTED BY:
City of San Pablo
1000 Gateway Avenue
San Pablo, CA 94806
ATTN: City Manager
WHEN RECORDED, MAIL TO:
DANCO COMMUNITIES
5251 Ericson Way
Arcata, CA 95521
ATTN: Daniel J. Johnson
No fee for recording pursuant to
Government Code section 27383
S P A C E A B O V E T H I S LINE FOR RECORDER’S USE
Documentary Transfer Tax: $
Based upon full fair market value of property
GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged, THE CITY OF SAN PABLO, a m unicipal corporation (herein called "Grantor"), hereby grants to , a (herein called
"Grantee"), the real property (t he "Property") legally described in the document attached hereto, labeled Exhibit A, and incorporated herein by this reference.
1. The Property is conveyed pursuant to the Disposition and Development Agreement (the “DDA”) entered into by and between the Granto r and the Grantee and dated _______________, 2021. The Property is also conveyed subject to easements of record.
2. The Grantee covenants and agrees for it self, its successors, its assigns and every successor-in-interest that the Property shall be devoted to the development of the Project described in the DDA, in particular, the de velopment of not less than one hundred (100) affordable rental dwelling units , and (a) all of the one hundred (100) rental dwelling units constructed on the Property shall be, at a mini mum, made available for occupancy by “lower income households,” as defined in Health and Safety Code Section 50079.5 (i.e., total household income is not greater than 80% of area median income), at an “affordable rent,” as defined in
Attachment No. 5
SPB/OldCityHallDDA Page 2 of 6 012621
Health and Safety Code Section 50053, (b) persons currently living or employed in the City of San Pablo shall be entitled to a preference in th e rental of the dwelling units constructed on the Property, and (c) these covenants and restrictions shall remain in effect for not less than fifty-five (55) years from the date of issuance of the Certificate of Completion for the Property. To further effectuate the Grantee’s covenants hereunder, the Grantee has entered into an Affordable Housing Regulatory Agreement to be recorded against the Property concurrently with the recordation of this Grant Deed.
3. The Grantee covenants and agrees for it self, its successors, its assigns and every successor-in-interest that the uses on the Prop erty shall conform to and be operated and maintained in accordance with the applicable provisions of the San Pablo Municipal Code and San Pablo Avenue Specific Plan , provided, however, that the co mmercial uses on the Property shall be expressly restricted as follows:
a. The Alvarado Adobe Museum shal l not be demolished but shall be retrofitted and renovated into a full service restaurant or other si milar compatible visitor-serving use with historic character, providing space for museum artifacts and exhibits identified by the San Pablo Historical & Museum Society; the use and design con cept/layout shall be subject to City approval;
b. In addition to uses prohibited by the San Pablo Municipal Code and San Pablo Avenue Specific Plan and/or notwithstanding uses permitted by the San Pablo Municipal Code and San Pablo Avenue Specific Plan , the following uses shall be prohibited on the Property: (1) the selling of ca nnabis and cannabis products; (2) la undromats; (3) liquor stores or businesses primarily selling alcoho l and alcoholic beverages, othe r than beer and wine, for off- premises consumption; (4) gambling and gaming room establishments; (5) check-cashing businesses; (6) tattoo shops; (7 ) pawn shops; (8) smoke shops or other primarily tobacco retailers; and (9) adult-related businesses; and
c. One commercial space in the Project shall be reserved for occupancy by a “local resident business” at a rental rate that is fifteen percent (15%) lower than the market rent for space in the Project determin ed at the time the lease for th e space is executed. “Local resident business” shall mean a business that is owned primarily by a resident of the City of San Pablo.
4. The Grantee, for itself and for each and every successor-in-interest, hereby releases and waives all rights, causes of action a nd claims the Grantee, or such successors in interest, has or may have in the future agains t the Grantor, and its o fficers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns (“Indemnitees”) arising out of or in connection with all liabi lity, loss, damage, costs or expenses (including reasonable attorneys’ fees and court costs) of any kind or nature arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person wh ich shall occur on or adjacent to the Property resulting from or in connection with the physical condition, develo pment, use or operation of the Property by the Grantee, each and every successor-in-interest of the Grantee, the Grantee’s agents, servants or employees or the general contractor or any subcontr actor or supplier of or to the Property, or the Grantee’s performance or non-performance under or with respect to the DDA. In furtherance of the intentions set forth herein, the Grantee, for itself and for each and every successor-in-interest, acknowledges that it is familiar with Section 1542 of the Civil C ode of the State of California that provides as follows:
Attachment No. 5
SPB/OldCityHallDDA Page 3 of 6 012621
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the rele ase and that, if known by him or her, would have materially affected his settlement with the debtor or released party.”
The Grantee, for itself and for each and every successor-in-interest, hereby waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or nonstatutory law of any other appl icable jurisdiction to the full ex tent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this paragraph 3.
The Grantee, for itself and for each and every successor-in-interest, acknowledges and agrees that the defense, i ndemnification, protection and hold harmless obligations of the Grantee and its successors-in-inte rest for the benefit of the Grantor set forth in this paragraph 3 are a material element of the consideration to the Grantor for the performance of its obligations under the DDA, a nd that the Grantor would not have entered the DDA unless the Grantee’s and successors’ obligations were as provided for herein.
5. Prior to the issuance of a Certificate of Completion by the Grantor as provided in the DDA, the Grantee shall not, except as permitted by the DDA, sell, transfer, convey, assign or lease the Property (or any portion thereof) without the prior wri tten approval of the Grantor.
This prohibition shall not apply subsequent to the issuance of a Certificate of Completion with respect to the improvements upon the Property (or portion thereof). This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Property or to prohibit or restrict the leasing of any part or part s of a building or structure when said improvements are completed.
6. Subject to the provisions of Section 5.7 of the DDA, the City shall have the additional right, at its option, to repurchase, reen ter and take possession of the Property hereby conveyed, or such portion thereof, with all improvements thereon, if after conveyance of title and prior to issuance of a certificate of occupancy for residential units to be developed on the Property, the Grantee or successor-in-interest shall:
a. Fail to proceed with the constructi on of the improvements as required by the DDA for a period of three (3) months after written notice thereof from the Grantor; or
b. Abandon or substantially suspend c onstruction of the improvements for a period of three (3) months after written notice of such abandonment or suspension from the Grantor; or
c. Transfer or suffer any involuntary tr ansfer of the Property (as defined in the DDA), or any part thereof, in violation of the DDA.
Such right to repurchase, reenter and repo ssess, to the extent provided in this paragraph 6, shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit:
Attachment No. 5
SPB/OldCityHallDDA Page 4 of 6 012621
a. Any mortgage, deed of trust or other security instrument permitted by the DDA; or
b. Any rights or interest s provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments.
Upon issuance of the certificate of occupancy for the residential units to be developed on the Property pursuant to the DDA, th e Grantor’s right to repurchase, reenter and take possession of the Property set forth in this paragraph 6 shall terminate and be of no further force or effect.
7. The Grantee covenants by and for itself and any successors-in-interest that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Secti on 12955 of the Governme nt Code, as those bases are defined in Sections 12926, 12926.1, subdivi sion (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Gove rnment Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoymen t of the Property, nor shall the Grantee itself or any person claiming under or thr ough it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.
All deeds, leases or contracts made relative to the Property, the improvements thereon or any part thereof, shall contain or be subject to substa ntially the following nondiscrimination clauses:
a. In deeds: “The grantee herein cove nants by and for himself or herself, his or her heirs, executors, administra tors, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any pers on or group of persons on account of any basis listed in subdivision (a ) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Government Code, in the sale, lease, sublease, transfer, use, occ upancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the se lection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein co nveyed. The foregoing covenants shall run with the land.”
b. In leases: “The lessee herein covena nts by and for himself or herself, his or her heirs, executors, administra tors, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government C ode, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision
Attachment No. 5
SPB/OldCityHallDDA Page 5 of 6 012621
(p) of Section 12955, Section 1 2955.2 and Section 12955.3 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, suble ssees, subtenants, or vendees in the premises herein leased.”
c. In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Secti ons 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Government Code , in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit a ny such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.”
8. The covenants contained in paragraphs 2, 5 and 6 of this Grant Deed shall remain in effect for the periods of time stated therein. The covenants contained in paragraphs 3 and 4 of this Grant Deed and the covenants against discri mination contained in paragraph 7 of this Grant Deed shall remain in perpetu ity. Upon recording of a Certific ate of Completion, paragraph 5 shall terminate of be of no further force or effect.
9. The covenants contained in paragraphs 2, 3, 4, 5, 6 and 7 of this Grant Deed shall be binding for the benefit of the Grantor, its successors and assigns, and any successor-in-interest to the Property or any part thereof, and such cove nants shall run in favor of the Grantor and such aforementioned parties for the entire period duri ng which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The Grantor and such aforementioned parties, in the event of any breach of any such covenants, shall ha ve the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or othe r proper proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor, its successors and such aforementioned parties.
Attachment No. 5
SPB/OldCityHallDDA Page 6 of 6 012621
IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized, this _____ day of __________________, 20___.
THE CITY OF SAN PABLO,
"GRANTOR"
By: [Not for Execution/Form Only]
City Manager
APPROVED:
By: [Not for Execution/Form Only]
Counsel for Grantor
The provisions of this Grant Deed are hereby approved and accepted by the Grantee.
,
"GRANTEE"
By: [Not for Execution/Form Only]
Attachment No. 5
SPB/OldCityHallDDA Exhibit A 012621
EXHIBIT A
LEGAL DESCRIPTION
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF SAN PABLO,
COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
[TO BE INSERTED]
(APNs: -)
Attachment No. 6
SPB/OldCityHallDDA Page 1 of 10 012621
ATTACHMENT NO. 6
FORM OF AFFORDABLE HOUSING REGULATORY AGREEMENT
RECORDING REQUESTED BY AND
WHEN RECORDED, MAIL TO:
City of San Pablo
1000 Gateway Avenue
San Pablo, CA 94806
ATTN: City Manager
No fee for recording pursuant to
Government Code Section 27383
S P A C E A B O V E T H I S LINE FOR RECORDER’S USE
AFFORDABLE HOUSING REGULATORY AGREEMENT
This AFFORDABLE HOUSING REGULATORY AGREEMENT (the “Agreement”) is made and entered into as of th is _____ day of ____________________, ____, by and between the CITY OF SAN PABLO, a California municipal corporation (“City”), and , a ( “ O w n e r ” ) .
Recitals
A. City and Owner have entered into a Di sposition and Development Agreement (the “DDA”) pursuant to which the Owner will acquire from the City that ce rtain real property located generally at 13831 San Pablo Avenue in th e City of San Pablo, C ounty of Contra Costa, State of California, as more particularly describe d in Exhibit A attached he reto (the “Property”), and will develop thereon not less than one hundred (100) rental dwelling units, all of which shall be affordable as more fully set forth herein (the “Affordable Housing”). Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the DDA.
B. The City has agreed to sell the Prop erty to the Owner on the condition that the Affordable Housing be maintained and operated in accordance with the re strictions set forth herein concerning affordability, operation, and maintenance.
C. In consideration of the City’s agreement to sell the Property to the Owner, the Owner has agreed to observe all the terms and conditions set forth in this Agreement.
Agreements
NOW, THEREFORE, THE CITY AN D THE OWNER HEREBY AGREE AS FOLLOWS:
Attachment No. 6
SPB/OldCityHallDDA Page 2 of 10 012621
ARTICLE 1
DEFINITIONS
1.1 Definitions
When used in this Agreement, the fo llowing terms shall have the respective meanings assigned to them in this Article 1:
(a) “Affordable Housing” shall m ean the 100 rental dwelling units constructed on the Property, all of which shal l be made available for occupancy by Lower Income Households at Affordable Rent, as defined herein. (b) “Affordable Rent” shall mean Rent for the use and occupancy of the Unit in compliance with the provision s of Health and Safety Code Section 50053 and the applicable regulations set forth in Title 25 of the Ca lifornia Code of Regulations, Section 6910 et seq., for Lower Income Households.
(c) “Agreement” shall mean this Affo rdable Housing Regulatory Agreement. (d) “Area Median Income” shall mean the median family income of a household adjusted for household size as published by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50093. (e) “City” shall mean the City of San Pablo, a California municipal corporation.
(f) “Completion Date” shall mean the date of issuance by the City of San Pablo of a Certificate of Completion for the Project, as provided in Section 3.6 of the DDA. (g) “DDA” shall mean the Disposition and Development Agreement entered into by and between the City and the Owner dated ____________________. (h) “Lower Income Household” shall m ean an eligible household as defined in Health and Safety Code Section 50079.5 and app licable regulations set forth in Title 25 of the California Code of Regulations, Section 6910 et seq.
(i) “Owner” shall mean , a
, and its successors and assigns to the Property, including the Affordable Housing.
(j) “Project” shall mean the Property an d the improvements to be constructed on the Property, including the Affordable Housi ng and commercial space, as more particularly described in the DDA.
(k) “Property” shall mean the real property owned by the Owner as identified in Recital A of this Agreement and as more particularly described in the Legal Description of the Property, attached hereto as Exhibit A.
(l) “Rent” shall mean the total of m onthly payments by the Tenant of a Unit for the use and occupancy of the Unit.
Attachment No. 6
SPB/OldCityHallDDA Page 3 of 10 012621
(m) “TCAC Regulatory Agreement” shall mean a regulatory agreement entered into between the Owner and the Califor nia Tax Credit Allocation Committee (“TCAC”), if applicable to the Property and the development of the Affordable Housing. (n) “Tenant” shall mean a household occupying a Unit.
(o) “Term” shall mean the term of this Agreement, which shall commence on the date this Agreement is recorded and shall co ntinue until the fifty-fift h (55th) anniversary of the date this Agreement is recorded.
(p) “Unit” shall mean one of the re ntal dwelling units in the Project.
ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements
Every Unit on the Property shall be made available t o, and occupied by, a Lower Income Household.
2.2 Affordability
(a) Affordable Rent. All of the Units on the Property shall be restricted to an Affordable Rent.
(b) Rent Increases. Rents on every Unit may be increased no more than once annually based upon changes in Area Median Income. Tenants shall be given at least thirty (30) days' written notice prior to any Rent increase.
(c) No Additional Fees. The Owner shall not charge any fee, other than Rent, to any resident of the Units for any housing or other services provided by the Owner.
2.3 Preferences
In order to ensure that there is an ade quate supply of affordable housing within the City of San Pablo for reside nts and employees of businesses wi thin and/or serving the City, to the extent permitted by law, the Owner shall ensure that preferences in the renting of the Units on the Property shall be given as follows:
(a) First, to persons who are cu rrently living in the City; and (b) Second, to persons who are cu rrently working in the City.
The Owner shall comply with state and fe deral fair housing laws in the marketing and rental of the Units on the Property.
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ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification
The Owner will obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from e ach Tenant renting any of the Units. The Owner shall make a good faith effort to verify that the income provided by an applicant or occupying household in an income certification is accurate by taking two or more of the following steps as a part of the verification pr ocess: (a) obtain a pay stub for the most recent pay period; (b) obtain an income tax return for the most recent tax year ; (c) conduct a credit agency or similar search; (d) obtain an income verification form from the applicant's or occupying household’s current employer; (e) obtain an income veri fication form from the Social Security Administration and/or the California Depart ment of Social Services if the applicant or occupying household receives assistance from either of such agencies; or (f ) if the applicant or occupying household is unemployed and has no su ch tax return, obtain another form of independent verification. Copies of Tenant income certifications shall be made available to the City upon request.
3.2 Annual Report to City
The Owner shall submit to the City (a) not later than the forty-fifth (45th) day after the close of each calendar year, or such other date as may be requested by the City, a statistical report, includ ing household size, income and rent da ta for all Units, setting forth the information called for therein, and (b) within fift een (15) days after recei pt of a written request, any other information or completed forms requested by the City in order to determine compliance with this Agreement.
3.3 Additional Information
The Owner shall provide any additional in formation reasonably requested by the City. The City shall have the right to examine and make copies of all books, records or other documents of the Owner that pertain to the Affordable Housing.
3.4 Records
The Owner shall maintain complete, accurate and current records pertaining to the Affordable Housing, and shall pe rmit any duly authorized represen tative of the City to inspect records, including records pertaining to the inco me and household size of Tenants. All Tenant lists, applications and waiting lists relating to th e Affordable Housing shall at all times be kept separate and identifiable from any other busi ness of the Owner and shall be maintained as required by the City, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. Th e Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Units for a period of at least five (5) years.
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3.5 On-site Inspection
The City shall have the right to perform an on-site inspection of the Affordable Housing at least one (1) time per year upon not le ss than twenty-four (24) hours’ prior written notice to Owner. The Owner agrees to cooperate in such inspection.
ARTICLE 4
OPERATION OF THE PROJECT
4.1 Residential Use
The Affordable Housing shall be operated only for residential us e, and no part of the Affordable Housing shall be operated as transient housing.
4.2 Taxes and Assessments
Subject to any applicable exemptions, th e Owner shall pay all real and personal property taxes, assessments and charges and al l income, employment, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that the Owner shall have the righ t to contest in good faith, any such taxes, assessments, or charges. In the event the Ow ner exercises its right to contest any tax, assessment, or charge against it, the Owner, on final determination of the proceeding or contest, shall immediately pay or discharg e any decision or judgment rende red against it, together with all costs, charges and interest.
ARTICLE 5
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities
The Owner is responsible for all management functions with respect to the Affordable Housing, including without limitation th e selection of Tenant s, certification and recertification of household size and income, evictions , collection of Rents and deposits, maintenance, landscaping, routine and extraordinary repairs, repl acement of capital items, and security. The City shall have no responsibilit y over management of the Affordable Housing.
The Owner shall retain a professional property management company approved by the City in its reasonable discretion to perform its management duties hereunder.
5.2 Management Agent; Periodic Reports
The Affordable Housing shall at all times be managed by an experienced management agent reasonably acce ptable to the City, with demonstrated ability to operate residential facilities like the Affordable Housing in a manner that will provide decent, safe, and sanitary housing (as approved, the “Management Agent”). The Owner shall submit for the City's approval the identity of any proposed Management Agent. The Owner sh all also submit such additional information about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary fo r the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth
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above, the City shall approve the proposed Management Agent by notifying the Owner in writing. Unless the proposed Mana gement Agent is disapproved by the City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved.
5.3 Performance Review
The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Affordable Housing. The purpose of each periodic review will be to enable the City to determine if the Affordable Housing is being operated and manage d in accordance with the requirements and standards of this Agreement. The Owner shall cooperate with the City in such reviews.
5.4 Replacement of Management Agent
If, as a result of a periodic review, the C ity determines in its reasonable judgment that the Affordable Housing is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the City shall deliver notice to the Owner of its intention to cause replacement of the Management Agent, including the reasons therefor.
Within fifteen (15) days of receipt by the Owner of such written notice, the City staff and the Owner shall meet in good faith to consider methods for improving the financial and operating status of the Affordable Housing, including, wi thout limitation, replacement of the Management Agent. If, after such meeting, the City staff recommends in writing the replacement of the Management Agent, the Owner shall promptly dismiss the then Management Agent, and shall appoint as the Management Agent a person or en tity meeting the standa rds for a Management Agent set forth in Section 5.2 above and approved by the City pursuant to Section 5.2 above.
Any contract for the operation or management of the Project entered into by the Owner shall provide that the contract can be terminated as set forth a bove. Failure to remove the Management Agent in accordance with the provisi ons of this Section shall constitute a default under this Agreement, and the City may enfor ce this provision through legal proceedings as specified in Section 6.8 below.
5.5 Approval of Management Policies
The Owner shall submit its written management policies with respect to the Affordable Housing to City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement.
5.6 Property Maintenance
The Owner agrees, for the entire Term of this Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulatio ns of all federal, state, county, municipal, and other governmental agencies and bodies having or cl aiming jurisdiction and all their respective departments, bureaus, and officials, and in accordance with the following maintenance conditions:
City places prime importance on quality maintenance to protect its investment and to ensure that all City -assisted affordable housing projects w ithin the City are not allowed to
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deteriorate due to below-average maintenance. No rmal wear and tear of the Affordable Housing will be acceptable to the City assuming the Owner agrees to provide all necessary improvements to assure the Affordable Housing is maintained in good condition. The Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair.
In the event that the Owner breaches a ny of the covenants contained in this section and such default continues for a period of five (5) days af ter written notice from the City with respect to graffiti, debris, waste material, a nd general maintenance or thirty (30) days after written notice from City with respect to lands caping and building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, th e City shall be permitted (but is not required) to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly paid by the Owner to the City upon demand.
ARTICLE 6
MISCELLANEOUS
6.1 Lease Provisions
In leasing the Units, the Owner shall use a form of Tenant lease approved by the City. The form of Tenant lease shall also comply with all requirements of this Agreement, and shall, among other matters:
(a) Provide for termination of the lease and consent by the Tenant to immediate eviction for failure: (1) to provide an y information required under this Agreement or reasonably requested by the Owner to establish or recertify the Tenant's qualification, or the qualification of the Tenant's hous ehold, for occupancy in the Affo rdable Housing in accordance with the standards set forth in this Agreement; or (2) to qualify as a Lower Income Household as a result of any material misrepresentation ma de by such Tenant with respect to income computation or certification.
(b) Be for an initial term of one (1) year. After the initial year of tenancy, the lease shall be month to month, however Rent may not be raised more often than once a year and then only in connection with a change in Area Median Income. The Owner will provide each Tenant with at least thirty (30) days' written noti ce of any increase in Rent applicable to such Tenant.
6.2 Lease Termination
Any termination of a lease or refusal to renew must be preceded by not less than sixty (60) days' written notice to the Tenant by the Owner specifying the grounds for the action.
6.3 Nondiscrimination
All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible as Lower Income Households. The
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Owner shall not give preference to any particular class or group of persons in renting the Units, except as set forth in Section 2.3 of this Agreem ent. There shall be no discrimination against or segregation of any person or group of persons on acc ount of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of any Unit, nor shall the Owner, or any person claiming under or through the Owner, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of any Unit.
6.4 Section 8 Certificate Holders
The Owner will accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the Un ited States Housing Act, or its successor.
The Owner shall not apply selectio n criteria to Section 8 certific ate or voucher holders that is more burdensome than criteria applied to all other prospective Tenant s, nor shall the Owner apply or permit the application of management po licies or lease provisions with respect to the Affordable Housing that have the effect of precluding occupancy of Units by such prospective Tenants.
6.5 Term
The provisions of this Agreement shall ap ply to the Property for the entire Term.
This Agreement shall bind any successor, heir or assign of the Owner, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City. The City has sold the Pr operty to the Owner on the condition, and in consideration of, this provision, and would not do so otherwise.
6.6 Notice of Expiration of Term
At least six (6) months prior to the expira tion of the Term of this Agreement, the Owner shall provide by first-cl ass mail, postage prepaid, a notice to all Tenants of the Units containing (a) the anticipated date of the expira tion of the Term, and (b) any anticipated increase in Rent upon the expiration of the Term.
6.7 Covenants to Run With the Land
The City and the Owner hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall run with the land, and shall bind all successors in title to the Property, provided, how ever, that on the expiration of the Term of this Agreement said covenants and restrictions sh all expire. Each and every cont ract, deed or other instrument hereafter executed covering or co nveying the Property or any por tion thereof, shall be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City ex pressly releases such conveyed portion of the Property from the requirements of this Agreement.
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6.8 Enforcement by City
If the Owner fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified the Owner in writing of the default or, if the default cannot be cured within thirty (30) days, has failed to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City shall have the right to enforce this Agreement by an action at law or in equity to compel the Owner’s performance and/or for damages, or any other remedy provided by law.
6.9 Attorneys' Fees and Costs
In any action brought to enforce this Ag reement, the prevailing party shall be entitled to all costs and expenses of suit, including attorneys' fees.
6.10 Recording and Filing
The City and the Owner shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records of the County of Contra Costa.
6.11 Governing Law
This Agreement shall be governed by the la ws of the State of California, other than its choice of law provisions.
6.12 Waiver of Requirements
Any of the requirements of this Agreemen t may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Agreement shall, or shall be deemed to, extend to or affect any other provision of this Agreement.
6.13 Amendments
This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of County of Contra Costa.
6.14 Notices
Any notice requirement set forth herein sha ll be deemed to be satisfied three (3) days after mailing of the notice first-class United States cer tified mail, postage prepaid, addressed to the appropriate party as follows:
O w n e r :
Attention:____________________
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City: City of San Pablo
1000 Gateway Avenue
San Pablo, CA 94806
Attention: Community Development Director
Such addresses may be changed by notice to the other party given in the same manner as provided above.
6.15 Severability
If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby.
6.16 Multiple Originals; Counterparts
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
WHEREAS, this Agreement has been entered in to by the undersigned as of the date first above written.
CITY:
CITY OF SAN PABLO, a California municipal
corporation
By:___________________________________
Matt Rodriguez, City Manager
OWNER:
,
a
By:___________________________________
Its:___________________________________
Attachment No. 6
SPB/OldCityHallDDA Exhibit A 012621
EXHIBIT A
LEGAL DESCRIPTION
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF SAN PABLO,
COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
[TO BE INSERTED]
(APNs:)
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ATTACHMENT NO. 7
RECIPROCAL EASEMENT AGREEMENT
RECORDING REQUESTED BY AND
WHEN RECORDED, MAIL TO:
City of San Pablo
1000 Gateway Avenue
San Pablo, CA 94806
ATTN: City Manager
No fee for recording pursuant to
Government Code Section 27383
S P A C E A B O V E T H I S LINE FOR RECORDER’S USE
RECIPROCAL EASEMENT AGREEMENT
[TO BE INSERTED]
Attachment No. 8
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ATTACHMENT NO. 8
FORM OF PROJECT LOAN NOTE
$2,000,000.00 ____________________, 20__
San Pablo, California
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned DANCO COMM UNITIES, a California corporation (herein the “Borro wer”), whose principal addre ss is 5251 Ericson Way, Arcata, California, 95521, promises to pa y to the CITY OF SAN PABL O, a California municipal corporation (herein the “Lender”), th e principal sum of TWO MILLION DOLLARS ($2,000,000.00) (the “Project Loan”), with simple inte rest at the rate of three percent (3%) per annum, upon the terms and conditions set forth herein.
1. DDA; Affordable Housing Regulatory Agr eement. This Project Loan Note is made pursuant to that cert ain Disposition and Developm ent Agreement dated as of ____________________, 2021, between Borrower and Lender (herein the “DDA”), pursuant to which Borrower will undertake the acquisition and development of certain real property (the “Site”) located within the City of San Pablo, Ca lifornia, to provide a mixed-use project on the Site containing not less than one hundred (100) un its of affordable rental housing and not less than 7,500 square feet of new ground floor commer cial space and the renovation of the Alvarado Adobe Museum building (3,500 square feet), togeth er with parking and associated amenities, all as more particularly set forth in the DDA (the “Project”). The Lender is making the loan evidenced by this Project Loan Note to facilitate the Project. In consideration of the loan from the Lender evidenced by this Project Loan Note, the Borrower has also entered into an Affordable Housing Regulatory Agreement (h erein the “Affordable Housing Regulatory Agreement”) with the Lender dated as of ______________________, 2021, pursuant to which Borrower has covenanted that all of the rental dwelling units in the Project shall be made available for occupancy to “lower income househol ds,” as defined in Health and Safety Code Section 50079.5, at an “affordable rent,” as defi ned in Health and Safety Code Section 50053 (a monthly rent that does not ex ceed 30% of 60% of area medi an income) and applicable regulations set forth in Title 25 of the Ca lifornia Code of Regulations, Section 6910 et seq. and that the restrictions shall remain in effect for a period of fifty-five (55) years from the issuance of the Certificate of Completion for the Project as provided in Section 3.6 of the DDA (herein the “Completion Date”).
2. Project Loan Deed of Trust. Payment of this Project Loan Note is secured by a deed of trust (the “Project Loan Deed of Trus t”) from Borrower to Lender, dated of even date herewith.
3. Payment. This Purchase Money Note shall be due and payable in full no later than thirty (30) years from the date hereof. Commencing on ____________________, 20__, and on ____________________ of each year thereafter, the Borrower shall make payments to the Lender in an amount equal to eighty percent (80%) of Residual Receipts, as defined below.
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“Residual Receipts” means, in a partic ular calendar year, the amount by which Gross Revenue (defined below) exceeds Annual Operating Expenses (defined below). “Gross Revenue,” with resp ect to a particular cale ndar year, shall mean all revenue, income, receipts, and other consideration actually received from ownership or operation of the Project. “Gross Revenue” sh all include, but not be limited to : all rents, fe es and charges paid by tenants, Section 8 payments or other rent al subsidy payments rece ived for the dwelling units, deposits forfeited by tenant s, all cancellation fees, price i ndex adjustments and any other rental adjustments to leases or rental agr eements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance to the extent not utili zed to repair or rebuild the Pr oject; condemnation awards for a taking of part or all of the Project for a te mporary period; and any revenue derived from a refinancing of the Project. “Gross Revenue” sha ll also include the fair market value of any goods or services provided in consideration for th e leasing or other use of any portion of the Project. “Gross Revenue” shall not include tenant s’ security deposits, loan proceeds other than revenue derived from a refinancing of the Project, capital contributions or similar advances. “Annual Operating Expenses,” with respec t to a particular calendar year, shall mean the following costs reasonably and actually incurred for operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accep ted accounting principles: property and other taxes and assessments imposed on the Project; de bt service currently due on a non-optional basis (excluding debt service due from Residual Receipts or surplus ca sh of the Project) on loans associated with development of the Project and approved by the City; property management fees and reimbursements, not to exceed fees and reim bursements which are standard in the industry and pursuant to a management contract approved by the City; deferred developer fees not to exceed $________; asset management fees not to exceed $________ annually; partnership management fees payable to the managing gene ral partner of the Borrower not to exceed $________ annually; premiums for property damage and liability insurance; utility services not paid for directly by tenants, in cluding but not limited to water, sewer, trash co llection, gas and electricity; maintenance and repa ir including but not limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, and supplies; any annual license or certificate of occupancy fees required for operation of the Project; securi ty services; advertising and ma rketing; cash deposited into a reserve for capital replacements of Project improvements in an amount not to exceed __________ percent (____%) of the total development cost of the Project; cash deposited into an operating reserve in an amount not to exceed __________ percent (__%) of Annual Operating Expenses; extraordinary operating costs specif ically approved by the City; payments of deductibles in connection with casualty insurance claims not normally paid from reserves; the amount of uninsured losses actua lly replaced, repaired or restored, and not normally paid from reserves; and other ordinary and reasonable operating expens es not listed above. “Annual Operating Expenses” shall not include the follo wing: depreciation, amortization, depletion or other non-cash expenses; any amount expended from a reserve account; and any capital cost with respect to the Project, as determined by the accountant for the Project.
4. Manner of Payment. Payment shall be ma de in lawful money of the United States to Lender at 1000 Gateway Avenue, San Pablo, Ca lifornia. The place of payment may be changed from time to time as the Lender may from time to time designate in writing.
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5. Right to Prepay. Borrower shall have the right to prepay this Project Loan Note in whole or in part.
6. Transfer of the Site. If all or any part of the Site or an interest therein is sold or transferred by the Borrower without the Lender’s prior written consent, except as otherwise permitted under the DDA, the Lender may, at the Lender’s option, declare all sums owing on this Project Loan Note to be immediately due and payable.
7. Default. The occurrence of any of the following (each an “Event of Default") shall constitute an event of default under this Purchase Money Note:
(a) Borrower fails to pay any amount due hereunder within fi fteen (15) days of its due date; or
(b) Any breach of or event of default by Borrower under the Affordable Housing Regulatory Agreement, the DDA, the Projec t Loan Deed of Trust or any other contract or instrument securing this Project Loan Note, which breach or event of default is not cured within the notice and grace periods applicable thereto as set fort h in such documents, or if no notice and grace period is otherwise specified for such breach or event of default, within thirty (30) days after written notice thereof from Lende r to Borrower, provided that if a breach or default cannot be cured within such thirty (30) day period, Borrower shall not be in default so long as Borrower commences to cure such breach or default within such th irty (30) day period and thereafter diligently prosecutes such cure to completion; or (c) The filing of a petition by or agai nst the Borrower under any provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to time, or under any simila r or other law relating to bankruptcy, insolvency, reorganization or other relief for debtors; the appointment of a r eceiver, trustee, custodian or liquidator of or for any part of the assets or property of the Borro wer; if Borrower becomes insolvent; if Borrower makes a general assignment for the benefit of cr editors; if Borrower is generally not paying its debts as they become due; or any attachment or like levy is made on any property of Borrower.
Upon the occurrence of any Event of Defau lt, or at any time thereafter, at the option of the Lender hereof, the entire unpaid principal owing on this Project Loan Note shall become immediately due and payable. This op tion may be exercised at any time following any such Event of Default, and Lender's failure to ex ercise such option shall not constitute a waiver of such option with respect to a ny subsequent Event of Default. Lender's failure in the exercise of any other right or remedy he reunder or under any agreement wh ich secures the indebtedness or is related thereto shall not a ffect any right or remedy and no sing le or partial exercise of any such right or remedy shall preclude any further exercise thereof.
8. Late Charge. At all times after an Event of Default by reason of Borrower's failure to pay amounts due under this Project Loan Note, interest shall accrue on the sums as to which Borrower is in default at the lower of the highest rate then allowed by law or five percent (5%) over the prime interest rate announced by Bank of America N.T.&S.A., as of the date of the default. If Bank of America N.T.&S.A. no longer exis ts or fails to announ ce a prime interest rate, the prime interest rate announced by the largest bank, in terms of total assets, of the member banks of the Twelfth District Federal Reserve Ba nk that announce a prime interest rate, shall be applicable for purposes of this paragraph.
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9. Borrower agrees to pay immediately upon demand all costs and expenses of Lender including reasonable attorneys' fees, (a) if after default this Project Loan Note be placed in the hands of an attorney or attorneys for collection, (b) if after a default hereunder or under the Project Loan Deed of Trust, the Affordable Housing Regulatory Agreement or the DDA, Lender finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Project Loan Note against Borrower, any guarantor or any other party liable therefor or to the protec tion of its rights under this Proj ect Loan Note, the Project Loan Deed of Trust, the Affordable Housing Regul atory Agreement and the DDA, or (c) if Lender seeks to have the Site abandoned by or reclaimed from any estate in bankr uptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection of this Project Loan Note or prohibiting the enforcement of the Project Lo an Deed of Trust or any other agreement evidencing or securing this Project Loan Note lifted by any bankruptcy or other court.
10. If Lender shall be made a party to or sh all reasonably intervene in any action or proceeding, whether in court or before any gover nmental agency, affecting the property or the title thereto or the interest of the Lender under the Project Loan Deed of Trust, including, without limitation, any form of condemnation or eminen t domain proceeding, except any action alleging negligence or misconduct on Lender’s part, Lender shall be reimbursed by Borrower immediately upon demand for all costs, charges a nd attorneys' fees incu rred by Lender in any such case, and the same shall be secured by the Pr oject Loan Deed of Trus t as a further charge and lien upon the Site.
11. The Borrower waives to the full extent permitted by applicable law the benefit of any laws or rules of court now or hereafter in ef fect relating to exemption, appraisement or stay of execution. The Borrower also hereby waives and releases to the full extent permitted by applicable law all benefit that might accrue to it by virtue of any present or future laws exempting any property securing this Project Loan Note, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, ex emption from civil process or extension of time for payment; and the Borrower agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue he reof, or any writ of executi on issued thereon, may be sold upon any such writ or by nonjudicial trustee’s sale under any deed of trust that may be executed to secure this Project Loan Note in whole or in part in any order desired by the Lender.
12. Whenever used, the words “Borrower” and “Lender” shall be deemed to include the respective successors and assigns of each.
13. This Project Loan Note shall be bi nding upon Borrower, its successors and assigns.
14. Time is of the essence w ith respect to every provision hereof. This Project Loan Note shall be construed in accordance with a nd be governed by the laws of the State of California.
15. This Project Loan Note is a nonrecourse note whereby Borrower has no personal liability for repayment of the sums evidenced he reby, and the Lender, upon an Event of Default, must resort only to income, prof its or other funds generated from the exercise of the Lender’s rights with respect to the Site, including any fund s which may result from the sale or disposition
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of the Site subsequent to a foreclosure of the Project Loan Deed of Tr ust, or conveyance of a deed to the Site in lieu of such foreclosure, for repayment of any amounts owed hereunder.
The foregoing limitation shall not apply to any and all loss, damage, liability, action, cause of action, cost or expense (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the Lender as a result of any (a) fraud or material misrepresentation under or in connection with the loan or any loan document, (b) intentional bad faith waste of the Site, (c) losses resulting from the Borrower’s failure to maintain insurance as required under the Project Loan Deed of Trust, or (d) misappropriation of any rent , security deposits, insurance proceeds, condemnation awards or any other pr oceeds derived from the Site and actually received by the Borrower. In th e event any of the foregoing ev ents (a) through (d) occurs, the Lender shall have the right to proceed directly against the Borrower at the time the event giving rise to the recourse liability occurred to rec over any and all loss, dama ge, liability, action, cause of action, cost or expense (i ncluding, without limitation, reas onable attorneys’ fees and expenses) incurred by the Lender.
16. If any provision of this Project Lo an Note shall be invalid, illegal or unenforceable, the validity, legality and enforceabi lity of the remaining provisions hereof shall not in any way be affected or impaired thereby.
DANCO COMMUNITIES, a California
corporation, “BORROWER”
By
Title
By
Title
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ATTACHMENT NO. 9
FORM OF PROJECT LOAN DEED OF TRUST
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Pablo
1000 Gateway Avenue
San Pablo, CA 94806
Attention: City Manager
No fee for recording pursuant to
Government Code Section 27383
(Space above this line for Recorder's use)
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (herein the “P roject Loan Deed of Trust”) is being entered into as of this ________ day of ____________________, 20__, by DANCO COMMUNITIES, a California corporation (the “Trustor”) , to COMMONWEALTH LAND TITLE INSURANCE COMPANY (the “Trustee”), in favor of the CI TY OF SAN PABLO, a California municipal corporation (the “Beneficiary”).
Trustor is the fee owner of the real property (the “property”), described in the attached Exhibit A, which is incorporated into this Projec t Loan Deed of Trust by reference. This Project Loan Deed of Trust is executed by Trustor in c onsideration of a loan be ing made by Beneficiary to Trustor (the “Project Loan”) . The Project Loan is evidenced by a promissory note of even date herewith in a principal amount of TWO MILLION DOLLARS ($2,000,000.00) executed by Trustor in favor of Beneficiary (the “Project Loan Note”).
In consideration of the Pr oject Loan, Trustor hereby ir revocably grants, conveys, transfers and assigns to the Trustee, its successors and assigns, in trust, with power of sale and right of entry and possession as provided below, all of its present and future estate, right, title and interest in and to the following described property (the “Mortgaged Property” or the “Premises”):
(A) All of Trustor’s estate, right, title and interest in and to the property, and all minerals, oil, gas and other hydrocarbon substan ces on the property, as well as all development rights, air rights, water, water rights, and water stock relating to the property; (B) All present and future structures, bu ildings, improvements, appurtenances and fixtures of any kind on the prope rty, including but not limited to all apparatus, equipment and appliances used in connection with the operati on or occupancy of the property, such as fire sprinklers and alarm systems, heating and air-conditioning systems and facilities used to provide any utility services, refriger ation, ventilation, laundry, drying, dishwashing, garbage disposal,
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stoves, recreation or other serv ices on the property, and all wi ndow coverings, drapes and rods, carpeting and floor coverings, it being intended and agreed that all such items will be conclusively considered to be a part of the real property conv eyed by this Project Loan Deed of Trust, whether or not attached or affixed to the property (the “Improvements”); (C) All appurtenances of the property and a ll rights of the Trustor in and to any streets, roads or public places, easements or rights-of-way, relating to the property; (D) All of the rents, royalties, profits a nd income of the property, and all rights of Trustor under all present and future leases affecting the property, including but not limited to any security deposits;
(E) All proceeds and claims arising on acc ount of any damage to or taking of the property or any Improvements thereon or any part thereof, and all causes of action and recoveries for any loss or diminution in the value of the property or any Improvements; (F) All goods located on the pr operty and used in the opera tion or occupancy of the property or in any construction on the property bu t which are not effectively made real property under Clause (B) above, includi ng but not limited to al l appliances, furniture and furnishings, building service equipment, and building materials, supplies and equipment; (G) All general intangibles relating to the development or use of the property, including but not limited to all governmental perm its relating to construction on the property, all names under or by which the property or any Im provements on the property may at any time be operated or known, and all rights to carry on business under any such names or any variant thereof, and all trademarks and goodwill in any way relating to the property; and (H) All water stock relating to the property, all shares of stock or other evidence of ownership of any part of the property that is owned by the Trustor in common with others, and all documents of membership in any owners’ or members' asso ciation or similar group having responsibility for managing or operating any part of the property.
This instrument secures:
(1) The payment and performance of the Trustor’s indebtedness and obligations under the Project Loan Note including all extens ions, renewals, modifications, amendments and replacements of the Project Loan Note;
(2) The payment and performance of the Trustor’s obligations under this Project Loan Deed of Trust;
(3) The payment of all sums advanced or paid out by the Beneficiary or the Trustee under or pursuant to any provision of this Project Loan Deed of Trust, together with interest thereon as provided herein;
(4) The payment of the princi pal and interest on all other future loans or advances made by the Beneficiary to the Trustor (or any successor-in-interest to the Trustor as the owner of all or any part of the Mort gaged Property) when the promissory note evidencing the loan or advance specifically states that it is secured by this Project Loan Deed of Trust (“Future
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Advances”), including all extensions, renewals, modifications, amendments and replacements of any Future Advances;
(5) The payment and performance of each and every obligation, covenant, and agreement of Trustor contained under all other present and future agreements executed by Trustor in favor of Beneficiary and relating to the Project Loan Note or the Project Loan, including without limita tion, the Disposition and Developm ent Agreement executed between Trustor and Beneficiary (the “DDA”), and the Affordable Housing Regulatory Agreement recorded against the property (the “Afforda ble Housing Regulatory Agreement”) (as such documents may be amended, modified or supplemen ted from time to time, collectively herein the “Related Documents”).
This Project Loan Deed of Trust, the Proj ect Loan Note, the Related Documents and any other instrument given to evidence or furthe r secure the payment and performance of any obligation secured hereby may hereafter be referred to as the “Loan Documents.”
ARTICLE I
COVENANTS OF TRUSTOR
To protect the security of this Project Loan Deed of Trust, the Trustor agrees as follows:
1.01 Performance. Trustor will pay and perfor m all indebtedness and obligations that are secured by this Project Loan Deed of Trust in accordance with their terms. All sums payable by Trustor hereunder shall be paid without noti ce, demand, counterclaim, offset, deduction, or defense.
1.02 Insurance. Trustor will maintain in force on the Mo rtgaged Property (a) hazard insurance against loss or damage to the Improve ments and Personal Property by fire and any of the risks covered by “fire and extended coverage” insurance, (b) commercial general liability insurance, (c) such other insurance, and in such amounts, as may from time to time be reasonably required by Beneficiary against the same or other hazards, excluding flood insurance and earthquake insurance, and (d) any other insurance required by law . The insurance policies must be satisfactory to the Beneficiary as to amount, form, deductibles and insurer, and must cover all risks Beneficiary requires. With respect to public liability insurance, Beneficiary shall be named as an additional insured, and as to Benefi ciary such insurance shall be primary and noncontributing in the event of loss with any other insurance Beneficiary may carry. The hazard insurance policy must contain a standard mort gagee clause satisfactory to the Beneficiary making all losses payable to the Be neficiary. All such insuran ce policies may only be cancelled or modified upon not less than thirty (30) da ys’ prior written notice to the Beneficiary.
Certificates of all such insurance satisfactor y to the Beneficiary and, at the request of Beneficiary, such insurance policies, together wi th receipts for the payment of premiums, are to be delivered to and held by the Beneficiary. Cer tificates of all renewal and replacement policies must be delivered to the Beneficiary at least fifteen (15) days before expiration of the old policies. Approval, disapproval or acceptance of any insurance by the Beneficiary will not be a representation of the solvency of any insurer, th e sufficiency of any amount of insurance or the form or legal sufficiency of a ny insurance contracts, and Trusto r hereby expressly assumes full responsibility for and liability, if any, with respect thereto.
1.03 Proceeds. All insurance proceeds on th e Mortgaged Property, and all causes of action, claims, compensation, awards and recoveries for any damage, conde mnation or taking of
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all or any part of the Mortgaged Property or for any damage or injury to it or for any loss or diminution in value of the Mortgaged Property, ar e hereby assigned to and shall be paid to the Beneficiary, subject to the ri ghts of superior lienholders. Trustor, upon obtaining knowledge of the institution of any such proceedings or of any damage to the Mortgaged Property, will immediately notify the Beneficiary in writing. The Beneficiary ma y participate in any suits or proceedings relating to any such proceeds, caus es of action, claims, compensation, awards or recoveries and may, subject to the rights of superior lienholde rs, make any compromise or settlement thereof and may join with Trustor in adjusting any loss covere d by insurance. The Beneficiary will apply any sums received by it under this paragraph first to the payment of all of its costs and expenses (including but not limited to legal fees and disbursements) incurred in obtaining those sums, and then, in its absolute discretion (subject to the following paragraph) and without regard to the adequacy of its security, to the payment of the indebtedness and obligations secured by this Purchase Money Deed of Trust or to Trustor for restorat ion or repair of the Mortgaged Property. Any application of such amounts or any portion thereof to the indebtedness secured hereby shall not be construed to cure or waive any default or notice of default hereunder or invalidate any act done pursuant to any such notice or default.
In the event Trustor is not in default hereunder and the following conditions are satisfied, Beneficiary shall make such remaining proceeds available to Trustor to restore the Mortgaged Property: (i) the Beneficiary shall be furnished w ith an estimate for its approval of the cost of restoration or repair accompanied by an architect’ s certification as to such costs and appropriate final plans and specifications for reconstruc tion of the improvements for approval by the Beneficiary; (ii) the improvements so restored or repaired shall be of substantially the same character and value as the improvements prior to damage or destruction and proper for the purposes for which they were originally erected; (iii) Trustor shall proceed forthwith with the completion of construction of the improvements, including the necessary work of restoration, in accordance with plans, specifications and drawings submitted to and approved by the Beneficiary; (iv) any monies which the Beneficiary makes avai lable for restoration shall be disbursed in accordance with standard construc tion lending practice or in any other manner approved by the Beneficiary; (v) Trustor shall fu rnish the beneficiary with evidence satisfactory to the Beneficiary that all improvements so restor ed and/or repaired and their contemplated use fully comply with all zoning, environmental and building laws, ordinances and regulations, and with all other applicable federal, state and mu nicipal laws and requirements; and (vi) if the estimated costs of reconstruction shall exceed th e proceeds available, Trustor shall furnish a satisfactory bond of completion or such cash de posits or other eviden ce satisfactory to the Beneficiary of Trustor’s ability to meet such excess costs.
1.04 Payment of Taxes and Claims. Subject to the provisions of the following paragraph of this Section 1.04, Tr ustor agrees to pay when due all taxes and assessments which are or may become a lien on the Mortgaged Prope rty and any bonds, fees, li ens, charges, fines, impositions and other items which are attribut able to or which are assessed against the Mortgaged Property or its rents, ro yalties, profits and income (“Taxe s”). Trustor also agrees to pay when due all lawful claims and demands of mechanics, materialmen, laborers and others for any work performed or materials delivered for the Mortgaged Property (“Claims”).
Trustor, at its expense, may contest, by appropriate proceedings conducted in good faith and with due diligence, the amount or validity, in whole or in part, of any Taxes or Claims, provided (i) Trustor shall have notified Bene ficiary prior to the commencement of such proceedings, (ii) in the case of any unpaid Taxe s or Claims, such proceedings shall suspend the
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collection thereof from Trustor, Beneficiary and the Mortgaged Property, and shall not constitute a presently enforceable lien against the Mortgaged Property during the pendency of such contest, (iii) neither the Mortgaged Property nor any part thereof nor any interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost, (iv) such proceedings shall not have an adverse effect on the lien or s ecurity interest created hereby or upon the enforcement of any provisions of the Loan Documents, and (v) if Be neficiary shall so require, Trustor shall have deposited with Beneficiary such security reas onably necessary for payment of the contested Taxes or Claims, with interest and penalties and Beneficiary’s expenses.
1.05 Impounds. Beneficiary may, at its opti on to be exercised prior to or upon the recordation of this Project Loan Deed of Trust or thereafter upon thirty (30) days’ written notice to Trustor and the existence of any reasonable gr ounds for insecurity as to payment by Trustor, require the deposit with Beneficiary or its desi gnee by Trustor of amounts sufficient to discharge the obligations of Trustor under Sections 1.02 a nd 1.04 hereof as and when they become due.
The determination of the amounts to be deposit ed with Beneficiary and the times for such deposit shall be made by Beneficiary in its sole discretion. Said amounts shall not be considered to be held by Beneficiary or its designee in trust nor as agent of Trustor, shall bear interest at the rate of interest customarily paid by Beneficiar y, and shall be applied to the payment of the obligations in respect of which the amounts were deposited or, at the option of Beneficiary, to the payment of said obligations in such order or priority as Beneficiary shall determine. If at any time within thirty (30) days prior to the due da te of any of the aforem entioned obligations the amounts then on deposit therefor shall be insufficien t for the payment of such obligations in full, Trustor shall, within ten (10) days after demand, deposit the amount of the deficiency with Beneficiary. If the amounts deposited are in excess of the actual obligations for which they were deposited, Beneficiary may refund any such excess, or, at its option, may hold the same in a reserve account, not in trust and bearing interest, and redu ce proportionately the required deposits for the ensuing year. No thing herein contained shall be deemed to affect any right or remedy of Beneficiary under any other provision of this Project Loan Deed of Trust or under any statute or rule of law to pay a ny such amount and to add the amount so paid to th e indebtedness hereby secured.
All amounts so deposited shall be held by Beneficiary or its de signee as additional security for the sums secured by this Project Lo an Deed of Trust, and upon the occurrence of a default hereunder Beneficiary may, in its sole a nd absolute discretion, and without regard to the adequacy of its security hereunde r in the event of a monetary de fault or nonmonetary default if the Beneficiary elects to accelerate the Project Loan, apply such amounts or any portion thereof to any part of the indebtedness secured hereby. Any such application of said amounts or any portion thereof to any indebtedness secured hereby shall not be construed to cure or waive any default or notice of default hereunder or invalida te any act done pursuant to any such default or notice.
To the extent Beneficiary requ ires deposits to be made pur suant to this Section 1.05, Trustor shall deliver to Benefici ary all tax bills, bond and assessment statements, statements of insurance premiums, and statements for any othe r obligations referred to above as soon as the same are received by Trustor. If Beneficiary sells or assigns this Project Loan Deed of Trust, Beneficiary shall have the right to transfer all amounts deposited under this Section to the purchaser or assignee, and Benefi ciary shall thereupon be released and have no further liability hereunder for the application of su ch deposits, and Trustor shall look solely to such purchaser or assignee for such application and for all responsibility relating to such deposits.
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1.06 Security Agreement. This Project Lo an Deed of Trust constitutes a security agreement with respect to all personal property and fixtures in which the Beneficiary is granted a security interest hereunder, and the Beneficiary shall have all of the rights and remedies of a secured party under the California Uniform Commerc ial Code as well as all other rights and remedies available at law or in equity. Trus tor hereby agrees to execute and deliver on demand and hereby irrevocably cons titutes and appoints Bene ficiary the attorney-in- fact of Trustor, to execute, deliver and, if appropriate, to file with the appropriate filing officer or office such security agreements, financing statements, conti nuation statements or other instruments as the Beneficiary may request or require in order to impose, perfect or continue the perfection of, the lien or security interest created hereby. U pon the occurrence of any default hereunder, the Beneficiary shall have the right to cause any of the Mortgaged Property which is personal property and subject to the security interest of the Bene ficiary hereunder, not including any personal property of any Tenant of the Project or any leased persona l property of Trustor (“Personal Property”) to be sold at any one or more public or private sales in any manner permitted by applicable law, and the Beneficiary shall further have all other rights and remedies, whether at law, in equity, or by statute, as are available to secured creditors under applicable law.
Any such disposition may be conducted by an employee or agent of the Beneficiary or the Trustee. Any person, including both the Trusto r and the Beneficiary, sh all be eligible to purchase any part or all of such property at any such disposition.
Expenses of retaking, holding, preparing for sale, selling or the like shall be borne by Trustor and shall include the Beneficiary’s and the Trustee’s attorneys’ fees and legal expenses.
Trustor, upon demand of the Be neficiary, shall assemble the Personal Property and make it available to the Beneficiary at the property, a place which is hereby deemed to be reasonably convenient to the Beneficiary. Th e Beneficiary shall gi ve Trustor at least five (5) days’ prior written notice of the time and place of any public sale or other disposition of such property or of the time of or after which any private sale or any other intended disposition is to be made, and if such notice is sent to Trustor, as the same is provided for the mailing of notices herein, it is hereby deemed that such notice shall be and is reasonable notice to Trustor.
Trustor hereby warrants, represents and covenants as follows:
(a) Trustor is, and as to portions of the Pers onal Property to be acquired after the date hereof will be, the sole owner of the Personal Property (except that Trustor may lease Personal Property which is immaterial in value and merely incidental to the operation of the Mortgaged Property), free from any senior a dverse lien, security interest, encumbrance or adverse claims thereon of any kind whatsoever except as permitted by Section 4.14 of this Project Loan Deed of Trust. Trustor will notify Beneficiary of, and will defend the Personal Property against, all claims and demands of all persons at any time claiming the same or any interest therein. (b) Trustor will not lease, sell, convey or in any manner transfer the Personal Property, without the prio r written consent of Bene ficiary, except for tran sfers as described in clause (d) below.
(c) The Personal Property is not used or bought for personal, family or household purposes.
(d) The Personal Property will be kept on or at the property and Trustor will not remove the Personal Property from the property without the prior written consent of Beneficiary,
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except such portions or items of Personal Property which are consumed or worn out in ordinary usage, all of which shall be promptly replaced by Trustor with new item s of equal or greater quality and value.
(e) Trustor maintains a place of business in the State of California and Trustor will immediately notify Beneficiary in writing of any change in its place of business. (f) Trustor will execute and deliver to the Beneficiary on demand, and at Trustor's cost and expense, any documents required to perfect and continue the perfection of the Beneficiary’s security interest in the Personal Property of Trustor granted by this instrument.
1.07 Assignment of Rents. All of the existing and future rents, royalties, income and profits of the Mortgaged Property that arise from its use or occupancy are hereby absolutely and presently assigned to the Beneficiary. Trustor irrevocably appoints Bene ficiary its true and lawful attorney-in-fact at the option of Beneficiary at any time a nd from time to time to demand, receive and enforce payment, give receipts or releases and sue in the name of Trustor or Beneficiary for all such rents, royalties, incomes and profits. However, until Trustor is in default under this Purchase Money Deed of Trust, Trus tor will have a license to demand, receive and enforce payment, give receipts or releases and sue in the name of Trus tor for all such rents, royalties, income and profits. Upon any defa ult by Trustor, the Beneficiary may terminate Trustor's license in its discretion at any time w ithout notice to Trustor an d may thereafter collect the rents, royalties, income and profits itself or by an agent or receiver. No action taken by the Beneficiary to collect any rents, royalties, income or profits will make the Beneficiary a “mortgagee-in-possession” of the Mortgaged Prope rty, unless the Beneficiary personally or by agent enters into actual possession of the Mort gaged Property. Possession by a court-appointed receiver will not be considered possession by the Be neficiary. All rents, royalties, income and profits collected by the Beneficiar y or a receiver will be applied first to pay all expenses of collection, and then to the payment of all cost s of operation and management of the Mortgaged Property, and then to the payment of the indebt edness and obligations secured by this Project Loan Deed of Trust in whatever order the Bene ficiary directs in its absolute discretion and without regard to the adequacy of its security.
1.08 Acceleration. Except as otherwise permitted in the Affordable Housing Regulatory Agreement or the DDA, if the Mortgage d Property or any part thereof or beneficial interest therein or any interest of Trustor is sold, assigned, transferred, conveyed, encumbered or full possessory rights therein transferred, conveyed or encumbered, in either or any case without the prior written consent of Beneficiary, such ev ent shall constitute a default under this Project Loan Deed of Trust and Beneficiary, at its opt ion, may declare the Project Loan Note and all other obligations hereunder to be immediately due and payable, and Beneficiary may invoke any remedies following such acceleration as are permitted by this Project Loan Deed of Trust or at law or in equity. The provisions of this Section 1.08 shall not apply to: (a) the granting of such security interests in the Mortgaged Property for the purpose of securing loans or funds to be used for financing the development of the Mortgaged Property, to whic h Beneficiary has agreed this Project Loan Deed of Trust shal l be subordinate as described in Section 4.14 hereof; and (b) a refinancing which does not incr ease the amounts of periodic paym ents or aggregate principal amount owed by Trustor, or extend the time for repayment thereof.
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1.09 Use and Maintenance.
(a) Trustor agrees that at all times duri ng construction and thereafter, Trustor will use, maintain, preserve and keep the Mortgage d Property, including all Improvements thereon to be maintained, preserved and kept, and to perform all obligations with respect to the development and rental of the individual residential units, in accordance with the terms and conditions of the DDA and the Affordable Housing Regulatory Agreement.
Trustor agrees to pay fully a nd discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Improvements to be constructed on th e property, diligently to file or procure the filing of a valid notice of completion upon completion of construc tion of any part of th e Improvements or the Mortgaged Property, diligently file or procure the filing of a notice of cessation upon the event of a cessation of labor on the work or construction of the Improvements for a continuous period of thirty (30) days or more, and to take all other re asonable steps to forestall the assertion of claims of lien against the Mortgaged Pr operty or any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary as its agen t (said agency being coupled with an interest) with the authority, but without an y obligation, to file for record any notices of completion or cessation of labor or any other no tice that Beneficiary deems necessary or desirable to protect its interests in and to the Improvements, the Mo rtgaged Property, the DDA or the Affordable Housing Regulatory Agreement; provided, however, that Beneficiary shall exercise its rights as agent of Trustor only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those actions as hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or claims as Beneficiary shall sp ecify upon laborers, materialmen, s ubcontractors or other persons who have furnished or claim to have furnished labor, services or materials in connection with the Improvements. Nothing herein contained shall require Trustor to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting; provided that Trustor shall, within ten (10) days after the filing of any claim of lien, record in the Office of the Recorder of Contra Costa County a surety bond sufficient to release said claim of lien, or provide Beneficiary, at Trustor’s cost, with such security or assurances (and extensions, renewals or substitutions thereof) as Beneficiary may, in its sole discretion, approve in writing. (b) Trustor will not commit any waste on th e Mortgaged Property or take any actions that might invalidate any insurance carried on the Mortgaged Property. Trustor will maintain the Mortgaged Property in good condition and repair and will complete or restore and repair promptly and in a good and workmanlike manner a ny building, structure, or improvement which may be constructed, damaged or destroyed there on, whether or not insura nce or other proceeds are available to cover in whole or in part the cost of any such completion, restoration or repair.
No Improvements may be removed, demolished or materially altered except for purposes of replacement valued at less than TWENTY THOUSAND DOLLARS ( $20,000.00) without the prior written consent of the Beneficiary.
(c) Without the prior written consent of th e Beneficiary, Trustor will not seek, make or consent to any change in the zoning or nature of occupancy or conditions of use of all or any part of the Mortgaged Property to the extent the same was not in tended by the Beneficiary at the time this Project Loan Deed of Trust was delivered.
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(d) Trustor shall comply with all applicable laws, orde rs, ordinances, regulations, restrictions and requirements of all governmental authorities affecting the Mortgaged Property and the use thereof, including, without limita tion, those relating to hazardous substances, pollution, or protection of the environment. Tr ustor will comply with and make all payments required under the provisions of any covenants, conditions or restri ctions affecting the Mortgaged Property, including bu t not limited to those contained in the Affordable Housing Regulatory Agreement.
1.10 Records. Trustor will keep adequa te books and records of account of the Mortgaged Property and its own financial affairs su fficient to permit the preparation of financial statements therefrom in accordance with gene rally accepted accounting principles. The Beneficiary will have the right to examine, copy and audit Trustor's records and books of account applicable to the Mortgaged Property at all reasonable times.
1.11 Defense. Trustor will, at its own expe nse, appear in and defend any action or proceeding that might affect the Beneficiary’s securi ty or the rights or po wers of the Beneficiary or the Trustee or that purports to affect any of th e Mortgaged Property. If Trustor fails to perform any of its covenants or agreements contained in this Project Loan Deed of Trust after the expiration of any applicable cure period, or if any action or proceeding of any kind (including but not limited to any bankruptcy, insolvency, arra ngement, reorganization or other debtor relief proceeding) is commenced which might affect the Beneficiary’s or the Trustee’s interest in the Mortgaged Property or the Beneficiary’s right to enforce its security, then the Beneficiary and/or the Trustee may, at their option, but without obligation to do so a nd without notice to or demand upon Trustor and without releasing Trustor from any obligation hereunder, make any appearances, disburse any sums and take any actions as may be deemed necessary or desirable to the Trustee or the Beneficiary to protect or enfo rce the security of this Project Loan Deed of Trust or to remedy the failure of Trustor to perform its covenants (w ithout, however, waiving any default of Trustor), including but not limited to disbursement of reasonable attorneys’ fees, entry upon the Mortgaged Property to make repairs or to take other action to protect the security hereof, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of the Beneficiar y or the Trustee appears to be pr ior or superior hereto. Trustor agrees to pay all reasonable out-of-pocket expe nses of the Beneficiar y and the Trustee thus incurred (including but not limited to fees a nd disbursements of counsel). Any sums so disbursed or advanced by the Beneficiary or the Trustee will be additional indebtedness of Trustor secured by this Project Loan Deed of Trust and will be payable by Trustor upon demand.
Any such sums so disbursed or advanced will bear interest at ten percent (10%) per annum, provided that any such sums so disbursed or advanced by the Trustee will not bear interest in excess of the maximum rate permitted to be char ged by the Trustee under applicable law. This paragraph will not be construed to require the Beneficiary or the Trustee to incur any expenses, make any appearances, or take any actions.
1.12 Financing Statement. This Project Lo an Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder of the county in which the Mortgaged Propert y is located with respect to any and all fixtures included within the term “Mortgaged Property” as used herein an d with respect to any goods or other personal property that may now be or hereafter become such fixtures.
1.13 Indemnity. In addition to any other indemnities to Beneficiary specifically provided for in this Project Loan Deed of Trus t, Trustor shall defend, w ith counsel approved by
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Beneficiary, protect, indemnify and save harm less Beneficiary from and against any and all losses, liabilities, obligations, claims, demands, dama ges, fines, taxes, penalties, actions, causes of action, orders, decrees, judgments, liens, co sts and expenses (including, without limitation, experts’, consultants’ and attorn eys’ fees), imposed upon or incurred by or asserted against Beneficiary by reason of (a) Bene ficiary's interest in the Mort gaged Property, (b) any accident, injury to or death of a person or persons or lo ss of or damage to prope rty occurring on or about or with respect to the Mortgaged Property or any part thereof or the adjoining sidewalks, curbs, vaults and vault space (if any), streets or ways, (c) any use, non-use, misuse, possession, occupation, alteration, operation, maintenance, management or condition (including, without limitation, the location or alleged location, re lease or suspected re lease of any Hazardous Material (as defined in Section 1.14(a) below) th ereon) of the Mortgaged Property or any part thereof, or of the adjoining sidewalks, curbs, st reets, ways, vaults and vault space (if any), (d) any failure on the part of Trustor to perform or observe any of its agre ements or obligations under this Project Loan Deed of Trust or the Lo an Documents, (e) any failure on the part of Trustor to comply with any law, regulation, ordinance, or requirement of any governmental body applicable to the Mortgaged Pr operty, (f) the performance of any labor or service or the furnishing of any material or other property in respect of the Mortgaged Property or any part thereof, (g) any negligence (to the extent that proceeds from any insurance actually maintained by Beneficiary do not cover the loss caused there by) or willful act or omission on the part of Trustor, and (h) any breach of any representation or warranty of Trustor contained in this Project Loan Deed of Trust. All amount s payable to Beneficiary under th is Section that are not paid within ten (10) days after written demand theref or by Beneficiary shall bear interest from the date of such demand. The provisions of this Section 1.13 shall surviv e the termination and reconveyance of this Project Loan Deed of Trust.
1.14 Environmental Matters.
(a) Trustor hereby represents and wa rrants to Beneficiary as follows:
(i) As used herein, the term “Hazardous Materials” means and includes any flammable, explosive, or radioactive materi als or hazardous, toxic or dangerous wastes, substances or related materials or any other chemicals, materi als or substances, exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority, including, but not limited to, asbestos, PCBs, petroleum products and by-products, substances defined or listed as “hazardous substances,” “t oxic substances,” “hazardous waste,” “hazardous material,” “extremely hazardous waste,” “restricte d hazardous waste” or similarly identified in, pursuant to, or for purposes of, the California Solid Waste Management, Resource Recovery and Recycling Act (California G overnment Code Section 66700, et seq.), the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Section 9601, et seq. ); the Hazardous Materials Transpor tation Act (49 U.S.C. Section 1801, et seq.); the Resource Conservation and R ecovery Act (42 U.S.C. Section 6901, et seq.); Section 25117 or Section 25316 of the Calif ornia Health & Safety Code; any so-called “Superfund” or “Superlien” law or any other federa l, state or local statute, law, ordinance, code, rule, regulation, order or decree now or in the fu ture regulating, relating to or im posing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material; any substance or mixture regulated under the Toxi c Substance Control Act of 1976 (15 U.S.C.
Section 2601, et seq.); any “toxic pollutant” under the Clean Water Act (33 U.S.C. Section 1251, et seq.); and any hazardous air pollutant under th e Clean Air Act (42 U.S.C. Section 7901,
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et seq.). References to specific statutes include any existing or future amendments or replacements thereof.
(ii) Trustor has obtained or will obtain all certificates, permits, licenses, approvals and authorizations necessary for the lawful construction, occupancy, use and operation of the Mortgaged Property for the purposes for which it is being used, including, but not limited to, any certificates, permits, licenses, approvals and authorizations required by any federal, state, county, regional or local authority whose jurisdiction includes, in whole or in part, environmental protection or matters pertaining to health, safety and welfare. Ex cept as previously disclosed to Beneficiary, Trustor has received no notice of any lawsuit or other regu latory, administrative, judicial or legal proceeding wh ich is presently pending or thr eatened which (A) challenges the issuance of any of the certificates, permits, li censes, approvals or authorizations for the Mortgaged Property or (B) alleges noncomplian ce by Trustor or the Mo rtgaged Property with any law, regulation, rule or ordinance which has a material effect on th e operation, occupancy, leasing or use of the Mortgaged Property for th e purposes for which it will be used. In addition, none of the nonresidential tenant s (if any) of the Mortgaged Property, to the knowledge of Trustor after due inquiry, has failed to obtai n any certificate, permit, license, approval or authorization required in connection with its operations on its premises. (b) Trustor shall keep and maintain the Mo rtgaged Property at all times in compliance with any and all federal, state and local statut es, laws, ordinances, code s, rules, regulations, orders and decrees now or hereaf ter relating to Hazardous Materials, industrial hygiene or to the environmental conditions on, unde r or about the Mortgaged Prope rty, including, but not limited to, soil and ground water conditio ns (“Hazardous Materials Laws ”). Trustor shall not use, generate, manufacture, release, store or di spose of, or permit to be used, generated, manufactured, released, stored or disposed of on, under, about or from the Mortgaged Property, or transport to or from or permit to be tran sported to or from th e Mortgaged Property, any Hazardous Materials in violation of any Hazardous Materials Laws. Trustor hereby agrees at all times to comply fully and in a timely manner w ith, and to cause all of Trustor’s employees, agents, contractors, subcontract ors and any other persons enteri ng the Mortgaged Property with the express or implied consent of Trustor, to so comply with, all Hazardous Materials Laws.
Trustor shall have the right to contest, at Trustor’s sole cost and expense, the applicability of any Hazardous Materials Laws or the gro unds for any attempted enforcement of any Hazardous Materials Laws provided that: (i) as a condition to any such contest, Trustor shall deliver to Beneficiary, at Trustor' s sole cost and expense, such te st results, consultants’ reports and other information regarding the then curre nt environmental condition of the Mortgaged Property and the effect that any additional delay that may result from any such contest would have on such environmental condition, as Benefici ary may reasonably require; (ii) Trustor shall have no right to contest if the delay that might result from any such contest would result in any material deterioration in the environmental c ondition of the Mortgaged Property or any portion thereof or in any material deterioration in the environmental condition of any other property; (iii) Trustor shall have no such right to contest if, as a result of such contest, any governmental agency would have the right to enforce a lien on all or any portion of the Mortgaged Property; and (iv) Trustor shall give prior written notice to Beneficiary of Trustor’ s intention to exercise such right of contest and, upon written request of Beneficiary, shall deliver to Beneficiary a good and sufficient bond or other security reasonably sa tisfactory to Beneficiary for the costs which would be incurred in complying with such Hazardous Materials Laws. Should a new chemical, material or substance become prohibited by fede ral, state or local regulation, or become known
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to pose a hazard, Trustor shall take measures to comply with the law or regulation, and/or take such steps as are necessary to minimize environmental threats. (c) Trustor shall immediat ely advise Beneficiary in writing of (and furnish Beneficiary with copies of all re levant documents pertaining to): (i) any and all enforcement, cleanup, removal or other governmental or regulato ry actions relating to the Mortgaged Property instituted, completed or threatened pursuant to any environmental laws, statutes, ordinances, rules and regulations, including any Hazardous Mate rials Laws, and of any notices received by Trustor with respect to the foregoing; (ii) Trus tor’s discovery of any claim made or clearly threatened in writing by any third party (other than by a governmental agency) and of any claim made or clearly threatened (whether or not in writing) by any governmental agency against Trustor or the Mortgaged Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Material s (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”) ; and (iii) Trustor’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Mortgaged Property that could cause the Mort gaged Property or any part thereo f to be classified as “border- zone property” under the provisions of Califor nia Health and Safety Code Sections 25220, et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, o ccupancy, transferability or use of the Mortgaged Property under any Hazardous Materials Laws. Beneficiary shall ha ve the right to join and participate in, as a party if it so elects, any legal or administrativ e proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorney s' fees in connection therewith paid by Trustor.
(d) Without Beneficiary’s prior written c onsent, which shall not be unreasonably withheld or delayed, Trustor shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Mortgaged Property, nor enter into any settlement agreement, consent decree or other compromise in respect to any Haza rdous Materials Claims, which remedial action, settlement, consent or compromise might, in Be neficiary’s reasonable judgment, impair the value of Beneficiary’s security hereunder; provided, however, that Beneficiary’s prior consent shall not be necessa ry in the event that the presence of any Hazardous Materials on, under or about the Mortgaged Property either poses an immediate threat to the health, safety or welfare of any individua l or is of such a natu re that an immediate remedial response is necessary and it is not possible to obtain Beneficiary's consent before taking such action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken. Beneficiar y agrees not to withhold its c onsent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction; (ii) Trustor establishes to the reason able satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would re sult in less impairment of Beneficiary’s security hereunder; (iii) all federa l, state and local governmental agencies having jurisdiction have approved of or required the particular remedial action; or (iv) a particular remedial action is recommended by a reputable e nvironmental consultant selected or approved by Beneficiary in a report which is satisfactory to Beneficiary in its reasonable discretion. (e) Trustor hereby agrees to defend (w ith counsel approved by Beneficiary), indemnify, protect and hold Bene ficiary harmless from and against, and shall reimburse Beneficiary for any and all Claims (as defined below). Trustor hereby expressly waives, with respect to any Claims, any immunity to whic h Trustor may otherwise be entitled under any industrial or workers’ compensation laws. As used herein, “Claims” means any and all actual
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out-of-pocket costs (including, without limitation, at torneys’ fees, consultants’ fees, experts’ fees, including sums paid in settlement of any clai m, expenses and court co sts), expense, loss or obligation arising from any claim, demand, loss, liability, damage, inj unctive relief, order, decree, judgment, injury to or death of any pe rson, damage or injury to property or natural resources, fine, tax, penalty, action and cause of action of any kind incurred by or asserted against Beneficiary and arising, directly or indirect ly, in whole or in part, out of the generation, storage, release, discharge, deposit, migration, use, handling or presence, placement or alleged or suspected generation, storage, rele ase, discharge, migration, deposit, use, handling, presence or placement of any Hazardous Materials at, on, a bout, under, within or from the Mortgaged Property, or in or adjacent to any part of the Mortgaged Property, or in the soil, ground water or soil vapor on or under the Mortgaged Propert y, or elsewhere in connection with the transportation of Hazardous Materials to or from the Mortgaged Property in violation of any Hazardous Materials Laws, whether or not known to Trustor or Beneficiary, whether foreseeable or unforeseeable, regardless of the source of such generation, storage, release, discharge, deposit, migration, use, handling, presence or placement and regardless of when such generation, storage, release, discharge, deposit, migration, use, handling, presence or placement occurred or is discovered. Without limiting the generality of th e foregoing and for purposes of clarification only, Claims also include all ac tual out-of-pocket costs incurred by Beneficiary in connection with (i) any investigation to determine whethe r the Mortgaged Property is in compliance with Hazardous Materials Laws, which investigation determines that the Mortgaged Property is not in compliance with such Laws, (ii) remediating any environmental contamination, and causing the Mortgaged Property to be or become in complia nce with all applicable Hazardous Materials Laws, (iii) any investigation, removal or remedia tion of any kind and disposal of any Hazardous Materials present at, on, under or within the Mort gaged Property or released from the Mortgaged Property to the extent required by applicable Hazar dous Materials Laws in e ffect at the time of such removal, remediation or disposal, and (iv) any repair of any damage to the Mortgaged Property or any other property caused by any such investiga tion, removal, remediation or disposal. The rights of Bene ficiary hereunder shall not be lim ited by any investigation or the scope of any investigation undertaken by or on behalf of Beneficiary in connection with the Mortgaged Property prior to the date hereof. Th e provisions of this Section 1.14(e) shall survive the termination and reconveyance of this Project Loan Deed of Trust.
ARTICLE II
EVENTS OF DEFAULT
2.01 Default. The Trustor will be in default under this Project Loan Deed of Trust if:
(a) There shall be a failure to make the payment of any installment of principal or interest or any other sum secu red hereby which continues for fifteen (15) days after such payment is due; or
(b) There shall be a failure to comply w ith any other term, obligation, covenant or condition contained in this Project Loan Deed of Trust; provided, however, that Trustor shall not be in default if Trustor, after Beneficiary sends written notice demanding cure of such failure, (i) cures the failure within thirty (30) days, or (ii) if the cure requires more than thirty (30) days, immediately commences to cure the failure and thereafter diligently prosecutes such cure to completion within sixty (60) days after giving notice of the default.
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(c) There occurs an appointment, pursuant to an order of a court of competent jurisdiction, of a trustee, receiver or liquidator of the Mortgage d Property or any part thereof, or of Trustor, or any termination or voluntary susp ension of the transaction of business of Trustor, or any attachment, execution or other judicial seizure of all or any substantial portion of Trustor’s assets, which appointment, attachment, execution or seizure is not discharged within forty-five (45) days; or
(d) Trustor, or any member of Trustor at any level or any tr ustee of Trustor, shall file a voluntary case under any applicable bankruptcy, insolvency, debtor relief, or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar official) of Trustor or such person or entity or for any part of th e Mortgaged Property or a ny substantial part of Trustor’s or such person’s or entity’s property , or shall make any gene ral assignment for the benefit of Trustor’s or such person’ s or entity’s creditors, or sha ll fail generally to pay Trustor’s or such person’s or entity’s debts as they become due or shall take any action in furtherance of any of the foregoing; or
(e) A court having jurisdiction shall enter a d ecree or order for relief in respect of Trustor, or any member of Trustor at any level or any trustee of Trustor, in any involuntary case brought under any bankruptcy, insolvency, debtor reli ef, or other similar law now or hereafter in effect, or Trustor or such member or trustee sh all consent to or shall fail to oppose any such proceeding, or any such court shall enter a decr ee or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or simila r official) of Trustor or such person or entity or for any part of the Mortgaged Property or any s ubstantial part of Trustor’s or such person’s or entity’s property, or ordering the winding up or li quidation of the affairs of Trustor or any such person or entity, and such decree or order shall not be dismissed w ithin sixty (60) days after the entry thereof; or
(f) There has occurred a default under any term, covenant, agreement, condition, provision, representation or warra nty contained in any of the Re lated Documents or any other mortgage or deed of trust encumbering all or any portion of the Mort gaged Property, regardless of whether such mortgage or deed of trust is prior or subordinate to this Project Loan Deed of Trust, or contained in any note or other instru ment secured thereby, or contained in any other instrument securing such note, if such default remains uncured following any applicable notice, grace or cure period; or
(g) There has occurred a violation of any c ondition, covenant or restriction recorded against or affecting the property, and such violation has not been cured within any applicable cure period provided therein; or
(h) Any representation or disclosure made to the Beneficiary by Trustor proves to be materially false or misleading on the date as of which made, whether or not that representation or disclosure appears in this Project Loan Deed of Trust; or (i) There has occurred a change of the c onstituent members, whether voluntarily or involuntarily or otherwise, or the sale, conve yance, transfer, dis position, charging or encumbrance of any such member interests, wit hout the prior written cons ent of the Beneficiary or as otherwise permitted in the DDA.
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With respect to any right to cure or cure period provided in this Section 2.01, performance of a cure by any member of Trusto r shall have the same effect as would like performance by Trustor.
ARTICLE III
REMEDIES
3.01 Remedies. If the Trustor is in defau lt, the Beneficiary ma y, at its option, and without notice to or demand upon the Trustor:
(a) Declare any or all indebtedness secured by this Project Loan Deed of Trust to be due and payable immediately;
(b) Upon five (5) days’ notice to Trustor, enter onto the Mortgaged Property, in person or by agent or by court-appointed receiv er, and take any and all steps which may be desirable in the Beneficiary’s sole discretion to complete any unfinished construction, to manage and operate the Mortgaged Propert y and to do any and all othe r acts which the Beneficiary deems proper to protect the secu rity hereof and, either with or without taking possession, in its own name or in the name of th e Trustor, sue for or otherwise collect and receive the rents, royalties, income and profits of the Mortgaged Property, and the Beneficiary may apply any rents, royalties, income or profits collected against the indebtedness secured by this Project Loan Deed of Trust without in any way curing or waiving any default of the Trustor; (c) Bring a court action to for eclose this Project Loan Deed of Trust or to enforce its provisions or any of the indebtedness or obligations secured by this Project Loan Deed of Trust; (d) Cause any or all of the Mortgaged Prope rty to be sold unde r the power of sale granted by this Project Loan Deed of Trust in any manner permitted by applicable law; and (e) Exercise any other right or remedy available under the Loan Documents or any other agreement of the Trustor, or under any guar anty of any obligations of the Trustor to the Beneficiary relating to the Project Loan, or otherwise available at law or in equity.
3.02 Power of Sale. In connection with the ex ercise of the power of sale granted by this Project Loan Deed of Trust:
(a) Beneficiary may elect to cause the Mort gaged Property or any part thereof to be sold under the power of sale herein granted in any manner permitted by applicable law. In connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Mortgaged Property which consists of a right in action or which is property that can be severed from the real property covered hereby or any improvements thereon without causing structural damage thereto as if the same were personal property, and dispos e of the same in accordance with applicable law, separate and apart from the sale of real property. Any sale of any personal property hereunder shall be conducted in any manner pe rmitted by Section 9501 or any other applicable section of the California Commerci al Code. Where the Mortgaged Property consists of real and personal property or fixtures, whether or not su ch personal property is located on or within the real property, Beneficiary may elect in its discretion to exercise its rights and remedies against any or all of the real property, personal property, and fixtures in such order and manner as is now or hereafter permitted by applicable law.
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(b) Without limiting the generality of the fo regoing, Beneficiary may, in its sole and absolute discretion and without regard to the ade quacy of its security, el ect to proceed against any or all of the real property, personal prope rty and fixtures in any manner permitted under Section 9501(4)(a) of the Califor nia Commercial Code; and if the Beneficiary elects to proceed in the manner permitted under Section 9501(4)(a)(i i) of the California Commercial Code, the power of sale herein granted shall be exercisable with respect to all or a ny of the real property, personal property and fixtures covered hereby, as designated by Beneficiar y, and the Trustee is hereby authorized and empowered to conduct a ny such sale of any real property, personal property and fixtures in accordance with the procedures applicable to real property. (c) Where the Mortgaged Prope rty consists of real prop erty and personal property, any reinstatement of the obligation secured hereby, following default and an election by the Beneficiary to accelerate the maturity of said obligation, which is made by Trustor or any other person or entity permitted to exercise the righ t of reinstatement under Section 2924c of the California Civil Code or any successor statute, sh all, in accordance with the terms of California Commercial Code Section 9501(4)(c)(iii), not prohibit the Beneficiary from conducting a sale or other disposition of any personal property or fixtures or from otherwise proceeding against or continuing to proceed against any personal property or fixtures in any manner permitted by the California Commercial Code; nor shall any such reinstatement invalidate, rescind or otherwise affect any sale, disposition or other proceeding held, conducted or instituted with respect to any personal property or fixtures pr ior to such reinstatement or pending at the time of such reinstatement. Any sums paid to Beneficiary in effecting any reinstatement pursuant to Section 2924c of the California Civil Code shall be a pplied to the secured obligation and to the Beneficiary's and Trustee's reasonable costs an d expenses in the manner required by Section 2924c.
(d) Should Beneficiary elect to sell any portion of the Mortgage d Property which is real property or which is persona l property or fixtures that Beneficiary has elected under Section 9501(4)(a)(ii) of the California Commercial Code to sell together with real property in accordance with the laws governing a sale of real property, Beneficiary or Trustee shall give such notice of default a nd election to sell as may then be required by law. Thereafter, upon the expiration of such time and the giving of such notic e of sale as may then be required by law, and without the necessity of any demand on Trustor, Trustee, at the time and place specified in the notice of sale, shall sell said real property or pa rt thereof at public auction to the highest bidder for cash in lawful money of the United States . Trustee may, and upon request of Beneficiary shall, from time to time, postpone any sale hereunder by public announcement thereof at the time and place noticed therefor.
(e) If the Mortgaged Property consists of se veral lots, parcels or items of property, Beneficiary may: (i) designate th e order in which such lots, parcel s or items shall be offered for sale or sold, or (ii) elect to sell such lots, parcels or items through a single sale, or through two or more successive sales, or in any other manner Beneficiary deems in its best interest. Any person, including Trustor, Trustee or Be neficiary, may purchase at any sale hereunder, and Beneficiary shall have the right to purchase at any sale hereunder by crediting upon the bid price the amount of all or any part of the indebt edness hereby secured. Should Be neficiary desire that more than one sale or other disposition of the Mortgaged Property be conducted, Beneficiary may, at its option, cause the same to be conducted simultaneously, or successively, on the same day, or at such different days or times and in such order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or otherwise affect the lien of this Purchase Money Deed of
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Trust on any part of the Mortga ged Property not sold until all indebtedness secured hereby has been fully paid. In the event Beneficiary el ects to dispose of the Mortgaged Property through more than one sale, Trustor agrees to pay the co sts and expenses of each such sale and of any judicial proceedings wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, their agents and coun sel, and to pay all expenses, liabilities and advances made or incurred by Trustee in connecti on with such sale or sales, together with interest on all such advances made by Trustee at the lower of the interest rate set forth in the Project Loan Note or the maximum rate permitted by law to be charged by Trustee. (f) Upon any sale hereunder, Trustee shall execute and de liver to the purchaser or purchasers a deed or deeds conveying the property so sold, but without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or purchaser s shall be let into immediate possession; and the recitals in any such deed or deeds of facts, such as default, the giving of notice of default and notice of sale, and other facts affecting the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such facts and any such deed or deeds shall be conclusive against all persons as to such facts recited therein.
3.03 Sale Proceeds. The proceeds of any sale under this Project Loan Deed of Trust will be applied in the following manner:
FIRST: Payment of the costs and expenses of the sale, including but not limited to the Trustee’s fees, legal fees and disbursements, title charges and transfer taxes, and payment of all expenses, liabilities and advances of the Trustee, together with interest on all advances made by the Trustee at the maxi mum rate permitted to be charged by the Trustee under applicable law.
SECOND: Payment of all sums expende d by the Beneficiary under the terms of this Project Loan Deed of Trust and not ye t repaid, together with interest on such sums at the maximum rate permitted to be charged by th e Beneficiary under applicable law.
THIRD: Payment of the indebtedness and obligations of the Trustor secured by this Project Loan Deed of Trust in any order that the Beneficiary chooses.
FOURTH: The remainder, if any, to the person or persons legally entitled to it.
3.04 Waiver. Trustor, for itself and for all persons hereunder claiming through or under it or who may at any time acquire a lien on a ll or any part of the Mortgaged Property or any interest therein, hereby expressly waives and re leases all rights to direct the order in which any of the Mortgaged Property and/or any other property now or hereafte r constituting security for any of the indebtedness secured hereby will be sold in the event of any sale under this Project Loan Deed of Trust, and also any right to have any of the Mortgaged Pr operty and/or any other property now or hereafter cons tituting security for any of the indebtedness secured hereby marshalled upon any foreclosure of th is Project Loan Deed of Trust or of any other security for any of said indebtedness.
3.05 Remedies Cumulative. All remedies contai ned in this Project Loan Deed of Trust are cumulative, and the Beneficiary also has all other remedies provided by law or in any other agreement between Trustor and the Beneficiary. No delay or failure by the Beneficiary to exercise any right or remedy under this Project Loan Deed of Tr ust will be construed to be a
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waiver of that right or remedy or of any default by Trustor. The Beneficiary may exercise any one or more of its rights and remedies at its option without regard to the adequacy of its security.
3.06 Costs and Fees. Trustor will pay all of the Beneficiary's and the Trustee's costs, fees and expenses incurred in any efforts to enfo rce any terms of this Project Loan Deed of Trust or in the performance of its or their duties he reunder, whether or not any lawsuit is filed, including but not limited to legal fees and disbur sements, foreclosure costs and title insurance or trustee's sale guaranty charges and any other g overnmental charges or impositions imposed by any governmental authority on the Trustee or the Bene ficiary by reason of its or their interest in the Project Loan Note, any note evidencing a future advance, or this Project Loan Deed of Trust.
ARTICLE IV
MISCELLANEOUS
4.01 Invalidity. The invalidity or unenforceabili ty of any one or more provisions of this Project Loan Deed of Trust will in no way affect any other provision.
4.02 Loan Statement. Trustor agrees to pay to the Beneficiary a reasonable charge, not to exceed the maximum allowed by law, for giving a ny statement of the status of the obligations secured by this Project Loan Deed of Trust.
4.03 Late Charge. If Trustor shall fail to make any payment due hereunder within fifteen (15) days after the date the same is due and payable, a late charge by way of damages shall be immediately due and payable in the amount of ten percent (10%) of the overdue amount.
Trustor recognizes that default in making the paymen ts herein agreed to be paid when due will result in the Beneficiary incu rring additional expense in servicing the Loan, in loss to the Beneficiary of the use of the money due, and in fr ustration to the Beneficiary in meeting its loan commitments. Trustor agrees that, if for a ny reason it fails to pay the amounts due under this Project Loan Deed of Trust within fifteen (15) days after the date when due, the Beneficiary shall be entitled to damages for the detriment caused thereby, but that it is extremely difficult and impractical to ascertain the extent of such dama ges. Trustor agrees that such amount as is specified herein is a reasonable approximation of damages for late payment.
4.04 Notices. All notices given under this Pr oject Loan Deed of Trust must be in writing and will be effectively se rved upon personal delivery or, if mailed, no later than five (5) days after deposit in certified United States mail, postage prepaid, return receipt requested, sent to the Beneficiary at its address appearing in the recording information block on the front page of this Project Loan Deed of Trust and sent to the Trustor at its addre sses appearing below its signature, which addresses may be changed by written notice. However, the service of any notice of default or noti ce of sale under this Project Loan D eed of Trust as required by law will, if mailed, be effective on the date of mailing.
4.05 Beneficiary Consent. Wit hout affecting Trustor’s liability for the payment of any of the indebtedness secured by this Project Loan Deed of Trust, the Be neficiary may from time to time and without notice to th e Trustor (a) release any person li able for the payment of that indebtedness, (b) extend or modify the terms of payment of that in debtedness, (c) accept additional real or personal propert y of any kind as security, or al ter, substitute or release any property securing that indebtedness, or (d) cause the Trustee to consent to the making of any map or plat of the Mortgaged Property, or to reconvey any part of the Mortga ged Property, or to join
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in granting any easement or creati ng any restriction on the Mortgage d Property, or to join in any subordination or other agreement affecting this Project Loan Deed of Trust.
4.06 Trustee Acceptance. Trustee accepts this Trust when this Pr oject Loan Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.
4.07 Statute of Limitations. The Trustor waiv es all present and future statutes of limitations as a defense to any action to enforce the provisions of this Project Loan Deed of Trust or to collect any indebtedness se cured by this Project Loan Deed of Trust to the fullest extent permitted by law, provided that such waiver shall not apply at any time after payment in full of all sums secured by the Project Loan Deed of Trust.
4.08 Interpretation. The term “Trustor” in cludes both the original Trustor and any subsequent owner or owners of any of the Mortgaged Property, and the term “Beneficiary” includes the original Beneficiary and also any future owner or holder, including pledgees and participants, of the Project Loan Note or any inte rest therein. Whenever the context requires, the singular includes the plural and vice versa and each gender includes each other gender. The headings of the articles of th is Project Loan Deed of Trust are for convenience only and do not limit its provisions.
4.09 Consent. The Beneficiary’s consent to any act or omission by Trustor will not be a consent to any other or subseque nt act or omission or a waiver of the need for such consent in any future or other instance.
4.10 Successors. The terms of this Project Loan Deed of Trust will bind and benefit the heirs, legal representatives, successors an d assigns of Trustor and Beneficiary and the successors-in-trust of the Trustee. If more than one person is named as Trustor, each will be jointly and severally liable to perform the obligations of the Trustor.
4.11 California Law. This Project Loan Deed of Trust will be governed by California law, excepting those provisions dealing with choice of laws.
4.12 Removal of Trustee. The Beneficiary may remove the Trustee or any successor Trustee at any time or times and appoint a su ccessor Trustee by recording a written substitution in the county where the real property covered by this Project Loan Deed of Trust is located, or in any other manner permitted by law. Upon that appointment, all of the powers, rights and authority of the Trustee will immediately become vested in its successor.
4.13 Inconsistency. The terms of this Project Loan Deed of Trust, or any modification thereof, shall prevail in the event of any inconsistency with the terms of the DDA, including, but not limited to, any terms of the DDA covering entitle ment to or distribution of any insurance or condemnation proceeds or other items referred to in this Project Loan Deed of Trust.
4.14 Subordination. This Project Loan Deed of Trust may be made subordinate to and only to the terms and conditions of documents evidencing construction and/or permanent financing as provided in the DDA. The loan doc uments to which this Project Loan Deed of Trust shall be subordinate shall include, and subordination hereunder is subject to, the following conditions (alternatively, these conditions may be contained in a separately recorded subordination agreement between the construc tion and/or permanent financing lender and Beneficiary): (a) the Beneficiary shall receive copies of any notices of default issued by the
Attachment No. 9
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lender to the Trustor; (b) the Beneficiary shall ha ve the right to cure any default by the Trustor within ninety (90) days after a notice of default; and (c) the Beneficiary shall have the right to exercise any and all remedies under this Project Loan Deed of Trust foll owing the expiration of ninety (90) days after delivery of notice of defau lt from the Beneficiary to the lender of a default by Trustor under the Project Loan Note or this Pr oject Loan Deed of Tr ust. The Beneficiary shall be entitled to reimbursement from the Trustor of all direct but reasonable costs and expenses incurred by Beneficiary in curing a default of Trustor.
4.15 Nonrecourse. The Project Loan Note secu red by this Project Loan Deed of Trust is a nonrecourse note whereby Trustor has no personal liability for repayment of the sums evidenced thereby, and the Beneficiary in the event of default must resort only to income, profits or other funds generated from the exercise of the Beneficiary’s rights with respect to the Premises, including any funds which may result fr om the sale or disposition of the Mortgaged Property subsequent to a foreclosure of this Project Loan Deed of Trust, or conveyance of a deed to the Mortgaged Property in lieu of such fo reclosure, for repayment of any amounts owed hereunder.
The foregoing limitation shall not apply to an y and all loss, damage , liability, action, cause of action, cost or expense (including, wi thout limitation, reasonable attorneys’ fees and expenses) incurred by the Beneficiary as a result of any (a) fraud or material misrepresentation under or in connection with the loan or any loan document, (b) intentional bad faith waste of the Mortgaged Property, (c) losses resulting from the Trustor’s failure to maintain insurance as required under this Project Loan Deed of Trust, or (d) misappropriation of any rent, security deposits, insurance proceeds, condemnation awar ds or any other proceeds derived from the Mortgaged Property and actually received by the Tr ustor. In the event any of the foregoing events (a) through (d) occurs, the Beneficiary shall have the right to proceed directly against the Trustor at the time the event giving rise to the r ecourse liability occurred to recover any and all loss, damage, liability, action, ca use of action, cost or expe nse (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the Beneficiary.
IN WITNESS WHEREOF, the undersigned has executed this Project Loan Deed of Trust as of the day and year first hereinabove written.
DANCO COMMUNITIES, a California corporation
By
Title
By
Title
“TRUSTOR”
Trustor’s Address:
5251 Ericson Way
Arcata, CA 95521