1 LOAN AGREEMENT
This Loan Agreement (this “Agreement”) is entered into effective as of ________________ (“Effective Date”) by and between the City of South San Francisco, a municipal corporation (the "City") and ____________(INSERT ROTARY ENTITY) ("Borrower"). The City and Borrower are hereinafter collectively referred to as the “Parties.”
RECITALS
A. Borrower is the owner of certain parcel at 500 Linden Avenue (APN: 012-175-260) located in the City of South San Francisco and as more particularly described in Exhibit A (“the Property”). Borrower desires to develop an eighty (80) unit senior affordable housing development consisting of five (5) studio Units and seventy-four (74) one-bedroom units with rents affordable to households with incomes between 15% of Area Median Income and 60% of Area Median Income and one (1) unrestricted two-bedroom manager’s unit, for qualifying residents at an age minimum to be agreed upon by the Parties, but not less than 55 years of age or older as defined in Civil Code section 51.3, and including ground floor commercial/retail component (“Senior Project” or “Project”) on the Property.
B. The City has identified a critical need for development of affordable housing as evidenced by data gathered and conclusions drawn in the City’s Housing Element and wishes to assist in the development of the Senior Project through various forms of financial assistance.
C. At its June 25, 2025 Regular Meeting, the South San Francisco City Council adopted Resolution No. 83-2025, conditionally committing a City loan out of its Commercial Linkage Fee Fund (“Fund 823”) to Borrower in the amount of Two Million, Three Hundred and SixtySix Thousand, Eight Hundred and Twenty-Eight Dollars ($2,366,828) for construction of the Senior Project.
D. At its January 14, 2026 Regular Meeting, City Council adopted Resolution No. 01-2026, conditionally committing an additional City loan out of Fund 823 to Borrower in the amount of Five Million, Five Hundred Thousand, Five Hundred and Eighty-One Dollars ($5,500,581) for construction of the Senior Project.
E. As contemplated by Resolutions No. 83-202 and 01-2026, and in accordance with the terms and conditions of this Agreement and accompanying Exhibits, the City agrees to loan to Borrower an amount not to exceed Seven Million, Eight Hundred and Sixty-Seven Thousand, Four Hundred and Nine Dollars ($7,867,409) (the “Loan”) to defray the construction costs associated with development of the Senior Project which Loan shall be evidenced by an accompanying Promissory Note dated as of the Effective Date and executed by Borrower substantially in the form attached hereto as Exhibit B (“Note”) secured by an Assignment of Collateral as set forth herein in Section 1.8 and, concurrent with Borrower’s execution of this Agreement, a Deed of Trust in the form attached hereto as Exhibit C (“Deed of Trust”) and subject to that Regulatory Agreement dated March 17, 2025 and recorded as Document No. 2025-015516 in the San Mateo County Recorder’s Office on April 3, 2025, entered into between the City and Rotary Plaza, Inc., a California nonprofit public benefit corporation ("RPI"), which encumbers the Property (“Regulatory Agreement”). The Borrower assumed Governent Code Section 54957.5
SB 343 Item #6a
09/30/2026 SP CC
2 the obligations imposed by the Regulatory Agreement upon the Borrower's acquisition of the Property from RPI. this language to be inserted as appropriate with the Rotary entity above The Deed of Trust will be recorded against the Property.
NOW THEREFORE, in consideration of their mutual undertakings and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. THE LOAN AND DISBURSEMENT OF LOAN PROCEEDS.
1.1. Loan. The City agrees to make the Loan, and Borrower agrees to accept the same, upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be evidenced by the Note. Provided that Borrower has complied with all conditions set forth in Section 1.6, the Loan shall be disbursed in accordance with Section 1.5 hereof.
1.2. Interest; Maturity Date. Interest shall accrue on the Loan at a rate of three percent (3%) simple interest per annum for so long as Borrower is not in default under (a) this Agreement, (b) the Note, (c) the Deed of Trust, or (d) the Regulatory Agreement (collectively, the “Loan Obligations”). Otherwise, the Loan shall accrue interest at the Default Rate, as set forth in the Note, until such default is cured. The outstanding balance of the Loan and any other sums due under the Note shall be payable in full on the fifty-fifth (55th) anniversary of the date of issuance of the last certificate of occupancy or equivalent certification provided for the Senior Project by the City’s Building Official (the “Maturity Date”); provided, however, that if such date cannot be established, the Maturity Date shall be the fifty-seventh (57th) anniversary of the Effective Date.
If the California Department of Housing and Community Development (“HCD") is a lender to the Senior Project, at conversion to permanent financing, the Parties will extend to the Maturity Date to match the maturity date of the HCD financing.
1.3. Repayment. Annual payments shall be due and payable on a residual receipts basis in accordance with the formula set forth below.
a. Annual Payment from Residual Receipts. Commencing on April 1 following the first (1st) anniversary of the City’s issuance of a final certificate of occupancy for the Project, and on each April 1 thereafter, Borrower shall pay to City a share a share of fifty percent (50%) of all Residual Receipts (defined below) generated by the Project during the previous calendar year to reduce the indebtedness owed under this AgreementNote. The City’s share of Residual Receipts shall be as set forth in negotiated intercreditor agreements, but in no case shall the City’s share of Residual Receipts be negotiated at less than a pro rata share based on the amount that each subsidy lender has contributed to Borrower for the Project. The City’s pro-rata share shall be based on the ratio that the original principal amount of the City’s Loan bears to the sum of the original principal amounts of all loans made to the Borrower that are payable from Residual Receipts, including any other loan from the City and any loan from the County of San Mateo. Payments shall be accompanied by Borrower’s calculation of Residual Receipts for the previous calendar year and such supporting documentation asCity may reasonably request, including without limitation, an independent audit prepared for the Project 3 by a certified public accountant in accordance with generally accepted accounting principles. Payments shall be credited first to any unpaid late charges and other costs and fees then due, then to any accrued interest, and then to principal. No later than November 1 of each year during the term hereof beginning after the first (1st) anniversary of the City’s issuance of a final certificate of occupancy for the Project, if requested by City, Borrower shall provide to City a projected budget for the following calendar year which shall include an estimation of Residual Receipts.
b. “Residual Receipts” means for each calendar year during the Term hereof, the amount by which Gross Revenue (defined below) exceeds Annual Operating Expenses (defined below) for the Project. Residual Receipts shall also include (a) condemnation awards for a permanent taking of part or all of the Property or the Project; and (b) net cash proceeds realized from any refinancing of the Project, less fees and closing costs reasonably incurred in connection with such refinancing and any City-approved uses of the net cash proceeds of the refinancing.
c. “Gross Revenue” means for each calendar year during the Term, all revenue, income, receipts and other consideration actually received by Borrower from the operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants; Section 8 payments or other rental subsidy payments received for the dwelling units; deposits forfeited by tenants; all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance (provided however, expenditure of such proceeds for repair or restoration of the Project shall be included within Annual Operating Expenses in the year of the expenditure); condemnation awards for a taking of part or all of the Property or the Project for a temporary period; the fair market value of any goods or services provided to Borrower in consideration for the leasing or other use of any part of the Project; and any release of funds from replacement and other reserve accounts to Borrower other than for costs associated with the Project. Gross Revenue shall not include tenant security deposits, loan proceeds, capital contributions or similar advances. d. “Annual Operating Expenses” means for each calendar year during the Term, the following costs reasonably and actually incurred for the 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 accepted accounting principles; all state and local property and other taxes and annual assessments imposed on the Project; premiums for property damage and liability insurance; debt service currently due and payable on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on loans that have been approved by the City and which are secured by deeds of trust (each, an “Approved Loan”); utility services not paid for directly by tenants, including but not limited to water,sewer, trash collection, gas and electricity; maintenance and repair, including but not limed to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, 4 common systems repairs, general repairs, janitorial and supplies; any annual license or certificate of occupancy fees required for operation of the Project; general administrative expenses including but not limited to advertising and marketing,security services and systems, and professional fees for legal, audit and accounting; property management fees and reimbursements including on-site manager expenses, not to exceed fees and reimbursements which are standard in the industry and pursuant to a management contract approved by the City; deposits into a reserve for capital replacements of Project improvementsin an amount no more than Five Hundred Dollars ($500) per unit per year or such greater amount as reasonably required by the holder of an Approved Loan or Borrower's organizational documents; deposits into an operating reserve in such reasonable amounts as are approved by the City, or in such amounts reasonably required by the holder of an Approved Loan or Borrower's organizational documents. Annual Operating Expenses shall not include the following: debt service payments on any loan which is not an Approved Loan, including without limitation, unsecured loans; depreciation, amortization, depletion or other non-cash expenses; capital expenditures; expenses paid for with disbursements from any reserve account; any amount paid to Borrower, or any entity controlled by the persons or entities in control of Borrower (unless such payment consists of fees paid to a property management agent or resident services agent, to the Project developer, to the Borrower’s general partners, or the asset management fee, or as otherwise set forth in the Borrower's organizational documents).
1.4. Use of Loan Proceeds. The Loan shall be used solely and exclusively to defray the construction costs for the Senior Project, consistent with the construction budget attached as Exhibit E (the “Construction Budget”).
1.5. Disbursement of Proceeds. Upon satisfaction of the conditions set forth in Section 1.6, and provided that Borrower has provided the City copies of third-party invoices and evidence of Borrower’s payment in accordance with the Construction Budget, and such other documentation as the City may reasonably require, the City shall promptly disburse Loan proceeds to Borrower.
1.6. Conditions Precedent to Disbursement of Funds. The City's obligation to disburse Loan proceeds is conditioned upon satisfaction of all the following conditions (“Loan Proceeds):
a. There exists no Default nor any act, failure, omission, or condition that would constitute a default under this Agreement;
b. Borrower’s execution and delivery to the City of this Agreement, the Note, and the Deed of Trust; and
c. Borrower's recordation of the Deed of Trust in the Official Records of San Mateo County; and
d. Borrower’s delivery to the City of both of the following: (i) a certified resolution indicating that Borrower has authorized this transaction and that the persons executing this Agreement on Borrower’s behalf have been duly authorized to do so, and (ii) a certified copies of Borrower’s certificate of limited partnership and 5 the Borrower's amended and restated partnership agreement (the "Partnership Agreement").
e. Borrower’s presentation of an updated Construction Budget, as reasonably approved by the City, accompanied by the request disbursement amount to provide for costs incurred to date. Requests for reimbursement payments can be made quarterly.
f. Borrower’s submittal to the City certificate(s) of insurance, in form and with insurers admitted in California and acceptable to the City, evidencing compliance with the insurance requirements attached hereto as Exhibit F, and upon demand by City at any time subsequent. If requested by the City, Borrower shall also provide complete copies of the required insurance policies and bonds.
1.7. No Obligation to Disburse Proceeds Upon Default or Termination. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse any portion of the Loan to Borrower:
a. Upon the failure of any of Borrower’s representations and warranties set forth in this Agreement to be true and correct in all material respects; b. Following the termination of this Agreement; or
c. During the pendency of any uncured Event of Default.
1.8. Security.
a. As security for the Loan, and as part of the consideration for entering into this Agreement, Borrower hereby assigns its rights under the Collateral, as defined below (the "Assignment"). The Assignment shall become effective upon the occurrence of an Event of Default or Termination for Infeasibility. The City shall have no obligation under the Collateral unless it expressly agrees in writing to be bound thereby. If the Assignment shall become effective, the City may use the Collateral for any purposes for which Borrower could have made use of the same in the development of the Senior Project. Borrower shall cooperate with the City in the implementation of its rights under the Assignment and shall immediately deposit the Collateral with the City if the Assignment becomes effective. As used herein, the term "Collateral" includes the following: all architectural designs, construction, engineering, surveying, and consulting contracts, and any and all amendments, modifications, supplements, addenda and general conditions thereto heretofore or hereafter entered into by Borrower and any contractor or consultant pertaining to development of the Senior Project; all plans and specifications, surveys, shop drawings, working drawings, reports, studies, amendments, modifications, changes, supplements, general conditions, addenda and work product thereto heretofore or hereafter prepared by Borrower or any contractor or consultant pertaining to development of the Senior Project; all land use approvals, conditional use permits, building permits and other governmental entitlements and approvals of any nature obtained for the Senior Project; and all financing 6 applications or other applications and all other tangible documents, except those of a proprietary or confidential nature, pertaining to development of the Senior Project.
b. Deed of Trust. In addition to the Assignment, concurrent with the Borrower’s execution of this Agreement, the Borrower shall record the Deed of Trust against the Property in a form provided by the City and reasonably acceptable to the Borrower in the Official Records of San Mateo County and comply with it. Such Deed of Trust shall be subordinate to Borrower’s private financing for acquisition of the Property and construction of the Senior Project and any HCD documents if required by HCD’s regulations and Guidelines.
1.9. Subordination. The Deed of Trust may be subordinated only to such loans and liens as the City may approve in writing. The City acknowledges that Borrower’s construction and permanent lender(s) may require the subordination of the Deed of Trust. Borrower acknowledges that the Deed of Trust secures performance of Borrower’s obligations pursuant to this Agreement and the Regulatory Agreement which may survive repayment of the Note, and that the Deed of Trust shall not be reconveyed prior to Borrower’s satisfaction of such obligations. City agrees to subordinate the Deed of Trust to the following lenders: Citiybank N.A (“Senior Lenders”). The Senior Lenders areis providing financing for the acquisition of the Property and construction of the Project (“Senior Loans”) and the City agrees to execute a subordination agreements with the Senior Lenders, subject to the following conditions to be incorporated into the subordination agreements:
a. Provided that Borrower agrees to use its best efforts to ensure that the instruments effecting such subordination for the benefit of Senior Lender shall contain each of the following provisions: (i) Senior Lender shall use its best efforts to provide to the City copy of any notice of default issued to Borrower concurrently with provision ofsuch notice to Borrower; and, (ii) City shall have the reasonable right, but not the obligation, to cure any default by Borrower within the same period of time provided to Borrower for such cure extended by an additional 90 days, (iii) provided that City has cured any default under Senior Lender’s deed of trust and other loan documents, City shall have the right to foreclose the City Deed of Trust and take title to the Property without acceleration of Senior Lender’s debt; and (iv) City shall have the right to transfer the Property without acceleration of Senior Lender’s debt to another entity which shall own and operate the Property and Project in accordance with this Agreement, subject to the prior written consent of the Senior Lender. Borrower agrees to provide to City a copy of any notice of default Borrower receives from any Senior Lender within thirty (30) days following Borrower’s receipt thereof.
b. The subordination(s) described in this section may be effective only during the original term of the Senior Loan and any extension of its term approved in writing by the City.
7 1.10. Impact Fee Reductions. The City agrees that the Senior Project shall receive the following reductions to certain development fees applicable to the Project at the time of building permit application as set forth below:
a. A fifty percent (50%) reduction to the Library Facilities Impact Fee, Parks & Recreation Impact Fee, Public Safety Impact Fee, and Transportation Impact Fee. b. One hundred percent (100%) reduction to the Child Care Impact Fee.
After application of the foregoing reductions, the remaining balance of City impact fees shall be paid by the Borrower in accordance with the then current Master Fee Schedule in effect at the time of building permit application for the Project. Borrower shall continue to be subject to all other applicable fees in addition to the above. .
1.11. Additional Covenants
a. City Use of Commercial Space. Borrower agrees that the City shall have the right to lease the ground floor commercial/retail space located within the Senior Project (the "Commercial Space") for a rent of One Dollar ($1) per year from the Borrower, or pursuant to a sublease between the Borrower's general partner, as landlord, and the City, as subtenant. The City shall have the right to control and approve any sublease or other third-party use of the Commercial Space. b. No Reduction in Parking. Borrower agrees that the number of parking spaces provided for the Senior Project shall not be reduced from the number of parking spaces approved by the City through site plan approvals.
2. NON-DISCRIMINATION; PREFERENCES.
2.1. Non-Discrimination. Borrower covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Senior Project or the Property, nor shall Borrower or any person claiming under or through Borrower 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 Senior Project. Deeds, leases, and contracts entered into by Borrower with respect to the Senior Project shall contain any mandatory non-discrimination language required under the Regulatory Agreement.
2.2. Preferences. Borrower shall for not less than fifty-one percent (51%) of the residential units within the Senior Project give first preference to eligible households in renting units in accordance with the local preference requirements of Chapter 8.100, Local Preferences and Requirements, or its successor provision, of the South San Francisco Municipal Code. Borrower will implement any preferences in the rental of units in the Senior Project pursuant to a preference 8 plan approved by its Senior Lenders and the City Manager. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, or any fair housing law, the provisions of such Section 42 of fair housing law shall control, and in no event shall Borrower be obligated to implement such preference if such implementation would result in any violation of applicable law.
3. ADDITIONAL COVENANTS, REPRESENTATIONS AND WARRANTIES OF BORROWER.
3.1. Representations. Borrower represents and warrants to the City as follows:
a. Organization of the Borrower. Borrower is a duly organized __________ [INSERT INFORMATION REGARDING ENTITY], validly existing and in good standing under the laws of the State of California. Borrower has all requisite power and authority to develop the Senior Project, to carry on its business as now conducted, and to execute, deliver and perform its obligations under this Agreement and the Note. The Borrower has received a determination from the Internal Revenue Service that it is exempt from federal tax under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended.
b. Authorization of the Loan; No Violation. The execution, delivery and performance of this Agreement and the Note have been duly authorized by Borrower, and this Agreement and the Note, when duly executed and delivered will constitute the valid and binding obligations of Borrower enforceable in accordance with their respective terms. Borrower’s execution of this Agreement and the Note and performance thereunder will not result in a breach of or constitute a default under any agreement, indenture or other instrument to which Borrower is a party or by which Borrower may be bound.
c. Litigation. There are no pending or to Borrower’s knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Borrower or its ability to carry out the obligations of Borrower under this Agreement and the Note. Borrower is not the subject of an action under federal or state Bankruptcy Law (as defined below).
3.2. Indemnification. Borrower shall indemnify, defend (with counsel approved by the City), and hold the City and its elected and appointed officers, officials, employees, contractors, agents, and representatives (all of the foregoing, collectively the “Indemnitees”) harmless from and against any and all liabilities, losses, damages, fines, deficiencies, penalties, claims, demands, suits, actions, causes of action, legal or administrative proceedings, judgments, costs and expenses (including without limitation reasonable attorneys’ fees and court costs) (all of the foregoing, collectively “Claims”) arising directly or indirectly in any manner in connection with or resulting from, (a) any and all of Borrower’s construction activities in connection with the Senior Project, including without limitation, all predevelopment activities and site investigations conducted by or for Borrower; (b) any failure of any of Borrower’s representations or warranties set forth in this Agreement, or made by Borrower in connection with the execution and delivery of this Agreement or in any certificate 9 furnished pursuant hereto, or in connection with any request for disbursement of Loan proceeds to be correct in all material respects; (c) any contract for services entered into between Borrower and a third party, or services provided to Borrower by a third party, related to the Senior Project; and (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises in connection with the Loan or any transaction contemplated thereby. Borrower’s obligations under this Section shall survive the making and repayment of the Loan and the expiration or termination of this Agreement. Borrower’s indemnity obligations shall not apply to Claims arising solely as a result of the willful misconduct or gross negligence of any of the Indemnitees or arising solely from the City’s breach of a material term of a lease governing the Commercial Space..
3.3. Books and Records. The City shall have the right, during business hours and after reasonable notice to Borrower, to request copies of, inspect, and copy Borrower's books and records pertaining to the Property, the Senior Project and the Loan. Borrower shall comply with any request for such records within thirty (30) days. The City shall maintain the copies of Borrower’s books and records in strict confidence except to the extent required to be disclosed by applicable law.
4. DEFAULT AND REMEDIES.
4.1. Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
a. Borrower fails to pay any amount due under the Note, and such failure continues for thirty (30) days after the City notifies Borrower thereof in writing. b. Any of Borrower’s representations or warranties contained in this Agreement, or made by Borrower in connection with the execution and delivery of this Agreement or in any certificate furnished pursuant hereto, or in connection with any request for disbursement of Loan Proceeds, shall prove to have been incorrect when made in any material respect.
c. Borrower fails to use Loan Proceeds in accordance with this Agreement or fails to use Loan Proceeds in accordance with Borrower's request for disbursement. d. Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower, (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. e. A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that, (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or 10 substantially all of such entity’s assets, (iii) orders the liquidation of Borrower, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Senior Project , and in each case the order or decree is not released, vacated, dismissed or fully bonded within sixty (60) days after its issuance.
f. Borrower fails to maintain insurance as required pursuant to any of the Loan Obligations, and Borrower fails to cure such default within thirty (30) days. g. Borrower defaults in the performance of any term, provision, covenant or agreement contained in the Loan Obligations, and unless a shorter cure period is specified for such default, the default continues for thirty (30) days after the date upon which the City shall have given written notice of the default to Borrower; provided, however, that in the case of a nonmonetary default that is not susceptible of cure within thirty (30) days, an Event of Default shall not arise hereunder if Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default to completion with due diligence and in good faith, but in no event longer than one hundred twenty (120) days from the receipt of notice of default.
4.2. Remedies. Upon the occurrence of an Event of Default, the City shall have the following rights:
a. To exercise the remedies under the Deed of Trust and the Assignment pursuant to and as described in Section 1.8;
b. To seek a judicial declaration or order of specific performance; c. In the case of an Event of Default arising under any Loan Obligation other than this Agreement, to exercise the rights under that Loan Obligation; or d. To terminate this Agreement.
The City shall accept any cure made by the Senior Lenders, on the same terms and conditions if made by Borrower. Notwithstanding the foregoing, the Loan is non-recourse to Borrower. Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice, any other remedy provided herein or in the Note. The City may exercise any rights and remedies available at law or in equity, in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement; provided, however, that Borrower's obligation to repay the Loan shall be secured by the Assignment and the Deed of Trust without recourse to Borrower; provided, however, nothing contained in the foregoing limitation of liability shall:
a. Impair the enforcement against all such security for the Loan of all the rights and remedies of the City under the Deed of Trust and any financing statements City files in connection with the Loan, as each of the foregoing may be amended, modified, or restated from time to time;
11 b. Impair the right of City to bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Deed of Trust, the interest in the Property and the Project created thereby and any other collateral given to City in connection with the indebtedness evidenced by the Note, and to name the Borrower as party defendant in any such action;
c. Be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; d. Constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City under the Note or to require that the Property shall continue to secure all of the indebtedness owed to City in accordance with the Note and the Deed of Trust; or e. Limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower to:
i. recover under Borrower’s indemnification obligations, or ii. recover from Borrower compensatory damages as well as other costs and expenses incurred by City (including without limitation attorney’s fees and expenses) arising as a result of the occurrence of any of the following:
(1) any fraud or material misrepresentation on the part of the Borrower, or any officer, director or authorized representative of Borrower in connection with the request for or creation of the Loan, or in this Agreement, the Regulatory Agreement or any City Document, or in connection with any request for any action or consent by City in connection with the Loan;
(2) any failure to maintain insurance on the Property or Project as required pursuant to this Agreement, the Regulatory Agreement and the City Documents;
(3) failure to pay taxes, assessments or other charges which may become liens on the Property or Project;
(4) the presence of hazardous or toxic material or waste on the Property arising from construction of the Senior Project; (5) the occurrence of any act or omission of Borrower that results in waste to or of the Property or Project and which has a material adverse effect on the value of the Property or the Project; 12 (6) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust;
(7) the material misapplication of Loan Proceeds; and
(8) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property or the Project.
5. MISCELLANEOUS.
5.1. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. Notwithstanding the foregoing, the City's obligation to make the Loan is personal to Borrower, and shall not be assignable by operation of law or otherwise absent the express written consent of the City, and any such prohibited assignment by operation of law or otherwise shall be void.
5.2. Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section. All such notices shall be sent by:
a. Personal delivery, in which case notice is effective upon delivery; b. Certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; c. Nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service;
d. Electronic mail, in which case notice shall be deemed delivered upon transmittal, provided that, (i) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery (in which case notice shall be deemed given two business days after the duplicate is deposited in the mail), or (ii) receipt is voluntarily acknowledged by the Party to be noticed (in which case notice shall be deemed given when acknowledged.
CITY:
City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attention: Economic & Community Development Department
13 BORROWER:
____________
and:
Goldfarb & Lipman LLP
1300 Clay Stret, 11th Floor
Oakland, CA 94612
Attn: William DiCamillo
Email: [email protected]
5.3. Waiver, Modification and Amendment. No failure or delay on the part of the City in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. No modification or waiver of any provision of this Agreement, nor any consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances unless expressly provided herein or by law. No amendment to or modification of this Agreement shall be effective unless and until such amendment or modification is in writing, properly approved in accordance with applicable procedures, and executed by the Parties.
5.4. Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement, including, but not limited to subordination agreements authorized by the City in accordance with Section 1.9.
5.5. Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.
5.6. Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council unless the City Manager determines in his or her discretion that such action requires such approval.
5.7. Non-Liability of City and City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Borrower, or any successor in interest, 14 in the event of any default or breach by the City, or for any amount of money which may become due to Borrower or its successor or for any obligation of the City under this Agreement.
5.8. No Third Party Beneficiaries. There shall be no third party beneficiaries to this Agreement.
5.9. Captions; Construction. The headings of the sections and paragraphs of this Agreement have been inserted for convenience only and shall not be used to construe this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and consistent with the purposes for which the Parties entered into this Agreement, and not strictly for or against any Party. Time is of the essence in the performance of this Agreement.
5.10. Governing Law; Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California without regard to principles of conflicts of law. The Parties consent to the jurisdiction of any federal or state court in the jurisdiction in which the Property is located (the “Property Jurisdiction”). Borrower agrees that any controversy arising under or in relation to this Agreement shall be litigated exclusively in courts having jurisdiction in the Property Jurisdiction. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.
5.11. No Pledging of City’s Credit. Under no circumstances shall the Borrower have the authority or power to pledge the credit of City or incur any obligation in the name of City.
Borrower shall save and hold harmless City and the Indemnitees for expenses arising out of this Agreement.
5.12. Attorneys' Fees. In the event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing in any such action shall be entitled to recover against the other Party all reasonable attorneys’ fees and costs incurred in such action.
5.13. Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties are materially altered or abridged by such invalidation, voiding or unenforceability.
5.14. Entire Agreement; Exhibits. The Loan Obligations, contain the entire agreement between the Parties with respect to the subject matter hereof. This Agreement supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits attached hereto are incorporated herein by this reference.
5.15. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.
5.16. Electronic Signature. The Parties may deliver executed copies of this Agreement to each other by electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any such 15 signature delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. No party may raise the use of any image transmission device or method or the fact that any signature was transmitted as an image as a defense to the enforcement of this Agreement.
SIGNATURES ON FOLLOWING PAGE.
16 IN WITNESS WHEREOF, the Parties have executed this Loan Agreement as of the date first written above.
CITY OF SOUTH SAN FRANCISCO,
a municipal corporation
By: ________________________________
Name: _______________________________
City Manager
ATTEST:
By: ___________________________
City Clerk
APPROVED AS TO FORM:
By: ___________________________
City Attorney
1 BORROWER:
[INSERT ROTARY ENTITY INFORMATION]
A–1
EXHIBIT A
Legal Description of Senior Parcel
• LOTS 9, 10 AND THE NORTHWESTERLY 48 FEET, FRONT AND REAR MEASUREMENTS, OF LOT 8 IN BLOCK 137, AS SHOWN ON THAT CERTAIN MAP ENTITLED, ''SOUTH SAN FRANCISCO, SAN MATEO CO. CAL.'', FILED IN THE OFFICE
OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF CALIFORNIA ON MARCH 1, 1892 IN BOOK ''B'' OF MAPS AT PAGE 6 AND COPIED INTO BOOK 2 OF MAPS AT PAGE 52.
• APN: 012-175-260; JPN 012-17-175-26A (Affects Lots 8, 9 and 10) B-1
EXHIBIT B
Form of Promissory Note
C-1
EXHIBIT C
Form of Deed of Trust
D-1
INTENTIONALLY DELETED
E-1
EXHIBIT E
Construction Budget
F-2
Exhibit F
INSURANCE REQUIREMENTS
Insurance coverage. Throughout the term of this Agreement, Borrower shall comply with the insurance requirements set forth in the City Documents, and shall, at Borrower's expense, maintain in full force and effect insurance coverage as specified in the City Documents.
1. Workers' Compensation. Throughout the term of this Agreement, Borrower shall comply with, and shall ensure that Borrower's contractors comply with, the laws of the State of California concerning workers' compensation. Without limiting the generality of the foregoing, Borrower shall maintain in effect throughout the term of this Agreement, one or more policies of worker's compensation insurance as required by law. Borrower's policy shall also include employer's liability coverage in an amount not less than $1,000,000 per accident.
2. General Liability Insurance. Borrower and all contractors working on behalf of Borrower on the Project shall at their sole cost obtain and keep in full force and effect throughout the term of this Agreement commercial general liability insurance in the amount of $5,000,000 per occurrence for bodily injury, personal injury, and property damage, products, completed operations, and contractual liability coverage. Such insurance shall be written on an occurrence basis and shall provide that (i) the Indemnitees shall be named as additional insureds under the policy; (ii) the policy shall operate as primary insurance; and (iii) no other insurance maintained by other named or additional insureds will be called upon to cover a loss covered thereunder.
3. Automobile Liability Insurance. Borrower and all contractors working on behalf of Borrower on the Project shall at their sole cost obtain and keep in full force and effect throughout the term of this Agreement automobile liability insurance in the amount of $3,000,000 per occurrence for bodily injury and property damage. Such insurance shall be written on an occurrence basis, and shall provide that (i) the Indemnitees shall be named as additional insureds under the policy; (ii) the policy shall operate as primary insurance; and ( iii) no other insurance maintained by other named or additional insureds will be called upon to cover a loss covered thereunder.
4. Course of Construction Insurance. Borrower shall obtain at its sole cost and keep in full force and effect throughout the course of construction, Course of Construction insurance with policy limits no less than $ 5,000,000 with no coinsurance penalty provisions, and in the standard " Builders Risk" form of policy. The City shall be named as loss payee as their interests may appear, and the insurer shall waive all rights of subrogation against the City.
5. Certificates of Insurance. Borrower shall file with the City, prior to commencement of construction of the Project or any portion thereof, and prior to commencement of construction on the Property pursuant to this Agreement, certificates of insurance in form acceptable to the City, evidencing the insurance coverage required pursuant to this Section together with duly executed endorsements evidencing additional insured status as required pursuant to this Section. Such certificates shall include a statement of obligation on the part of the carrier to notify the City of any cancellation, major change in coverage, expiration, termination or nonrenewal of the coverage F-2
at least thirty (30) calendar days prior to the effective date of such cancellation or change in coverage (except that only ten (10) calendar days prior notice shall be required for cancellation due to non-payment of premiums).
6. Other Requirements. Borrower shall also furnish or cause to be furnished to the City evidence satisfactory to the City that any contractor with whom it has contracted for the performance of work on the Properties carries the same insurance required of Borrower hereinabove, and in the amounts of coverage specified, and each general contractor shall be required to obtain certification of insurance from all subcontractors. Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best' s rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Builder' s Risk and property insurance shall name the City as loss payees as their interests may appear.
7. Reinstatement. If any insurance policy or coverage required hereunder is canceled or reduced, Borrower shall, within fifteen ( 15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with the City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, the City may, without further notice and its option, procure such insurance coverage at Borrower's expense and Borrower shall promptly reimburse the City for such reasonable expense upon receipt of billing from the City.
8. Primary Coverage: Waiver of Subrogation. Coverage provided by Borrower and its contractors shall be primary insurance and shall not be contributing with an insurance, or self-insurance maintained by the City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City.
9. Self-Insured Retention. If Owner’s insurance policy includes a self-insured retention that must be paid by a named insured as a precondition of the insurer’s liability, or which has the effect of providing that payments of the self-insured retention by others, including additional insureds or insurers do not serve to satisfy the self-insured retention, such provisions must be modified by special endorsement so as to not apply to the additional insured coverage required by this Agreement so as to not prevent any of the parties to this Agreement from satisfying or paying the self-insured retention required to be paid as a precondition to the insurer’s liability. Additionally, the certificates of insurance must note whether the policy does or does not include any self-insured retention and also must disclose the deductible.