Agenda packet — Vallejo City Council, September 24, 2024 (part 3 of 6)

On May 10, 2022, the City of Vallejo, Firm Foundation Community Housing and Shelter Inc. were awarded a California Department of Housing and Community Development (HCD) Homekey Program (“Homekey”) Round 2 Grant of $11,621,866 to develop and build a permanent supportive housing project to house chronically homeless individuals. On June 10, 2022, the Council accepted the grant and amended the City’s Budget to receive the grant. On June 14, 2022, the Council approved a resolution to appropriate Homekey Round 2 grant funding for the Broadway Project.

The existing State, City and Housing Authority funding amounts for the Broadway Project are summarized below:

Funding Source Amount
State of CA Homekey $11,621,866
City of Vallejo American
Rescue Plan Act (ARPA)
$192,740
Solano County American
Rescue Plan Act (ARPA)
$3,000,000
City of Vallejo American
Rescue Plan ACT (ARPA)
$200,000
Infill Infrastructure Grant
Program
$2,559,656
Wells Fargo Grant* $90,000
LMIHAF Loan $3,300,000
City of Vallejo American
Rescue Plan Act (ARPA)
$3,270,335
Measure P Loan Funding $2,879,665
Total project funding $27,114,262

*Awarded directly to Firm Foundation
On May 14, 2024, staff presented step one Notice of Intent to amend the fiscal year 2023-2024 budget in the amount of $6.15M for the Broadway Project in order to close the construction funding gap and complete the project within the designated HCD HOMEKEY Grant timelines.

On May 28, 2024, City Council adopted a resolution allocating $2,879,665 of Measure P Funding to complete the construction of the Broadway Project.

The item before City Council tonight is to approve a loan agreement with Firm Foundation Community Housing for the additional $2,879,665 as authorized by the City Council on May 28, 2024, and to approve an Affordability Agreement for the Broadway Project.

In addition, the parties are executing three agreements to confirm Firm Foundation Community Housing's obligations under the various grants awarded to the City on behalf of the Broadway Project. These include the First Amendment to the ARPA Grant Funding Agreement, the Subrecipient Agreement for the County of Date: September 24, 2024
Subject: ADOPT A RESOLUTION APPROVING THE FOLLOWING AGREEMENTS BETWEEN

THE CITY OF VALLEJO AND FIRM FOUNDATION COMMUNITY HOUSING REGARDING THE BROADWAY PROJECT: 1) MEASURE P LOAN AGREEMENT IN THE AMOUNT OF $2,879,665 AND AFFORDABILITY AGREEMENT; 2) FIRST AMENDMENT TO THE ARPA FUND GRANT AGREEMENT; 3) COUNTY OF SOLANO ARPA GRANT SUBRECIPIENT AGREEMENT; 4) INFILL
INFRASTRUCTURE GRANT SUBRECIPIENT AGREEMENT; AND 5) OPTION AGREEMENT AND REAL PROPERTY TRANSFER AGREEMENT; AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME

Page 3 ends

Solano ARPA Grant, and the Subrecipient Agreement for the Infill Infrastructure Grant Program.

Last, the Option Agreement will give the City the option to acquire the Broadway Project, after the project is complete, for the purchase price of $1.00 for an initial term of two years, with an option to extend for $1.00 for each additional year, and with no obligation to purchase the property.

FISCAL IMPACT
There is no additional fiscal impact associated with this item. City Council amended the budget and allocated funding at their May 28, 2024 meeting from Measure P funding.

ENVIRONMENTAL REVIEW
The City filed a Notice of Exemption with the Clerk of the Board of Supervisors of the County of Solano and with the Office of Planning and Research for the Broadway Project on July 6, 2022.

ATTACHMENTS

1. Resolution_Broadway ARPA MPOC IIG Option_CAO Stamp

2. Measure P Loan Agreement and Affordability Agreement_FFCH2024_CAO Stamp (1)

3. Attachment No. 1 Map of the Site

4. First Amendment ARPA Grant Agreement_CAO Stamp

5. ARPA-Subrecipient Agreement-Firm Foundation_CAO Stamp

6. IIG Program Qualifying Infill Area Subrecipient Agreement_CAO Stamp

7. Option Agreement_Broadway Project_CAO Stamp

8. Exhibit A to the Option Agreement__Real Property Transfer Agreement_CAO Stamp

CONTACT
Gillian Haen, Assistant City Manager (707) 648-4163
[email protected]

RESOLUTION NO. 24-________

ADOPT A RESOLUTION APPROVING THE FOLLOWING AGREEMENTS BETWEEN

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
WHEREAS, Firm Foundation Community Housing is constructing the Broadway Project, a 47-unit Permanent Supportive Housing Project, with 1 manager’s unit (total 48 units), that will provide wrap around services to chronically homeless population in Vallejo (“Project”); and
WHEREAS, the City of Vallejo (“City”), Firm Foundation Community Housing, and Shelter, Inc. obtained grant funding for the Project through the Project HOMEKEY grant in the amount of $11,621,866; and
WHEREAS, the City obtained additional grant funding for the Project through the Infill Infrastructure Program Grant in the amount of $2,559,656; the Solano County ARPA Grant in the Amount of $3,000,000; and the City ARPA Grant in the amount of $3,270,335; and
WHEREAS, on May 14, 2024, the City Council provided notice of intent to amend the 2023-2024 Fiscal Year budget to include the ARPA Grant and the Measure P loan; and WHEREAS, on May 28, 2024, the City Council approved step 2 amending the Fiscal Year 2023-2024 budget to allocate $3,270,335 of American Rescue Plan Act (“ARPA”) and $2,879,665 of Measure P funding towards the construction of the Project; and WHEREAS, the ARPA Grant Agreement between the City and Firm Foundation Community Housing needs to be amended to include the previously allocated sum of $392,740 of ARPA funds previously authorized by City Council on June 11, 2024; and WHEREAS, Solano County awarded the Broadway Project $3,000,000 of ARPA funds and necessitates a subrecipient agreement to be executed with Firm Foundation Community Housing; and
WHEREAS, the Infill Infrastructure Grant award of $2,559,656 awarded to the Project necessitates a subrecipient award to be executed with Firm Foundation Community Housing; and

WHEREAS, due to the significant investment of public funds into the Project, the City Council wishes to enter into an agreement to enable the option of purchase of the Project once it is complete if the City Council so chooses to do so.

NOW, THEREFORE BE IT RESOLVED that the City Council does hereby approve the following agreements between the City of Vallejo and Firm Foundation Community Housing regarding the Broadway Project: 1) Measure P Loan Agreement in the amount of $2,879,665 and Affordability Agreement; 2) First Amendment to the ARPA Fund Grant Agreement; 3) County of Solano ARPA Grant Subrecipient Agreement; 4) Infill Infrastructure Grant Subrecipient Agreement; and 5) Option Agreement and Real Property Transfer Agreement, with any modifications thereto as recommended by the City Attorney.

BE IT FURTHER RESOLVED that the City Council does hereby authorize the City Manager or their designee to execute same.

BE IT FURTHER RESOLVED that the City Council does hereby direct the City Clerk to record in the County of Solano Recorder’s Office 1) the Measure P Loan Affordability Agreement and the 2) Option Agreement, following execution of the documents.

Adopted by the Council of the City of Vallejo at a regular meeting held on September 24, 2024 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_________________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
_________________________________________
DAWN G. ABRAHAMSON, CITY CLERK

LOAN AGREEMENT
by and between the

CITY OF VALLEJO
AND

FIRM FOUNDATION COMMUNITY HOUSING
for the
Development and
Construction of Permanent Supportive Housing
at
2441 Broadway Street

ATTACHMENTS
Attachment No. 1 Map of the Site
Attachment No. 2 Legal Description of the Site
Attachment No. 3 City Note
Attachment No. 4 City Deed of Trust
Attachment No. 5 Affordability Agreement
1 LOAN AGREEMENT
THIS LOAN AGREEMENT (the “Agreement”) is entered into as of the 25th day of September 2024, by and between the CITY OF VALLEJO (the “City”) and FIRM FOUNDATION COMMUNITY HOUSING, a California nonprofit public benefit corporation (the “Borrower”).

The City and the Borrower hereby agree as follows:
[§100] SUBJECT OF AGREEMENT
[§101] Background and Purpose of This Agreement.

The purpose of this Agreement is to effectuate the Permanent Supportive Housing (“PSH”) project for 2441 Broadway Street (the “Project”) by providing financial assistance to the Borrower to pay certain costs associated with the development and construction of the Project, consisting of approximately forty-seven (47) affordable and/or PSH units plus one unrestricted manager’s unit that will be contained in the Project and are referred to herein as the “Housing Units.” Pursuant to this Agreement, the Borrower shall limit the rental of the Housing Units to Extremely Low Income Households defined as at or below 30 percent of the Area Median Income (“AMI”). One unit shall be an unrestricted manager’s unit. The gross monthly rent for the restricted Housing Units (excluding any supplemental rental assistance from the State of California, the federal government or any other public agency to those tenants or on behalf of those units) shall not exceed the “affordable rent” as determined for extremely-low income households pursuant to federal low-income housing tax credit program requirements, the income eligibility levels, definition of AMI, rent limits, and all provisions under such program regarding income assumed household size and continued occupancy and rent requirements for households whose incomes exceed the eligible income limitations. The affordability restrictions as required by this Agreement shall remain in effect for 55 years, commencing upon recordation of the Affordability Agreement attached hereto as Attachment No. 5. In addition to the affordability restrictions as set forth herein, the Borrower shall work with the City to develop a program that will, to the extent permitted by applicable federal, state and local law, provide a preference to lease to tenants that demonstrate residency, either permanent or itinerant, within the City of Vallejo limits and that identify as homeless, either sheltered or unsheltered, as defined by the U.S. Department of Housing & Urban Development (“HUD”) for purposes of the Point-in-Time Census. The Borrower shall work collaboratively with the City to develop such a preference program, and the final program shall be subject to review and written approval by the City and Borrower. The use of the Site, defined in Section 103, below, pursuant to this Agreement and the fulfillment generally of this Agreement are in the vital and best interests of the City and the health, safety, and welfare of its residents and in accordance with the public purposes and provisions of applicable federal, state and local laws and requirements.

The Project may receive Project Based Section 8 vouchers or other rental subsidies (the “Rental Subsidies”) throughout the term of the Affordability Agreement. If, during the term of the Affordability Agreement, any change in federal law occurs or any action (or inaction) by Congress or any federal or State agency occurs, which results in a reduction, termination or nonrenewal of the Rental Subsidies, such that the rental subsidy projected on the budget for the Project is reduced or no longer available, Borrower may increase the rents on one or more of the 2 Extremely Low Income Units during the remainder of the Term up to 60 percent AMI, provided Borrower demonstrates to the satisfaction of the City that such rental increase is necessary to maintain the financial stability of the Project and no alternative rental subsidies are available, and such increase is permitted by all other funding and regulatory agreements recorded against the Project.
[§102] The Project Area.

The Project Area is located in the City of Vallejo, California, and the exact boundaries of the Project Area are specifically described as the lot located at: 2441 Broadway Street (the “Project Area”), and as described in Attachment 2.
[§103] The Site.

The Site is located within the City and shown on the “Map of the Site,” attached hereto as Attachment 1 and incorporated by reference herein, and as more particularly described in the “Legal Description of the Site,” attached hereto as Attachment 2 and incorporated herein by reference. The Site is located within the boundaries of the Project Area. [§104] The Term.

The City and Borrower desire by the execution of this Agreement to assure the Site remains affordable for fifty-five (55) years, following the date of the recordation of the Affordability Agreement (the “Term”).
[§200] METHOD OF FINANCING THE PROJECT
[§201] City’s Loan.

The City hereby agrees to make a loan to Borrower in the amount of TWO MILLION

EIGHT HUNDRED SEVENTY-NINE THOUSAND SIX HUNDRED SIXTY-FIVE DOLLARS ($2,879,665) (the “City Loan”) from Measure P funds, subject to the terms and conditions set forth in this Agreement, and subject further to the terms and conditions set forth within the documents and instruments executed by the Borrower in connection with this transaction. [§202] Repayment of the City Loan.

The City Loan shall be due and payable in full at the earlier of (i) sale or transfer of the Project by Borrower; or (ii) fifty-five (55) years after the date the Project obtains its final certificate of occupancy (the “Maturity Date”) or, at such earlier time as set forth herein, and shall bear simple interest at the rate of three percent (3.0 %) per annum. [§203] Individual Disbursements for the Project.

Prior to each disbursement for costs of the Project, Borrower must satisfy the following conditions:
3 a. Borrower must have delivered to the City an “Expenditure Request” in form and substance satisfactory to the City, together with: (i) copies of invoices, contracts or other documents covering all amounts requested; (ii) a line-item breakdown of costs to be covered by the Expenditure Request; and (iii) copies of checks issued to pay expenses covered in the previous Expenditure Request. The City may grant or withhold its approval of any line item contained in the Expenditure Request that, if funded, would cause it to exceed the budgeted line item as previously approved by the City.
b. Acknowledgment that the Project is being constructed in a good and workman-like manner by appropriate means substantially in accordance with the plans and specifications for the Project and all required inspections and approvals have been obtained as and when necessary or desirable.
c. Acknowledgments of payment and lien waivers from all Persons who have furnished labor, materials and/or services in the development of the Site or the construction of the improvements, covering work performed, materials supplied, and services rendered through the date of the last preceding disbursement. As used in this Section 203, “Person” means an individual, a corporation, a partnership, a joint venture, a limited liability company, a trust, an unincorporated association, any Governmental Authority or any other entity. “Lien Waiver” means a lien waiver in the form set forth in California Civil Code §§ 8132-8134. d. With respect to any disbursement request that covers construction costs, Borrower must have certified to the City that the Project complies with the applicable labor standards required by the U.S. Department of Housing and Urban Development Office of Labor Relations and the Vallejo Municipal Code and all other agreements applicable to the Project and Site.
[§204] Limitations on Approved Expenditures.

The City may refuse to disburse funds for any expenditure: (a) during any period in which an event that, with notice or the passage of time or both, would constitute an Event of Default remains uncured, or during the pendency of an uncured Event of Default; or (b) for disapproved, unauthorized or improperly documented expenses. The City is not obligated to approve expenditure of the full amount of the City Loan “Funding Amount” unless approved Expenditure Requests support disbursement of the full Funding Amount, and in no event may the aggregate amount of all funds disbursed to Borrower under this Agreement exceed the Funding Amount. [§300] IMPROVEMENT OF THE SITE
[§301] Improvement of the Site by the Borrower.

The Borrower agrees to use the Funding Amount towards construction of the Project (the “Development Work”).
[§301.1] Cost of Development. The cost of Development Work shall be borne by the Borrower subject to the terms of this Agreement. 4 [§301.2] Bodily Injury and Property Damage and other
Insurance; Indemnification. Prior to the commencement of Development Work (or any work related thereto) upon the Site, the Borrower shall furnish, or cause to be furnished, to the City duplicate originals or appropriate certificates of bodily injury and property damage insurance policies in the amount of at least TWO MILLION DOLLARS ($2,000,000.00) for any person, THREE MILLION DOLLARS ($3,000,000.00) for any occurrence, FIVE MILLION DOLLARS ($5,000,000) annual aggregate and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) property damage, naming the City as an additional insured and all such other insurance required by any other financing document applicable to the Project, including but not limited to the Note and Deed of Trust. Borrower shall indemnify City as set forth in Section 304 of this Agreement, the Note and Deed of Trust and any and all other financing documents or any Agreement recorded against the Property. Such indemnification obligations shall be covered by Insurance. Such insurance policies shall be maintained and kept in force, and such obligation to indemnify shall continue, during periods of construction upon the Site and until the City has issued a Certificate of Completion for the entire Site or until any later period of time required by any other Agreement recorded against the Property.
[§301.3] Rights of Access During Development Work.

Representatives of the City shall have the reasonable right of access to the Site, without charges or fees, at normal work hours upon reasonable written notice to Borrower during the period of Development Work for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing improvements on the Site. [§301.4] Local, State, and Federal Laws. The Borrower shall carry out the development of the improvements on the Site in conformity with all applicable laws, rules, regulations and agreements, including all applicable federal and state labor standards. [§301.5] Antidiscrimination. The Borrower, for itself and its successors and assigns, agrees that on the Site provided for in this Agreement, the Borrower will not discriminate against any employee or applicant for employment on 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 and 12955.2 of the Government Code.
[§302] Prohibition Against Transfer and Assignment of Agreement. [§302.1] Prohibition. The identity and qualifications of Borrower as an experienced and successful developer of affordable rental housing developments are of particular concern to the City. It is because of this identity and these qualifications that the City has entered into this Agreement with the Borrower. No voluntary or involuntary successor in interest of the Borrower shall acquire any rights or powers under this Agreement by assignment or otherwise, nor shall Borrower make any total or partial sale, transfer, conveyance, encumbrance to secure financing, assignment or lease of the whole or any part of the Project without the prior written approval of the City pursuant to Section 302.3 hereof, except as expressly set forth herein, which approval may be withheld in the sole discretion of the City. 5 [§302.2] Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment or transfer of this Agreement, the City Loan, the Affordability Agreement, or conveyance of the Project or any part thereof pursuant to Section 302.4 shall not be required in connection with any of the following (the “Permitted Transfers”):
a. The lease of Housing Units to qualified tenants.
[§302.3] Transfers Requiring City Consent. Notwithstanding any other provision of this Agreement to the contrary, any other assignment or transfer of this Agreement, the City Loan, the Affordability Agreement, or conveyance of the Project or any part thereof pursuant to Section 302 shall require City approval. In the event of an assignment by Borrower requiring the City’s prior approval, Borrower shall give written notice to City of such assignment or transfer request. City shall respond within 60 days on approval of such transfer.

Any other transfer, assignment, encumbrance or lease without the City’s prior written consent will be voidable and, at the City’s election, constitute an Event of Default under this Agreement. [§302.4] City Consideration of Requested Transfer. The City agrees that it will consider approval of a transfer request made pursuant to this Section 302, provided (a) the Borrower delivers written notice to the City requesting such approval, and (b) the proposed assignee or transferee possesses comparable operational experience and capability, and comparable net worth and resources, as the proposed transferor or assignor, and (c) the assignee or transferee assumes the obligations of the Borrower under this Agreement in a form which is acceptable to the City. Such notice shall be accompanied by evidence regarding the proposed assignee’s or purchaser’s qualifications and experience and its financial commitments and resources sufficient to enable the City to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 302 and other criteria as reasonably determined by the City. [§302.5] Successors and Assigns. This Agreement shall run with the land, and all of the terms, covenants, and conditions of this Agreement shall be binding upon the Borrower and the permitted successors and assigns of the Borrower. [§303] Rights of Holders.
[§303.1] Holder Not Obligated to Construct. The holder of any mortgage, deed of trust or other security interest pertaining to the Site shall in no way be obligated by the provisions of this Agreement to construct, or complete such Development Work, or to guarantee such construction or completion. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.
[§303.2] 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 Borrower with respect to any breach or default by the Borrower in the completion of the Development Work, the City shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement (who has previously 6 made a request therefor) a copy of such notice or demand. Each such holder shall (insofar as the rights of the City are concerned) have the right, at its option, within 30 days, or if the default cannot be cured within a 30-day period, Borrower will have 60 days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on its security interest. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the Development Work, or the completion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Borrower’s obligations to the City by written agreement satisfactory to the City. The holder in that event must agree to complete, in the manner provided in this Agreement, the Development Work to which the lien or title of such holder relates and submit evidence satisfactory to the City that it has the qualifications and financial responsibility necessary to perform such obligations. [§304] Indemnity; Compliance with Laws.

Borrower agrees to defend, indemnify, protect, and hold harmless the City and all City officers, elected and appointed officials, employees, and agents from, regarding and against any all liabilities, obligations, orders, claims, damages, fines, penalties, and expenses of any kind whatsoever, together with fees (including, without limitation, reasonable attorneys’ fees), whenever arising or resulting from or in connection with the obligation to comply with all laws with respect to the construction of the Project, including, without limitation, all applicable federal and state labor laws and standards and all relocation requirements or that may incur as a direct or indirect consequence of: (i) the making of the City Note, or (ii) any failure at any time of any of Borrower’s covenants, representations or warranties to be true and correct in any material respect, (iii) any act, error or omission by Borrower, any employee, agent, officer, official, vendor, contractor, subcontractor of Borrower, any tenant, guest, invitee, trespasser, or any other person or entity present on the Site, any contractor, subcontractor or material supplier, engineer, architect or other person or entity with respect to its work at the Site or on the Project, (iv) failure to maintain, repair or replace any and all improvements on the Site which may become damaged or destroyed.

Borrower shall pay immediately upon City’s demand any amounts owing under this indemnity together with interest from the date of demand until paid at the rate of interest, which shall be the highest rate then allowed by law. Borrower’s duty to indemnify City shall survive repayment of the Note. The indemnity set forth herein shall not extend to losses, damages, liabilities, claims, actions, judgments, court costs, and legal or other expenses which City, its officers, employees, and agents, or any of them, incur to the extent that such are caused by any City’s negligence or willful misconduct.

Notwithstanding anything to the contrary contained in this Agreement, no deficiency judgment may be obtained against the Borrower in connection with this Agreement or the City Loan, except for actual or constructive fraud, material intentional misrepresentation, intentional bad faith waste of or on the Site, and such other matters as are referred to below. Consequently, no deficiency amount may be recovered from Borrower under the provisions hereof, except as may be provided herein. Notwithstanding the generality of the foregoing, however, Borrower shall indemnify, defend, protect, and hold the City harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense, including, without limitation, reasonable 7 attorneys’ fees and expenses incurred by the holder hereof, arising as a result of any (i) fraud or material intentional misrepresentation by the Borrower under or in connection with this Agreement; (ii) intentional bad faith waste of the real property encumbered by the City Deed of Trust; and (iii) losses resulting from the Borrower’s failure to maintain insurance as required under the provisions of the City Deed of Trust. The Borrower’s obligation to indemnify the City hereof as aforesaid shall be recourse obligations of the Borrower, and in the event of any breach of such obligations, the City shall have the right to proceed directly against the Borrower to recover any and all losses, damages, liability, costs, and expenses (including without limitation, reasonable attorney’s fees and expenses) and may bring any action and institute any proceeding to obtain a deficiency judgment in or following foreclosure for any and all such losses, damages, liabilities, costs, and expenses resulting from such breach.

The foregoing indemnity shall survive any termination of this Agreement. [§305] Prevailing Wages.

To the extent applicable, Borrower shall comply and cause its contractors and subcontractors to comply with Labor Code section 1720, et seq. and implementing regulations regarding the payment of prevailing wages (“Prevailing Wage Law”) with regard to the Development Work. Borrower shall be solely responsible for effectuating compliance with the Prevailing Wage Law, and in the event that the Department of Industrial Relations or an appropriate court or other governmental body initiates an enforcement action due to a failure by Borrower to pay prevailing wages in compliance with state law, or undertakes proceedings to consider whether the Development Work constitutes a public work subject to prevailing wages and/or determines that the Development Work does constitute a public work subject to prevailing wages, Borrower shall 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 Borrower, its contractors, and subcontractors) to pay prevailing wages as required by the Prevailing Wage Law in connection with Development Work. The foregoing indemnity shall survive any termination of this Agreement.
[§306] Environmental Indemnity.

Borrower agrees, from and after the date of acquisition of the Site, to defend, indemnify, protect, and hold harmless the City and their officers, elected and appointed officials, employees, agents, attorneys, representatives, legal successors, and assigns (“Indemnitees”) from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, Environmental Response Actions (as defined herein), claims, losses, damages, fines, expenses, Environmental Response Costs (as defined herein), or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys’ fees and experts’ consultants’ fees, all of which collectively are referred to as “Environmental Claims”), whenever arising, and whether or not caused in whole or in part by the City, resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration, and/or release (collectively, the “Management”) of Hazardous Materials at, on, in, or beneath the Site, except for claims arising as a result of the gross negligence or willful misconduct of the City and except for any such Hazardous Materials that are customarily used in residential 8 developments. The Borrower’s defense, indemnification, protection, and hold harmless obligations herein shall include, without limitation, the duty to respond to any Environmental Claims at the Borrower’s sole cost. At the request of Borrower, the City shall cooperate with the Borrower in its defense of any such claim, action, suit proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense, provided that the City shall not be obligated to incur any expense in connection with such cooperation. City’s agreement to cooperate shall not be deemed to limit or otherwise modify Borrower’s obligations under this indemnity. Borrower’s indemnification as set forth herein shall survive Borrower’s satisfaction of its obligations set forth in this Agreement or the earlier termination of this Agreement. Notwithstanding any contrary provision hereof, the indemnity provided in this Section 306 shall not apply to Environmental Claims arising in connection with or resulting from Hazardous Materials present on the Site prior to the date the Site is conveyed to the Borrower, except Environmental Claims resulting from or arising in connection with the negligent act or omission of Borrower.

Hazardous Materials means any material that, because of its quantity, concentration, or physical or chemical characteristics, is deemed by any Governmental Agency to pose a present or potential hazard to human health or safety or to the environment. Hazardous Materials includes any material or substance listed, defined or otherwise identified as a “hazardous substance,” “hazardous waste,” “hazardous material,” “pollutant,” “contaminant,” “pesticide” or is listed as a chemical known to cause cancer or reproductive toxicity or is otherwise identified as “hazardous” or “toxic” under any Environmental Law, as well as any asbestos, radioactive materials, polychlorinated biphenyls, and any materials containing any of them, and petroleum, including crude oil or any fraction, and natural gas or natural gas liquids. Materials of a type and quantity normally used in the rehabilitation, operation or maintenance of developments similar to the Project will not be deemed Hazardous Materials for the purposes of this Agreement if used in compliance with applicable Environmental Laws.

The foregoing indemnity shall survive any termination of this Agreement. [§306.1] Definitions.
a. As used in this Agreement, the term “Environmental Response Actions” means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, engendered, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by the Borrower. b. As used in this Agreement, the term “Environmental Response Costs” means any and all costs associated with 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 that is (1) defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous 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 9 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 substance” pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) determined by California, federal or local government authority to be capable of posing a risk of injury to health safety or property.
[§306.2] Materiality.

The Borrower acknowledges and agrees that the defense, indemnification, protection, and hold harmless obligations of the Borrower for the benefit of the City set forth in this Agreement are a material element of the consideration to the City for the performance of its obligations under this Agreement and that the City would not have entered this Agreement unless the Borrower’s obligations were as provided for herein. [§400] MANAGEMENT AND MAINTENANCE OF THE PROJECT
[§401] Use of the Site.

The Borrower covenants and agrees that the Borrower shall for itself, its successors, its assigns, and every successor in interest devote the Site to an affordable PSH project as identified herein, in accordance with the terms of the Affordability Agreement and this Agreement for the periods of time specified therein. The foregoing covenant shall run with the land. [§402] Maintenance of the Site.

Borrower shall keep the Site in good condition, order, and repair and shall not commit waste or permit impairment, demolition or deterioration of the Site; shall comply with all applicable state and federal regulations addressing the physical condition of the Site and buildings located on the Site and all applicable standards of the City, including, but not limited to, selection of tenants, recertification of income and household size, evictions, collection of rents, routine and extraordinary repairs, and replacement of capital items. Borrower must maintain or cause to be maintained the Project, including the Housing Units, and common areas, in a safe and sanitary manner in accordance with local health, building, and housing codes, California Health and Safety Code 17920.10, and the applicable provisions of 24 CFR Part 35, building standards, planning regulations, and utilities code; shall complete or restore promptly and in good and workman-like manner any building which may be constructed, damaged or destroyed and to pay when due all claims for labor performed and materials furnished; shall maintain the buildings in a habitable condition; and do all other acts which from the character or use of the Site may be reasonably necessary. City shall have the right to inspect the Site during normal business hours at all times prior to the occupancy of the Project, after occupancy, Borrower and the occupant shall be given at least 72 hours written notice prior to any such inspection, except in the case of an emergency. 10 [§403] Contracting With Management Agent.

Borrower may contract or permit contracting with a management agent for the performance of the services or duties required in Section 402 or Section 405, subject to the City’s prior written approval of both the management agent and, at the City’s discretion, the management contract between Borrower and the management agent, provided, however, that the arrangement will not relieve Borrower of responsibility for performance of those duties. Any management contract must contain a provision allowing Borrower to terminate the contract for cause without penalty upon 30 days’ notice.
[§404] Borrower Management.

The City will provide written notice to Borrower of any determination that Borrower has failed to operate and manage the Project in accordance with this Agreement, in which case, the City may require Borrower to contract or cause contracting with a management agent, or replace any management agent, to operate the Project, or to make other arrangements the City deems necessary to ensure performance of the functions required in Section 402 or Section 405. [§405] Obligation for Tenant Supportive Services.

The Borrower agrees to contract directly with another agency, organization or other qualified entity, approved in writing by the City, for ongoing tenant supportive services, which may include but are not limited to: healthcare access and services, mental health care access and services, employment training and search services, benefit acquisition assistance, substance abuse counseling and treatment, and other social services required by tenants and as required in the HCD Homekey Regulatory Agreement, Affordability Agreement or in any other applicable documents. [§406] Obligation to Refrain from Discrimination.

The Borrower covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental handicap, medical condition, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Borrower itself or any person claiming under or through 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 of the Site. The foregoing covenants shall run with the land and shall remain in effect in perpetuity.
[§407] Form of Nondiscrimination and Non-Segregation Clause.

The Borrower shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental handicap, medical condition, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses. City understands that the wording of certain 11 services agreements is not within the control of Borrower, and to such extent that Borrower does not have control of the wording, then Borrower is excused from complying with this section. [§407.1] In deeds.
“The grantee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of 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 land herein conveyed, nor shall the grantee himself, or any person claiming under or through him, 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 land herein conveyed. The foregoing covenants shall run with the land.”
[§407.2] In leases.
“The lessee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through him, 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 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 leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, 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, sublessees, subtenants or vendees in the land herein leased.””
[§407.3] 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 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 land, nor shall the transferee himself, or any person claiming under or through him, 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.” [§408] Rights of Access.

For the purposes of assuring compliance with this Agreement, representatives of the City shall have the reasonable right of access to the Site without charges or fees for the purpose of 12 inspection of the Site as to maintenance of the improvements thereon. Such representatives of the City shall be those who are so identified in writing by the City Manager of the City, or his/her designee.
[§409] Effect and Duration of Covenants.

The covenants contained in Sections 401 and 402 of this Agreement shall remain in effect for 55 years commencing with the date the Affordability Agreement is recorded on the Site. The covenants against discrimination contained in Sections 406 and 407 of this Agreement shall remain in effect in perpetuity. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding on the part of the Borrower and any successors and assigns to the Site or any part thereof, and the tenants, lessees, sublessees, and occupants of the Site, for the benefit of and in favor of the City, and any successor in interest thereto.
[§410] Project Monitoring, Reports, Books, and Records.

Borrower understands and agrees that it will be monitored by the City from time to time to assure compliance with all terms and conditions in this Agreement and all laws that are applicable to the Project. Borrower acknowledges that the City may also conduct periodic on-site inspections of the Project. Borrower must cooperate with the monitoring by the City and ensure full access to the Project and all information related to the Project as reasonably required by the City.

Borrower must keep and maintain books, records, and other documents relating to the receipt and use of all City Loan funds, including all documents evidencing any Project Income and Project Expenses. Borrower must maintain records of all income, expenditures, assets, liabilities, contracts, operations, tenant eligibility, and condition of the Project. All financial reports must be prepared and maintained in accordance with Generally Accepted Accounting Principles (GAAP) as in effect at the time of performance.

For the period up until the completion of construction, Borrower must provide written notice of the replacement of its Project Manager or any equivalent position within 30 days after the effective date of such replacement.
[§411] Bi-Monthly Reporting.

Borrower must submit, every eight weeks, until all of the loan funds have been disbursed to Borrower, bi-monthly reports (the “Bi-Monthly Project Update”) describing progress toward developing the Project with respect to obtaining necessary approvals from other City departments, consultants, and contractors, changes in scope, cost or schedule, financial documentation of the loan funds spent to date, and significant milestones achieved in the past month and expected to be achieved in the coming month. The Bi-Monthly Project Update must be submitted by email. [§412] Annual Reporting.

Borrower must file with the City annual report forms (the “Annual Monitoring Report”) that include audited financial statements with an income and expense statement for the Project covering the applicable reporting period, line-item statements of Project Expenses, Project Income, 13 Project Fees (if any), evidence of required insurance, and rent roll, no later than 120 days after the end of City’s fiscal year. Notwithstanding anything to the contrary contained herein, to the extent that the definitions in this Section 412 conflict with the definitions in the Note, the definitions in the Note shall control.
[§412.1]Borrower must deliver to City copies of any operating and financial reports provided to other lenders for the Project promptly after submittal to such other lenders.
[§412.2]“Project Expenses” means the following costs, which may be paid from Project Income (as defined in Section 412.4) in the following order of priority to the extent of available Project Income: (a) all charges incurred in the operation of the Project for utilities, real estate taxes and assessments, and premiums for insurance required under this Agreement or by other lenders providing secured financing for the Project; (b) salaries, wages, and any other compensation due and payable to the employees or agents of Borrower employed in connection with the Project, including all related withholding taxes, insurance premiums, Social Security payments, and other payroll taxes or payments; (c) required payments of interest and principal, if any, on any junior or senior financing secured by the Site and used to finance the Project that has been approved by the City; (d) all other expenses actually incurred to cover operating costs of the Project, including maintenance and repairs, the fee of any managing agent, and any supportive services fees paid to the supportive service provider; and (e) any extraordinary expenses approved in advance by the City. Project Fees are not Project Expenses. [§412.3]“Project Fees” means developer fees and entitlement, building, and other relevant and required permit fees due to the City or other authorized jurisdiction.
[§412.4]“Project Income” means all income and receipts in any form received by Borrower from the operation of the Project, including rents, fees, deposits (other than tenant security deposits), any accrued interest disbursed from any reserve account for a purpose other than that for which the reserve account was established, reimbursements, and other charges paid to Borrower in connection with the Project. Interest accruing on any portion of the Funding Amount is not Project Income.
[§413] Project Completion Report.

Within the specific time periods set forth below after the completion of construction, lease- up, or permanent financing of the Project, as applicable, Borrower must provide to the City the reports listed below certified by Borrower to be complete and accurate. Subsequent to the required submission of the reports listed below, Borrower shall provide to the City information or documents reasonably requested by the City to assist in the City’s review and analysis of the submitted reports:
a. Within 120 days after completion of the Development Work, a draft project completion audit: identifying the sources and uses of all funds used for the Project including the City Loan;
14 b. Within 60 days after 75 percent occupancy, and 100 percent occupancy, respectively, a report on the lease-up of the Housing Units including number of leases by race, ethnicity, and single-headed household by gender, also indicating the Housing Units by income category. If these occupancy milestones occur within 60 days of each other, Borrower may submit one report.
[§414] Response to Inquiries.

At the request of the City, its agents, employees or attorneys, Borrower must respond promptly and specifically to questions relating to the income, expenditures, assets, liabilities, contracts, operations, and condition of the Project, the status of any mortgage encumbering the Project, and any other requested information with respect to Borrower or the Project. [§500] DEFAULTS AND REMEDIES
[§501] Defaults.

Subject to the extensions of time set forth in Section 604, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement.

The non-defaulting party shall notify the defaulting party that a default exists and that the defaulting party must cure same within 30 days of receipt of the notice of default, or if a cure cannot be effected within such time, the non-defaulting party must commence the cure within 30 days of receipt of the notice of default and proceed to prosecute diligently said cure within a reasonable time. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with reasonable diligence and during any period of curing shall not be in default. [§502] Legal Actions.

In addition to any other rights or remedies, and except as otherwise expressly set forth herein, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Solano, State of California, or in any other appropriate court in that county.

The non-defaulting party may also, at its option, cure the breach and sue in any court of proper jurisdiction to collect the reasonable costs incurred by virtue of curing or correcting the defaulting party’s breach. Further, the non-defaulting party may file legal action to require the defaulting party specifically to perform the terms and conditions of this Agreement. [§503] Applicable Law.

The laws of the State of California shall govern the interpretation and enforcement of this Agreement.
15 [§504] Acceptance of Service of Process.

In the event that any legal action is commenced by the Borrower against the City, service of process on the City shall be made by personal service upon the City Clerk 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 Borrower, service of process on the Borrower shall be made by personal service upon the individual named as Borrower’s agent for service of process with the California Secretary of State, or in such other manner as may be provided by law and shall be valid whether made within or without the State of California.
[§505] 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 exercise by it, at the same time or at different times, of any other rights or remedies for the same default or any other default by the other party. [§506] Damages.

If the Borrower or the City defaults with regard to any of the provisions of this Agreement, and the default is not cured or commenced to be cured by the defaulting party in accordance with the requirements of Section 501, subject to Section 304 hereof, the defaulting party shall be liable to the other party for any damages caused by such default. [§507] Specific Performance.

If the Borrower or the City defaults under any of the provisions of this Agreement, and the default is not cured or commenced to be cured by the defaulting party in accordance with the requirements of Section 501, the non-defaulting party, at its option, may institute an action for specific performance of the terms of this Agreement.
[§508] Remedies and Rights of Termination.
[§508.1] Termination by the Borrower. Prior to the disbursement of the City Loan, in the event that the Borrower is unable to obtain financing for the development of the Site pursuant to this Agreement then this Agreement may, at the option of the Borrower, be terminated by written notice thereof to the City. Upon termination pursuant to this Section 508.1, neither the City nor the Borrower shall have any further rights against or liability to the other under this Agreement.
[§508.2] Termination by the City.
a. The City may terminate this Agreement by written notice to the Borrower upon the following events:
16 i. The Borrower 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
ii. The Borrower sells or otherwise transfers ownership of the Project and/or the Site to a third party without the prior written consent of the City; or iii. There is any significant change in the ownership or identity of the Borrower or the parties in control of the Borrower contrary to the provisions of Section 302 hereof; or
iv. Borrower has not received commitments reasonably
satisfactory to the City for the full project financing sources or substitute sources reasonably acceptable to the City; or
v. The Borrower fails to obtain any entitlements or conduct CEQA review or required permits that would allow for the lawful construction and development of the Project as identified herein and approved by the City; or vi. The Borrower is in breach or default with respect to any other obligation of the Borrower under this Agreement or any other funding or regulatory agreement recorded against the Site (subject to any applicable notice and cure period). b. In the event of any default under this Agreement by Borrower after execution by the Borrower of the City Note, City Deed of Trust, and the disbursement of the City Loan, then the Agreement may, at the option of the City, be terminated by written notice to the Borrower. In the event of such termination, the City’s rights and remedies shall be as set forth in the City Note and City Deed of Trust.
[§600] GENERAL PROVISIONS
[§601] 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 affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested.

The Borrower warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. [§602] Nonliability of City and Borrower Officials and Employees. a. To the extent permitted by applicable law, no member, official or employee of the City shall be personally liable to the Borrower in the event of any default or breach by the City or for any amount which may become due to the Borrower or on any obligations under the terms of this Agreement.
17 b. To the extent permitted by applicable law, no member, board member, official or employee of the Borrower shall be personally liable to the City in the event of any default or breach by the Borrower or for any amount which may become due to the City or on any obligations under the terms of this Agreement.
[§603] Notices, Demands, and Communications Between the Parties.

Any notice required or permitted to be delivered hereunder shall be in writing and shall be deemed received upon personal delivery or upon delivery by facsimile to the party to whom the notice is directed or, if sent by mail, three business days following its deposit in the United States mail, postage prepaid, certified mail, return receipt requested, or, if sent by overnight air courier, on the next business day following dispatch, and in any of such events addressed to City or Borrower, as the case may be, at the addresses set forth below (or such other address as a party may specify by notice given pursuant to this Section 603):

Borrower: Firm Foundation Community Housing
1035 B St. Unit B
Hayward, CA 94541
Attn: Executive Director
City: City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590
Attn.: City Manager
With a copy to:

City Attorney of the City of Vallejo
555 Santa Clara Street, 3rd Floor
Vallejo, CA 94590
[§604] Enforced Delay.

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 war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; or unusually severe weather. [§605] Relationship Between City and Borrower.

It is hereby acknowledged that the relationship between the City and the Borrower is not that of a partnership or joint venture and that the City and the Borrower shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. The 18 Borrower agrees to indemnify, hold harmless, and defend the City from any claim made against the City arising from a claimed relationship of partnership or joint venture between the City and the Borrower with respect to the development, operation, maintenance or management of the Site or the Project.
[§606] City Approvals and Actions.

Whenever a reference is made herein to an action or approval to be undertaken by the City, the City Manager or his or her designee is authorized to act on behalf of the City unless specifically provided otherwise or the context should require otherwise. [§607] Counterparts.

This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in two originals, each of which is deemed to be an original.
[§608] Integration.

This Agreement comprises pages 1 through 21, inclusive, and Attachments 1 through 5, and contains the entire understanding between the parties relating to the transaction contemplated by this Agreement. Any prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party’s own independent investigation of any and all facts such party deems material.

This Agreement constitutes the entire understanding and agreement of the parties, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. [§609] Titles and Captions.

Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise. [§610] Interpretation.

As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word “including” shall be construed as if followed by the words “without limitation.” This Agreement shall be interpreted as though prepared jointly by both parties. [§611] No Waiver.

A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party must be in writing and signed by the appropriate authorities of the City and Borrower and shall not be construed as a waiver of any 19 succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement.
[§612] Modifications.

Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. [§613] Severability.

If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. [§614] Computation of Time.

The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. [§615] Legal Advice.

Each party represents and warrants to the other the following: They have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement, and they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. [§616] Time of Essence.

Time is expressly made of the essence with respect to the performance by the City and the Borrower of each and every obligation and condition of this Agreement. [§617] Cooperation.

Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements.
20 [§618] Governing Law.

This Agreement, and the rights and obligations of the parties, shall be governed and interpreted in accordance with the laws of the State of California. Should litigation occur, venue shall be in Superior Court of Solano County.
[§700] TIME FOR ACCEPTANCE OF AGREEMENT BY CITY
This Agreement, when executed by the Borrower and delivered to the City, must be authorized, executed, and delivered by the City within 30 days after the date of signature by the Borrower or this Agreement shall be void, except to the extent that the Borrower and the City may consent in writing to further extensions of time for the authorization, execution, and delivery of this Agreement. The effective date of this Agreement shall be the date when this Agreement has been signed by the City.
[SIGNATURE BLOCK ON NEXT PAGE]
21 FIRM FOUNDATION COMMUNITY
HOUSING, a California public benefit
corporation
By: ________________________
Taryn Sandulyak
Executive Director

DATE: _____________________
(City Seal)

CITY OF VALLEJO,
a municipal corporation
By: ________________________
Andrew Murray
City Manager
DATE: _____________________
ATTEST:

By: ________________________
Dawn Abrahamson
City Clerk
APPROVED AS TO CONTENT:
__________________________
Gillian Hayes
Assistant City Manager
APPROVED AS TO FORM:

Veronica A. F. Nebb
City Attorney
Acknowledgment

ACKNOWLEDGMENT
State of California
County of____________________
On _____________________ before me, __________________________________________, (here insert name and title of the officer)
personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature________________________________
Acknowledgment

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

WITNESS my hand and official seal.

Signature________________________________
Attachment No. 1
ATTACHMENT NO. 1

MAP OF THE SITE
Attachment No. 2
ATTACHMENT NO. 2

LEGAL DESCRIPTION OF THE SITE
APN: 0067-140-150

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF VALLEJO, COUNTY OF SOLANO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

Parcel "B" as shown on that certain Parcel Map entitled: "Parcel Map, Portion of Sec. 36, T.4.N., R4W. M.D.B.&M., City of Vallejo, Solano County, California", filed for record in the office of the County Recorder of Solano County, on August 24, 1982 in Book 23 of Parcel Maps, at Page 79.

EXCEPTING THEREFROM a life estate as to an undivided one fifth (1/5) right, title, and interest in and to all mineral rights and all minerals of every kind and nature beneath the above- described land as granted in the Deed from Henry A. Mini, et al, to Virginia C. Mini, dated November 5, 1954, recorded January 14, 1955, in Book 748 of Official Records, at Page 313, Instrument No. 678.

Attachment No. 3, Page 1

CITY NOTE
(Broadway Street Project)
Principal Sum Not to Exceed ______________, 2024
$2,879,665.00Vallejo, California
FOR VALUE RECEIVED, FIRM FOUNDATION COMMUNITY HOUSING, a California public benefit corporation (the “Maker” or “Borrower”), having an address at 1035 B Street, Hayward, CA 94541, promises to pay THE CITY OF VALLEJO (“Payee” or “City”), the principal sum not to exceed TWO MILLION EIGHT HUNDRED SEVENTY-NINE THOUSAND SIX HUNDRED SIXTY-FIVE DOLLARS ($2,879,665), or so much of such principal as may be advanced, with interest at the rate of three percent (3%) per annum. Interest shall be simple interest only.

1. Purpose. This Note is made and delivered pursuant to and in implementation of that certain Loan Agreement entered into between City and Borrower, dated September 25, 2024 (the “Loan Agreement”), which provides for construction by the Maker of the “ Project” described in Section 3 below.

2. Security. Payment of this Note shall be secured by a deed of trust and assignment of rents (the “City Deed of Trust”), from Maker to Payee, which City Deed of Trust shall be executed and recorded against the Site.

3. Housing Project. Maker will construct a 47-unit permanent supportive housing community, plus one manager’s unit, on the Site (the “Project”). The 48 units that are contained in the Project are referred to herein as the “Housing Units.” The Project shall be maintained and operated in accordance with that certain Affordability Agreement by and between City and Borrower, dated September 25, 2024, and recorded concurrently with the City Deed of Trust.

4. Maturity Date. This Note shall be due and payable in full at the earlier of (i) sale or transfer of the Project by Borrower (except as otherwise permitted under the Loan Agreement); or (ii) 55 years after the date the Project obtains its final certificate of occupancy (the “Maturity Date”).

5. Payment Location. Payment shall be made in lawful money of the United States to Payee in care of the City of Vallejo Finance Department, 555 Santa Clara Street, Vallejo, CA 94590. The place of payment may be changed from time to time as the Payee may from time to time designate in writing.

6. Default. The occurrence of any of the following shall constitute an event of default under this Note:
a. Maker fails to pay any amount due hereunder within 30 days of its due date; or
Attachment No. 3, Page 2
b. Any default by Maker under this Note, the City Deed of Trust, the Loan Agreement or the Affordability Agreement recorded against the Site after the expiration of all applicable cure periods; or
c. Any default by Maker under any other obligation of Maker recorded against the Site after the expiration of all applicable cure periods; or Maker shall not be considered in default under this Note until the expiration of all notice and cure periods provided to Maker.

Upon the occurrence of any uncured event of default, or at any time thereafter, at the option of the Payee hereof, the entire unpaid principal and interest owing on this Note shall become immediately due and payable. This option may be exercised at any time following any such event, and the acceptance of one or more installments thereafter shall not constitute a waiver of Payee’s option. Payee’s failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. Payee’s failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof.

7. Default Interest Rate. At all times when Maker is in default hereunder by reason of Maker’s failure to pay principal due under this Note within applicable cure periods, the interest rate on the sums as to which Maker is in default (including principal, if Payee has elected to declare it immediately due and payable), shall be the highest rate then allowed by law as of the date of the default, or ten percent, whichever is lower.

8. Waivers. Maker and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest, and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability.

9. Costs. Maker agrees to pay immediately upon demand all costs and expenses of Payee including reasonable attorneys’ fees:
a. If after default and the expiration of all notice and cure periods this Note is placed in the hands of an attorney or attorneys for collection,
b. If after a default hereunder or under the City Deed of Trust or Loan Agreement and after the expiration of all notice and cure periods Payee finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Note against Maker, any guarantor or any other party liable therefor or to the protection of its rights under this Note, the City Deed of Trust, the Loan Agreement or other loan document, financing document, or regulatory agreement executed in connection with this Project, or Attachment No. 3, Page 3
c. If Payee seeks to have the Site abandoned by or reclaimed from any estate in bankruptcy or attempts to have any stay or injunction prohibiting the enforcement or collection of this Note or prohibiting the enforcement of the City Deed of Trust or any other agreement evidencing or securing this Note lifted by any bankruptcy or other court.

If Payee shall be made a party to or shall reasonably intervene in any action or proceeding, whether in court or before any governmental entity, affecting the Site or the title thereto or the interest of the Payee under the City Deed of Trust, including, without limitation, any form of condemnation or eminent domain proceeding, Payee shall be reimbursed by Maker immediately upon demand for all costs, charges, and reasonable attorneys’ fees incurred by Payee in any such case, and the same shall be secured by the City Deed of Trust as a further charge and lien upon the Site.

10. Notices. Any notices provided for in this City Note shall be given by mailing such notice by certified mail, return receipt requested at the addresses listed below or at such address as either party may designate by written notice.

If to City:

If to Maker:

11. Successors. This Note shall be binding upon Maker, its successors, and assigns.

12. California Law. This Note shall be construed in accordance with and be governed by the laws of the State of California.

13. Severability. If any provision of this City Note shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
(SIGNATURES ON THE FOLLOWING PAGE)
Cityof Vallejo555 Santa Clara StreetVallejo, CA 94590Attn.:City ManagerWith a copy to:City Attorney of the City of Vallejo555 Santa Clara Street, 3rd FloorVallejo, CA 94590Firm Foundation Community Housing2845 Castro Valley Blvd.Castro Valley, CA 94546Attn: Senior Project Manager Attachment No. 3, Page 4

FIRM FOUNDATION COMMUNITY
HOUSING, INC.
a California non-profit public benefit corporation
By:

By: ____________________________________
By: ____________________________________
Attachment No. 4, Exhibit A
Escrow No.:

RECORDING REQUESTED BY
City of Vallejo
When Recorded, Mail Document to:

City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590

EXEMPT FROM RECORDING FEES
PURSUANT TO GOV. CODE § 227383
________________________________________________________________________________________________________ (Space above this line for Recorder’s use only)
APN: 0067-140-150

DEED OF TRUST
THIS DEED OF TRUST ("Security Instrument ") is made on ___________, 2024. The Trustor is Firm Foundation Community Housing, a California public benefit corporation (“Borrower ").

The Trustee is North American Title Company . The Beneficiary is the City of Vallejo , which is organized and existing under the laws of California, and whose address is 555 Santa Clara Street, Vallejo, CA 94590 ("Lender ").

Borrower owes Lender the principal sum of Two Million Eight Hundred Seventy-Nine Thousand Six Hundred Sixty-Five Dollars and Zero Cents ($2,879,665.00 ). This debt is evidenced by Borrower's Promissory Note dated the same date as this Security Instrument ("Note"), which provides for deferred monthly payments, with the full debt, if not paid earlier, due and payable 55 years from the date of this Security Instrument. This Security Instrument secures to Lender : (a) the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions, and modifications; (b) the payment of all other sums, with interest advanced under paragraph 7 to protect the security of this Security Instrument ; and (c) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale the following described property located in Solano County, California :

See Exhibit "A"
APN #: 0067-140-150
which has the address of 2441 Broadway Street, Vallejo, CA, 94589 TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, rights, appurtenances, rents, royalties, mineral, oil and gas rights and profits, water rights and stock, and all fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property ."
BORROWER COVENANTS that Borrower is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

Attachment No. 4, Exhibit A
THIS SECU RI TY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property.

U NIFORM COVENANTS . Borrower and Lender covenant and agree as follows:

1. Payment of Principal and Interest Prepayment and Late Charges . Borro wer shall promptly pay when due the principal of and interest on the debt evidenced by the Note and prepayment and late charges due under the Note.

2. Charges; Liens. Borrower shall pay when due all taxes, assessments, charges, and liens attributable to the Property, which may attain priority over this Security Instrument, excepting that nothing contained herein shall be deemed to prohibit Borrower from contesting the validity of or amounts of any tax, assessment, charge, or lien, nor to limit the remedies available to Borrower in respect thereto; provided, however, that prior to commencing any such contest, Lender, in its reasonable discretion, may require Borrower to post bond in an amount sufficient to cover the tax, assessment, charge, or lien, or such portion thereof, to be contested and shall thereafter proceed in good faith to contest the validity or amount of such tax, assessment, charge, or lien.

Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender 's opinion operate to prevent the enforcement of the lien or forfeiture of any part of the Property; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within ten days of the giving of notice.

3. Hazard Insurance . Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by f ire, hazards included within the term “extended coverage," and any other hazards for which Lender requires insurance . This insurance shall be maintained in the amounts and for the periods that Lender requires. The insurance carrier providing the insurance shall be chosen by Borrower and subject to Lender's approval, which shall not be unreasonably withheld .

All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause. Lender shall have the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.

Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If Borrower abandons the Property or does not answer within 30 days a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may collect Attachment No. 4, Exhibit A
the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period will begin when the notice is given.

4. Preservation and Maintenance of Property; Leaseholds . Borrower shall not destroy, damage, or substantially change the Property, or allow the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold, Borrower shall comply with the provisions of the lease, and if Borrower acquires fee title to the Property, the leasehold and fee title shall not merge unless Lender agrees to the merger in writing.

5. Protection of Lender's Rights in the Property; Mortgage Insurance . If Borrower fails to perform the covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender 's rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation, or to enforce laws or regulations), then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender 's rights in the Property. Lender's actions may include paying any sums secured by a lien, which has priority over this Security Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although Lender may take action under this paragraph 5, Lender does not have to do so.

Any amounts disbursed by Lender under this paragraph 5 shall become additional debt of Borrower secured by this Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest, upon notice from Lender to Borrower requesting payment.

6. Inspection. Lender or its agent may make reasonable entries upon and inspections of the Property . Lender shall give Borrower notice at the time of or prior to an inspection specifying reasonable cause for the inspection .

7. Condemnation . The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender.

In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower.

In the event of a partial taking of the Property, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the taking, divided by (b) the fair market value of the Property immediately before the taking. Any balance shall be paid to Borrower.

If the Property is abandoned by Borrower, or if after notice by Lender to Borrower that the condemner offers to make an award or settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the proceeds, at its option, either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due.

8. Borrower Not Released : Forbearance by Lender Not a Waiver . Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to any successor in interest of Borrower shall not operate to release the liability of the original Borrower or Borrower's successors in interest. Lender shall not be required to Attachment No. 4, Exhibit A
commence proceedings against any successor in interest or extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy.

9. Successors and Assigns Bound; Joint and Several Liability; C o-signers . The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower, subject to the provisions of Paragraph 15. Borrower's covenants and agreements shall be joint and several. Any Borrower who co-signs this Security Instrument but does not execute the Note: (a) is co-signing this Security Instrument only to mortgage, grant, and convey that Borrower's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower may agree to extend, modify, forbear, or make any accommodations with regard to the terms of this Security Instrument or the Note without that Borrower’s consent.

10. Loan Charges. If the loan secured by this Security Instrument is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the loan exceed the permitted limits, then (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit, and (b) any sums already collected from Borrower which exceeded p e r m i t t e d limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge under the Note.

11. Legislation Affecting Lender’s Rights . If enactment or expiration of applicable laws has the effect of rendering any provision of the Note or this Security instrument unenforceable according to its terms, Lender, at its option, may require immediate payment in full of all sums secured by this Security Instrument and may invoke any remedies permitted by paragraph 19.

If Lender exercises this option, Lender shall take the steps specified in the second paragraph of paragraph 15.

12. Notices . Any notice to Borrower provided for in this Security Instrument shall be given by delivering it or by mailing it by first class mail unless applicable law requires use of another method. The notice shall be directed to the address in Section 603 of the Loan Document , or any other address Borrower designates by notice to Lender. Any notice to Lender shall be given by first class mail to Lender's address stated herein or any other address Lender designates by notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have been given to Borrower or Lender when given as provided in this paragraph.

13. Governing Law; Severability . This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. In the event that any provision or clause of this Security Instrument or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. To this end the provisions of this Security Instrument and the Note are declared to be severable.

14. Borrower' s Copy. Borrower shall be given one conformed copy of the Note and of this Security Instrument.

Attachment No. 4, Exhibit A

15. Transfer of the Property a Beneficial Interest in Borrower . If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, Lender shall not exercise this option if federal law as of the date of this Security Instrument prohibits exercise.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period. Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

16. Borrower's Right to Reinstate . If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earlier of: (a) five days (or such other period as applicable law may specify for reinstatement) before sale of the Property pursuant to any power of sale contained in this Security Instrument, or (b) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower:
(a) pays Lender all sums which then would be due under this Security Instrument and the Note had no acceleration occurred, (b) cures any default of any other covenants or agreements, (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys· fees, and (d) takes such action as Lender may reasonably require to ensure that the lien of this Security Instrument, Lender's rights in the Property, and Borrower's obligation to pay the sums secured by this Security Instrument shall continue unchanged. Upon reinstatement by Borrower, this Security Instrument and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under paragraphs 11 or 15.

NON-UNIFORM COVENANTS . Borrower and Lender further covenant and agree as follows:

17. Acceleration; Remedies . Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under paragraphs 11 and 15 unless applicable law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph 17 including but not limited to reasonable attorneys' fees and costs of title evidence.

If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold. Trustee shall cause this notice to be recorded in each county in which any part of the Property is located. Lender or Trustee shall mail copies of the notice as prescribed by applicable law to Borrower and to the other persons prescribed by applicable law. Trustee shall Attachment No. 4, Exhibit A
give public notice of sale to the persons and in the manner prescribed by applicable law. After the time required by applicable law, Trustee. without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or its designee may purchase the Property at any sale.

Trustee shall deliver to the purchaser Trustee's deed conveying the P roperty without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein . Trustee shall apply the proceeds of the sale in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.

18. Lender in Possession . Upon acceleration under paragraph 19 or abandonment of the Property, Lender (in person. by agent. or by judicially appointed receiver) shall be entitled to enter upon, take possession of, and manage the Property and to collect the rents of the Property including those past due. Any rents collected by Lender or the receiver shall be applied first to payment of the costs of management of the Property and collection of rents, including, but not limited to: receiver's fees, premiums on receiver's bonds, and reasonable attorneys' fees, and then to the sums secured by this Security Instrument.

19. Reconveyance . Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt secured by this Security Instrument to Trustee. Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled to it.

Such person or persons shall pay any recordation costs.

20. Substitute Trustee . Lender, at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the Property is located.

The instrument shall contain the name of the original Lender, Trustee, and Borrower, the book and page where this Security Instrument is recorded and the name and address of the successor trustee. Without conveyance of the Property, the successor trustee shall succeed to all the title, powers. and duties conferred upon the Trustee herein and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution .

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any rider(s) executed by Borrower and recorded with it.

FIRM FOUNDATION COMMUNITY HOUSING, BORROWER
By: Taryn Sandulyak, Executive Director
(Space Below This Line for Acknowledgment)
Attachment No. 4, Exhibit A

EXHIBIT A
Legal Description
APN: 0067-140-150

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF VALLEJO, COUNTY OF SOLANO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

Attachment No. 5

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590
Attn.: City Clerk
APN: 0067-140-150

AFFORDABILITY AGREEMENT
This Agreement dated ____________, 2024, is between the CITY OF VALLEJO, a municipal corporation (the “City”), and FIRM FOUNDATION COMMUNITY HOUSING, a California nonprofit public benefit corporation (“Borrower”).

RECITALS
A. Pursuant to the Loan Agreement between the City and Borrower executed concurrently herewith (the “Loan Agreement”), the City has made a loan to Borrower for the purpose of developing and constructing housing on the certain real property as described in Exhibit A attached hereto and incorporated herein by reference (the “Site”) for the purpose of providing 47 units plus one unrestricted manager’s unit (the “Housing Units”) to be available at an affordable rent to persons and families of extremely low income levels (the “Project”). Under the Loan Agreement, the City has provided Borrower with a loan in the amount of TWO MILLION EIGHT

HUNDRED SEVENTY-NINE THOUSAND SIX HUNDRED SIXTY-FIVE DOLLARS ($2,879,665), (the “City Loan”). Borrower has executed a promissory note for the City Loan (the “City Note”), and a deed of trust recorded against the Site (the “City Deed of Trust”).

B. Pursuant to the Loan Agreement, in the event of any default under this Affordability Agreement and following the expiration of all applicable notice and cure periods, Borrower agrees to repay City all amounts owing under the City Note and the City Deed of Trust recorded against the Site.

C. The City and Borrower desire by the execution of this Agreement to assure the affordability covenant to last for a minimum of 55 years, following the date of recordation of this Affordability Agreement (the “Term”).

NOW THEREFORE, the parties acknowledge and agree as follows:

1. SITE. Owner represents and warrants that it holds the fee title interest in that certain parcel of real property commonly known as 2441 Broadway Street in Vallejo, California (APN:
0067-140-150) as more particularly described in Exhibit A.

Attachment No. 5

2. USE OF THE SITE. Owner hereby covenants and agrees, for itself, its lessees, successors, and assigns, that Owner shall not use the Site other than for the operation of a permanent supportive housing project including 47 affordable supportive rental housing units and one manager’s unit, in compliance with all of the following:
a. Development. Owner shall diligently construct a supportive housing project consisting of 47 rental units and one manager’s unit for a total of 48 units on the Site (the “Project”). Pursuant to the conditions of the Site Development Permit SD22-0022, approved by the City on August 22, 2022, Owner has agreed to restrict 47 of the Units in the Project for occupancy by Extremely Low Income Households, as defined below, collectively the “Restricted Units.” All of the supportive housing units within the Project shall be collectively referred to in this Agreement as the “Units.”
b. Restrictions on Use. Owner understands that the Project as approved includes, among other things, a density bonus and application of reduced development standards under State Density Bonus Law, permitting the reduction of the minimum rear setback, ground floor heights, and area of solid waste room space otherwise required and the elimination of the private open space, street tree, and long-term bicycle parking requirements, and that said entitlements were based upon the proposed use constituting a Subsidized/Assisted (affordable) Supportive Housing project. Owner understands and agrees that the use of the Site is specifically restricted for use as a Subsidized/Assisted Supportive Housing project and that any new or different use, including housing which does not constitute Subsidized/Assisted Supportive Housing, would require new entitlements. The provisions of this section 2.b. shall run with the land as a use covenant and shall survive termination of this Affordable Housing Agreement. c. Income and Rent Restrictions. Upon completion of construction, Owner shall operate the Project as a “Permanent Affordable Supportive Housing Project” with the required number of Units, as set forth herein, for rental to Extremely Low Income Households in accordance with the following criteria:
(1) General. The term “Permanent Affordable Supportive Housing Project” as set forth herein, means a residential rental project in which the identified number of units is consistent with the occupancy restrictions set forth below. The Restricted Units will be occupied or held for occupancy as follows:
(i) 47 Restricted Units will be occupied or held for occupancy by Extremely Low Income Households. An “Extremely Low
Income Household” is one whose income is at or below 30% of the area median income as adjusted by household size appropriate for the Unit. Said Extremely Low Income Units shall be Rent Restricted for Very Low Income as set forth herein.

Attachment No. 5
(2) As used herein, all references to “area median income” shall mean the median household income (adjusted for household size appropriate for the Unit and for other factors, such as area of high housing cost) of the Metropolitan Statistical Area in which Solano County is located, as annually estimated by the United States Department of Housing and Urban Development (“HUD”) pursuant to Section 8 of the United States Housing Act of 1937 or as established in accordance with Section 50093 of the California Health and Safety Code.
(3) Rent-Restricted Units.
(i) An Extremely Low Income Unit is Rent Restricted for Extremely Low Income if the rent (as defined in Section 50106 of the California Health and Safety Code) for the Unit does not exceed thirty percent (30%) of area median income, adjusted by household size appropriate for the Unit.
(ii) For purposes of determining rent, the “household size appropriate for the Unit” shall be determined in accordance with Section 42(g)(2)(C) of the Internal Revenue Code.
(iii) For purposes of this Agreement, rent does not include any payment under Section 8 of the United States Housing Act of 1937 or any comparable federal rental assistance program (with respect to such Restricted Unit or occupants thereof) but does include any utility allowance determined by the Secretary of the Department of Housing and Urban Development after taking into account such determinations under Section 8 of the United States Housing Act. (4) Tenants of the Restricted Units are not required to accept services from Owner for which charges will be made in excess of rent as a condition of tenancy.
d. Reporting Requirements. Owner shall certify under penalty of perjury to the City within sixty (60) days after January 1 of each year that during the preceding calendar year the requirements of section 2 of this Agreement have been met. Such certification shall be submitted in a form acceptable to the City. The income certification required by this section shall be supplied by each tenant in a Restricted Unit.

In order to provide the above certification, the Owner or its agent shall retain the following information:
(1) Total number, size, and affordability type of the Restricted Units. (2) The number of persons living in each Restricted Unit.

Attachment No. 5
(3) Rent charged for each Restricted Unit, by affordability type, including utility allowance.
(4) Any and all vacancies in the Restricted Units and information that shows when and to whom the next available Restricted Units were rented. (5) Annual income certification for each tenant of a Restricted Unit; and (6) Documentation to support income certification for each tenant in a Restricted Unit.

Such information shall be retained by Owner for at least six (6) years from the date of each annual verification. City may from time to time during the term of this Agreement reasonably request additional or different information be retained and Owner shall promptly comply with any such reasonable request. Upon request for examination by City, Owner, at any time during normal business hours, shall make available all of its records with respect to all matters covered by this Agreement. Owner shall permit City to audit, examine, copy and make excerpts or transcripts from these records. e. Preservation and Maintenance of the Project. During the useful life of the Project, Owner shall maintain the Project at a high-quality level, and shall keep the Project in good condition, order and repair and shall not commit waste or permit impairment, demolition or deterioration of the Project, nor violation of City ordinance. City or its duly authorized representatives shall have the right to inspect the Project at all reasonable times, provided Owner and the occupants of the Units (subject to the express terms of the occupants’ lease) to be inspected are given notice prior to any such inspection.
f. Management.
(1) City shall have the right to approve or disapprove of the proposed Owner’s Management Agent, including any change of Owner’s Management Agent.

The Management Agreement with the Owner’s Management Agent shall name the City as a third-party beneficiary permitting City the right to enforce such agreement. Owner shall submit a copy of such Management Agreement, and any subsequent amendments thereto, to the City. City shall have the right to approve or disapprove such agreement to the extent to ensure compliance of such agreement with the provisions of this Agreement and all other agreements recorded against the Project or the Site, including the requirement for high quality property management, on-going grounds and property maintenance, implementation, monitoring and compliance and adherence to the Management Plan.
(2) Owner and/or Owner’s Management Agent shall prepare a Management Plan for the management of the Project, including each of the following minimum provisions, which shall be subject to the review and approval of the City:

Attachment No. 5
(i) Rules and procedures for qualifying and screening tenants and filling vacancies. Said rules and procedures shall include anti- discrimination policies, waiting list policies, grievance process, eligibility certification process and unit transfer policies. (ii) Measures to maintain security and crime prevention, including the provision of a licensed security guard (“Safety Ambassador”) who shall be required to monitor the Site daily from 6 p.m. to 1 a.m., seven days a week, for a period of three months from the date the Site is occupied at 50% occupancy. From and after the end of the 3-month period, provided the average number of criminal incident reports reported by the Vallejo Police Department (excluding physical and mental wellness checks and EMT service calls), averages fewer than eight calls per month, the requirement to have a Safety Ambassador on the Site shall be terminated.
(iii) Rules of conduct for tenants, including provisions for: drug free property; anti violence against women and other tenants; anti-drug; smoking; storage and open space use; noise; alcohol in common areas, unlawful activities, annual inspections; parking; annual eligibility certification; and grounds for eviction. The rules of conduct related to parking must include that the vehicle be in good repair and operable, be legally registered to the tenant, and have a current registration sticker.
(iv) Process for handling tenant complaints/grievances. (v) Provisions for maintenance of the Site, Project and the Units, including keeping the Site, Project and Units in good condition, order and repair, free of waste or deterioration and in full compliance with all City ordinances.
(vi) Provisions for ongoing communications between management and tenants, management and Owner, City and management and City and Owner.
(vii) Provisions for property management staffing, including daily on- site management of the Project.
(viii) A copy of the standard lease agreement.

A copy of the Management Plan shall be provided to City at least sixty (60) days prior to occupation of the Project and prior to the City approval of the Owner’s Management Agent. Any proposed amendments or revisions to the Management Plan shall be provided to City promptly upon any such request for modification.

Attachment No. 5
(3) Owner and/or Owner’s Management Agent shall comply with all terms and conditions of the Project Financing and shall promptly notify City if there is any default or failure to make any payment of principal, interest or any fees owing on any debt affecting the Project, or upon any other default or failure to comply with any material terms of any financing or financing regulatory agreement affecting the Project. Owner and/or Owner’s Management Agent shall promptly provide City with a copy of all notices received from any lender under any financing agreements or from any other party relating to the financing regulatory agreement(s). (4) Notwithstanding City’s approval of the Management Agent, Management Agreement and Management Plan, Owner shall at all times remain responsible for compliance with the requirements of the Management Agreement, the City’s loans or funding agreements, if any, and this Agreement, with respect to the use, operation and maintenance of the Site.

3. NO DISCRIMINATION. The Project shall, at all times, comply with all Federal, State and local fair housing and civil rights laws and with all equal opportunity requirements. Owner 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 race, color, creed, religion, sex, sexual preference, source of income, age, marital status, physical or mental handicap, medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Owner itself or any person claiming under or through 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 Site.

All deeds, leases or contracts made relating to the Site, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination clauses:
a.In deeds: The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental handicap, medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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 in the land herein conveyed. The foregoing covenants shall run with the land.
b.In leases: The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through Attachment No. 5
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 race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental handicap, medical condition, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land 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, sublessees, subtenants or vendees in the land herein leased. c.In contracts: There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental handicap, medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the 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, sublessees subtenants, or vendees in the land.

These covenants against discrimination shall be deemed to run with the land and shall survive termination of this Agreement and shall remain in effect in perpetuity.

4. DURATION. The covenants contained in the provisions of this Agreement shall remain in effect for 55 years after occupancy of the Project, or such longer period as may be permitted by law.

5. SALE OR TRANSFER OF SITE. Owner shall not make any sale, assignment, conveyance, or transfer of the Site, or any interest therein, without City’s prior written consent. City shall have the right, in its sole discretion, to impose such terms and conditions as necessary to ensure compliance with this Agreement.

6. NO IMPAIRMENT OF LIEN. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument; provided, however, that any successor of Owner to the Site shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such successor’s title was acquired by foreclosure, deed in lieu of foreclosure, trustee’s sale or otherwise.

7. SUCCESSORS AND ASSIGNS. The covenants contained in this Agreement shall be binding upon Owner and any successor in interest to the Site or any part thereof, for the benefit of City, and its respective successors and assigns and such covenants shall run in favor of the City and its respective successors and assigns for the entire period during which Attachment No. 5
such covenants shall be in force and effect, without regard to whether City is an owner of any land or interest therein to which such covenants relate. City and its respective successors and assigns in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies under this Agreement, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Agreement shall be enforceable only by City and its successors and assigns.

8. SUBORDINATION. It is the objective of the City and Owner that this Agreement shall not be subordinated for the benefit of lenders providing financing to the Project and that the City may subordinate the provisions of this Agreement only if the City is satisfied that subordination will not impair the City’s ability to enforce the affordability restrictions and all City project approvals, and that all other provisions of such subordinations, including but not limited to notice and cure provisions on behalf of City, are acceptable to City in its sole discretion. Notwithstanding the foregoing, the City will not object to subordination of this Agreement to the California Department of Housing and Community Development Homekey Round 2 regulatory agreement which restricts 47 units at 30% of AMI.

9. INDEMNIFICATION.
a. Owner shall defend, indemnify and hold harmless City and its agents (including consultants), officials, officers, and employees, from any and all damage, liability or loss or any claim of damage, liability or loss, including without limitation attorney’s fees or costs, connected with or arising out of: (i) any action or proceeding (collectively “action”) against City, or its agents (including consultants), officials, officers, or employees, arising out of or related to any decision, determination, or action made or taken approving, supplementing, or sustaining the Project or any part thereof, or any related approvals; or (ii) any action imposing or seeking to impose personal liability against such agents (including consultants), officers, or employees resulting from their involvement in the Project, including without limitation any claim for punitive damages or private attorney general fees claimed by or awarded to any party if such action arose as a result of Owner’s negligence, intentional misconduct or willful failure to comply with the terms of this Agreement or any other agreement recorded against the Site. b. Nothing in this section 9 shall limit the scope or application of any and all indemnifications provided by Owner to City under any other agreements, approvals or entitlements of which Owner is a party or is otherwise bound affecting the Site, the Project, or any portion thereof.
c. The provisions of this section 9 shall survive termination of this Agreement.

10. INSURANCE REQUIREMENTS. Throughout the Term of this Agreement, Owner shall keep the Site and Project improvements insured against loss or damage by a standard commercial property special form policy in amounts not less than the replacement value of Attachment No. 5
the Project improvements and shall maintain such additional insurance coverage as follows:
a. Commercial General Liability Insurance providing coverage at least as broad as ISO CGL Form 00 01 on an occurrence basis for bodily injury, including death, of one or more persons, property damage, and personal injury, arising out of activities performed by or on behalf of the Owner, its subcontractors, products and operations of Owner, its subcontractors, and premises owned, leased, or used by the Owner, its subcontractors, with limits of not less than two million dollars ($2,000,000) for any person, three million dollars ($3,000,000.00) for any occurrence, five million dollars ($5,000,000) annual aggregate. The policy must provide contractual liability and products and completed operations coverage for the term of the policy.

The policy must not include an exclusion for sexual abuse, physical abuse, or molestation.
b. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employers’ Liability insurance with a limit of no less than $1,000,000 per accident for bodily injury or disease.
c. Builder’s Risk (or Course of Construction) insurance utilizing an “All Risk” (Special Perils) coverage form, with limits equal to the completed value of the project and no coinsurance penalty provisions. Such coverage shall name the City of Vallejo as a loss payee as their interest may appear and provide that the insurer shall not have rights of recovery against the City and Owner. d. The minimum limits of insurance required by this section may be satisfied by a combination of primary and umbrella or excess insurance coverage; provided that any umbrella or excess insurance must contain, or be endorsed to contain, a provision that it applies on a primary basis for the benefit of the City, and any insurance or self-insurance maintained by the City, its officials, employees, or volunteers is in excess of such umbrella or excess coverage and does not contribute with it.
e. The City, its officials, employees, and volunteers must be covered by policy terms or endorsement as additional insureds as respects general liability arising out of:
activities performed by or on behalf of Owner and its subcontractors; products and completed operations of Owner and its subcontractors; and premises owned, leased, or used by Owner and its subcontractors.
f. The policies must contain, or be endorsed to contain, the following provisions. (1) Owner’s insurance coverage, including excess insurance, is primary insurance as respects the City, its officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officials, employees, or volunteers is in excess of Owner’s insurance and does not contribute with it.

Attachment No. 5
(2) Any failure to comply with reporting provisions of the policies does not affect coverage provided to the City, its officials, employees, or volunteers. (3) Coverage must state that Owner’s insurance applies separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.
g. The Owner shall provide the City with 30 days’ written notice of cancellation or material change in the policy language or terms.
h. Insurance must be placed with insurers with a Bests’ rating of not less than A:VI.

Self-insured retentions, policy terms, or other variations that do not comply with the requirements of this section 11 must be declared to and approved by the City in writing prior to execution of this Agreement.
i. The Owner shall furnish the City with certificates evidencing the insurance required. The certificates must be forwarded to the City’s Risk Manager. Copies of policies must be delivered to the City on demand. Certificates of insurance must be signed by an authorized representative of the insurance carrier. j. The City may terminate this Agreement if the certificates of insurance required have not been provided prior to execution of this Agreement or if the insurance is canceled or the Owner otherwise ceases to be insured as required by this section. k. Any available insurance proceeds in excess of the specified minimum limits and coverages must be made available to the City.
l. The Owner’s liability to the City is not in any way limited to or affected by the amount of insurance coverage required or carried by the Owner in connection with this Agreement.
m. In the event of damage or destruction to the Site or improvements thereon, all commercial property insurance (including builder's risk) proceeds shall be applied to the payment of the costs of repairing or rebuilding that part of the Site and improvements damaged or destroyed, provided that the extent of Owner’s obligation to restore the Property and improvements shall be limited to the amount of the insurance proceeds.
n. If the Project improvements are damaged or destroyed, then Owner shall, to the extent insured, or required to be insured, and with reasonable diligence, repair, reconstruct or replace such improvements (to the extent the same is commercially feasible) to a condition substantially similar to their condition immediately prior to such damage or destruction. All such repair, reconstruction or replacements shall be at the sole cost and expense of Owner and, upon completion thereof, shall be free and clear of all mechanics’ liens.

Attachment No. 5

11. CONFORMING MODIFICATIONS. Owner and City shall reasonably consider, at the request of either party, modifications to this Agreement from time to time for purposes of clarification of terms hereof in implementation of the Project funding, or in order to conform the terms hereof to changes in law or other requirements pertaining to financing.

12. DOCUMENTS REFERENCED HEREIN. Owner acknowledges receipt of all documents referenced herein, including but not limited to the documents referenced in section 2 hereof, and that it is familiar with the terms thereof. City agrees to provide Owner with copies of any amendments or modifications to said documents.

13. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute an original, but all of which, when taken together, shall constitute the same instrument, with the same effect as if all of the parties to this Agreement had executed the same counterpart.
[Signatures on the following page.]
Attachment No. 5
IN WITNESS WHEREOF, City and Owner have caused this instrument to be executed on their behalf by their respective officers or representatives thereunto duly authorized, as of _________________________________, 2024.

FIRM FOUNDATION COMMUNITY

HOUSING,
a California public benefit corporation
By: ________________________
Taryn Sandulyak
Executive Director
DATE: __________________
(City Seal)

CITY OF VALLEJO,
a municipal corporation
By: ________________________
Andrew Murray
City Manager
DATE: ___________
ATTEST:

By: ________________________
Dawn Abrahamson
City Clerk
APPROVED AS TO CONTENT:
__________________________
Gillian Hayes
Assistant City Manager
APPROVED AS TO FORM:

Veronica A. F. Nebb
City Attorney
Attachment No. 5

EXHIBIT A
Legal Description of Property
APN: 0067-140-150

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF VALLEJO, COUNTY OF SOLANO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

Attachment No. 5

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

WITNESS my hand and official seal.

Signature________________________________

First Amendment to ARPA Fund Grant Agreement between City of Vallejo and Firm Foundation Page 1 of 3 First Amendment to
ARPA Fund Grant Agreement
Firm Foundation Community Housing
This First Amendment to the American Rescue Act (“ARPA”) Fund Grant Agreement made and entered into on June 25, 2024, hereinafter referred to as “Agreement,” between Firm Foundation Community Housing, a California nonprofit public benefit corporation, therein referred to as “Grantee,” and the City of Vallejo, a municipal corporation, therein referred to as “City,” is made and entered into on this 25th day of September 2024.

Grantee and City do mutually agree as follows:

1.Section 2 of the Agreement, “Disbursement of Funds,” is hereby amended to read in its entirety as follows:
“2. Disbursement of Funds. The City shall disburse to the Grantee a total sum not to exceed $3,270,335 (“Grant Funds”) in accordance with Section 4, below.”

2.Section 3 of the Agreement, “Additional Funds,” is hereby amended to read in its entirety as follows:
“3. Additional Funds. Grantee acknowledges that this sum is in addition to the two previous grants of ARPA funds made to Grantee by the City for the Broadway Project in the amounts of $392,740, and $3,000,000, respectively, as authorized by Resolution Nos. 22-005 and 23-164 and County of Solano
Standard Contract No. COV-1-ARPA (“Previous Grant Funds”).

By accepting the Grant Funds, Grantee hereby attests that it has expended and will continue to expend the Previous Grant Funds in compliance with all federal, state, and local laws, requirements, rules, and regulations applicable thereto, including the applicable terms and conditions of this Agreement.”

3. Integration. This First Amendment contains the entire agreement between the parties with respect to its subject matter and supersedes whatever oral or written understanding they may have had prior to the execution of this First Amendment. This First Amendment shall not be amended or modified except by a written agreement executed by each of the parties. Except as specifically revised herein, all terms and conditions of the Agreement shall remain in full force and effect, and Grantee shall perform all duties, obligations and conditions required under the Agreement.

First Amendment to ARPA Fund Grant Agreement between City of Vallejo and Firm Foundation Page 2 of 3

4. Inconsistencies. In the event of any conflict or inconsistency between the provisions of this First Amendment and the Agreement, the provisions of this First Amendment shall control in all respects.

5. Ambiguities. The parties have each carefully reviewed this First Amendment and have agreed to each term of this First Amendment. No ambiguity shall be presumed to be construed against either party.

6. Counterparts. This First Amendment may be executed by the parties in one or more counterparts all of which collectively shall constitute one document and agreement.

7. Authority. The person signing this First Amendment on behalf of the Grantee hereby represents and warrants that he or she is fully authorized to sign this First Amendment on behalf of Grantee.
(SIGNATURES ON THE FOLLOWING PAGE)
First Amendment to ARPA Fund Grant Agreement between City of Vallejo and Firm Foundation Page 3 of 3 IN WITNESS WHEREOF, the parties have entered into this First Amendment on the day and year first hereinabove appearing.

FIRM FOUNDATION COMMUNITY

HOUSING,
a California nonprofit public benefit
corporation
BY:

Taryn Sandulyak
Vice President, Finance
DATE:
11710808
Vallejo Business License No
(City Seal)

CITY OF VALLEJO,
a municipal corporation
BY:

Andrew Murray
City Manager
DATE:

ATTEST:

Dawn G. Abrahamson
City Clerk
APPROVED AS TO FORM:

Veronica A. F. Nebb
City Attorney
1 Subrecipient Agreement between
Firm Foundation Community Housing and the City of Vallejo County of Solano ARPA Grant
This SUBRECIPIENT AGREEMENT ("Agreement") is made at Vallejo, California, dated for reference this 25th day of September 2024, by and between the City of Vallejo, a municipal corporation, and Firm Foundation Community Housing, a California nonprofit public benefit corporation.

RECITALS
A. Firm Foundation Community Housing is the owner and developer of the affordable housing development known as the Broadway Project, a permanent supportive affordable housing development located at 2441 Broadway in Vallejo, California.

B. On March 7, 2023, the City of Vallejo applied to the County of Solano (“Grantor”) for grant funding under the American Rescue Plan Act (“ARPA”) on behalf of Firm Foundation Community Housing for the Broadway Project and received a grant in the amount of Three Million Dollars and Zero Cents ($3,000,000.00)(“Grant Funds”) pursuant to Standard Contract Number COV-01-ARPA, entered into by the City of Vallejo (“Recipient”) and the Grantor as of April 1, 2023 (“Effective Date”). The Standard Contract and all amendments, exhibits and attachments thereto are referred to herein as the “Grant Agreement.”
C. This Agreement is intended to memorialize the terms under which Firm Foundation Community Housing, referred to herein as the “Subrecipient,” is to receive, expend, and account for the Grant Funds.

Now therefore, Recipient and Subrecipient agree as follows:

AGREEMENT

1. Recitals. The above recitals are true and correct and are incorporated herein by reference.

2. Term. This Agreement takes effect as of the Effective Date and terminates as set forth in Section 7, below.

3. Disbursement of Funds. Recipient shall disburse to the Subrecipient a total sum not to exceed $3,000,000.00 in accordance with Section 6, below. Recipient’s obligation under this Agreement is subject to the availability of the Grant Funds.

2 4. Authorized Activities. The following terms apply to the Subrecipient’s activities and expenditures related to this Agreement:
a. The Subrecipient is only authorized to use the Grant Funds solely for costs it incurs that are necessary for completion of the construction of the Broadway Project as set forth in the Grant Agreement and for no other purpose (“Authorized Activities”). b. Any costs that are determined by subsequent audit to be unallowable are subject to repayment by the Subrecipient to the Recipient within 60 days of being notified of same unless the Recipient approves in writing an alternative repayment plan. c. Subrecipient shall complete such Authorized Activities in compliance with the Grant Documents and shall act in good faith to provide Recipient with such information, consultation, certifications, and to take such other actions in relation to such Authorized Activities as may be necessary and reasonable to ensure Recipient is able to timely deliver the Broadway Project and meet its obligations under the Grant Documents, including but not limited to site control, reporting, and County of Solano monitoring of the Project.

5. Books and Records. During the term of this Agreement and for five years after the termination or expiration of this Agreement, the Subrecipient shall keep appropriate books, records, and accounts in connection with the ARPA funds and activities performed under this Agreement and is subject to the following:
a. The Subrecipient shall maintain all records related to this Agreement in accordance with generally accepted accounting practices, including the following records:
(i) general ledger and subsidiary ledgers used to account for the receipt of ARPA funds and the disbursements of ARPA funds to meet eligible expenses; (ii) budget records for all fiscal years covered by this Agreement; (iii) payroll, time records, human resource records to support costs incurred for payroll expenses related to this Agreement; (iv) receipts of purchases made related to this Agreement; (v) contracts and subcontracts entered into using ARPA funds and all documents related to such contracts; (vi) all documentation of reports, audits, and other monitoring of contractors, subcontractors, and the Subrecipient; (vii) all documentation supporting the performance outcomes of contracts, subcontracts, and this Agreement; (viii) all internal and external email/electronic communications related to use of ARPA funds; and (ix) all investigative files and inquiry reports involving payment of ARPA funds.
b. The Subrecipient shall make its books, records, and accounts (both those that relate to this Agreement and those that do not), employees, performance-related records, property, and equipment related to this Agreement available to the City’s Finance Director, the City Auditor, and any independent auditor at all reasonable times so that the Finance Director, City Auditor, or an independent auditor may determine whether the Subrecipient has complied with this Agreement. If the City requests, the Subrecipient shall obtain and provide to the City, at the Subrecipient’s sole cost, an independent financial audit of the Subrecipient’s use of the ARPA funds.
3 c. Upon demand by the City, given in accordance with Section 9, the Subrecipient shall reimburse the City for all ARPA funds that the Finance Director, City Auditor, or an independent auditor determines were expended for activities other than Authorized Activities in accordance with this Agreement, with reimbursement to be by check payable to the City and delivered to the City at the address shown in Section 9.

6. Reimbursement Basis. The City will make payments to the Subrecipient in arrears as follows:
a. Progress Payments. On a monthly basis, the Subrecipient shall provide the Recipient with a written report on the progress made on the Authorized Activities and a detailed and properly documented invoice for reimbursement that must include a detailed accounting of costs already incurred in sufficient detail for the City, in its opinion, to substantiate payment. The Recipient will notify the Subrecipient within 15 business days following receipt of its invoice and written report of any circumstances or data identified by the Recipient that would cause withholding of approval and subsequent payment. The Recipient may request any additional documentation it determines is needed to substantiate any request for reimbursement. The recipient reserves the right to withhold payment of unauthorized amounts. The Recipient shall remit payment to Subrecipient within a reasonable time after invoice approval.
b. Final Payment. As a condition of receiving final payment under this Agreement, the Subrecipient shall provide the Recipient with (i) all of the documents described in 4(a) above covering the period since the Subrecipient last submitted a monthly payment request, and (ii) the closeout report required under Section 8(f), below. The Recipient may request any additional documentation it determines is needed to substantiate any request for reimbursement or that is needed to complete the closeout report. The Recipient reserves the right to withhold payment of unauthorized amounts. The Recipient shall remit payment to Subrecipient within a reasonable time after invoice and closeout report approval.

7. Termination. The City may terminate this Agreement if the City Manager determines that:
a. The Subrecipient has failed to perform, or has performed unsatisfactorily, any term of this Agreement, including failing to use the ARPA funds solely for Authorized Activities;
b. The Subrecipient has made (with or without knowledge) any material misrepresentation of any nature with respect to any information or statements furnished to City in connection with this Agreement; or
c. There is pending litigation with respect to the performance by Subrecipient of any of its duties or obligations under this Agreement that may materially jeopardize or adversely affect the undertaking of or the carrying out of the Authorized Activities.
4 8. Other Requirements. In connection with its activities and expenditures related to this Agreement, the Subrecipient shall do the following:
a. All or part of this Agreement will be paid with Federal awards. The federal funds received under this Agreement may be designated as a subaward of the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). Funds, payments, expenses, and procurements under this Agreement must be used in accordance with federal statutes, regulations and the terms and conditions of the Federal award, including but not limited to, the US Treasury Final Rule (31 CFR Part 35), CSLFRF Compliance Reporting Guidance, and CSLFRF Frequently Asked Questions and all amendments or successor laws, regulations, or guidance thereto. b. Subrecipient shall also comply with all other applicable federal statutes, regulations, and executive orders, and shall provide for such compliance by other parties in any contracts it enters into with other parties relating to or involving funding under this Agreement.
c. Subrecipient shall be responsible for any disallowances, questioned costs, or other items, including interest, not allowed under ARPA CSLFRF funding.

Subrecipient shall return to Recipient any funds disallowed within ninety (90) days of notification from Recipient to return such funds.
d. Subrecipient agrees to comply with and support all applicable ARPA CSLFRF reporting requirements and all reporting requirements otherwise stated in the Agreement. Subrecipient shall maintain compliance with all other applicable federal reporting requirements.
e. On a monthly basis, the Subrecipient shall provide the Recipient with a written report on the progress made on the Authorized Activities. This monthly report must include all the following: (i) a narrative explanation of the Subrecipient’s progress toward completion of construction of the Broadway Project; (ii) an itemized list of all expenditures of ARPA funds to date, including the names of any contractors paid with ARPA funds and the amount paid; and (iii) any other information the City may request to demonstrate that the ARPA funds are being used solely for Authorized Activities and in accordance with this Agreement, the Grant Agreement, and all applicable laws; and f. No later than sixty days following the final disbursement of ARPA funds under this Agreement, the Subrecipient shall provide Recipient with a closeout report that includes all the following: (i) an itemized list of all expenditures of ARPA funds; (ii) the name of each contractor who is paid with ARPA funds; (iii) the amount of each contract for the purchase of goods or services that is paid for in whole or in part with ARPA funds; (iv) a copy of each contract for the purchase of goods or services that is paid for in whole or in part with ARPA funds; (v) all information required to be reported under the Grant Agreement; and (vi) any other information that Recipient may request to demonstrate that the ARPA funds were used solely for Authorized Activities in accordance with this Agreement. The 5 Subrecipient shall include with the report a certification that it used the ARPA funds solely for Authorized Activities in accordance with the terms of this Agreement.

9. Notices. Any notice, request, report, or demand under this Agreement must be in writing and will be considered properly given and effective only when mailed or delivered in the manner provided by this section 9 to the persons identified below or their successors. A mailed notice, application, request, report, or demand will be effective or will be considered to have been given on the third calendar day after it is deposited in the United States Mail (certified mail and return receipt requested), addressed as set forth below, with postage prepaid. A notice, application, request, report, or demand sent in any other manner will be effective or will be considered properly given when actually delivered. Any party may change its address for these purposes by giving written notice of the change to the other party in the manner provided in this section.

If to the Recipient:

City of Vallejo
555 Santa Clara St.

Vallejo, CA 94590
Attn: Andrew Murray, City Manager
With a copy to:

City of Vallejo
555 Santa Clara St., 3rd Floor
Vallejo, CA 94590
Attn: Veronica Nebb, City Attorney

If to the Subrecipient:

Firm Foundation Community Housing
1035 B St. Unit B
Hayward, CA 94541
Attn: Taryn Sandulyak, Vice President

10. Indemnity. The Subrecipient shall defend, hold harmless and indemnify the County of Solano and the City of Vallejo and their respective officers, employees, agents, and elective and appointive boards and commissions, and each and every one of them (“Indemnitees”), from all claims, losses, damages, including property damages, personal injury, death and liability of every kind, directly or indirectly arising from Subrecipient’s operations or from any persons directly or indirectly employed by, or acting as agent for, Subrecipient, excepting the sole negligence or willful misconduct of the Indemnitees. This indemnification shall extend to claims, losses, damages, injury and liability for injuries occurring after Subrecipient’s services, as well as during the progress of rendering such services. Acceptance of insurance required by this Agreement does not relieve Subrecipient from liability under this Indemnification clause. This indemnification clause shall apply to all damages or claims from damages suffered by Subrecipient’s operations regardless of whether any insurance is applicable 6 or not. Subrecipient’s duty to indemnify the Indemnitees shall survive the term of this Agreement.

11. Insurance. During the term of this Agreement, the Subrecipient shall maintain insurance coverage as follows:

A. Minimum Scope of Insurance.

1. Insurance Services Office Commercial General Liability coverage (occurrence Form CG 00 01).

2. Insurance Services Office Form Number CA 00 01 covering Automobile Liability, Code 1 (any auto).

3. Worker’s Compensation insurance as required by the State of California and Employer’s Liability Insurance.

B. Minimum Limits of Insurance. Subrecipient must maintain limits no less than:

1. General Liability (including operations, products and completed operations): $2,000,000 per occurrence for bodily injury and property damage, or the full per occurrence limits of the policy, whichever is great. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.

3. Workers’ Compensation: As required by the State of California.

4. Employer’s Liability: $1,000,000 per accident for bodily injury or disease.

C. If Subrecipient maintains higher limits than the minimums shown above, Recipient is entitled to coverage for the higher limits maintained by Subrecipient. Any insurance proceeds in excess of the specified limits and coverage required, which are applicable to a given loss, shall be available to the Recipient. No representation is made that the minimums shown above are sufficient to cover the indemnity or other obligations of the Subrecipient under this Agreement.

1. The general liability and automobile policies must contain, or be endorsed to contain, the following provision:
a. The County of Solano, the City of Vallejo, and their respective officers, officials, agents, employees, and volunteers must be included as additional insureds with respect to liability arising out of automobiles owned, leased, hired, or borrowed by or on befall the Subrecipient; and with respect to liability arising out of work 7 or operations performed by or on behalf of Subrecipient including materials, parts or equipment furnished in connection with such work or operations. General Liability coverage shall be provided in the form of an Additional Insured endorsement (CG 20 10 11 85 or both CG 20 10 and CG 20 37 if later ISO revisions are used or the equivalent) to Subrecipient’s insurance policy, or as a separate owner’s policy. The insurance afforded to the additional insureds shall be at least as broad as that afforded to the first-named insured.

2. The Subrecipient shall furnish the Recipient with certificates evidencing the insurance required. The certificates must be forwarded to the City of Vallejo Risk Manager. Copies of policies must be delivered to the Risk Manager on demand. Certificates of insurance must be signed by an authorized representative of the insurance carrier.

12. Conflicts of Interest. The Subrecipient, its officers, directors, employees, agents, and subcontractors shall not have or acquire any interest, directly or indirectly, that creates an actual or apparent conflict with the interests of the Recipient or the County of Solano or that in any way hinders the Subrecipient’s performance under this Agreement.

13. Miscellaneous.
a.Assignment. The Subrecipient may not assign or otherwise transfer this Agreement or any interest in it without Recipient’s written consent, which the Recipient may grant or deny in its sole discretion. An assignment or other transfer made contrary to this Section 13(a) is void.
b.Successors and Assigns. This Agreement binds and inures to the benefit of the successors and assigns of the parties. This section 13(b) does not constitute the Recipient’s consent to any assignment of this Agreement or any interest in this Agreement.
c.Interpretation. Words used in the singular number shall include the plural, and vice-versa and any gender shall be deemed to include each other gender. The captions and headings of the Sections of this Agreement are for convenience of reference only and shall not be deemed to define or limit the provisions hereof. d.Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. This Agreement shall be governed by and construed in accordance with the laws of the State of California. All obligations under this Agreement are performable in Solano County, California; and any litigation concerning, relating to, or arising under this Agreement shall be filed in the superior court of California, Solano County.
e.Waiver of Breach. A party’s failure to insist on strict performance of this Agreement or to exercise any right or remedy upon the other party’s breach of this Agreement will not constitute a waiver of the performance, right, or remedy. A party’s waiver of the other party’s breach of any term or provision in this Agreement is not a continuing waiver or a waiver of any subsequent breach of the same or any other term or provision. A 8 waiver is binding only if set forth in writing and signed by the waiving party. f.Severability. If a court with jurisdiction rules that any nonmaterial part of this Agreement is invalid, unenforceable, or contrary to law or public policy, then the rest of this Agreement remains valid and fully enforceable.
g.Counterparts. The parties may sign this Agreement in counterparts, each of which is considered an original, but all of which constitute the same agreement.

Facsimiles, pdfs, and photocopies of signature pages of the agreement have the same binding effect as originals.
h.Time of Essence. Time is of the essence in performing this Agreement.
i.Authority to Sign. The person signing this Agreement on Subrecipient's behalf represents that he or she is authorized to do so and that no further action beyond his or her signature is required to bind Subrecipient to this Agreement.

Recipient shall have no obligations whatsoever under this Agreement, unless and until this Agreement is executed by the City Manager or the City Manager’s authorized designee. j.Compliance with all Laws, Requirements, and Orders. The Subrecipient shall comply with all applicable laws, regulations, orders of public officials, and requirements in connection with this Agreement, including all non-discrimination and equal opportunity laws to ensure that Subrecipient does not deny benefits or services or otherwise discriminate on the basis of race, color, national origin (including limited English proficiency), disability, age, or sex (including sexual orientation and gender identity). k.Tax Implications and Consequences. The Recipient makes no representations as to the tax consequences associated with the disbursement of ARPA funds related to this Agreement, and any determination related to this issue is the sole responsibility of the Subrecipient. Subrecipient acknowledges consulting with its own tax advisors or tax attorneys regarding this transaction or having had an opportunity to do so prior to signing this Agreement. Subrecipient acknowledges that the Recipient cannot provide advice regarding the tax consequences or implications of the ARPA funds disbursed to Subrecipient under the terms of this Agreement.
l.Integration and Modification. This Agreement sets forth the parties’ entire understanding regarding the matters set forth above and is intended to be their final, complete, and exclusive expression of those matters. It supersedes all prior or contemporaneous agreements, representations, and negotiations—written, oral, express, or implied—and may be modified only by another written agreement signed by both parties. m.Attachments. Attachment 1 to this Agreement is incorporated herein by reference.
(Signature Page Follows)
11 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year shown below the name of each of the parties.

FIRM FOUNDATION COMMUNITY
HOUSING, a California nonprofit public
benefit corporation
By:

Taryn Sandulyak, Executive Director
DATE:

Vallejo Business License No.
(City Seal)

CITY OF VALLEJO,
a municipal corporation
By:

Andrew Murray, City Manager
DATE:

ATTEST:

By:

Dawn G. Abrahamson, City Clerk
APPROVED AS TO FORM:

Veronica A. F. Nebb, City Attorney
APPROVED AS TO INSURANCE:

Armond Sarkis, Risk Manager
12 ATTACHMENT 1
[STANDARD CONTRACT NUMBER COV-01-ARPA]
1 Subrecipient Agreement between
Firm Foundation Community Housing and the City of Vallejo Infill Infrastructure Grant Program
This SUBRECIPIENT AGREEMENT ("Agreement") is made at Vallejo, California, dated for reference this 25th day of September 2024, by and between the City of Vallejo, a municipal corporation, and Firm Foundation Community Housing, a California nonprofit public benefit corporation.

RECITALS
A. Firm Foundation Community Housing is the owner and developer of the affordable housing development known as the Broadway Project, located at 2441 Broadway in Vallejo, California.

B. On June 16, 2022, the City of Vallejo applied to the California Department of Housing and Community Development (“Department”) for a grant under the Infill Infrastructure Grant Program of 2019 on behalf of Firm Foundation Community Housing for the Broadway Project and received a grant in an amount not to exceed Two Million Five Hundred and Fifty-Nine Thousand Six Hundred and Fifty Dollars and Zero Cents ($2,559,650.00) (“Grant Funds”) pursuant to Standard Agreement Number 22-IIG-17825, entered into by the City of Vallejo (“Recipient”) and the Department on October 26, 2023 (“Grant Agreement”). The Application, Grant Agreement, Disbursement Agreement and all amendments, exhibits and attachments thereto are referred to collectively herein as the “Grant Documents.”
C. This Agreement is intended to memorialize the terms under which Firm Foundation Community Housing, referred to herein as the “Subrecipient,” is to receive and implement the Grant Funds.

Now therefore, Recipient and Subrecipient agree as follows:

AGREEMENT

1. Recitals. The above recitals are true and correct and are incorporated herein by reference.

2. Term. This Agreement takes effect as of October 26, 2023 (the “Effective Date”) and terminates June 30, 2030, unless terminated earlier as set forth in Section 7, below.

2 3. Disbursement of Funds. Recipient will disburse to the Subrecipient up to a maximum of $2,559,650.00 in accordance with Section 5, below.

4. Authorized Activities. The following terms apply to the Subrecipient’s activities and expenditures related to this Agreement:
a. The Subrecipient is only authorized to use the Grant Funds solely for costs it incurs that are necessary for completion of the construction of the Broadway Project including clearing, demolition, excavation, grading, soil stabilization, retaining wall creation, erosion control, sewer utility connection, water utility connection, storm drain connection, joint trench, surface improvements, tree mitigation, foundation work, impact fees and design costs as set forth in Exhibit E, paragraph 1, of the Grant Agreement (“Scope of Work”) and for no other purpose (“Authorized Activities”). b. Any costs that are determined by subsequent audit to be unallowable are subject to repayment by the Subrecipient to the Recipient within 60 days of being notified of same unless the Recipient approves in writing an alternative repayment plan. c. Subrecipient shall complete such Scope of Work in compliance with the Grant Documents, the Guidelines, the Department, and the State of California, and shall act in good faith to provide Recipient with such information, consultation, certifications, and to take such other actions in relation to such Scope of Work as may be necessary and reasonable to ensure Recipient is able to timely deliver the Broadway Project and meet its obligations under the Grant Documents, including but not limited to site control, reporting, and Department monitoring of the Broadway Project.

5. Reimbursement. The Recipient will make payments to the Subrecipient in arrears as follows. On a monthly basis, the Subrecipient shall provide the Recipient with: (i) an invoice that includes a description of work performed, material supplied, and/or costs incurred for which the reimbursement is requested; (ii) copies of all receipts for expenses paid during the period; and (iii) unconditional lien releases for construction costs paid with the proceeds of prior reimbursement requests and conditional (upon receipt of payment) lien releases for construction costs to be paid with the proceeds of the present reimbursement request. The Subrecipient shall submit any additional data and/or information requested by the Recipient to support the Subrecipient’s reimbursement request and shall submit any additional data and/or information that may be required for reporting by the Recipient to the Department under the Grant Documents.

The Recipient reserves the right to withhold payment of unauthorized amounts. No reimbursement will be made which would cause the distribution of Grant Funds to exceed the not-to-exceed amount set forth in Section 3. The Recipient shall remit payment to Subrecipient within a reasonable time after invoice approval.

6. Books and Records. During the term of this Agreement and for five years after the termination or expiration of this Agreement, the Subrecipient shall keep appropriate books, records, and accounts in connection with the Grant Funds and 3 activities performed under this Agreement and is subject to the following:
a. The Subrecipient shall maintain all records related to this Agreement in accordance with generally accepted accounting practices, including the following records:
(i) general ledger and subsidiary ledgers used to account for the receipt of the Grant Funds and the disbursements of Grant Funds to meet eligible expenses; (ii) budget records for all fiscal years covered by this Agreement; (iii) payroll, time records, human resource records to support costs incurred for payroll expenses related to this Agreement; (iv) receipts of purchases made related to this Agreement; and (v) contracts and subcontracts entered into using Grant Funds and all documents related to such contracts. b. The Subrecipient shall make its books, records, and accounts (both those that relate to this Agreement and those that do not), employees, performance-related records, property, and equipment related to this Agreement available to the Recipient’s Finance Director, Auditor, and any independent auditor at all reasonable times so that the Finance Director, Auditor, or an independent auditor may determine whether the Subrecipient has complied with this Agreement. If the Recipient requests, the Subrecipient shall obtain and provide to the Recipient, at the Subrecipient’s sole cost, an independent financial audit of the Subrecipient’s use of the Grant Funds. c. Upon written demand by the Recipient, Subrecipient shall reimburse the Recipient for all Grant Funds that the Finance Director, Recipient Auditor, or an independent auditor determines were expended for activities other than Authorized Activities in accordance with this Agreement, with reimbursement to be by check payable to the Recipient and delivered to the Recipient at the address shown in Section 9.

7. Termination. The Recipient may terminate this Agreement if the City Manager determines that:
a. The Subrecipient has failed to perform, or has performed unsatisfactorily, any provision or requirement of this Agreement, including failing to use the Grant Funds solely for Authorized Activities;
b. The Subrecipient has made (with or without knowledge) any material misrepresentation of any nature with respect to any information or statements furnished to Recipient in connection with this Agreement; or
c. There is pending litigation with respect to the performance by Subrecipient of any of its duties or obligations under this Agreement that may materially jeopardize or adversely affect the undertaking of or the carrying out of the Authorized Activities.

8. Other Requirements. In connection with its activities and expenditures related to this Agreement, the Subrecipient shall do the following:
a. The Subrecipient shall provide security to assure completion of the 4 Scope of Work with Performance and Payment Bonds or a Letter of Credit, which shall remain in effect during the entire term of construction of the Broadway Project and which shall be in a form and from an issuer which is acceptable to the Recipient. The Performance Bond shall be in an amount at least equal to one hundred percent (100%) of the approved construction costs to provide security for the faithful performance of the Grant Agreement including a warranty period of at least 12 months after completion. The Payment Bond shall be in an amount at least equal to one hundred percent (100%) of the approved construction costs to provide security for the payment of all persons performing labor on the Project and furnishing materials in connection with the Project. If a Letter of Credit is used, it shall be in an amount equal to at least 20% of the approved construction costs. The Recipient and Department shall be named as an additional obligee in the Bonds or beneficiary under a Letter of Credit.
b. Subrecipient agrees to use a general contractor or contractors (“Contractor”). Any successor to or substitute for the Contractor shall be subject to the approval of the Recipient. Subrecipient hereby certifies that the Contractor is in good standing with the California State Contractors' License Board. Subrecipient shall only contract with contractors who are so licensed and will require that the Contractor, and any successor thereto, shall only contract with contractors and subcontractors who are so licensed.
c. Subrecipient shall enter into a written contract or contracts with the Contractor for the performance of the Scope of Work (the “Construction Contract”).

Recipient shall not terminate or substantially amend the Construction Contract with respect to the Broadway Project without the prior written approval of the Recipient. Subrecipient shall monitor and enforce the terms and conditions of the Construction Contract to ensure completion of the Scope of Work. The Construction Contract shall contain provisions for compliance with State Prevailing Wage Law as required by the Grant Documents and the Guidelines.
d. Subrecipient shall not purchase or install or permit to be purchased or installed any materials, equipment, fixtures or other part of the Broadway Project under any agreements or arrangements wherein the supplier or seller reserves or purports to reserve the right to remove or to repossess any such items or to consider them personal property after their incorporation into the Broadway Project, unless authorized in writing by the Recipient.
e. If a claim of lien is recorded affecting the Broadway Project, or a stop notice is served upon the Recipient which affects the Grant Funds or any other funding for the Broadway Project, Subrecipient shall, within twenty (20) days of such recording or service or within five (5) days of the Recipient’s demand (whichever last occurs): (i) pay and fully discharge the same; (ii) effect the release thereof by recording or delivering to the Recipient a surety bond in sufficient form and amount, or otherwise; or (iii) provide the Recipient with other assurance which the Recipient deems, in its sole discretion, to be satisfactory for the payment of such lien or stop notice and for the full and continuous protection of the Recipient from the effect of such lien or stop notice. If Subrecipient has 5 not received actual notice of the claim of lien or stop notice prior to the Recipient’s demand, then the five- (5-) day period described above shall be extended to twenty (20) days.

Subrecipient shall give the Recipient prompt written notice of all lien claims affecting the Broadway Project.
f. Subrecipient acknowledges that the Department has the right to inspect the Broadway Project during construction. Inspection of the Broadway Project shall be for the sole purpose of protecting the Department’s interest and is not to be construed as a representation by the Department that there has been compliance with plans or that the Broadway Project will be free of faulty materials or workmanship. g. Subrecipient shall be responsible for all applicable obligations of Recipient set forth in the Grant Agreement, which agreement is attached hereto as Exhibit A and incorporated herein by reference.

9. Notices. Any notice, request, report, or demand under this Agreement must be in writing and will be considered properly given and effective only when mailed or delivered in the manner provided by this Section 9 to the persons identified below or their successors. A mailed notice, application, request, report, or demand will be effective or will be considered to have been given on the third calendar day after it is deposited in the United States Mail (certified mail and return receipt requested), addressed as set forth below, with postage prepaid. A notice, application, request, report, or demand sent in any other manner will be effective or will be considered properly given when actually delivered. Any party may change its address for these purposes by giving written notice of the change to the other party in the manner provided in this section.

If to the Recipient:

City of Vallejo
555 Santa Clara St.

Vallejo, CA 94590
Attn: Andrew Murray, City Manager
With a copy to:

City of Vallejo
555 Santa Clara St., 3rd Floor
Vallejo, CA 94590
Attn: Veronica Nebb, City Attorney

If to the Subrecipient:

Firm Foundation Community Housing
1035 B St. Unit B
Hayward, CA 94541
Attn: Taryn Sandulyak, Vice President
6 10. Indemnity. Subrecipient shall defend and hold harmless the Recipient, its officers, employees, and agents and the City, its officers, employees and agents, and each and every one of them (“Indemnitees”) from and against any and all actions, damages, costs, liabilities, claims, demands, losses, judgements, penalties, costs and expenses of every type and description, including but not limited to, any fees and/or costs reasonably incurred by the Indemnitees arising out of or relating to this Agreement and/or any acts or omissions of Recipient (collectively, “Liabilities”), including Liabilities arising from personal injury or death, damage to personal, real, or intellectual property or the environment, contractual or other economic damages, or regulatory penalties, which the Indemnitees may incur as a direct or indirect consequence of; (i) Subrecipient’s failure to perform any obligations as and when required by this Agreement or the Grant Documents; (ii) any failure at any time of any of Subrecipient’s representations or warranties to be true and correct; or (iii) any act or omission by Subrecipient, any contractor, subcontractor, materials supplier, engineer, architect, or other person or entity with respect to the Broadway Project. Subrecipient shall pay immediately, upon demand by Recipient, any amounts owning under this indemnity together with interest from the date the indebtedness arises until paid at the rate of 10% per annum. The duty of Subrecipient to indemnify and hold harmless includes the duties to defend as set forth in Section 2278 of the Civil Code. Subrecipient shall indemnify and hold harmless the Indemnitees as set forth herein regardless of the existence or degree of fault or negligence whether active or passive, primary or secondary on the part of the Indemnitees or the Subrecipient; provided, however, that Subrecipient’s duty to Indemnify and hold harmless hereunder shall not extend to liability arising from gross negligence or willful misconduct on the part of the Indemnitees. Subrecipient’s duty to indemnify the Indemnitees shall survive the term of the Agreement.

11. Insurance.

A. During the term of this Agreement, the Subrecipient shall maintain, and ensure that its Contractor maintains, insurance coverage as follows

1. All insurance shall be kept in full force and effect from the beginning of the work through contract acceptance.

2. All insurance shall be with an insurance company with a rating from A.M. Best Financial Strength Rating of A or better and a Financial Size Category of VII or better.

3. Coverage shall include completed operations coverage with a carrier acceptable to the Recipient through the expiration of the patent deficiency in construction statute of repose set forth in Code of Civil Procedure Section 337.1.

B. WORKERS’ COMPENSATION AND EMPLOYERS’ LIABILITY INSURANCE

1. In accordance with Labor Code Section 1860, the Subrecipient or its Contractor shall secure the payment of worker’s compensation in accordance with Labor Code Section 3700.
7 2. In accordance with Labor Code Section 1861, the Subrecipient shall submit to the Recipient the following certification before performing the work:
a. I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.

3. Contract execution constitutes certification submittal.

4. Employer’s Liability Insurance in amounts not less than:
a. $1,000,000 for each accident for bodily injury by accident; b. $1,000,000 policy limit for bodily injury by disease; c. $1,000,000 for each employee for bodily injury by disease.

C. GENERAL LIABILITY INSURANCE

1. General Liability and Umbrella or Excess Liability Insurance covering all operations by or on behalf of the Subrecipient providing insurance for bodily injury liability and property damage liability for the following limits and including coverage for:
a. Premises, operations, and mobile equipment;
b. Products and completed operations;
c. Broad form property damage (including completed
operations);
d. Explosion, collapse, and underground hazards;
e. Personal injury;
f. Contractual liability.

2. Contractor’s certified Small Business subcontractors shall not be required to carry Liability Insurance that exceeds the limits in Section 2.D.1, “Liability Limits/Additional Insureds,” of these specifications. The maximum required Liability Insurance limits in Section 2.D.1, “Liability Limits/Additional Insureds,” of these specifications shall apply to certified Small Business subcontractors for work performed on the project, regardless of tier. The provisions of Section 2.D.1, “Liability Limits/Additional Insureds,” shall be included in all subcontracts for all tiers. 8 D. LIABILITY LIMITS/ADDITIONAL INSUREDS

1. The limits of liability shall be at least the amounts shown in the following table:

Construction
Contract
Amount
For Each
Occurrence
Aggregate for
Products/Completed
Operation
General
Aggregate
Umbrella or
Excess
Liability
<$1,000,000 $1,000,000 $2,000,000 $2,000,000 $5,000,000 >$1,000,000
<$15,000,000
$1,000,000 $2,000,000 $2,000,000 $10,000,000
>$15,000,000
<$25,000,000
$2,000,000 $2,000,000 $4,000,000 $15,000,000
>$25,000,000 $2,000,000 $2,000,000 $4,000,000 $25,000,000

1. Combined single limit for bodily injury and property damage.

2. This limit shall apply separately to the Contractor’s work under this contract.

3. The umbrella or excess policy shall contain a clause stating that it takes effect (drops down) in the event the primary limits are impaired or exhausted.

4. “Construction Contract Amount” is the total amount of the construction contract all or a portion of which is funded with IIG funds.

2. The State, including its officers, directors, agents (excluding agents who are design professionals), and employees, shall be named as additional insureds under the General Liability and Umbrella Liability Policies with respect to liability arising out of or connected with work or operations performed by or on behalf of the Contractor under this contract. Coverage for such additional insureds does not extend to liability:
a. Arising from any defective or substandard condition of the roadway which existed at or before the time the Contractor started work, unless such condition has been changed by the work or the scope of the work requires the Contractor to maintain existing roadway facilities and the claim arises from the Contractor’s failure to maintain;
b. For claims occurring after the work is completed and accepted unless these claims are directly related to alleged acts or omissions of the Contractor that occurred during the course of the work; or
c. To the extent prohibited by Insurance Code Section 11580.04

3. Additional insured coverage shall be provided by a policy provision or by an endorsement providing coverage at least as broad as Additional Insured (Form B) endorsement form CG 2010, as published by the Insurance Services Office (ISO), or other form designated by the Department.

E. CONTRACTOR’S INSURANCE POLICY IS PRIMARY. The policy shall stipulate that the insurance afforded the additional insureds applies as primary insurance. 9 Any other insurance or self-insurance maintained by the State is excess only and shall not be called upon to contribute with this insurance.

F. AUTOMOBILE LIABILITY INSURANCE. The Contractor shall carry automobile liability insurance, including coverage for all owned, hired, and non-owned automobiles. The primary limits of liability shall be not less than $1,000,000 combined single limit each accident for bodily injury and property damage. The umbrella or excess liability coverage required under Section 2.D.1 also applies to automobile liability.

G. POLICY FORMS, ENDORSEMENTS, AND CERTIFICATES. The Contractor shall provide its General Liability Insurance under Commercial General Liability policy form No. CG0001 as published by the Insurance Services Office (ISO) or under a policy form at least as broad as policy form No. CG0001.

12. Conflicts of Interest. The Subrecipient, its officers, directors, employees, agents, and subcontractors shall not have or acquire any interest, directly or indirectly, that creates an actual or apparent conflict with the interests of the Recipient or that in any way hinders the Subrecipient’s performance under this Agreement.

13. Assignment. The Subrecipient may not assign or otherwise transfer this Agreement or any interest in it without the Recipient’s written consent, which the Recipient may grant or deny in its sole discretion. An assignment or other transfer made contrary to this Section 13 is void.

14. Successors and Assigns. This Agreement binds and inures to the benefit of the successors and assigns of the parties. This section 14 does not constitute the Recipient’s consent to any assignment of this Agreement or any interest in this Agreement.

15. Interpretation. This Agreement is to be interpreted and applied in accordance with California law.

16. Waiver of Breach. A party’s failure to insist on strict performance of this Agreement or to exercise any right or remedy upon the other party’s breach of this Agreement will not constitute a waiver of the performance, right, or remedy. A party’s waiver of the other party’s breach of any term or provision in this Agreement is not a continuing waiver or a waiver of any subsequent breach of the same or any other term or provision. A waiver is binding only if set forth in writing and signed by the waiving party.

17. Severability. If a court with jurisdiction rules that any nonmaterial part of this Agreement is invalid, unenforceable, or contrary to law or public policy, then the rest of this Agreement remains valid and fully enforceable.

18. Counterparts. The parties may sign this Agreement in counterparts, each of which is considered an original, but all of which constitute the same agreement. Facsimiles, pdfs, and photocopies of signature pages of the agreement have the same binding effect as originals.
10 19. Time of Essence. Time is of the essence in performing this Agreement.

20. Authority to Sign. The person signing this Agreement on Subrecipient’s behalf represents that he or she is authorized to do so and that no further action beyond his or her signature is required to bind Subrecipient to this Agreement. Recipient shall have no obligations whatsoever under this Agreement, unless and until this Agreement is executed by the City Manager or the City Manager’s authorized designee.

21. Compliance with all Laws, Requirements, and Orders. The Subrecipient shall comply with all applicable laws, regulations, orders of public officials, and requirements in connection with this Agreement, including all non-discrimination and equal opportunity laws to ensure that Subrecipient does not deny benefits or services or otherwise discriminate on the basis of race, color, national origin (including limited English proficiency), disability, age, or sex (including sexual orientation and gender identity).

22. Tax Implications and Consequences. The Recipient makes no representations as to the tax consequences associated with the disbursement of Grant Funds related to this Agreement, and any determination related to this issue is the sole responsibility of the Subrecipient. Subrecipient acknowledges consulting with its own tax advisors or tax attorneys regarding this transaction or having had an opportunity to do so prior to signing this Agreement. Subrecipient acknowledges the Recipient cannot provide advice regarding the tax consequences or implications of the Grant Funds disbursed to Subrecipient under the terms of this Agreement.

23. Integration and Modification. This Agreement sets forth the parties’ entire understanding regarding the matters set forth above and is intended to be their final, complete, and exclusive expression of those matters. It supersedes all prior or contemporaneous agreements, representations, and negotiations—written, oral, express, or implied—and may be modified only by another written agreement signed by both parties. (Signature page follows)
11 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year shown below the name of each of the parties.

FIRM FOUNDATION COMMUNITY
HOUSING., a California nonprofit public
benefit corporation
By:

Taryn Sandulyak, Vice President
DATE:

Vallejo Business License No.
(City Seal)

CITY OF VALLEJO,
a municipal corporation
By:

Andrew Murray, City Manager
DATE:

ATTEST:

By:

Dawn G. Abrahamson, City Clerk
APPROVED AS TO FORM:

Veronica A. F. Nebb, City Attorney
APPROVED AS TO INSURANCE:

Armond Sarkis, Risk Manager
12 EXHIBIT A
[Attach IIG Agreement]
1 RECORDING REQUESTED BY AND
AFTER RECORDATION, MAIL TO:

City of Vallejo
Attn: City Clerk
555 Santa Clara Street
Vallejo, CA 94590
APN.: 0067-140-150No Recording Fees per Gov. Code §27383

OPTION AGREEMENT
THIS Option Agreement (this “Agreement”) is granted this 25th day of September 2024 (the “Effective Date”) by FIRM FOUNDATION COMMUNITY HOUSING, a California nonprofit public benefit corporation (“Optionor”), to the CITY OF VALLEJO, a municipal corporation (“Optionee”).

RECITALS
WHEREAS, Optionor is the owner of real property in Solano County, referred to in this Agreement as the “Property,” commonly known as 2441 Broadway in Vallejo, California and more particularly described in the real estate transfer agreement attached hereto as Exhibit A, which by this reference made a part of this Agreement (the “Real Property Transfer Agreement”); and
WHEREAS, Optionee desires to acquire the exclusive right and option to acquire the Property under specified terms and conditions, without becoming obligated to purchase the Property.

AGREEMENT
NOW THEREFORE, the parties agree as follows:

1. Grant of Option. The Optionor grants to the Optionee the exclusive right and option to purchase the Property at the price and under the terms and conditions set forth in the Real Property Transfer Agreement (such right, the “Option”).

2 2.Term of Option. The term of this Option shall commence on the Effective Date and, unless extended pursuant to Paragraph 7 below, shall expire or terminate on December 31, 2026 (“Initial Term”). At any time prior to the expiration of the Initial Term, Optionor may enter into an agreement to sell the Property to a creditworthy bona fide third party with relevant experience owning or operating affordable housing projects for a purchase price equal to or greater than the amount of the “Purchase Price” as set forth in the Real Property Transfer Agreement, with the prior written consent of the Optionee. At any time during the Extended Term, Optionor may enter into an agreement to sell the Property to a creditworthy bona fide third party with relevant experience owning or operating affordable housing projects for a purchase price equal to or greater than the amount of the “Purchase Price” as set forth in the Real Property Transfer Agreement. In the event that Optionor enters into an agreement with a third party to sell the property, Optionor shall notify the Optionee in writing and upon said notice, Optionee shall have 90 days to exercise its Option to purchase the property for a purchase price equal to that set forth in paragraph 3 below.

3. Amount of Consideration. This Option is granted in consideration of Optionee’s payment to Optionor of the sum of $1.00, receipt of which is hereby acknowledged by this Agreement.

4. Application of Consideration to Purchase Price. If this Option or any extension of this Option is exercised in accordance with its terms, then the consideration paid to Optionor by Optionee shall be credited against the purchase price of the Property.

5. Retention of Consideration. If this Option or any extension of this Option is not exercised in accordance with the terms and conditions of this Agreement, all sums paid to Optionor by Optionee shall be retained by Optionor in consideration of the granting of this Option.

6. Exercise of Option. Optionee may exercise this Option by execution and tender to Optionor of the Real Property Transfer Agreement. Optionor shall immediately execute and deliver to Optionee an executed copy of the Real Property Transfer Agreement within five days. If this Option is properly exercised, the Optionor and Optionee will perform respectively, as “Transferor” and “Transferee,” the obligations stated in the Real Property Transfer Agreement.

7. Extension of Option. Following the expiration of the Initial Term, Optionee may extend this Option on a year-to-year basis for five (5) years for the consideration of $1.00 per year (“Extended Term”).
3 If Optionee fails to extend the Option in accordance with this Agreement, but later tenders the sum of money required for an extension, the Optionor may accept that sum of money and extend the Option or, reject it and terminate the Option.

8. Covenants and Warranties of Optionor. Through the term of this Option, and any extension thereof, Optionor warrants it shall: (a) maintain Property during construction of the Project and following the receipt of all certificates of occupancy for the Project, Optionor shall maintain operating services, utilities, maintenance, and repair at Optionor’s sole cost; (b) refrain from committing any waste or nuisance upon the Property; (c) observe all known laws, ordinances, regulations, and restrictions affecting the Property and its use; (d) preserve the use, possession, and management of the Property and not execute or enter into leases or other contracts with regards to the operation of the Property, including any equipment maintenance or service contracts beyond the option Term or extension thereof, unless first approved in writing by Optionee; and (e) provide to Optionee copies of all documents, reports, studies, maps, surveys, current leases, current maintenance agreements, historical data, or other materials that are in Optionor’s possession or control that pertain to the Property.

9. Automatic Termination. If Optionee fails to exercise the Option in accordance with the terms of this Agreement within the option period or any extension thereto, then the Option granted by this Agreement, and the Optionee’s rights under it, shall automatically and immediately terminate without notice. Immediately on termination under this Paragraph 9, the Optionee shall properly execute, acknowledge, and deliver to Optionor within 14 days of request, a release, quitclaim deed, or any other document required by Optionor or a title insurance company to verify the termination of the Option.

10. Option Assignable. Optionee shall have the right to assign this Option at any time during the Option Term.

11. Notices. Unless otherwise provided in this Agreement, any notice, tender, or delivery to be given by either party to the other may be effected by personal delivery in writing or by registered or certified mail, postage prepaid, return receipt requested, or by email with delivery receipt requested, or by facsimile transmission with a confirmation copy to be sent by mail, and shall be deemed received as of actual receipt. Notices shall be addressed as set forth below, but each party may change its address by written notice in accordance with this Paragraph 11.

If to Optionor:
4 Firm Foundation Community Housing
1035 B Street Unit B
Hayward, CA 94541
Attn: Executive Director
Email: [email protected]
With a copy to:

Fennemore
1111 Broadway, 24th Floor
Oakland, CA 94607
Attention: Amara L. Morrison, Esq.

Fax: 510.834.1928
Email: [email protected]
If to Optionee:

Andrew Murray
City Manager
City of Vallejo
555 Santa Clara St.

Vallejo, CA 94590
Fax: 707-648-4576
Email: [email protected]
With a copy to:

Veronica Nebb
City Attorney
City of Vallejo
555 Santa Clara St.

Vallejo, CA 94590
Fax: 707-648-4545
Email: [email protected]

12. Attorney’s Fees. In the event of any controversy, claim, or dispute between the parties to this Agreement, arising out of or relating to this Agreement or any breach of it, the prevailing party shall be entitled, in addition to any other relief that may be granted, to a reasonable sum for attorney’s fees in the litigation. The attorney’s fees shall be determined by the court in that litigation or in a separate action brought for that purpose.
5 13. Binding Effect. This Agreement shall bind and inure to the benefit of its parties, their respective heirs or successors, and assigns, as expressly provided in this Agreement.

14. Governing Law and Choice of Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California. All obligations under this Agreement are performable in Solano County, California; and any litigation concerning, relating to, or arising under this Agreement shall be filed in the superior court of California, Solano County.
(SIGNATURES ON THE FOLLOWING PAGE)
6 IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

OPTIONOR:

FIRM FOUNDATION COMMUNITY HOUSING,
a California nonprofit public benefit corporation
By:

Taryn Sandulyak,
Executive Director
OPTIONEE:

CITY OF VALLEJO,
a municipal corporation
By:

Andrew Murray,
City Manager
7 Exhibit A
[Attach Real Property Transfer Agreement].

REAL PROPERTY TRANSFER AGREEMENT
THIS REAL PROPERTY TRANSFER AGREEMENT (“Agreement”) is made and entered into as of the ______ day of 20___ (“Effective Date”), by and between Firm Foundation Community Housing, a California nonprofit community benefit corporation (“Transferor”) and the City of Vallejo, a California charter city (“Transferee”).

RECITALS
A. Transferor is the owner of that certain real property located at 2441 Broadway Street, Vallejo, California (Assessor Parcel No.: 0067-140-150) and more particularly described in Exhibit A attached hereto (“Real Property”), together with all improvements, rights, privileges, easements, and appurtenances; all personal property, equipment, supplies, and fixtures owned by Transferor and located at the Real Property; and Transferor’s interest as lessor in any leases of the Real Property, or any portion thereof (collectively, the “Property”).

Transferor is constructing a new affordable multifamily apartment project consisting of [48] units to be known as the “Broadway Project” on the Real Property. For the purposes of this Agreement, “Improvements” shall be defined as set forth in the Broadway Project Improvement Agreement.

B. Transferee desires to acquire ownership of the Property and Transferor desires to transfer the Property to Transferee on the terms and conditions in this Agreement.

NOW THEREFORE, for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree as follows:

1. Real Property Transfer.

Subject to the terms and conditions of this Agreement, Transferor agrees to transfer, and Transferee agrees to accept the Property.

2. Purchase Price.
(a) Escrow. The transfer of the Property shall be handled through an escrow (“Escrow”) to be opened with Old Republic Title Company in Vallejo, California or such other title company as may be mutually acceptable to Transferee and Transferor (“Escrow Agent”).

(b) Price. The purchase price of the Property shall be One Dollar ($1.00) plus the assumption of all debt encumbering the Property (“Purchase Price”), in consideration of the substantial investment of public monies made by the Transferee to the Broadway Project.

3. Review of Property.

Upon execution of this Agreement, Transferor shall:
(a) Provide Transferee with reasonable access to the Property to inspect the Property, following 24-hour prior advance notice from Transferee, except in the case of emergency, to determine its present condition. This shall include the right of physical inspections to the property and the following, each of which is subject to specific written verification by Transferee:
i. Physical Inspection of the Property, including testing as otherwise set forth in this agreement, and acceptance of the condition. Transferee shall indemnify Transferor for any costs, expenses or damages incurred arising from or relating to any physical inspection of the Property conducted by the Transferee, any of its agents or employees.
ii. Transferor shall provide a list identifying, to Transferor's knowledge, if any, the location of all known hazardous
materials, asbestos, or lead-based paint present on the Property. Transferor shall also provide all documentation, including but not limited to reports, if any, in Transferor's possession, custody or control concerning the actual
presence of hazardous materials, asbestos, or lead-based paint present on the Property at any time.
(b) Documentation, Reports and Records. Transferee's review and approval of the following documentation, reports and records related to the Property. i. Title Report and Documents:

1. A current preliminary title report on the Property
accompanied by copies of all documents referred to
in the preliminary title report.

2. Copies of all known unrecorded, existing or
proposed easements, covenants, restrictions,
agreements and other documents which affect title to
the Property and which would be binding upon
Transferee after the Closing and which are not
disclosed by the preliminary title report of which
Transferor has knowledge.

3. To the extent one exists, Transferor's most current
survey of the Property and Improvements by a
licensed surveyor or civil engineer.
ii. Property Operations. Transferee's review and approval of available documentation, reports and records concerning Property and its operations including the following:

1. Verification that most recent property taxes are paid.

2. The building operating expenses. At the request of
Transferee, Transferor shall promptly provide any
documentation in Transferor's possession, custody or
control related to the operating expenses, including
copies of invoices, billings, payments of the
expenses and charges to tenants for review and
approval. Transferor will provide a list of any such
documents it is aware of but cannot or has not
provided to Transferee, in which case Transferor
shall have no obligation to obtain said document, but
Transferor shall cooperate with Transferee to
facilitate Transferee obtaining said documents,
including but not limited to providing any written
authorizations.

3. Tenant billings and summaries for the operating
expenses from date of initial occupancy to present.

4. Service contracts related to any item on and being
transferred with the Property (for example HVAC,
Elevator and Fire/Sprinkler System Service
Agreements).

5. Certificates of Occupancy, warranties and other
contracts or documents of significance to the
Property.

6. Building permits and certificates of occupancy. (any copies in Transferor's possession, custody or control
shall be provided by Transferor).

7. The as-built plans and specifications for each
building and all Improvements. If Transferor does
not provide the as-built plans and specifications
called for in this paragraph on the basis that the cost is more than nominal, it shall so indicate to
Transferee in writing and reasonably cooperate with
Transferee obtaining said as-built plans and
specifications, including but not limited to providing
any necessary authorization(s).

8. Any and all as-built plans and specifications for the Property, of the structural, roof, mechanical,
electrical, plumbing and life safety condition of the
Property.
iii. Improvements. Transferor shall provide the following for review by Transferee:

1. Verification or Transferor's certification that there are no amounts due and owing on any Improvement,
all apparatus, equipment and appliances used in
connection with the operation or occupancy of the
Property, such as heating, ventilating and air
conditioning systems and facilities used to provide
any utility services, refrigeration, garbage disposal,
recreation or other services on the Property and that
all such Improvements will pass to Transferee free
and clear of all liens and encumbrances.
(c) Title. Transferee's review and acceptance of conditions to title of the Property.
i. Within thirty (30) days of Transferee's receipt of the preliminary report, or the Effective Date, whichever is later, Transferee will notify Transferor in writing of any title exceptions which are not acceptable to Transferee.
ii. Not later than ten (10) business days after receipt of Transferee's notice, Transferor shall notify Transferee in writing of Transferor's election whether or not to cure (at Transferor's sole expense) any title exceptions which are not acceptable to Transferee. Transferor's failure to respond shall be deemed an election by Transferor not to cure any such title exceptions.
iii. If Transferor elects not to cure, Transferee shall have ten (60) days from Transferor's notice, or the deemed election, by Transferor, to notify Transferor of its election to either (1) accept any title exceptions which Transferor has not elected to cure or (2) terminate this Agreement.
(d) Property Occupants. Transferee's review and approval of all documents, reports and records concerning occupants of the Property including:
i. All current leasehold interests in the property to
include written lease agreements for all parties in
possession of any portion of the Property, and all
supporting documents.
ii. A list of any occupants of the Property without a
written lease or permission to occupy. To the extent
any such occupants exist, Transferor shall either
obtain a lease compliant with the HUD Section 8
Project Based Voucher program and all Broadway
Project tenancy restrictions or shall recover
possession from such occupants prior to Closing.
(e) Personal Property. Transferee's review and approval of all Personal Property described in Exhibit B. Transferor shall remove all personal property not specifically identified on Exhibit B and any identified in Exhibit B that has been requested in writing to be removed by Transferee. Transferor shall contact Transferee when all identified personal property is removed so that remaining personal property can be inspected and removed or personal property can be approved. (f) Transferor shall provide Transferee with any of the documents identified above that are in Transferor's possession, custody or control for Transferee's review and approval. Transferor shall provide all documents in Transferor's possession, custody or control to Transferee within five (5) calendar days of execution of this Agreement.
(g) If any of the conditions or obligations contained in this Section 3 are not satisfied, unless the parties mutually agree in writing to extend Transferor's time to perform any or all of the conditions, then Transferee shall have the right at its election either to (1) waive the condition in question and proceed with the transfer or, (2) terminate this Agreement. In the event Transferee elects to terminate the Agreement, Transferee shall pay any title and Escrow charges and neither party shall have further rights or obligations under this Agreement except for those obligations which expressly survive the termination of this Agreement and, if Transferee has made any deposit, it will be returned in full to Transferee.
(h) City Council Approval. Transferor understands and agrees that Transferee is a California charter city and that Transferee’s legislative body must approve the terms and conditions including but not limited to clear title, set forth herein before Escrow may close. Transferee shall have no obligation to close Escrow until the City Council of Transferee approves this Agreement at a regularly or specially called City Council meeting and further approves that all terms and conditions have been met.

4. Title to the Property.
(a) At the Closing, Transferor shall convey to Transferee marketable fee simple title to the Real Property, all rights, privileges and easements appurtenant thereto and to the Improvements by a duly executed and acknowledged grant deed in a form acceptable to Transferee, substantially conforming to the form attached as Exhibit E.

Evidence of delivery of marketable fee simple title shall be the issuance by Old Republic Title Company of an American Land Title Association Extended Coverage Owner's Policy (“ALTA”), at the sole expense of Transferee, in an amount no less than the appraised value of the Real Property or the combined value of the City of Vallejo’s investments, loans, and grants made to Transferor, whichever is greater, ensuring fee simple title to the Real Property, Improvements and appurtenant rights, privileges and easements to Transferee, subject only to such exceptions as Transferee shall approve pursuant to Section 3 above.

Such policy shall provide full coverage against mechanics' or materialmen's liens arising out of the construction of any of the Improvements and shall contain such special endorsements as Transferee may reasonably require.
(b) At the Closing, Transferor shall transfer title to the Personal Property, without warranty, by a bill of sale (“Bill of Sale”) in the form as Exhibit C attached hereto.

5. Closing.
(a) The Closing shall occur sixty (60) calendar days after the satisfaction or waiver of the conditions in Section 3. The Closing may be extended by mutual agreement in writing by both parties, provided, however, that neither party shall be obligated to agree to such an extension.
(b) At or before Closing, Transferor shall deliver to Transferee the following:
i. Grant deed conveying to Transferee the Real Property, Improvements and all rights, privileges and easements
appurtenant thereto as required by this agreement.

1. The Property shall be free and clear of all liens,
encumbrances, assessments, easements and taxes,
except (A) real property taxes and assessments for
the fiscal year in which Escrow closes (subject to
pro-rations) and (B) easements or rights-of-way over
the land portion of the Property for public or quasi-
public utilities or public street purposes and (C) such other items as Transferee approves in writing
pursuant to Paragraph 3(b) above.

2. Notwithstanding any other provision in this
Agreement, Transferor must remove all liens on the
Real Property before Closing.
ii. Bill of Sale covering the Personal Property and any apparatus, equipment or appliances which are a part of the Improvements in the form attached hereto as Exhibit C.
iii. Original copies of all leases or any other documents indicating an interest in occupying or using the Property; iv. Validly executed assignments of all leases or any other documents indicating an interest in occupying or using the Property;
v. Originals or copies of the Service Contracts, if any; vi. Assignment of Service Contracts in the form attached hereto as Exhibit D;
vi. Copies of building permits and certificates of occupancy for the Improvements;
vii. Closing statement in form and content satisfactory to Transferee and Transferor; and
viii. Any other documents, instruments or agreements called for hereunder which have not been previously delivered.
(c) Transferor or Transferee may waive compliance on the other Party’s part under any of the foregoing items by an instrument in writing. (d) Transferor and Transferee shall each deposit such other instruments as are reasonably required by the Escrow or otherwise required to close the escrow and consummate the transfer of the Property in accordance with the terms hereof. (e) Real property taxes and assessments, water, sewer and utility charges, amounts payable under the Service Contracts, annual permits and/or inspection fees (calculated on the basis of the period covered) and other expenses normal to the operation and maintenance of the Property shall be prorated as of the Closing on the basis of a 365-day year.
(f) The following charges shall be allocated as follows:
i. Title fees shall be paid by Transferee
ii. Escrow fees shall be paid by Transferee
iii. Documentary County Transfer Tax, if any, shall be paid by Transferee
iv. City Transfer Tax, if any, shall be paid by Transferee v. Recording Fees, if any, shall be paid 50% by Transferor and 50% by Transferee; provided that the Parties do not
anticipate any Recording Fees being imposed as Transferee is exempt from Recording Fees; in addition, Transferor shall pay all fees required to remove deeds of trust and any and all judgment liens, if any. Finally, if Transferor needs to clear other items from title, Transferor pays those recording fees and all related costs.
(g) Transferee and Transferor acknowledge that no broker's commission or finder's fee is payable in connection with this transaction; and each indemnitor agrees to indemnify and hold the other harmless from and against all liability, claims, demands, damages, or costs of any kind whatsoever arising from or connected with any broker's or finder's fee or commission or charge claimed to be owed to any person arising from the indemnitor's conduct with respect to this transaction, other than the commissions authorized in this Section.

6. Representations and Warranties of Transferor.

Transferor hereby represents and warrants the following, each of which shall be true in all respects as of the Effective Date and as of the date of Closing and shall survive Closing:
(a) Intentionally omitted.
(b) To the best of Transferor's actual knowledge, without independent investigation, there is no existence of asbestos, PCB transformers or other toxic, hazardous or contaminated substances and/or underground storage tanks in, on or about the Property except for such toxic or hazardous substances which are customarily maintained upon and within buildings similar to the Property for the purpose of ordinary use, maintenance and repair.
(c) Except as disclosed in writing to Transferee, to the best of Transferor's knowledge, without independent investigation, there are no conditions existing with respect to the use and operation of the Property that violates or are not in full conformance with any applicable ordinance, regulation or code of any federal, state, county or municipal department, board, body, agency, office or other governmental authority, including any applicable law, ordinance, regulation or code presently enacted but with prospective application., Transferor agrees to notify Transferee of any notice of violation received between the date of this Agreement and the time of Closing. Should Transferor disclose a notice of violation to Transferee as provided in this Section, (1) Transferee may terminate this Agreement, in which case Transferee shall be returned any deposit paid to escrow, or (2) the Parties may mutually agree to extend the time for Closing for the purpose of Transferor curing the notice of violation at Transferor's expense. (d) Except as disclosed in writing to Transferee, Transferor does not have any knowledge of any condemnation, zoning or other land use regulation proceedings, either instituted or planned to be instituted, which would detrimentally affect the use and operation of the Property.
(e) To Transferor's knowledge, the survey, mechanical and structural plans and specifications, other reports, certificates of occupancy, warranties and all other contracts or documents delivered to Transferee, if any, pursuant to this Agreement or in connection with the execution hereof are true and correct copies. (f) Except as otherwise disclosed in writing to Transferee, Transferor has no knowledge of any lawsuits or legal action that is or are threatened or pending that are likely to have a material, adverse or other detrimental effect on the Property. (g) To the best of Transferor's knowledge, and without independent investigation, there are no illegal connections for any water, sewer, gas, electric, telephone and drainage facilities.
(h) All documents executed by Transferor which are to be delivered to Transferee at Closing are and at the Closing shall be duly authorized, executed and delivered by Transferor, are and at the Closing shall be legal, valid and binding obligations of Transferor, are and at Closing shall be sufficient to convey title (if they purport to do so) and do not and at the Closing shall not violate any provisions of any agreement to which Transferor is a party or to which it is subject.
(i) To the best of Transferor's knowledge, Transferor has disclosed all facts actually known to Transferor and relevant to the condition of the Property, without regard to the manner in which Transferee intends to operate or develop the Property after Closing.
(j) After execution of this Agreement and during the escrow period, Transferor shall not enter into any new contract or agreement pertaining to the Property, unless Transferor shall first send to Transferee for approval a copy of the document it proposes to sign, and Transferee approves of the document in writing.

7. No Back-Up Offers. Prior to the expiration of the term of the Option Agreement by and between the Transferor and Transferee, Transferor shall not enter into any other agreements to sell or lease the Property without the prior consent of the City of Vallejo, which consent shall not be unreasonably withheld, conditioned or delayed, as long as this Agreement is in force.

8. Loss by Fire or Other Casualty; Condemnation. In the event that prior to Closing the Property or any part thereof is destroyed or materially damaged or if condemnation proceedings are commenced against the Property, Transferee shall have the right, exercisable by giving written notice of such decision to Transferor within thirty (30) business days after receiving Transferor's written notice of such damage, destruction or condemnation proceedings, to terminate this Agreement in which case neither party shall have any further rights or obligations hereunder. If Transferee elects to accept the Property in its then condition, all proceeds of insurance or condemnation awards payable to Transferor by reason of such damage, destruction or condemnation shall be paid or assigned to Transferee at or before Closing. In the event of non-material damage to the Property (i.e., any damage costing less than $250,000 to repair), which damage Transferor is unwilling to repair or replace, Transferee shall have the right, exercisable by giving written notice within thirty (30) business days after receiving Transferor's written notice of such damage, either to:
(a) terminate this Agreement, or
(b) accept the Property in its then condition and proceed with the acquisition, in which case Transferee shall be entitled to receive all proceeds of insurance payable to Transferor by reason of such damage. For purposes of any repairs or replacements under this Subsection 8 (b), the Closing may be extended, at Transferee's election, for a reasonable time., to allow such repairs or replacements to be made.

9. Possession. Possession of the Property shall be delivered to Transferee at Closing; provided, however, that Transferor shall afford authorized representatives of Transferee reasonable access to the Property for the purposes of satisfying Transferee with respect to the representations, warranties and covenants of Transferor contained herein and with respect to satisfaction of any conditions precedent to the Closing.

10. Maintenance of the Property. Between the Transferor's execution of this Agreement and Closing, Transferor shall:
(a) Maintain the Property in a good and marketable condition, the same as though Transferor were retaining the Property;
(b) Refrain from performing any grading or excavation, construction or removal of any Improvements or making any other change or improvement upon or about the Property without the prior written consent of the City of Vallejo; (c) Except for any mortgage, deed of trust, lien, pledge, or encumbrance arising from any financing to be obtained by the Transferor in the process of constructing the Project, which is approved by the Transferee, refrain from creating or incurring or suffering to exist any mortgage, lien, lease, pledge or other encumbrances in any way affecting the Property or title without Transferee's prior written approval; (d) Refrain from committing any waste or nuisance upon the Property; and
(e) Except for any contract, lien, pledge, or encumbrance arising from any financing obtained by the Transferor during the process of constructing the Project and approved by Transferee, not execute, extend or otherwise further encumber the Property with contracts, including without limitation equipment maintenance or service contracts beyond the Closing, unless such contracts or agreements are first approved in writing by Transferee, in Transferee’s discretion not to be unreasonably withheld, conditioned or delayed.

11. Survival. All warranties, covenants, and other obligations described herein shall survive delivery of the grant deed.

12. Time of the Essence. Time is of the essence of all times and dates set forth in this Agreement.

13. Exhibits. All exhibits attached hereto are incorporated herein by reference.

14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

15. Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. This Agreement shall be governed by and construed in accordance with the laws of the State of California. All obligations under this Agreement are performable in Solano County, California; and any litigation concerning, relating to, or arising under this Agreement shall be filed in the superior court of California, Solano County.

16. Interpretation. Words used in the singular number shall include the plural, and vice-versa and any gender shall be deemed to include each other gender. The captions and headings of the Sections of this Agreement are for convenience of reference only and shall not be deemed to define or limit the provisions hereof.

17. Notices. Any and all notices required or permitted under this Agreement or by law shall be given in writing either by personal service, overnight delivery by a reputable delivery company or by registered or certified mail, postage prepaid, and return receipt requested, or by facsimile transmission with a confirmation copy to be sent by mail, or by email with delivery receipt requested. Any such notice shall be effective as of the date it is transmitted and mailed or delivered, if transmitted by facsimile transmission on or before 5:00p.m. Pacific Time; or on the following day if transmitted after 5:00 p.m. Pacific Time.

Notices shall be addressed as shown below for each party, except that, if any party gives notice of a change of name or address, notices to that party shall thereafter be given as shown in that notice.

If to Transferor:

Firm Foundation Community Housing
1035 B Street Unit B
Hayward, CA 94541
Attn: Executive Director
Email: [email protected]
With a copy to:

Fennemore
1111 Broadway, 24th Floor
Oakland, CA 94607
Attention: Amara L. Morrison, Esq.

Fax: 510.834.1928
Email: [email protected]
If to Transferee:

Andrew Murray
City Manager
City of Vallejo
555 Santa Clara St.

Vallejo, CA 94590
707-648-4576
[email protected]
With a copy to:

Veronica Nebb
City Attorney
City of Vallejo
555 Santa Clara St.

Vallejo, CA 94590
707-648-4545
[email protected]

18. Indemnity. Transferor shall defend and hold harmless the Transferee, its officers, employees, and agents and the City, its officers, employees and agents, and each and every one of them (“Indemnitees”) from and against any and all actions, damages, costs, liabilities, claims, demands, losses, judgements, penalties, costs and expenses of every type and description, including but not limited to, any fees and/or costs reasonably incurred by the Indemnitees arising out of or relating to this Agreement and/or any acts or omissions of Transferee (collectively, “Liabilities”), including Liabilities arising from personal injury or death, damage to personal, real, or intellectual property or the environment, contractual or other economic damages, or regulatory penalties, which the Indemnitees may incur as a direct or indirect consequence of; (i) Transferor’s failure to perform any obligations as and when required by this Agreement or the Grant Documents; (ii) any failure at any time of any of Transferor’s representations or warranties to be true and correct; or (iii) any act or omission by Transferor, any contractor, subcontractor, materials supplier, engineer, architect, or other person or entity with respect to the Broadway Project. Transferor shall pay immediately, upon demand by Transferee, any amounts owning under this indemnity together with interest from the date the indebtedness arises until paid at the rate of 10% per annum. The duty of Transferor to indemnify and hold harmless includes the duties to defend as set forth in Section 2278 of the Civil Code.

Transferor shall indemnify and hold harmless the Indemnitees as set forth herein regardless of the existence or degree of fault or negligence whether active or passive, primary or secondary on the part of the Indemnitees or the Transferor; provided, however, that Transferor’s duty to Indemnify and hold harmless hereunder shall not extend to liability arising from gross negligence or willful misconduct on the part of the Indemnitees.

Transferor’s duty to indemnify the Indemnitees shall survive the term of the Agreement.

19. Continuation and Survival of Representations and Warranties. All agreements, representations and warranties by the respective parties contained herein or made in writing pursuant to this Agreement are intended to and shall remain true and correct as of Closing, shall be deemed to be material and shall survive the execution and delivery of this Agreement and the delivery of the grant deed and transfer of title. All statements contained in any certificate or other instrument delivered at any time by or on behalf of Transferor in connection with the transaction contemplated hereby shall constitute representations and warranties hereunder.

20. Counterparts. This Agreement and all amendments and supplements to it may be executed in counterparts, and all counterparts together shall be construed as one document.

21. Further Assurances. Transferor and Transferee agree to execute such additional documents and take such actions as may be reasonable and necessary to carry out the provisions of the Agreement.
[Signatures on Following Page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

TRANSFEROR:

FIRM FOUNDATION COMMUNITY
HOUSING, a California nonprofit public benefit
corporation
Taryn Sandulyak, Executive Director
Date
Tax I.D. Number
TRANSFEREE:

CITY OF VALLEJO,
A California charter city
Andrew Murray
City Manager
Date
APPROVED AS TO FORM:

By:

Veronica A. F. Nebb
City Attorney

LIST OF EXHIBITS
Exhibit A: Real Property Description
Exhibit B: Schedule of Personal Property
Exhibit C: Form of Bill of Sale
Exhibit D: Assignment of Service Contracts
Exhibit E: Form of Grant Deed

EXHIBIT A

REAL PROPERTY
Legal Description
The land referred to is situated in the County of Solano, City of Vallejo, State of California, and is described as follows:

APN: 0067-140-150
Parcel “B” as shown on that certain Parcel Map entitled: “Parcel Map, Portion of Sec. 36, T.4.N., R4W. M.D.B.&M., City of Vallejo, Solano County, California”, filed for record in the office of the County Recorder of Solano County, on August 24, 1982 in Book 23 of Parcel Maps, at Page 79.

Mini, dated November 5, 1954, recorded January 14, 1955, in Book 748 of Official Records, at Page 313, Instrument No. 678.

EXHIBIT B

PERSONAL PROPERTY

EXHIBIT C

BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Firm Foundation Community Housing, a California nonprofit public benefit corporation (“Transferor”) does hereby transfer and convey to the City of Vallejo, a California charter city (“Transferee”), the following personal property which Transferor warrants to be free and clear of all encumbrances, to wit:

The personal property itemized on Schedule 1 attached hereto and incorporated herein by this reference.

Transferor does hereby covenant with Transferee that the undersigned is the lawful owner of such personal property and that the undersigned has good right to sell the same as aforesaid and shall warrant and defend the title thereto unto Transferee, its successors and assigns, against their claims and demands of all persons whomsoever or entities whatsoever.

HOWEVER, TRANSFEROR HEREBY DISCLAIMS ALL OTHER WARRANTIES

WITH RESPECT TO THE PERSONAL PROPERTY CONVEYED HEREBY,

WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY

WARRANTIES OF MERCHANTABILITY OR WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND THE SAME IS SOLD IN AN “AS IS, WHERE IS” CONDITION, WITH ALL FAULTS.

DATED as of this day of , 20___.

TRANSFEROR:

Firm Foundation Community Housing
By:

Taryn Sandulyak, Executive Director

EXHIBIT C
SCHEDULE 1 - PERSONAL PROPERTY

EXHIBIT D

ASSIGNMENT OF SERVICE CONTRACTS
THIS ASSIGNMENT (“Assignment”) is made and entered into as of this __ day of ___ , 20____, by FIRM FOUNDATION COMMUNITY HOUSING, a California nonprofit public benefit corporation (“Assignor”), to the CITY OF VALLEJO, a California charter city (“Assignee”). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns and transfers to Assignee all of its right, title, claim and interest in and under all of the service contracts listed in Schedule 1 attached hereto and incorporated herein by reference.

ASSIGNOR AND ASSIGNEE FURTHER AGREE AND COVENANT AS FOLLOWS:

1. Assignor covenants that the service contracts described in Schedule 1 are in full force and effect and to Assignor's knowledge there exist no defaults thereunder, nor any acts or events which with the passage of time or the giving of notice could become defaults thereunder, on the part of either party thereto.

2. Assignor shall indemnify and hold Assignee harmless from any and all cost, liability, damage or expense, including without limitation reasonable attorney fees and expenses, originating prior to the date hereof and arising out of the service contracts described in Schedule 1.

3. Assignee shall indemnify and hold Assignor harmless from any and all cost, liability, damage or expense, including without limitation reasonable attorney fees and expenses, originating subsequent to the date hereof and arising out of the service contracts described in Schedule 1.

4. In the event of any litigation between Assignor and Assignee arising out of the obligations of Assignor under this Assignment, the losing party shall pay the prevailing party's costs and expenses of such litigation, including without limitation reasonable attorney's fees and expenses.

5. This Assignment shall inure to the benefit of and be binding upon the successors and assigns of Assignor and Assignee.
[Signatures on Following Page]
ASSIGNOR:

FIRM FOUNDATION COMMUNITY

HOUSING
Taryn Sandulyak
Executive Director
Date
Title
Tax I.D. Number
ASSIGNEE:

CITY OF VALLEJO,
A California charter city
Andrew Murray
City Manager
Date
APPROVED AS TO FORM:

VERONICA NEBB

CITY ATTORNEY
By:

Veronica Nebb

EXHIBIT D
SCHEDULE 1 - SERVICE CONTRACTS

EXHIBIT E

GRANT DEED
ACTION ITEM 8.J.

DATE: September 24, 2024
TO: Mayor and Members of the City Council
FROM: Stephanie Sifuentes, Human Resources Director
SUBJECT: ADOPT A RESOLUTION APPROVING AMENDMENT TO THE FY 2024-2025 BUDGET FOR CAMP NEGOTIATIONS (STEP 2)

RECOMMENDATION
Adopt a resolution to amend the City's Fiscal Year 2024-2025 Adopted Budget.

REASONS FOR RECOMMENDATION
The memorandum of Understanding between the City of Vallejo and CAMP expired on June 30, 2024. The City and CAMP have been actively engaged in negotiations and have come to a tentative agreement. IBEW members ratified this agreement on August 23, 2024. Pursuant to California Government Code 3505.1, if the parties reach a Tentative Agreement, the Council shall vote to accept or reject it within 30 days of its presentation to the Council at a publicly noticed hearing. Council approved the new MOU with CAMP during a regular meeting on September 10, 2024. This is the second step of the required two-step budget amendment process to amend the FY 2024-25 Adopted Budget.

BACKGROUND AND DISCUSSION
The current MOU between the City and CAMP expired on June 30, 2024. The parties have been engaged in negotiations and have come to a tentative agreement. CAMP members ratified this agreement on August 23, 2024, with the following key terms:

Duration Two-year (expires on June 30, 2026)
Wages (COLAs) 5% effective the first full pay period after adoption 5% effective the first full pay period following July 1, 2025 Group Health Insurance Increase from 75% to 80%
Increase in Medflex (cash in-lieu) from $250/month to $400/month Management Leave
(FLSA-Exempt CAMP
members)
40 hours, prorated for the 2024 calendar year, effective September 21, 2024 60 hours effective the first full pay period following January 1, 2025

Council approved the first resolution approving the new MOU with CAMP. This resolution is the second step of the required two-step budget amendment process to amend the FY 2024-25 Adopted Budget and to approve the new Salary Plan. This amended budget would go into effect on September 21, 2024.

FISCAL IMPACT
Approval of the attached Tentative Agreement will increase the FY 2024-25 General Fund and Other Funds expenditures by an estimated $736K and $277K respectively. City had budgeted 3.5% COLA in FY 24-25 in General Fund.

Net additional FY 2024-25 budget impacts are as follows:
• COLA 5%: General Fund $189K and Other Funds $238K

Date: September 24, 2024
Subject: ADOPT A RESOLUTION APPROVING AMENDMENT TO THE FY 2024-2025 BUDGET FOR CAMP NEGOTIATIONS (STEP 2)

Page 2 ends

• Group Health insurance increase: General Fund $104K and Other Funds $38K • Medflex (In-lieu of): General Fund $2K, Other Funds $1K

Net Additional costs will be expended from the fund balance for FY 2024-25.

Funding for future fiscal years will be requested as part of the annual budget process and will be factored into the Five-Year Financial Forecast.

ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.

ATTACHMENTS

1. CAMP BUDGET RESO CAO STAMP

2. CAMP Budget reso Exh 1

CONTACT
Stephanie Sifuentes, Human Resources Director (707) 649-4852 [email protected]

RESOLUTION NO. 24-_ N.C.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO AMENDING THE FISCAL YEAR 2024-25 BUDGET FOR THE SUCCESSOR MEMORANDUM OF

UNDERSTANDING WITH THE CONFIDENTIAL, ADMINISTRATIVE, MANAGERIAL,

AND PROFESSIONAL (CAMP) ASSOCIATION OF VALLEJO
WHEREAS, in June 2024, the City Council adopted a budget for Fiscal Year 2024-25; and WHEREAS, City Charter Section 703 requires that available funds not included in the budget may be appropriated by City Council after giving one week’s notice of intention to do so; and WHEREAS, on September 10, 2024 City Council gave notice of its intention to amend the City’s budget for Fiscal Year 2024-25; and
WHEREAS, on S e p t e m b e r 1 0 , 2024 the City Council approved a successor Memorandum of Understanding between the City of Vallejo and the Confidential, Administrative, Managerial, and Professional Association of Vallejo (the “MOU”); and WHEREAS, the MOU has certain pay increases and changes to benefits that require an adjustment to the 2024-25 budget; and
WHEREAS, staff is proposing that the General Fund expenditures be increased by $295,000 as set forth in Exhibit 1 and of this Resolution; and
WHEREAS, staff is proposing that Other City Fund expenditures be increased by $277,000 respectively as set forth in Exhibit 1 of this Resolution; and WHEREAS, staff is proposing to draw down from the fund balance by $572,000 as set forth in Exhibit 1 and of this Resolution; and
WHEREAS, the City Council has considered the report and recommendations of the City Manager on the budget amendments and has determined that the budget amendments are both fair and appropriate.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Vallejo, pursuant to Charter Section 703, does hereby approve the amendment of the City’s budget for Fiscal Year 2024-25, as set forth in Exhibit 1 of this Resolution, which is by this reference incorporated herein; Adopted by the Council of the City of Vallejo at a regular meeting held on September 24, 2024 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

ROBERT H. MCCONNELL, MAYOR
ATTEST: DAWN G. ABRAHAMSON, CITY CLERK

City of Vallejo
Fiscal Year 2024-2025
Budget Amendment
CAMP New Contract
EXHIBIT 1

Expenditure
General Fund
Fund 001 $ 664,828
Fund 003 71,172
Subtotal, General Fund 736,000
Reclass Anticipated Compensation Increase Budget from Non- Departmental to Departments (441,000)
Net Impact to General Fund 295,000
Other Funds
Fund 121 25,269
Fund 161 8,750
Fund 401 205,380
Fund 501 8,941
Fund 508/509 28,660
Total, Other Funds 277,000
Total FY 2024-2025 Budget Adjustment $ 572,000
ACTION ITEM 8.K.

DATE: September 24, 2024
TO: Mayor and Members of the City Council
FROM: Stephanie Sifuentes, Human Resources Director
SUBJECT: ADOPT A RESOLUTION APPROVING AMENDMENT TO FISCAL YEAR 2024-25

BUDGET RELATING TO SALARY AND BENEFIT CHANGES FOR UNREPRESENTED EMPLOYEES (STEP 2)

RECOMMENDATION
Adopt a resolution to amend the City's Fiscal Year 2024-2025 Adopted Budget.

REASONS FOR RECOMMENDATION
The Unrepresented Executive Management Employee Group has not received a cost of living adjustment (COLA) since July 1, 2023. Additionally, benefits have not been adjusted for many years. We have now reached agreements with VPOA, IBEW, and CAMP, each resulting in wage increases. The recommended changes are necessary in order to minimize compaction between employees in the Unrepresented Group and their subordinate staff in VPOA, IBEW, and CAMP, and try to maintain internal equity to the best of our ability.

Increasing the group health insurance and in-lieu amounts to mirror that of what IBEW and CAMP received will also help to maintain internal equity, as well as to assist in improving our competitiveness in the market for recruitment and retention. This is the second step of the required two-step budget amendment process to amend the FY 2024-25 Adopted Budget.

BACKGROUND AND DISCUSSION
Upon Council's adoption of newly negotiated agreements with the City's Confidential, Administrative, Managerial, and Professional Association of Vallejo (CAMP) and the International Brotherhood of Electrical Workers, Local 1245 (IBEW), and in order to maintain internal equity, avoid compaction issues, and mitigate recruitment and retention challenges, staff is recommending the following changes to this resolution:

Wages (COLAs) 5% effective the first full pay period after adoption 5% effective the first full pay period following July 1, 2025 Group Health
Insurance
Increase from 75% to 80%
Increase in Medflex (cash in-lieu) from $250/month to $400/month

Additional amendments to the resolution include clean-up to the class list, and language clean-up to ensure we are consistent with current laws regarding sick and bereavement leave, as well as a section on other pays to bring current practice into compliance with CalPERS for reporting requirements.

This is the second step of the required two-step budget amendment process to amend the FY 2024-25 Adopted Budget and to approve the new Salary Plan. This amended budget would go into effect on September 21, 2024.

FISCAL IMPACT
Approval of the attached Tentative Agreement will increase the FY 2024-25 General Fund and Other Funds expenditures by an estimated $466K and $75K respectively. City had budgeted 3.5% COLA in FY 24-25 for General Fund.

Date: September 24, 2024
Subject: ADOPT A RESOLUTION APPROVING AMENDMENT TO FISCAL YEAR 2024-25

BUDGET RELATING TO SALARY AND BENEFIT CHANGES FOR
UNREPRESENTED EMPLOYEES (STEP 2)

Page 2 ends

Net Additional FY 2024-25 budget impacts are as follows:
• COLA 5% : General Fund $126K and Other Funds $66K
• Group Health insurance increase: General Fund $46K and Other Funds $8K • Medflex (In-lieu of): General Fund $150 and Other Funds $600

Net additional costs will be expended from the fund balance for FY 2024-25.

Funding for future fiscal years will be requested as part of the annual budget process and will be factored into the Five-Year Financial Forecast.

ATTACHMENTS

1. UNREP BUDGET RESO CAO STAMP

2. Exhibit 1 - Unrep Budget Reso

CONTACT
Stephanie Sifuentes, Human Resources Director (707) 649-4852 [email protected]

RESOLUTION NO. 24-_ N.C.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO AMENDING THE FISCAL YEAR 2024-25 BUDGET FOR THE NEW UNREPRESENTED EXECUTIVE

MANAGEMENT EMPLOYEE COMPENSATION PLAN
WHEREAS, in June 2024, the City Council adopted a budget for Fiscal Year 2024-25; and WHEREAS, City Charter Section 703 requires that available funds not included in the budget may be appropriated by City Council after giving one week’s notice of intention to do so; and WHEREAS, on September 10, 2024 City Council gave notice of its intention to amend the City’s budget for Fiscal Year 2024-25; and
WHEREAS, on September 10, 2024 the City Council approved the new Unrepresented Executive Management Employees Compensation Plan Resolution and Schedule; and WHEREAS, the resolution has certain pay increases and changes to benefits that require an adjustment to the 2024-25 budget; and
WHEREAS, staff is proposing that the General Fund expenditures be increased by $172,050 as set forth in Exhibit 1 and of this Resolution; and
WHEREAS, staff is proposing that Other City Fund expenditures be increased by $74,700 respectively as set forth in Exhibit 1 of this Resolution; and WHEREAS, staff is proposing to draw down from the fund balance by $246,750 as set forth in Exhibit 1 and of this Resolution; and
WHEREAS, the City Council has considered the report and recommendations of the City Manager on the budget amendments and has determined that the budget amendments are both fair and appropriate.

AYES:

NOES:

ABSENT:

ABSTAIN:

ROBERT H. MCCONNELL, MAYOR
ATTEST:

DAWN G. ABRAHAMSON, CITY CLERK

City of Vallejo
Fiscal Year 2024-2025
Budget Amendment
EXHIBIT 1
Unrep New Compensation Plan

Expenditure
General Fund
Fund 001 $ 450,172
Fund 003 15,878
Subtotal, General Fund 466,050
Reclass Anticipated Compensation Increase Budget from Non- Departmental to Departments (294,000)
Net Impact to General Fund 172,050
Other Funds
Fund 121 11,250
Fund 401 51,721
Fund 508/509 11,729
Total, Other Funds 74,700
Total FY 2024-2025 Budget Adjustment $ 246,750
CONSENT CALENDAR 8.L.

DATE: September 24, 2024
TO: Mayor and Members of the City Council
FROM: Gillian Haen, Assistant City Manager
SUBJECT: ADOPT A RESOLUTION APPROVING THE SIXTH AMENDMENT TO THE PURCHASE

AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BY AND BETWEEN

THE CITY OF VALLEJO AND BLUE ROCK SPRINGS, LLC TO EXTEND THE TIME IN

WHICH TO NEGOTIATE THE PARTICIPATION AND PERFORMANCE AGREEMENTS

AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE SAME

RECOMMENDATION
Adopt a Resolution approving the Sixth Amendment to the Purchase and Sale Agreement and Joint Escrow Instructions by and between the City of Vallejo and Blue Rock Springs, LLC to extend the time in which to negotiate Participation and Performance Agreements and authorizing the City Manager to execute the same.

REASONS FOR RECOMMENDATION
The Fifth Amendment to the PSA for the revitalization of the Blue Rock Springs Golf Course Housing Project is scheduled to expire on September 23, 2024. This Sixth Amendment provides the parties with an additional 112 days in which to negotiate and execute the Participation Agreement and Performance Agreement, respectively set to expire on January 14, 2025.

BACKGROUND AND DISCUSSION
On November 15, 2022, the City Council approved the Purchase and Sale Agreement and Joint Escrow Instructions (PSA) for 655 Columbus Parkway to Blue Rock Springs, LLC, which proposes to develop housing and commercial uses on the property. Escrow closed on or about December 28, 2022. Subsections 6(d)(i) and 6(f)(i) of the PSA provide that the parties may extend the time period in which to negotiate and execute a Participation Agreement and Performance Agreement, respectively, subject to written agreement executed by both parties. This Fifth Amendment extended the deadline from March 27, 2024 to Monday, September 23, 2024 and was approved by Council on March 12, 2024. At that time, Council gave staff a directive to negotiate agreed upon terms and to draft the documents. The Sixth Amendment extends the deadline to January 14, 2025, which should provide staff with sufficient time to complete these tasks.

During this time, staff and the developer have continued to negotiate key deal terms, including the structure of the payment to the City based on the financial performance of the project, conditions and instructions for the appraisal, development of the commercial pad, and CFD special tax, among others. During this time, the Developer has also continued public outreach with stakeholder meetings held on July 30, 2024 and September 5, 2024. This extension will provide additional time to draft the key terms into formal documents for City Council consideration.

FISCAL IMPACT
Amending the PSA does not pose any fiscal impacts to the General Fund.

ENVIRONMENTAL REVIEW
Extending the time for the parties to negotiate and finish drafting these agreements is exempt from environmental review under the California Environmental Quality Act (CEQA) because said action is not a

Date: September 24, 2024
Subject: ADOPT A RESOLUTION APPROVING THE SIXTH AMENDMENT TO THE PURCHASE

AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BY AND

BETWEEN THE CITY OF VALLEJO AND BLUE ROCK SPRINGS, LLC TO EXTEND

THE TIME IN WHICH TO NEGOTIATE THE PARTICIPATION AND

PERFORMANCE AGREEMENTS AND AUTHORIZING THE CITY MANAGER TO

EXECUTE THE SAME

Page 2 ends

project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines section 15378.

ATTACHMENTS

1. Resolution_SixthAmendment_CAO Stamp

2. Sixth Amendment.2024.08.27_CAO Stamp

3. BLUE ROCK SPRINGS LLC Purchase and Sale Agreement and Joint Escrow Instructions

4. First Amendment - BRS-PurchaseAgreement_1-20-23

5. Second Amendment - BRS-PurchaseAgreement_4-14-23

6. Third Amendment - BRS-PurchaseAgreement_6-26-23

7. Fourth Amendment- BRS-PurchaseAgreement_9-01-23

8. Fifth Amendment - BRS-PurchaseAgreement_3-12-24

CONTACT
Gillian Haen, Assistant City Manager (707) 648-4163
[email protected]
Michael Nimon, Economic Development Director (707) 648-4109 [email protected]

RESOLUTION NO. 24-______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO APPROVING THE SIXTH

AMENDMENT TO THE PURCHASE AND SALE AGREEMENT AND JOINT ESCROW

INSTRUCTIONS BY AND BETWEEN THE CITY OF VALLEJO AND BLUE ROCK SPRINGS,

LLC AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
WHEREAS, the City of Vallejo (“City”) and Blue Rock Springs, LLC (“BRS”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of December 20, 2022 (“Agreement”), pursuant to which BRS agreed to acquire that certain real property commonly known as 655 Columbus Parkway, Vallejo, California (“Subject Property”); and WHEREAS, escrow closed on Blue Rock Springs’ acquisition of the Subject Property on or about December 8, 2022; and
WHEREAS, subsections 6(d)(i) and 6(f)(i) of the Agreement provide that the parties may extend the time period in which to negotiate and execute a Participation Agreement and Performance Agreement, subject to a written agreement executed by both parties extending such deadline; and WHEREAS, the parties desire to amend the Agreement to provide additional time in which to complete their negotiations of these agreements.

NOW, THEREFORE BE IT RESOLVED that the City Council hereby approves the Sixth Amendment to the Purchase and Sale Agreement and Joint Escrow Instructions extending the deadline in which to negotiate and execute a Participation Agreement and Performance Agreement to January 15, 2025 (“Sixth Amendment”).

BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute said Sixth Amendment with such modification as may be recommended by the City Attorney.

PASSED AND ADOPTED by the City Council of the City of Vallejo at a regular meeting held on September 24, 2024, with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN
ATTEST
ROBERT H. MCCONNELL, MAYOR

DAWN G. ABRAHAMSON, CITY CLERK

Page 1 ends

SIXTH AMENDMENT TO PURCHASE AND SALE AGREEMENT AND

JOINT ESCROW INSTRUCTIONS
This Sixth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions (“ Sixth Amendment”) is made and entered by and between The City of Vallejo, a municipal corporation (“City”) and Blue Rock Springs, LLC, a Delaware limited liability company, or its assignee (“ BRS”) (each a “Party,” and collectively, “Parties”), dated for reference purposes as of September ___, 2024.

City and BRS do mutually agree as follows:

RECITALS
This Sixth Amendment is made with reference to the following facts, which the Parties agree are true and accurate:

A. City and BRS are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of December 20, 2022 (“Agreement”), pursuant to which BRS agreed to acquire the Subject Property.

B. Escrow closed on BRS’ acquisition of the Property on or about December 28, 2022.

C. The Agreement was modified by the following documents:
a. First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, dated as of January 20, 2023 (“First Amendment”); b. Second Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, dated as of April 14, 2023 (“Second Amendment”); c. Third Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, dated as of June 21, 2023 (“Third Amendment”); and d. Fourth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, dated as of September 1, 2023 (“Fourth Amendment”). e. Fifth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, dated as of February 1, 2024 (“Fifth Amendment”).

D. Section references and capitalized terms not defined in this Sixth Amendment shall have the meanings given to them in the Agreement.

NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants contained in this Agreement, the receipt and adequacy of which is acknowledged, the Parties, intending to be legally bound, agree as follows:

AGREEMENT
The Recitals set forth in the introductory paragraphs of this Sixth Amendment constitute a material part of this Sixth Amendment, and are fully incorporated herein by this reference, as if set forth in their entirety.

1. Participation Agreement; Performance Agreement. Section 6(d)(i) and 6(f)(i) of the Agreement shall be and hereby are amended to provide:

Page 2 ends

a. The Parties shall have seven hundred fifty-eight (749) days after the December 28, 2022 Close of Escrow, i.e., until Wednesday, January 15, 2025 to negotiate and execute a Participation Agreement and Performance Agreement, respectively. The date for Rescission to occur based on a failure to negotiate and execute such agreement(s) shall be and hereby is similarly extended. For the avoidance of doubt, the updated deadline is an extension of one hundred fourteen (114) days after the September 23, 2024 date established by the Fifth Amendment. b. The City Manager shall have the authority, in his reasonable discretion, to further extend the above-referenced time period by an additional sixty-one (61) days, i.e., until Monday, March 16, 2025, which extension may be confirmed by acknowledged e-mail communication to representatives of BRS. 2. Ratification. a. The Agreement, as amended, is hereby ratified and the Parties hereby reaffirm their obligations under the Agreement, as so amended as described herein. b. The Parties also ratify that certain Agreement and Instructions to Hold Funds in Escrow – Mutual Release (“Holdback Agreement”), for the benefit of First American Title, and affirm at the Escrowed Funds (as defined in the Holdback Agreement, shall remain in escrow until execution of the Participation Agreement and Performance Agreement, and the recording of the Memorandum of Agreement contemplated by Section 6(f)(iv) of the Agreement. c. Except as otherwise provided in this Sixth Amendment, the terms of the Agreement are not modified, altered or amended, and remain in full force and effect. [SIGNATURES FOLLOW]

Page 3 ends

IN WITNESS WHEREOF, the Parties have executed this Sixth Amendment as of the date first written above. THE CITY OF VALLEJO a municipal corporation _____________________________________ By: Andrew Murray Its: City Manager BLUE ROCK SPRINGS, LLC a Delaware limited liability company By: LEWIS MANAGEMENT CORP., a Delaware corporation Its: Manager _______________________________ By: John M. Goodman Its: Chief Executive Officer and Senior Executive Vice President ATTEST: _____________________________________ By: Dawn G. Abrahamson Its: City Clerk

APPROVED AS TO CONTENT: _____________________________________ By: Gillian Haen Its: Assistant City Manager

APPROVED AS TO FORM: _____________________________________ By: Veronica A. F. Nebb Its: City Attorney

Dec 21, 2022 12:13 PM, 1049529041
Contract and Routing Form
Date Originated:

Finance Department ∙ 555 Santa Clara Street ∙ Vallejo ∙ CA ∙ 94590 ∙ 707.648.4592 Department: City Manager's Office, Economic Development Division Staff Contact: Emi Theriault, [email protected] Contract Type: Other: Purchase and Sale Agreement and related Lease Agreement Vendor: Lewis Management Corp.

Contract Not to Exceed Amount: 0.00
Contract Start Date: Dec 20, 2022 End Date: Dec 20, 2026 Authority to Contract: City Council Date to Council: Dec 20, 2022 Other Comments:

Please contact City Clerk if related executed Resolutions of approval need to be included.

Attachments are uploaded for review here: https://bit.ly/vContracts Approved Pre-Requisition Form
I have uploaded additional files.Yes
DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

Contract and Routing Form
Signature Page
Department Initial Date Comment
Originating Department/Division
Risk Manager

Finance Department

City Attorney

City Manager

City Clerk

Return executed contract to: Emi Theriault
DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW

INSTRUCTIONS BY AND BETWEEN

THE CITY OF VALLEJO,

A MUNICIPAL CORPORATION
AND

BLUE ROCK SPRINGS, LLC,

A DELAWARE LIMITED LIABILITY COMPANY
December 20, 2022
DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

Page 1 ends

PURCHASE AND SALE AGREEMENT AND

JOINT ESCROW INSTRUCTIONS

This Purchase and Sale Agreement and Joint Escrow Instructions (“Agreement”) is made and entered by and between The City of Vallejo, a municipal corporation (“City”) and Blue Rock Springs, LLC, a Delaware limited liability company, or its assignee (“ BRS”) (each a “ Party,” and collectively, “Parties”), dated for reference purposes as of December 20, 2022. City and BRS do mutually agree as follows:

RECITALS

This Agreement is made with reference to the following facts, which the Parties agree are true and accurate:

A. City is the record owner of that certain real property commonly known as 655 Columbus Parkway, Vallejo, California (“ City Property ”), which is currently improved with two (2) eighteen- (18-) hole golf courses, clubhouse and associated improvements that are currently managed by Touchstone Golf, LLC, a Delaware limited liability company (“Touchstone”), pursuant to an agreement with City. The City Property is more fully described on Exhibit A to this Agreement, which is incorporated herein by this reference.

B. On or about August 8, 2017, City issued a Request for Qualifications (“RFQ”) for the “Revitalization of Two 18 -Hole Golf Courses and 225 Acres at Blue Rock Springs Municipal Golf Course through a Public -Private Partnership, Management, Lease or Other Agreement.” The RFQ identified three goals for any revitalization project: (1) renovate and restore the municipal golf course in a manner that allows for it to operate as an affordable public course but independent of subsidies from City; (2) fund the development of a new or renovated multi -use clubhouse and associated facilities serving both the golf course and the local community; and (3) preserve or improve the existing aesthetics, quality, property values, environment and views of the surrounding neighborhoods.

C. BRS’s predecessor-in-interest, Greg Norman Golf Course Design Company, LLC, a Florida limited liability company (“Norman”), responded to the RFQ with a proposal that included a sale of a portion of the City Property.

D. City subsequently entered into Exclusive Right to Negotiate Agreement with Norman regarding the Subject Property, dated July 3, 2018 (“ERN”). Norman subsequently assigned the ERN to BRS.

E. The Parties intend that BRS will acquire a portion of the City Property on the terms established by this Agreement, and that after closing, BRS will submit all applications necessary for the redevelopment of the City Property (“BRS Applications”).

F. The ERN was amended on eight (8) occasions between December 26, 2018 and October 20, 2022, in response to communications that Syar Industries, Inc., a California corporation (“Syar”) made to the City, and which resulted in City’s receipt of a formal complaint letter on or about June 2, 2020 (“Syar Complaint”).

DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

Page 2 ends

G. Following negotiations between the Parties and Syar concerning the Syar Complaint, the Parties entered into that certain Settlement and Release Agreement with Syar, which was approved by the City Council for City by Resolution 22-136 N.C. adopted July 12, 2022, a true and correct copy of which is appended to this Agreement as Exhibit B, and is incorporated herein by this reference (“Syar Agreement”). Relevant here, the Syar Agreement requires the City and BRS to undertake certain additional actions as set forth in the Syar Agreement, including without limitation recording a Collaborative Use Easement on certain portions of the City Property identified in the Syar Agreement as set forth in the Syar Agreement (“Collaborative Use Easement”). In addition, a land plan (“Land Plan”) was developed, and is appended to the Syar Agreement.

H. As of the date of this Agreement, the current 8 th Amendment to the ERN expires December 29, 2022.

I. The Parties now intend to establish the terms on which the City will sell and BRS will purchase a portion of the City Property which consists of a portion of each of Solano County Assessor’s Parcel No. (“APN”) 0081-040-100, 0081-040-880, 0081-191-010, 0081-040-110, and 0181- 190-010, including: (1) all rights, easements and appurtenances belonging or appurtenant thereto; and (2) all existing improvements located thereon, as more fully described in Exhibit C -1 through C-3 to this Agreement and incorporated herein by this reference (“Subject Property”).

NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants contained in this Agreement, the receipt and adequacy of which is acknowledged, the Parties agree as follows:

AGREEMENT

The Recitals set forth in the introductory paragraphs of this Agreement constitute a material part of this Agreement, and are fully incorporated herein by this reference, as if set forth in their entirety.

1. Effective Date . The Parties acknowledge that Ci ty’s ability to enter into this Agreement is contingent upon the enactment of a resolution by the City Council approving this Agreement. Accordingly, as used herein, the term “Effective Date” shall mean the latter of the date on which and this Agreement (a) has been executed by both Parties, and (b) the resolution(s) adopted by the City Council approving and authorizing this Agreement, shall become final and effective.

2. Purchase and Sale . City agrees to sell and BRS agrees to purchase the Subject Property, including without limitation all rights, easements and appurtenances belonging or appurtenant thereto, on the terms and conditions stated in this Agreement. For the avoidance of doubt, the Subject Property does not include (a) personal property used in the operation of a golf course on the Subject Property, (b) intellectual property in connection with such operations, (c) rights to select an operator for the golf course on the balance of the City Property, or (d) water and water rights, including both riparian and appropriative rights, in connection with the operation of the golf course; or (e) other property rights in connection with the City’s conduct of golf -related activities on the Subject Property.

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3. Consideration to City.

a. Payment of Negotiation Fee. City previously received the Negotiation Fee from BRS in the total sum of One Hundred Thousand Dollars ($100,000.00), as provided by the ERN.

The Negotiation Fee is non-refundable to BRS and has been used to cover the costs associated with the negotiation of the ERN.

b. City Cost Security Deposit . In addition to the Negotiation Fee, BRS posted the sum of Fifty Thousand Dollars ($50,000 .00), as provided by the ERN (“ City Cost Security Deposit”) to fund payment of City Costs, as defined by the ERN. The City Cost Security Deposit is non-refundable to BRS and has been used to cover the costs of negotiation of this Agreement.

c. Purchase Deposit. Within three (3) days after the Effective Date, BR S shall deliver into Escrow (as hereinafter defined) with the Escrow Holder a deposit in the sum of One Hundred Fifty Thousand Dollars ($150,000.00) in cashier’s check or by confirmed wire transfer of good and available funds (“Purchase Deposit”). The Purchase Deposit shall be placed in an interest- bearing account, shall be refundable to Buyer (except for the Nonrefundable Consideration Payment and Appraisal Fees), and shall be applied to the Purchase Price at Closing. City requested that BRS fund the cos t of an appraisal of other City property, i.e., 400 Mare Island Way, Vallejo, California (“400 Mare Island”), in connection with its request that the Subject Property be released from certain loan obligations for which the Subject Property was pledged as security (“Loan Obligations”). To the extent that BRS funds the cost of the appraisal for 400 Mare Island, BRS may deduct the cost of the 400 Mare Island appraisal from the amount of the Purchase Deposit deposited with Escrow Holder. The full amount of the Purchase Deposit (i.e., $150,000) shall nonetheless be credited toward the Purchase Price.

d. Independent Consideration . Immediately upon receipt of the Purchase Deposit, Escrow Holder shall release a “ Nonrefundable Consideration Payment,” in the amount of One Thousand Dollars ($ 1,000.00) to City without further instructions from City or BRS. The Nonrefundable Consideration Payment is paid to City in consideration for City granting BRS the right to purchase the Subject Property and to conduct due diligence as a contingency in accordance with the terms and conditions of this Agreement. Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Nonrefundable Consideration Payment be refundable; however, the Nonrefundable Consideration Payment shall be applicable to the Purchase Price at Closing.

e. Purchase Price.

i. The Purchase Price for the Property is and shall be the fair market value of the Property in its as -is-where-is condition, as is determined by an MAI -certified appraiser with at least ten (10) years of experience appraising comparable unimproved real property in Solano County, California (“Qualified Appraiser”).

ii. The Qualified Appraiser shall be instructed to appraise the Property for uses then allowed und er then applicable laws and entitlements (without taking into account any prospective future uses or prospective value attributable to prospective entitlements and development rights that may thereafter be issued by any governmental or quasi-governmental entity, and assigning no value to the existing golf course operations of the Property ). The appraisal shall recognize this DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

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purchase as a “bulk” land sale. Further, no value shall be attributed to any portion of the Property lying within the Columbus Parkw ay right of way including, easements for streets, sidewalks, curb, gutter and/or existing easements which prohibit or restrict the use of the Property excluding therefrom the Collaborative Use Agreement.

iii. BRS shall have no obligation to purchase the Subjec t Property unless and until an appraisal of the Subject Property establishes the Purchase Price, and the Purchase Price is approved by BRS and City, each in its sole and absolute discretion. Each Party shall approve or disapprove the Purchase Price, in writing, within three (3) business days after its receipt of the appraisal which establishes the Purchase Price.

iv. City shall appoint the Qualified Appraiser . All fees associated with obtaining the appraisal (“Appraisal Fees”) shall be funded by BRS, which shall be non-refundable to BRS and shall not be applicable to the Purchase Price at Closing (as opposed to the costs to appraise 400 Mare Island), which are the subject of Section 3(c) of this Agreement.

v. After approval of the Purchase Price by eac h of the Parties, and prior to the Closing Date, BRS shall deposit the balance of the Purchase Price in Escrow as provided by Section 10(b)(i), together with all other funds necessary on the part of BRS to enable Escrow Agent to comply with these instructions (see Sections 12 and 13) (“Closing Funds”).

4. Escrow. The Parties have opened escrow with First American Title Company, Northern California Homebuilder Services, c/o Tammi Buna, Senior Escrow Officer, 4750 Willow Road, Suite 275, Pleasanton, CA 94588, Escrow No. 0131-622619ala (“Escrow Agent”).

5. Limited Pre-Closing Investigation of the Property. During the period starting on the Effective Date and continuing through the Closing Date, BRS shall have the right to conduct limited physical inspections of the Subject Property and receive certain limited disclosures from City, as provided below.

a. Environmental Investigation . BRS previously obtained a Phase I environmental site assessment for the Subject Property (“Environmental Report”). BRS shall have a right to enter onto the Subject Property with reasonable advance notice to City, for purposes of obtaining an update to the Environmental Report and conducting such follow-up investigation as may be reasonable and necessary for BRS to evaluate the Subject P roperty’s environmental condition in manner sufficient to satisfy the “All Appropriate Inquiries” rule established by the Environmental Protection Agency. See 40 CFR Part 312, et seq.

b. Natural Hazard Disclosure . City may be required under California law to disclose if the Property lies within the following natural hazard areas or zones: (i) a special flood hazard area designated by the Federal Emergency Management Agency (California Civil Code Section 1102.17); ( ii) an area of potential flooding (Californ ia Government Code Section 8589.4); (iii) a very high fire hazard severity zone (California Government Code Section 51183.5); ( iv) a wild land area that may contain substantial forest fire risks and hazards (Public Resources Code Section 4136); (v) an earthquake fault zone (Public Resources Code Section 2621.9); or ( vi) a seismic hazard zone (Public Resources Code Section 2694). On or about November 3, 2022, BRS obtained a Natural Hazards Disclosure Statement concerning the Property issued by JCP -LGS, which Natural DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

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Hazards Disclosure Statement shall and hereby does satisfy City’s compliance with the above -stated obligations. BRS hereby acknowledges receipt the Natural Hazards Disclosure Statement.

c. Title and Survey.

i. Preliminary Title Report. Prior to the Effective Date, BRS requested that First American Title Insurance Company (“ Title Company ”) issue a preliminary title report pertaining to the Subject Property, together with complete and legible copies of all documents relating to the title exceptions and other matters referred to in such preliminary title report (collectively, the “Preliminary Title Report”). The Preliminary Title Report shall provide for issuance of an owner’s policy of title insurance to BRS using an ALTA Policy Form 2021 or on such other form as BRS may require in its sole and absolute discretion, in the full amount of the Purchase Price, subject only to the Permitted Exceptions (defined below) (“Owner’s Title Policy”).

A. Within two (2) business days after the Effective Date , BRS shall notify City in writing (“ Title Objection Notice ”) of any title exceptions identified in the Preliminary Title Report and/or Survey that BRS disapproves in its sole and absolute discretion (“Title Objection”).

B. BRS hereby disapproves all deeds of trust, de linquent payments of taxes and assessments and other monetary liens affecting the Subject Property that accrued prior to Closing (other than liens for non -delinquent property taxes and assessments as described above) (“ Monetary Exceptions ”). City hereby c ovenants to cause all such Monetary Exceptions to be satisfied at City’s sole cost and expense (including all prepayment penalties and charges) before or concurrently with the Close of Escrow from sales proceeds or otherwise.

Notwithstanding the above, City and BRS acknowledge that the Subject Property is pledged as security for Loan Obligations to Union Bank of California, N.A., a national banking association organized an existing under the laws of the United States of American, as trustee (for convenience, “Union Bank”).

City shall exercise its best efforts to cause the release of the Subject Property from the Loan Obligations prior to Closing. In the event that City is unable to do so, the Loan Obligations shall become the subject of Section 6 of this Agreement, and its failure to secure the release the Loan Obligations shall not be deemed a pre-closing default within the meaning of Section 16.

C. Any exception to coverage shown on the Preliminary Title Report, or matter that is not listed as a Title Obje ction in the BRS’ Title Objection Notice will be deemed approved by BRS and shall constitute a “Permitted Exception” hereunder.

D. City shall have a period of two (2) business days following its receipt of the Title Objection Notice within which to notify BRS in writing (“ Title Objection Response”) of its agreement to remove, alter, modify or otherwise mitigate any Title Objection to the satisfaction of BRS. City’s failure to timely provide a Title Objection Response will be deemed an election by City not to cure the Title Objections prior to the Close of Escrow. In the event that City is not willing to remove, alter, modify or otherwise mitigate any Title Objection to the satisfaction of BRS, BRS shall elect within two (2) business days after the City’s Title Objection Response was due to (1) waive its disapproval of such exception, in which case such exception shall then be deemed to be a Permitted Exception, or (2) terminate its obligation to purchase the Subject Property.

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ii. Survey. BRS shall obtain a boundary survey for the Subject Property (“Survey”) prepared by as surveyor and/or engineer selected by BRS in its sole discretion, provided that BRS shall pay for the cost of such Survey and provide City and the Title Company with copies of such Survey. The surveyor and/engineer shall prepare a metes and bounds legal description that will identify the Real Subject Property for purposes of the Title Policy, Grant Deed, and Rescission Deed (all as defined herein ). The Survey and legal description shall be subject to the approval of the City Manager and the City Attorney, and such approval shall be and hereby is a condition of Closing.

d. Golf Lease. Prior to Closing, City and BRS shall negotiate and execute a lease agreement (“Golf Lease”), which shall commence at the Close of Escrow, pursuant to which City shall continue to hold possession of the Subject Property and operate the golf course and attendant facilities thereon. The Golf Lease shall include commercially reasonable insurance and indemnity requirements for similar leases, in favor of BRS.

In the event that (i) each of the Parties does not approve the Purchase Price, or (ii) BRS terminates the Agreement prior to the Closing Date due to a condition identified in the Environmental Report or Natural Hazards Disclosure Statement; due to a title or survey defect ; or due to the failure of the Parties to timely enter into the Golf Lease ; the Purchase Deposit shall be refunded to BRS, less the Nonrefundable Consideration Payment, Appraisal Fees, and any amounts due to Escrow Agent from BRS pursuant to this Agreement. City shall promptly (but no longer than two (2) business days after such termination) execute any instructions required by Escrow Agent in order to release the Purchase Deposit. Upon BRS’ termination or deemed termination of this Agreement under this Section 5, neither party shall have any further liability under this Agreement or under the ERN, except for any obligations that are specifically stated to survive the termination of this Agreement (the “ Surviving Obligations”).

6. Post-Closing Obligations . The Parties intend that certain activities must be performed after Closing, to confirm the sale of the Subject Property and to realize the development of the Subject Property by BRS if and as ultimately approved by the City in the normal course of entitlement and permitting review. Accordingly, the Parties shall undertake the following activities after Closing, reasonably and in good faith, which obligations shall survive the close of escrow.

a. Release of Subject Property from Loan Obligations.

i. In the event that City is unable to obtain the release of the Subject Property from the Loan Obligations prior t o Closing, as contemplated by Section 5(c)(1)(B), that failure shall not be deemed a pre -closing default within the meaning of Section 16. City shall have fifteen (15) business days after Closing , subject to a written agreement executed by both Parties extending such deadline, to secure such release by the recording of such documents as Title Company requires to remove the Loan Obligations as Monetary Exceptions to the Title Policy (“Union Bank Documents”), so that the Title Policy may be re-issued to BRS free from such Monetary Exceptions.

Commencement of the Due Diligence Period established by Section 6(e) shall be postponed until the date when the Union Bank Documents are recorded in the Official Records of Solano County (“Official Records”).

ii. To the extent that that the Union Bank Documents do not record within fifteen (15) days after Closing, as such date may be extended from time -to-time, Rescission shall occur within the meaning of and as provided in Section 7.

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b. Continued Operation of Golf Course. City shall continue to operate the golf course and attendant facilities on the Subject Property pursuant to the Golf Lease. For the avoidance of doubt, City shall be permitted to continue golf operations on the Subject Property after the Close of Escrow, and may continue to conduct such operations through Touchstone or any other management company that City may choose in its reasonable discretion.

c. Reimbursement Agreement.

i. Within sixty (60) days after Closing, subject to a written agreement executed by both Parties extending such deadline, the Parties shall negotiate and execute an agreement to provide for BRS’ payment of City’s reasonable costs associated with the engagement of City Staff (if not subject to flat rate entitlement fees), third-party consultants and attorneys, including City’s legal counsel (outside or staff), contract project manager, and financial and engineering consultants, in connection with the review and processing of the BRS Applications, and, to the extent City’s involvement is necessary or desirable to BRS, the permits from resource agencies (“Reimbursement Agreement”).

ii. The Reimbursement Agreement shall be in the City’s usual form and will provide for an “evergreen deposit” of One Hundred Thousand and 00/100 Dollars ($100,000.00) to secure BRS’ obligations to pay such costs. The Parties contemplate that BRS’ first payment of costs due to City under the Reimbursement Agreement shall be payable no earlier than the latter of the following dates: (A) sixty (60) calendar days af ter Closing, (B) ninety (90) days prior to submittal of development applications by BRS.

iii. In the event that City and BRS are not able to timely negotiate and execute a Reimbursement Agreement, Rescission shall occur within the meaning of and as provided in Section 7.

d. Participation Agreement.

i. No later than one hundred twenty (120) days after closing, subject to a written agreement executed by both Parties extending such deadline, the Parties shall negotiate and execute a Participation Agreement by which the City will receive (A) additional consideration for the Subject Property after BRS’ receipt of final entitlements for a project on the Subject Property; and (B) additional consideration for the Subject Property at such time as (1) finished lots are sold to merchant builders for construction, or (2) BRS sells the improved residential and/or commercial property.

ii. In the event that City and BRS are not able to timely negotiate and execute a Participation Agreement, Rescission shall occur within the meaning of and as provided in Section 7.

e. Conduct of Due Diligence; Physical Inspections.

i. BRS shall have the opportunity to perform due diligence investigations after Close of Escrow, which investigations may include (A) a review of all the documents, materials DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

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or information relating to the Subject Property, including without limitation those described on Exhibit D attached hereto and incorporated herein by this reference (collectively, the “Due Diligence Materials”), which shall be provided to BRS no later than fifteen (15) calendar days after Close of Escrow; and (B) a review of the physical condition of the Subject Property, including without limitation investigations, and tests of the Subject Property, including but no t limited to, geotechnical soil borings, test pits, physical inspections and other environmental tests of the Subject Property (“Physical Inspections”), all at BRS’ sole risk, cost, and expense.

ii. BRS shall complete its review of the Due Diligence Materials within forty-five (45) days after City delivers the Due Diligence Materials and shall complete its Physical Inspections within sixty (60) days after Close of Escrow (“Due Diligence Period”).

iii. At the conclusion of the Due Diligence Period, BRS shall notify the City in writing as to whether it approves the Subject Property and intends to retain title (“ Approval Notice”), or if it disapproves the Subject Property (“ Disapproval Notice”). For the avoidance of doubt, BRS shall not issue a Disapproval Not ice unless the Due Diligence Materials or Physical Inspections disclose conditions that B RS determines will materially impact B RS’s intended use and development of the Subject Property and or the value of the Subject Property.

iv. If BRS issues a Disapproval Notice,, Rescission shall occur within the meaning of and as provided in Section 7. The failure by BRS to deliver its Disapproval Notice shall be deemed to be its approval of the Subject Property.

v. In the event BRS terminates this Agreement and exercises the right of Rescission, BRS shall return all Due Diligence Materials provided by City to BRS and shall permanently delete any electronic copies held by BRS.

f. Performance Agreement; Pursuit of Entitlements by BRS.

i. Within one hundred twenty (120) after Closing, subject to a written agreement executed by both Parties extending such deadline, City and BRS shall negotiate and execute an agreement that includes a performance schedule pursuant to which BRS shall proceed with filing those applications and submittals that are and will be necessary to secure issuance of entitlements to develop the Subject Property (“ Performance Agreement ”). The Performance Agreement shall provide that (A) the requested entitlements shall be consistent with the limitations impose d on the development of the Subject Property by the Syar Agreement; and that (B) entitlements for the Subject Property shall be pursued in an expeditious manner, with reasonable diligence, and on a timeline that is generally consistent with the performance schedule, market conditions, and other similar factors, and the goal of completing expeditious development of the Subject Property, subject to force majeure, which shall be defined in the Performance Agreement.

ii. The Performance Agreement (or alternate for m of agreement, as the Parties may agree) shall provide that the City shall have a power of termination (a reversionary interest) in the Subject Property (“Power of Termination”) as provided in Section 7(e).

iii. The Performance Agreement (or alternate form of agreement, as the Parties may agree) shall provide that if the BRS Applications are not approved, and BRS is not able to DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

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secure entitlements for a project, the nature of which project, shall be within BRS’ sole and absolute discretion, BRS shall have the right to require the City to repurchase the Subject Property by refunding to BRS the Purchase Price (inclusive of the Purchase Deposit and any unexpended amounts pursuant to the Reimbursement Agreement, but exclusive of the Nonrefundable Consideration and Appraisal Fees) in consideration for BRS reconveying the Subject Property to the City. iv. Following execution of the Performance Agreement, a Memorandum of Agreement shall be recorded on title to the Subject Pr operty to assure that the City’s Power of Termination is recorded in the chain of title for the Subject Property. v. BRS shall engage Norman, at its sole cost and expense, to develop a Conceptual Golf Site Design and Upgrade package (“ Concept Plan”). Norman shall also prepare a construction estimate for the implementation of the Concept Plan. The Concept Plan shall be consistent with the limitations imposed on the development of the City Property by the Syar Agreement and any cost limitation imposed by City. City shall have the right to approve the cost and scope to develop the Concept Plan. Upon City approval of the cost and scope to develop the Concept Plan, BRS shall within thirty (30) days of approval of the cost and scope prepare and submit to the City the Concept Plan. Upon approval of the Concept Plan by City, and concurrently with submittal of the BRS Applications, BRS shall submit plans sufficient to permit (1) CEQA review of and approval of designs for the Golf Site design and upgrade; (2) the pursuit of entitlements (i.e., the Concept Plan shall include sufficient detail to permit the submittal of a development application and pursuit of entitlements, and shall include a site layout and grading plan , among other requirements ); (3) an updated construction estimate for same; ( 4) allow the City or City Designee to obtain construction bids for the Golf Site design and upgrade. For the avoidance of doubt, BRS is not obligated to provide construction-level detail in the Concept Plan.
vi. In the event that City and BRS are not able to timely negotiate and execute a Performance Agreement, Rescission shall occur within the meaning of and as provided in Section 7.
vii. BRS may request that City enter into a development agreement in connection with its pursuit of entitlement applications for the Subject Property, which shall be considered by the City in the normal course of processing for such applications. g. CEQA Compliance. In compliance with CEQA, and to give members of the public the opportunity to be aware of the environmental consequences of a development project on the Subject Property, and to fully participate in the CEQA process, the Parties acknowledge that City has no obligation to approve a development project on the Subject Property and that any such project shall be subject to all applicable governmental approvals . City shall retain discretion in accordance with applicable law before action on the project by the City Council to (i) identify and impose mitigation measures to mitigate significant envir onmental impacts, (ii) select other feasible alternatives to avoid significant environmental impacts, (iii) balance the benefits of the project against any significant environmental impacts prior to taking final action if such significant impacts cannot otherwise be avoided, or (iv) determine not to proceed with the project. Any failure by City Council to grant such approvals after a public hearing thereon shall not constitute a default or a breach of the terms of this Agreement by City.

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7. Rescission; Power of Termination.

a. In the event that the Union Bank Documents are not recorded as required by Section 6(a); if the Parties are not able to timely reach agreement on the Reimbursement Agreement, Participation Agreement, Performance Agreement, or if BRS issues a Disapproval Notice at the conclusion of the Due Diligence Period , the conveyance of the Subject Property to BRS shall be rescinded (“Rescission”).

b. In the event of Rescission, (i) BRS shall receive the return of the Purchase Deposit (less the Nonrefundable Consideration Payment and Appraisal Fees) and the Purchase Price, together with and any unexpended amounts pursuant to the Reimbursement Agreement; (ii) the Parties shall execute and record a deed rescinding BRS’ acquisition of the Subject Property. (“Rescission Deed”).

c. For the avoidance of doubt, BRS shall not have a right of Rescission in connection with its pursuit of entitlements for the project, with CEQA, any development agreement, or with the City’s pursuit of development of golf or other improvements on that portion of the City Property retained by City.

d. In the event of Rescission, BRS shall not be entitled to reimbursement of any amounts expended pursuant to the Negotiation Fee, the City Cost Security Deposit, the Reimbursement Agreement, Performance Agreement or any costs associated with the processing of the BRS Applications.

e. In the event that BRS fails to comply with the Performance Agreement, the City may exercise the Power of T ermination under the Performance Agreement (Cal. Civ.

Code § 885.010, et seq.), in which case fee ownership of the Subject Property shall be returned to the City and BRS shall receive the return of the Purchase Price and such other sums as the Parties negotiate in the Performance Agreement.

8. Conditions Precedent . The following shall be the conditions precedent to the applicable Party’s obligations to consummate the purchase and sale transaction contemplated herein:

a. Conditions to BRS’ Obligations . BRS’ obligations hereunder, including, but not limited to, its obligation to consummate the purchase transaction provided for herein, are subject to the satisfaction, in BRS’ sole and absolute discretion, of each of the following conditions, each of which is for the sole benefit of BRS and may only be waived by BRS in writing:

i. City’s Representations and Warranties . Each representation and warranty made in this Agreement by City shall be true and correct in all material respects at the time as of which the same is made and as of the Close of Escrow.

ii. Purchase Price. The Purchase shall have been established and approved by BRS and City.

iii. Approval of Legal Description . The legal description pursuant to which the Subject Property shall be conveyed to BRS shall have been approved by BRS and City.

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iv. Delivery of the Golf Lease. A fully executed copy of the Golf Lease shall have been delivered to Escrow by City.

v. Owner’s Title Policy. Title Company shall be irrevocably committed to issue, at the Closing, its standard coverage owner’s title insurance policy (and provided BRS provides the Survey to the Title Company (in a form that meets the Title Company’s reasonable requirements), its extended coverage ALTA Owner’s Title Insurance Policy ( 2021 Form), with liability equal to the Purchase Price, or in such greater amount as BRS may request and to which Title Company may agree to underwrite, showing fee title to the Subject Property vested in BRS, free and clear of any and all tenancies and/or occupancy rights of third parties affecting all or any portion of the Subject Property, with the limited exception of the existing lease to Touchstone, and subject only to the Permitted Exceptions (the “Owner’s Title Policy”).

vi. City Deliveries. City shall have delivered to Escrow Ag ent the items described in Section 10(a) hereof.

vii. No Pending Action . There shall exist no pending actions, suits, arbitrations, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against City that would materially and adversely affect City’s ability to perform its obligations under this Agreement.

viii. Condemnation. This Agreement shall not have been terminated by BRS as a result of any condemnation or threatened condemnation of the Subject P roperty as described in Sections 14(a)(vi) and 15 hereof.

ix. BRS’ Waiver of Conditions. BRS may at any time or times on or before the Close of Escrow, at its sole election, waive any of the conditions precedent to BRS’ obligations under this Section 8(a) or otherwise and consummate the sale, but any such waiver shall be effective only if contained in a writing signed by BRS and delivered to City. In the event any of the conditions precedent for the benefit of BRS that are contained in this Agreement are not completely fulfilled and satisfied, then in addition to any other rights or remedies BRS may have, BRS may, prior to the Closing Date (defined below), terminate its obligation to purchase the Subject Property, and (A) the Purchase Deposit and all accrued interest thereon shall immediately refunded to BRS (less the Nonrefundable Consideration Payment and Appraisal Fees and any amounts due to Escrow Agent from BRS pursuant to this Agreement); (B) BRS’ obligation to purchase, and City’s obligation to sell, the Subject Property shall terminate; and (C) neither Party shall have any further obligation to the other except , except as to the Surviving Obligations. Any unexpended amounts pursuant to the Reimbursement Agreement shall be returned to BRS by City outside of Escrow.

b. Conditions to City’s Obligations. City’s obligations hereunder, including, but not limited to, its obligation to consummate the purchase transaction provided for herein, are subject to the satisfaction, in City’s sole and absolute discretion, of each of the following conditions, each of which is for the sole benefit of City and may be waived by City in writing:

i. Purchase Price. The Purchase shall have been established and approved by BRS and City.

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ii. Approval of Legal Description . T he legal description pursuant to which the Subject Property shall be conveyed to BRS shall have been approved by BRS and City.

iii. Delivery of the Golf Lease. A fully executed copy of the Golf Lease shall have been delivered to Escrow by BRS.

iv. BRS Deliveries. BRS shall have delivered to Escrow Agent the items required to be delivered by BRS pursuant to Section 10(b).

v. Due Performance. BRS shall not be in default under this Agreement and shall have duly performed each and every covenant, undertaking and agreement to be performed by it prior to the Close of Escrow hereunder.

vi. BRS’ Representations and Warranties . Each representation and warranty made in this Agreement by BRS shall be true and correct in all material respects at the time as of which the same is made and as of the Close of Escrow.

vii. City’s Waiver of Conditions. City may at any time or times on or before the Close of Escrow, at its sole election, waive any of the conditions precedent to City’s obligations under this Section 8(b) or otherwise and consummate the sale, but any such waiver shall be effective only if contained in a writing signed by City and delivered to BRS. In the event any of the conditions precedent for the benefit of City that are contained in this Agreement are not completely fulfilled and satisfied, then in addition to any other rights or remedies City may have, City may, prior to the Closing, terminate its obligation to convey the Subject Property, and the Purchase Deposit and all accrued interest thereon shall immediately r efunded to BRS, less the Nonrefundable Consideration Payment and Appraisal Fees, and any amounts due to Escrow Holder from BRS pursuant to this Agreement, BRS’ obligation to purchase, and City’s obligation to sell, the Subject Property shall terminate, and neither Party shall have any further obligation to the other except as otherwise provided in this Agreement. Any unexpended amounts pursuant to the Reimbursement Agreement shall be returned to BRS by City outside of Escrow.

9. Covenants During Escrow. From the Effective Date until the earlier of the Closing or the termination by BRS or City of its obligation to complete the transfer of the Subject Property, BRS and City, as applicable, covenant and agree to the following:

a. Operation of the Subject Property Prior to Close of Escrow.

i. Affirmative Covenants. City shall (A) pay all taxes and assessments, and service all debt secured by the Subject Property, if any, prior to delinquency, (B) maintain and operate the Subject Property in substantially its current condition, and (C) maintain property and liability insurance related to the Subject Property at the level and with the insurance companies that City currently maintains.

ii. Negative Covenants. Following BRS’ delivery of an executed copy of this Agreement, City shall not, except as otherwise specifically permitted or required pursuant to this Agreement, or as otherwise agreed or permitted by BRS in writing in BRS’ sole and absolute discretion, (A) grant, create or allow the creation of any easement, right -of-way, encumbrance, lien, restriction, DocuSign Envelope ID: DD048B7C-3F32-4019-B775-453A28F31325

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Vallejo City CouncilSeptember 24, 2024

Vallejo City Council
September 24, 2024