94-040 Community Housing DevelopersI
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LOAN AGREEME?lT
by and b e t •,;ee n
.HE CITY OF CUPERTI :lO
and
r.OMMUNITY HOUSING DEVELOPERS, INC.
L
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LO,\H AGRE£..'1 E~l T
,, I THIS LOA1l AGREEM E!iT (the "A g r ee r:i e nt") is made as of
1 Ji LILL .:-Y C , 1995 (th e "Comr:i e n cer.o ent Date"), by and between
t}) City o f Cupert i no (th e "City"), and Co mmunity Housing
Develop e r s , I nc., a Ca li f o r n ia n onp r of it public b e nefit
r:orpor a t i on (th e "D <:!velope r"), ·..:i th r e fe r e nc e to the following
facts:
A. The City desires to make a loan to Developer in the
ar:io;.int of Eight Hundr·e d Tw e nty-On e Thou s and Dollars ($821,000)
from the City's Affordable Housing Fund to assist Developer in
developing the low-incor:ie hou s in g d es crib e d below.
B. The Developer intends to purchase the real property
described in the attached Exhibit A (the "Property"). The
~roperty is located within Cupertino, California. The
.i.mprovements on the Property (the "Ir:iprovements") shall include
forty {40) r~sidential unit s a nd ancillary landscaping, parking,
and other inprcvements. The Property and the Improvements will
be referred to collectively as the "Development."
C. The Developer's acq~isition of the Property for the
construction of the housing units in the Development is not
financially feasible without the City's financial assistance.
The City therefore desires to provide financial assistance to the
Developer for such, in consideration ~f the Developer's agreement
to construct and operate the Development consistent with this
Agreement, including (without limitation) the occupancy and
affordability restriction s set forth in Article Four.
D. A negative d e claration and accompanying initial study
have been pr e p a r e d by th e City for the d e velopment of the
Developme nt. Th e n e gative declaration was a p proved ~y the City's
Planninp, Commi~::;ion on b e half o r the City on December 12
199 ll , anc.! by the City Co uncil on .Janu;1ry 3 , 1992..__. '.1.he
negat:Ive declar a tion ha s se ~vc d a s the e nvironm e ntal
documentation und er th e Ca li fo rnia Environmental Quality Act for
consideration ~nd app r o val of this Agreement.
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WITH REFERENCE TO THE FACTS RECITED ABOVE , the City and the
Developer (the "Pilrties") agree as follo ws :
ARTICLE 1:
1. 1
DEFINITI OHS
Defini1:ions
In aduiticn to the terms defined elsewhere in this
Agreement, the fellowing definitions shall apply:
~a) "Affordable Un i ts" h as the mec1nir.g given in
Section 4.9.
(b) "Agr~ement" meilns this Loan Agreement.
(c; "App-..:oved Development Loan" means any of the
folloving loans to the Oevelope~ in connection with the
Development: (i) the Bank Loan; (ii) the County HOME Loan;
the County Trust rund Loan; (iv) the CHFA Loan; and (v) any
loan approved by the City in its sole discretion.
(iii)
other
(d) "Bank Loan" means a loan to be made by W8lls
Fargo Bank to the Developer for the construction of the
Improvemen~s in the maximum amount of One Million Seven Hundred
Fifty-T'No Thousand Dollars ($1,752,000).
(e) "CHFA Loan" means a loan to be made to the
Developer by the California Housing Finance Agency to replace the
Bank Loan and provide perm ~nen t financing for the Improvements in
the maxi~um principal amcunt of th8 Bank loan.
( f) "City" means the City of Cupertino, California,
op er ating through its governing body and its various departments.
(g) "City DeeJ of Trust" means the dE!ed of trust
encumbering th~ Property and securing the City Note and this
Agreement. A form of the City De ed of Trust is attached as
Exhibit C.
(h) "City Loan" r.1e.:.1ns the loan to be made by the City
to the Dev eloper pursu.:.int to this Agreement in the maximum
princii::,al ilm ount of Eight Hundred Twenty-One Thousand Dollars
($821,000), as furcher cescribed in Secti0n 2.1 below.
(i) "City Note" means the r,romissory note to be
signed by the Developer to evidence the Developer's obligation to
repay the City Loan. A form of the City Note is attached as
Exh i b i..L.e.
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(j) "Cor:u:iencen e r.t Date " ~hv.11 rr.0a n the date of this
Agreement as set forth in th e fir s t paragraph on Page 1 which
precedes the rccital f ·
(k ) "Count y " r..ca n s th e County or S anta Clara, a
politica l subdivi sio n of th e State of Califor nia.
( 1) "C ounty HOME Loan" me a :-,s a loan to be made to the
Develop er by the County purs u an t to HUD's HOME program, in the
maximu m principal amount of SiY Hundred Thcusand Dollars
($600,000).
(m) "County Trust :-'und Loa n" mea ns a loan to br made
to the Develop er by the County from the county's Bond Trust Fund
in the illa x i mum principal amount of One Hundred Thousand Dollars
($100,000).
(n) "Develo pe r" mea n s Col!l17lunity Housing Developers,
Inc., a Calif o rnia nonprofit public benefit corporation, or its
assignee.
(o) "Developer Event of Default" has the meaning
given in Section 6.1.
(p) "Development" means the Property and the
Improvements.
(q) "HUD" neans the United States Department of
Housing and Urba n Deve lopm e nt.
(r) "Improvem e nt s " mea ns the forty (40) unit
residential r e nt a l facility on the Property to be developed under
this Agre eme nt.
(s ) "Low Incor.ie Ho u se hold" h as the meaning given in
Section 4.9.
(t) "Mod erate Income Household" h as the meaning given
in Section 4.9.
(u) "Pa rt ies " means the City and the Developer.
(v) "Prop erty " mea n s the property described in the
attached Ex hibit A, u p on which the Improvements will be
develop ed , constructe d a nd operated pursuant to this Agreement.
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(w) "R e nt" h as the meaning giv e n in Section 4.9.
-J-
. t s .. " means the security
(x) "Sec ur i ty Fin a ncing In e r e '-'milar ta e d ee d of trust, or s.1
interest created by any m~~egP~o~erty secu ring a n Approved
financing encumbrance on -
Develop~8nt Loan.
"Tern " h as t he meaning give n in Section 8.2(a).
( y)
( z) "Transfer" ha s ~he nea n ing given in Section 5.1.
"Unit" has the meaning giyen ir. Section 4.9.
1.2 _Ex hibits
The following exhibits are attached to and
in c orporat e d into this Agreeme~t:
ARTICLE 2:
2. 1.
Exhibit A : Leg a l De scription
Exhibit B: Form of City Note
Exhibit C: Form of City Deed
Exhibit D: CDBG Requirements
Exhibit E: Development Buctgct
LC,AN l-'h0VISI0NS
Loan.
of the Property
of Trust
The City shall loan to the Developer the principal
amount of E i ght Hundred Twenty-One Thousand Dollars ($821,000),
to be disbursed in the manner described in Section 2.5 below.
The obligation to repay the City Loan shall be evidenced hy the
City Note in subs tantially the form attached to this Agreement as
Exhibit B.
2.2 Int e r est And Re p av mcnt.
The interest and repayment terms for th e City Loan are set
forth in the City Note; provid ed , ho weve r, that on or after the
8leventh (11th) anniversary of the date of the Note the City may
review the 0perating hist ory of the De v el opment to determine
whether the Dev 8l op ment ha s Surplus Cash, as defined in the Note,
sufficient to ma ke fixed payments on the Note. In addition, any
project savings s hall be u se d to reduce the principal due under
the Note. Any such requirement by City of fixed payments or
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reduction of pri n cipal shal l be s ubj ect to th e prior written
app r oval o f th e Cali fornia !l o u s i ng F i :i ance ;..gency .
2. J. Use of Loan Funds.
The Dev eloper shall u se th e C i t y Loan funds to acquire and
cevelop the Prope rt y . The Deve]o~e r s h all not u se the City Loan
funds f or any other purpo se w1~hc u t the prior written consent of
the City. The u ses o f the City l oa n funds are set forth in th~
9evelopm~nt Budget attached t o this Agreement as Ex hibit E.
2. 4.
The
I.oan, as
the City
attached
shall be
2. 5.
Securit~.
Developer shall s ecure its obligation to repay the City
evid e nced by th e City Note , by signing and delivering to
the City Dee d o ~ Trust in substantially the form
to this Agre eme nt as Exhibit C . The City Deed of Trust
record ed agai~st the Deve lopme nt.
Disbursem e nt of Loa n Pr oceed s.
The City shall have no obligation to disburse an~ of the
City Loan unless th e follo~ing condit i ons hav2 been and cont i nue
to be satisfied:
(a) The Developer h as sign e d and delivered to the
City the City Note in substa ntia lly the form attached to this
Agreement as Exhibit Band the City Deed of Trust in
substantially the form attached to this Agreement as Exhibit G-
(b) The City Deed of Trust hns been recorded against
the Property in the off icial records o f the County.
(c) A title insurer reasonably acceptable to the City
is uncon C itionally and irre vo cably comrn itt~d to issuing an ALTA
Lender's Poli cy of insurance insuring the priority of the City
Deed of Trust in the amount of the City Loan, subject only to
such L .cception s and exclusions as ma y be reascnably acceptable to
the City, and containing such e n jorsern~nts as the City may
reasonably require.
(d) The Develop e r has furnished the City with
evidence of insuranc e cover ag e sa tisfy i ng the requirements of
Section 4.6(b).
(e) The City has received e vidence reasonably
satisfactory to the City that the Developer exists in good
standing at th e time of the proposed disbursement, and that the
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Developer has duly authoriz e d entry into a nd p e rformance under
this Agreement.
(f) The p roceeds of the City Loan, together with
other funds or firm commitments for funds th ~t the Developer has
obtained in conn e ction wi th the Development , are not less than
the amount that the City determines is necessa ry to pay for
develop~ent of the Dev e lop me nt and t o satisfy all of the
coven ants contai n ed in , this Agreement.
2.6 Subo r dination .
(a) Th e Ci~y shall subor di nate, and shall execute
such docu me nts as may be necessary to subordinate, the priority
of the City Deej of Tru s t to encuflbrances on the Property in
connection with the Bank Loan and, upon repayment of the Bank
Loan, the CHFA Loan, but in no event shall the City subordinate
its deed of trust to eri s umbrances whi c h in principal amount
exceed $1,752,000. Pursuant to Section 8.13 of this Agreement
the Ci t y Manag e r is hereby authorized without further authorization
from the City Council to negotiate and execute subordination
agreements in connection with the Bank Loan and the CHFA Loan in
accordance with the provisions of this Section 2.6.
(b) The city may include in any subordination
documents that effectuate the subordination described in Section
2.6(a) reasonably adequate notice and cure rights to enable the
City to protect its financirtl interests in t~e Development .
ARTICLE 3: CON S'!'RU CTION OF THE DEVELOPMENT
J . 1 Comme n ce me nt of CQ n s truction.
Th e Dev e lop e r shall c cmm ence construction of the
Improvements no later th ~n one hundred eighty (180) days after
recordation of the City Deed of Tru s t. Developer shall submit a
final pro-forma to City prior to the comne nce me nt of
constructicn.
3.2 Completion of Construction.
The D8veloper sha ll dilig e ntly prosecute to
~ompletion the con s truction of the Improv em ents and shall
complete the conscru c tion no later than eighteen (18) months
after comm e nc e ment. Co mp l eti on of const ruc tion of the
Improvements s hall be evidenced by i ssua nc e of a governmental
certificate of occupancy for all forty (40) unit s in the
Improvements.
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J. 3 Construc tio~rs~ant to Plans .
(a) The Develop e r shall construct the Improvements in
accordance with the plans a~d sp2c ifications approved by the
City, and the terms and cc:.dit.!.ons of all l _.,,'ld use permits and
approvals required by th e City.
(b) All con J truction work and pr fessional services
shall be p8rforrned by p ersons or ent i ties licensed or oth~rwise
authorized to perform the appli cab le construction work or service
in the State of Cali f ornia.
J. 4 Compli~nce with Applicabl e La w
The Develop ,:,r shall cause al 1 work performP-d in connection
with the Property, includi r.g co~struction of the Improvem~nts, to
be performed in compliance with all applicable laws, ordinances,
rules, and regulations of federal, state, county or municipal
governments or agencies now in force or that may be enacted
hereafter. The work s~all proceed only after procurement of each
permit, license, or other authorization that may be required by
any govern~ental agency having jurisdiction, and the Developer
shall be responsible to the City for the procurement and
maintenance thereof, as may be required of the Developer and all
entities engaged in ~ork on the Property. The Developer shall
comply #ith the requirements of the Community Dev8lopment Block
Grant ("CDBG") program as set forth in the CDBG Requirements
a~tached to this Agreement as Exhibit D.
J.5 Equal Opportunity.
During the construction of the Improvements there shall be
no discrimination on ~he basis of race, color, creed, religion,
sex, sexual orientation, narital status, national origin,
ancestry, or handicap in the hiring, firing, promoting, or
demoting of any person e ng age d in the construction work.
3.6 Mec h anics Liens, Ston Notices. and Notices of
CompJeti o n.
(a) If any claim of lien is filed against the
Property or a stop notice affecting the City Loan is served on
the City or any other lender or other third party in connection
with the Development, then the Developer shall, within twenty
(20) days after such filing or service, either pay and fully
discharge the lien or stop 1otice, effect t~e release of such
lien or stop notice by delivering to the City a surety bond in
sufficient form and amount, or _provide the City with other
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ossu r il nc e Siltisfilctory, to the City that: t he claim of lien or stop
n~tice ~ill b e paid or dischilrged .
(b) If the Develop~r fails to d ischarge any iien,
encumbranc e , charge, or claim in the manner required in Section
J.6(a), then in ad dition to an y other right or rern~dy, the City
mily (but shall be u nder no oblig ation to) discha~ge such lien,
enc~rnbrilnce, c h ~rg e , or claim at th e Developer's expense.
J.ltern a t El:,r , the C ity nay requ ire the De•,elope r to immediacely
deposit with the City th e amount n ecess ary to satisfy such lien
or claim and any costs, p endi r.g r esol ution ther e of . The City may
use such dep os it to satisfy any clai m or liP.n that is adversely
determined aga inst the Dev e lu pe r.
(c) The Developer shall file a valid notice of
cessation or notice of conpleti on upon cessation of construction
on the Development for a continuous period of thirty (JO) days or
more , and take all oth e r reasonable steps to forestall the
assertion of claims of lien against the Property. The Developer
authorizes the City, but without cny obligation, to record any
notices of completion or cessiltion of labor, or ony other notice
that the City deems necessary or desirable to protect its
interest in the Developme nt.
J.7 Post-Construction Audit .
Develo?e r shall submit to City within three (3) months after
completion of construction an audit of construction costs a~d
expenditures conducted by an ind~pendent c ertified public
accountant.
ARTICLE 4:
4 . 1
CONTINUING OBLIGATIONS
APPl i c ab i 1 i ty .
The Dcv c loper sh<1 l l cor.,~l y with th i s Article Four t:1roughout
the Term. Prepayme nt o f the City Loan s h a ll not relieve the
De v elop er o f the obligation to c ompl y with this Article Four.
4.2 1/_sc , Mui nt cn .:rnce and Ope r ~tiQ.D.
The Deve loper s h all :
(a) Pro~ptly following the completion of construction
of the Improvements, contin~ously operate and maintain the
Development as multifamily housing rented to occupants and at
rent l e vels i n co n formity with Sections 4.10 and 4.11.
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(b) Dur i n g th e co urs e of s uch o pera t i on, mainta in t he
De ve l opme n t , i n cl u ding a il lan d sc a ping , i n go o d repair and i n a
n ea t, c lea n, an d ord erly c o n ditio n. Su b j e c t to the r e quireme n ts
o f s enio r lender s, if any Improv eme n ts a re da ma ged or destr o yed,
then t h e Developer s h al l, at i ts cos t a n d expense, diligently
un d e rtak e to r e p a i r or r es t ore such Imp rovements. Such work or
r e p a i r shall be connenced withi n one hu n d red tw e nty (120) days
aft er the damage or loss occurs a nd sha l l be complete within one
(1) y ear thereaf t e r. An y i n s urance p r ocee ds collected for such
d ama ge or d e structio n sh all be ap p lied to the cost of such
rep ai rs o r r es tor ati on.
(c) Op era t e and ma int a in t he De velopment in fu l~
compliance with the P lan and al l ap pl i c a ble lo c ctl, sta te, a r.d
federal l a ws and r egu1 a tions .
4 .3 Ch a ng e s.
The Developer s hall p r o mpt ly notify the City in writing of
any changes in the location of an y place of business of the
Developer, and of any other change in fact or circumstance
(including the Developer's assets) that both (a) was represented
or warranted at any time by the Developer to the City, and (b)
will materially adversely a ffect the Developer's capacity t o
perform its obligations under this Agreement.
4.4 Notification of L itiga tion.
The Developer shall promptly notify the City in writtng of
(a) any litigation that (i) materially affects the Developer or
the Property and ( ii) would materially adversely affect t~1e
Oevelo~er's capacity to per f orm its obligations under this
Agreement, and (b) any claims or disputes that involve a material
risk of litigation th a t would materially adversely aff ec t the
Developer's capacity to p e r f orm it s obligations under t his
Agreement.
4.5 Entry by t h e Ci ty .
After not i ce to the De v elop e r, the Developer shall permit
the City, through its offic e r s , ag e nts, or employee s , at all
reasonable tim e s, both duri n g an d a ft er construction of the
Improvement~, to e nter onto the Prop e rty to in s pect the
Development 1or complianc ~ with thi s Agr eement. The City is
under no obl i g a tion to s ~pe r v ise , in s p e c t , or inform the
Develope r o f t~e progr ess o f con st ruction, and the Developer
s ~a ll not r e ly upon th e C i t y f or a ny s uch a ct i vi t y. Th e City
Eh a ll not unr eas on a bly dist ·Jr b a n y r es id e nti a l t e n a nts in the
c our se of a ny i n apcction c o n d uc ted purs u a nt to this S e ction 4.5.
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4.6 I nd e :nnity; I nsurance .
(a) The Develo p~r shall indemnify, defend (with
counsel re a sonably approved by the City, at the City's option),
and hold the City, and its e rn ployees, officers and agents
harmless against all clai~s which arise out of or in connection
with the ownership or occupancy o f or construction on ~r in
connection with the Property by the Developer or the Developer's
contractors, subcontractors, agents, employees, or tenants. This
indemnity s hall not extend to any claim arising solely fro~ the
City's n egl igence or failur~ to perform its obligations under
this Agreement. This S ect ion 4.6(a) shall survive the
terminat io n of this Agree~ent.
(b) The Develop e r shall maintain the following
minimum insurance coverag e , issueci by an insurer and in a form
reasonably acce~table to th e City:
(i) Worker's Compensation insurance, including
Employer's Liability coverage, with limits not less than One
Million Dollars {$1,000,000) each uccident.
(ii) Comprehensive General Liability insurance
with limits not less than Two Million Dollars ($2,000,000) each
occurrence combined single limit for Bodily Injury and Pr0perty
Damage, including coverages for Contractual Liability, Personal
Injury, Broad form Property Damage Projects and Completed
Operations.
(iii) r.ompr e hensive Automobile Liability insurance
with limits not less than One Million Dollars ($1,000,000) each
occurrence combined single limit for Bodily Injury and Property
Damage, including coterages for owned, nor.-owned and hired
vehicles, as applicable; provided, however, that if the Developer
and its contractors and agents do not own or lease vehicles for
purposes of thi s Agreement, then no alltomobile in~urance shall be
required.
(iv) Prop e rty insurance covering the Improvements
c u v ~ring all risks o f less, including flood, for one hundred
percent (100 %) of the repl ace~ent value, with deductible, if any,
acceptabl8 to the City.
If a holder of Security Financing ln terest requires greater
insurance coverage, then such greater coverage shall apply in the
place of the coverage desc ribed above for purposes of this
subsection (b).
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(c) Pri o r to a nd for the full dt....rr1tion of
construction of the I::i pro ·.r e::ients ond any 0tJ1e !:" construction
activity or1 the Prop e rty. the DevelopPr shall cause any general
contractor or agent worki~g ~nder direct contract with the
Developer in conr.ection with t he co n s truction ~ctivity , and all
s ubc ontractors working ~n dc~ i ndir e ct contract wit h the Deve loper
in connection with the construction ac t iv ity , to mai ntain
insurance of the typ es and in at l~a s t the minimum amou nts
d escribed in Sections •~.6(b)(i), (ii), and (iii), a nd shall
reguire t hat such in s urance neet all 0f the general requirements
o f Sectio~ 4 .6(d).
(d) The required insuran~e shall be provided under an
occurrence form, a n d the Developer sha l: mai ntain such coverage
continuo~sly th ro u ghout th e T erm . Should any of the required
insura nce be provided un der a form o f coverage that includes an
annual aggregate limit or prov id es that claims investigation or
legal defense costs be incl uded in such annua~ aggregate limit,
such annual aggregate li mit shall be two tim e s the occurrence
limits spec if ied above. Co mpre hensive General Liability,
Comprehensive Automobile Liability und Property insurance
policies shall be endorsed to n ame as additional insured the
City, the City and the i r r espec tive o ffi c e rs, agents, and
employees. All policies and bonds shall be e ndorsed to provi~e
thirty (30) days prior written notice of cancellation, reduction
in coverage, or intent not to r e n ew to the address established
for notices to the City pursuant to Section 8.1 below . Upon the
City's request at any time during the Term, the Developer shall
provide certifica tes of insurance, in a form and with insurers
reasonably acceptable to the City, evidencing compliance with the
requiremen t s of this Section 4 .6, a nd shall provide complete
copies of such insuranc~ polic ies, including a separate
endorsement n ami ng the City as a n additional insured (unless the
City noti fies the Develop er that a separate endo rsement is not
required for a particular fo rm of insurance).
4.7 Hazardous M~t e rials .
The De velope r shal l k ee p and rnaj ntain the Property in
compliance wit h, a nd shall not cause or perrnit the Prop~rty to be
in violation of, a ny federal, state, o r loca l laws, ordinances,
or regulations rela ting to industrial h ygie n e or to the
environmental conditions on or under the Property, including (but
not limited to) soil and ground wuter conditions. The Developer
shall not u se , gcncrutc, manufacture, store, or dispose of, on,
und er, or about t:,c Property , or tr.:lnsport to or from the
Property, any f lamn,:,bl c explosives , r.:ldioacti ve ma ter ia ls,
haz ardous W.:l stcs , toxic subst~nccs , or relat e d m.:lterl.:lls,
including (without liin itiltion ) .:lny s1 1b s t.::inc cs defi n ed as or
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includ ed in t~c d e finiti o n of "huzurdous subs tances," "hazardous
·..:astes ," "hzi~c1rdous r.1c1terizils ," or "t oxi c substancP.s " under any
a pplic able federal or st u t e lc1~s or ~egula tions (collectively
referred tc as "l!zizzirdous Materi zils ") e x ce pt su::::h of the
foregoing as way be custo na ri ly and l a~f ully kept and used in and
ubo ut r esidential r ental pr ope rt y .
The De~elopcr s h all i~~edi at ely ud vise the City in writ i ng
if at any ti~e it re c e ives ~ritte~ n o tice of (a) any and all
enforce ~e nt , cl eanup , r e~ovul , er ot her governne ntal or
r egu lat ory acti o ns insti tut ed , c o ~pl eted , or threatened against
the Devel oper or the ?roperty pur s uant to any applicable federal,
state, or local l a~s , ordinances, or r eg ul at ions relating to any
Hazardous Materials ("Hazardous Mater ia ls Law "); (b) all claims
made or thr ec1 t e ne d by any th ird party agai nst the Developer or
the Property r e lating t o damage, contribution, cost recovery
compensation, loss, or injury resulting from any Hazardous
Mater ials (t he matters set forth in cl a uses (a) and (b) above are
referred to as "Hazardous M.:1terials Claims"); and (c) the
Developer's discovery of any occurr e nce or condi tion on any real
property adjoining or in the vicinity of the Property that could
cause the Property or any part thereof t0 be classified as
"border-zone property" under Cali fornia Health and Safety Code
Sections 25220 et _§_g_g. or corresponding regulations, or to be
otherwise subj e ct to 'any restrictions on the ownership,
occupancy, tran sfe rability, or u se of the Property under any
Hazardous Materials Law.
The Develop~r shall per~i~ the City to join and par~icipate
in, as a party if it so elects, any legal proceedings or actions
initi3ted in conn e ction with any Hazardous Materials. The
Developer shall indemni f y, defend (with counsel reasonably
acceptable by the City, at the City's option}, and hold harmless
the City and it s directors, o ff i ce rs, e mployees, and agents from
and ag.:1inst any lo ss , damage, cost , expense, or liability
directly or indirectly arising out of or attributable to the use,
generation, storage , release , threatened release, discharge,
disposal, or presence of H~~c1rd ou ~ Materials on or under the
Property, including (wi thout l imitation): (a) all foreseeable
consequential darna1es ; (b) the cos~s of any required or necessary
repair, clcunup, or detoxification of the Property and the
preparation and imrlernentation of any closure, remedial, or other
required plc1ns; and (c) all rea~onabl e costs and expenses
incurred by the City in connection with clauses (a) and (b),
including (but not limited to) reasona~le attorneys' fees. This
paragraph shall survive t e rmination of this Agreement.
4.3
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The Developer covenants by and for itself and its successors
and assigns that ~here shall be no discrimination against or
segregation of a person or of a group of persons on account cf
race, color, religion~ creed, sex, sexual orientation, marit~l
status, ancestry or national origin in the snle, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property,
nor shall the Developer or any person claiming under or through
the Developer establish or permit any such practice or practices
of discrinination or segregation with reference to the selection,
location, number, use oc occupancy of tenants, leisees,
subtP.nants, sublessees or vendees in the Property. The foregoing
covenant shall run with t:·1e land and shall survive termination of
th:i.s Agreement.
4.9 Affordability Definitions.
The following definitions shall apply for the purposes of
this Article Four:
(a) "Adjusted Income" means annual income as
determined by 24 CFR Part 92. If 24 CFR 92 no longer sets
standards for income determination, then the City shall provide
the Developer with a method of calculation of adjusted income
reasonably similar to that providad in 24 CFR Part 92.
(b) "Affordable Units" means t:1e Units with respect
to which occupancy and Rent are restricted pursuant to Sections
4.10 and 4.11, and includes the Low Income Units and the Moderate
Inccme Units.
(c) "Low Income Household" means a household with an
Adjusted Income that does not exceed eighty percent (80%) of
Median Income.
(d) "Low Income Units" means the Units which,
pursuant to Section 4.10 below, are required to be occupied by
Low Income Households.
(e) "Median Income" means the median income, adjusted
for household size, ·for households in the County of Santa Clara,
California, as published from time to tiree by HUD. If such
income determinations are no longer publi~hed, or are not updated
for a period of at least eighteen (18) months, then the City
shall provide the Developer with other income determinations
which are reasonably similar with respect to methods of
calculation to those previously published by HUD.
190001).J~
06/14/95 -lJ-
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( f) "Modcr;:i~e In cor.ie Household" mea ns ;:i household
~ith ;:in Adjusted Incor.ie that does not exceed one hundred twenty
percent (12o i ) of Median Incor.ie .
(g) "M od9rate Income Units " means the Units which,
pursuant to Section 4.10 beloN , arP. requ~red to be occupied by
Moderate Income Households.
(h) "Rent" neans the total of monthly payments by the
tenants of ~ Unit for the following: use and occupancy cf the
Unit and land and associated facilities, including parking; any
separately c~arged fees or service charges assessed by the
Developer which are required of all tenants, other than security
deposits; the cost of an adequate level of service for utilities
paid by the tenant, including garbage collection, sewer, water,
and electricit~, gas,. other heating, cooking, and refrigeration
fuel, but not tel ephone or cable television service; and any
other interest, taxes, fees, or charges for use of the land or
associated facilities and assessed by a public or private entity
other than the Developer, and paid by the tenant. ·
(i) "Unit" means one of the forty (40) dwelling units
on the Property to be developed pursuant to this Agreement.
(j) "Very Low Income Househ o ld" means a household
with an Adjusted Income that does not exceed fifty percent (50%)
of Media~ Income.
(k) "Vf::!ry Low Income Units" means the Units which,
pursuant to Section 4.:o below, are required to be occupied by
Very Low Income Households.
4. 10 Occ up a ~cy Req uir eme nts.
At l east eight (8) Un i ts shall be occupied by or, if
vacant, available f0~ rental and occupancy by, Very Lo:, Income
Households, at lea s t eleven (11) Units shall be occupl8d by or,
if vacant, avail~ble for rental and occupancy by, Low Income
Households, ar.j at least tw e nty-one (21) Units shall be occupied
by or, if vacant, available for rental and occupancy by, Moderate
Income Households. To extent any of the requj .rements of this
Article Four are inccnsistent with the requir~nents of the
California Hou s ing Finance Agency ("CHFA"), subject to COBG
regulations complian~e with CHFA requirements shall constitute
compliance with the requir e me nts of this Article 1-·our.
4.11
190001)1'!>0
06/ 14 /95
Allowable f<ent.
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(a) Subject to S ec ti o n 4.:1 below, the Rent charged
the occupa nts of the Very Low Income Units shall not e~ceed one-
twelfth of thirty pe:cent (30 %) of fifty percent (50%) of Median
Income, the Rent charged the occup a nt s of the Low Income Units
shall not exceed one-twelfth of thirty percent (30%) of sixty
percent (60 !t ) of Median I nco me , and the Rent charged occupants of
the Moderate Income Units s h all n o t exceed one-t~elfth of thirty
p erce nt (JO %) of one hundr e d ten perce nt (110 %) of Median Income.
(b) In c ~lculating the a llowable Rent for the
Affordable Units, the following assumed household sizes shall be
utilized:
Number of Bedrooms Assumed Hous e hold Size
Studio 1
One 2
~WO J
Three 4
Four 5
(c) Rents for the Affordable Units may be increased
no more than one (1) time per year, and the maximum Rent levels
following a~ increase, or upon? new occup a n~y, shall not exceed
the Rent levels set forth in subsection (a) above, corresponding
to the Median Income figures published by HUD for that year.
4.12 Increa se d Income of Occupying Households.
(a) If upon re ce rtification of an occupant
household's income the Developer· discovers that the Adjusted
Income of a Very Low Income Hou se hold has increased above one
hundred forty percent (1 4 0 %) of the maximum income that defines a
household as a Very Low Income Household, but has not increased
above eighty percent (80 %) of Median Income, then sue~
household's Unit shall no longer be considered a Very Low Income
Unit and shall begin to be considered a Low Income Unit, and the
Rent may be increased to nat greater than one-twelfth of thirty
percent (30%) of sixty percent (60%) of Median Inco~e upon sixty
(60) days written notice to the t e nant, and the Developer shall
r~nt the next available Unit to a Very Low Income Household to
satisfy the occupancy requirements of Section 4.10, at a Rent in
accordance with Section 4.11.
(b) If upon recertification of an occupant
household's income the Dev e loper discovers that the Adjusted
Income of a Low Income Hou s ehold has increased above one hundred
forty percent (14c)%) of th e m.:1ximum income that defines a
0000 .l'SO
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household as a Lo ·..; In cor..e Ho use h olc , but h.:is n o t increased abcve
one hun dred t ~enty percen t (1 20 \) of Media n I n come , t he n such
hou se hold's Unit shall no l o ng er be conside red a Low Income Unit
a n d shall b egi n to be considered a Moder.:i te Income Unit, and the
~e nt may be increas ed to not greater tha n one-twe lfth of thirty
percent (30 %) of one hundred ten p e r ce n~ (110 %) of Median Income
upon sixty (60 ) days w~itten noti ci t o the t e n a rit, and the
Develo per shalJ rent th e n ex t avai la~le Cni t to a Lo~ Income
Household t o satis fy the oc c upan cy r equire~en ts of Sec t i o n 4 .10,
at a Rent in acc o rdan ce with Section ~.11 .
(c) If u po n recertification of a n oc c upant
household's in c ome th e Developer di s cov e r s that ':he Adjusted
Income of a Very Lo w In c ome Ho us e hold, Low Incom~ Household or a
Moderate Income Household has increased above one hundred twenty
percent (120 %) of Median Income, then such household's Unit shall
no longer be deemed a Very Low Income Unit, a Low Income Unit or
a Moderate Income Unit, as applicable, and the Rent charged that
household may be increased without limitatio~ under this
Agreement upon sixty (60) days ~ritten notice to the tenant, and
the Developer shall rent the next available Unit to a Very Low
Income Household, Low Income Household or Moderate Income
Household, as applicable, to satisfy the occupancy requirements
of Section 4.10, at a Rent in accordance with Section 4.11.
(d) There shall be no violation of the occupancy
requirements of Section 4.10 on account of the continuous
occupancy of a Unit by a household that was a Very Low Income
Household, Low Income lfousehold or Moderate Income Household upon
initial occupancy of the Unit but that is no longer a Very Low
Income Household, Low Inco me Hou se hold or Mod~rate Income
Household. When s uch a hou seh old v~ca t es its Unit, the Developer
s hall rent the Unit to a Very Low I~come Household, Low Income
Household or Mod e rat e Income l!ou .;e hold, as applicable, to
satisfy the occupancy requir eme nt s o f Section 4.10, a~ a Rent in
accordance with Sec tion 1.1 1 .
(e) Wh e n a Very Low Income Unit, Low Income Unit or
Moderate Inco me Unit becomes vacant upon the termination of the
occupancy o f the Un it , Lhe Unit shal l be d eened to be
continuously occupied by a Very Low Income Household, Low Income
Household or Mod e rate Income Hou se hold, .:1s applicable, until
reoccupi e d, at which t ime the character of the Unit sha ll be
redetermined.
4.13
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f)(,/ I 4 !'i~,
Le:Jst? Pr ov,i s i ons .
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The Developer shall utilize a form of lease or rental
agreement approved by the City for all Affordable Units. The
City shall not withhold approval from any form that:
(a) authorizes the Developer to immediately terminate
the tenancy of any household one (1) or more of whose members
misrepresented any fact material to the household's qualiZication
as a Very Low Income Household, Low Income Household or Moderate
Income Household;
(b) provides that the tenant's income is subject to
annual certification in accordance with Section 4.14;
(c) provides that if the household's Adjusted Xncome
increases as described in Section 4.12, then the Rent may be
increased in accordance with Section 4.12;
(d) provides that if the household refuses to provide
inform~tion requested by tr.e Deve~oper for the a -~al
recertification described in Section 4.14, then ~he household's
tenancy shall be subject to immediate termination; and
(e) provides that the household's tenancy shall be
subject to immediate termination f,or material noncompliance Y:ith
the lease or rental agreement. "Material noncompliance with the
lease o!:" rental agreement" includes one or more substantial
violations or habitual minor violations of the lease or rental
agreement which:
4.14
190000.l'SO
06/l"/9S
(1) Interfere with the use, possession or quiet
enjoyment of their units by other tenants of
the Development;
(2) Adversely affect the health or safety of any
perscn;
(j) Substantially interfere with the management,
maintenance or operution of the Development;
or
(4) Result from the failure or refusal tJ pay
rent or other charges due in a timely
fashion.
(f) otherwise complies with this Agreement.
Tenant Income Certification.
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The Develop e r shal l obt.1 in , comple te, and m:.sintain on file
i n come certi:ication s f r o r:1 eil c h Ve ry Lo..r Inccme Hou sehoid, Low
Income Household and Mo de rate Income !!ousehold, rtatei no more
than thirty (JO) days prior to initial occupancy and annually
thereafter. The De ~cloper shall make a good faith effort to
verify that th e income reported by an ~pplicant in an income
c ~rtificati on is &ccurate b y obt aini ng one or more of the
following as a part of the verification Drocess:
(a) a pay stub fo r the most recent pay peciod;
(b) an income tax return for the most recent tax year;
(c) an income verification form from the applicant's current
e mployer ; or
(d) an inccme verification form from the Social Security
Administration and/or the California Department of Social
Services if the applicant receives assiscance from either of such
agencies.
r .f none of the previcusly mentioned forms of verification is
possible, then another for~ of independent verification may be
obtained. If an occupant of an Affordable Unit refuses to
provide information reques~ed by the Developer for the annual
certificat i on, then the Developer shall imrneuiately terminate
such houseoold'~ tenancy i~ a manner consistent with applicable
laws.
4.15 Ten a nt Selection.
(a) The Developer shall not discrlminate against Very
Low IncoMe Hous e hold, Low Income Household or Moderate Income
Household applicants on the basis of source of income or rent
payment (f or example, AFDC or Section 8), and the Developer shall
consider a prospectiv~ ten a nt's satisfactory credit history and
previous satisfactory rent history of at ~east one (1) year as
sufficient e vidence of the ab ility to pay the applicable Rent o~
a timely basis when due. For example, a~ility to pay shall be
demonstrated if a Very Low Income Houset.old, Low Income Household
or Moderate Income Hqu seho ld can show that it paid in a timely
manner the same percentage or more of its income for rent as it
would be requir e d to p a y for the Rent applicable to the
Affordable Unit to be occupied.
(b) In selecting tenants from among eligible
applicants, the Developer shall give prior i ty to the following:
(i) an applica nt hous ehold in which at least one
me mb er (A) has b ee n disp:aced, within the meaning of Title 25
I 90001>.l'!.0
0(,/14/')S -18-
California CoJc of Rcgulc1tions Sectio n 6008 (f)
of th e City , ana (B) !:"1 s no ~ occupied sc1fe , s;u .
housing since being displaced;
,y the activities
_ary permanent
(ii) an applicc nt household in which at least one
memb er works in Cupertino, California ; and
(i i i) an applica nt household in which nt least one
member lives in Cup"rtino, California.
4.16 Security Deposits.
The Developar shall not require security deposits on t h e
Affordable Units in excess cf one month's Rent for such Unics,
and shall not require for s~·:h U~its any other deposits,
i ;1clud i ng (;.;ithout limitatio1 :) h.2 ::: deposits, cleanin1 deposits,
or final month rent deposits.
4.17 Ann ual Report to City.
Each year commencing on the first June 30 after the issuance
of a c8rtificate of occupancy for the last residential unit in
the Develo~ment, znd no later than June JO of each year
thereafter, the Developer shall submit an annual report to the
City, in a form approved by the City. The annual report shall
include for each Affordable Unit the Rent . and the income and
household size of each household occupyinq an Affordable Unit.
The report shall also state the date the tenancy commenced for
each Affordable Unit and such other information as the City may
be required by law to obtain.
4.18 Additional Information.
~h~ Developer shall provide any additional information
reasonably r~quest~d by t he City.
4.19 Records.
The Developer shall ~aintain complete , accurate, and current
records pert ai n i ng to the Units for five (5) years after creating
such records, and shall permit any duly authorized re~resentative
of the City to inspect and copy such records, including the
records pert~ining to income and household size of te~ant
households as deacribed in Section 4.14.
4.20 Mnn~gement Agent; Periodic Review.
(a ) If th e Developer retains a third party to rna~age
the Property, then the Developer shall retain an experienced
190001) l'S-0
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manage::ient agent ( the 11 :-~c1 ::.:i qe ::-.c nt J. . .,e nt") reason abl'.( acceptable
to th e City , wi~h d c~o n~t~.:itc~ a bility to opera~e r e sidential
facilities li~e th ose o n t he P rope rty in a manner that will
provide decent, safe, and sanita ry housing. The Developer shall
submit f er the Cicy's approv a: the identity of any proposed
Management Agent. The Devel o per s hall also submit such
additional informati o n about th e background, experience, and
financial co n ditio n cf a ny proposed Management Agent as is
re asonobly n ec essary fer L~e City to d e termine whether the
proposed Management Agent meet s the standard for a qualified
Manage~ent Agent set forth above. If the proposed Management
Agent meets the standard for a qualified Management Agent set
forth abo ve , then th e Cit; shall approve the proposed Management
Agent by no~ifying the Developer. in writing. Unless the p=oposed
Management Agent is disappr ov ed by the City within thirty (JO)
days, which disap~roval shal l state with reasonable specificity
the basis for disapproval, it shall be deemed a~proved.
(b) Upon the City's request, the C2veloper shall
cooperate with the City in the periodic review of the management
practices and financial status of the Prop,~ty at ~he following
ti~es: (1) within thirty (JO) days ~f~er the issuar.ce of a
certificat8 of occupancy for the lasL r8sidential unit in the
Development; (2) within six (6) months after the issuance of a
c~rtificate of occup a nc y fer the last residential unit in the
Development; and (J) within thirty (JO) days after each
anniversary of the issuance of the issua~ce of a certificate of
occupancy for the last resident~al unit in the Development. The
purpose of each periodic revieN will be to enable the City to
determine if the Develop~ent is being operated and managed in
accordanc e with the requirenents and stand~rds of this Agreement.
4.21 Specific Enfo~cemenL of Aff0rdability
Res t r i cJ~j"u n 2 .
Specific enfor cemen t of ~~e Developer's agreement to comply
with the rent and occupancy r est rictions of this Article Four is
the only means by which the Clty may obtain the benefits of the
Afford~ble Units, and the Dcvelcper therefore ~grees to the
imposition of the rem ed y of specific performance against it in
the case of any Dev elo p er non-compliance with the rent and
occupancy restrictions of this Article Four. In addition to the
remedies specified in this Sectio n 4.21, the City shall have the
ri0ht to pur s u e any of the r e medies set forth in Article Seven
below.
4. 2 ·.:
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j.:ecs .:1 nd Taxes.
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The Dcve:ioper shall be solely responsible for payment of all
f ee s , assessments, taxes, c h arges, and levies imposed oy any
public au~hority o~ utility company wi th respect to the
Developme nt, and shall pay such charges prior to delinquency.
However, the Developer shall noc b~ required to pay and discharge
any such charge so long as (a) the legali ty thereof is being
contested dili gen~l y ~nd in g o od faith a nd by appropriate
p~oceedings, and (b) if r equested by the City, the Developer
deposits with the Citt ariy funds or other fcrms . of assurance that
the City in good faith from time to time determines appropriate
to protect the City irom the consequences of the contest being
unsuccessful.
4.23 Annual Audit.
Developer shall submi t to City within three (J) months
foll0wing the cl0se of Developer's fiscal year an annual audi~ of
the Development performed by an independent certified public
accountant.
ARTICLE 5: ASSIGNMENT AND TRANSFERS
5.1 Definitions.
As used in this Article Five, the ter.n "Transfer" means:
(a) Any total or partial sale, lease, assignment, or
other conveyance, or any trust or power, or any transfer in any
other mode or forr.·, of or with respect to this Agreement or of
any part of or interest in the Development, or any agreement to
do any of the foregoing; or
(b) Any total or partial sale, assignment, or other
conveyance, or any trust or power , or any transfer in any other
mode or form, of or with respect to any ownership interest in the
Developer or any agre eme nt to do any of the foregoing.
5.2 Purpose o f Rest ri ctions on Transfer.
This Agreement is e ntered into solely for the pu~pos~ of the
Developer's acquisition, construction, and operation of the
Development in accordance with the terms of this Agreement. The
qualifications and identity of the Developer are of particular
concern to the City, in v iew of:
(a) The reliance by the City upon the unique
qualifications and ability of the Developer to serve as the
catalyst for construction o f the Pr op er ty and upon the continuing
interest which the Developer will 'hav e in the Property to assure
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< '~' • I , ', I T -, , I f ,.. • .. ~
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th e quality o f the u se , op e :::-a ti o ri, c:i nd rn .:1 intenance deemed
criti c 3l by the Ci t y i n th e c o n s t:::-u st i on of t~e Property;
(b ) The fact th a t a c h a ng e in ownership or control of
the owner of ~h e Property, or ot c:i s ubstantial part thereof, or
any other act or tr a n sa ction in v o l ving or resulting in a
signific a nt ch a ~g e i n c~n e :::-s h ip o r with respect to the identity
of the p a rti es in control c f t he Dev e l o per or the degree thereof,
is for pr a ct ical purpo s es a tr a n sfe r o r dispositi0n of the
Property; and
(c) T!1e ir:iportance to the City and the City of the
standards of use, operation, and rnainte~ance of the Property.
It is because of the qualifications and identity of the
Developer that the City is entering into this Agreement and that
Transfers are p e rmitted only as provided in this Agreement.
5.3 Pr o hibited Trans f ers.
The limitations on Transfers set forth in this Article Five
shall apply throughout the Term. .:xcept as expressly permitted
in this Agreement, the Developer ~epresents that it has not made
or created, and agrees that i.t will not make or create or suffer
to be made or created; a~y Transfer, either voluntarily or by
operation of law, without the prior ~ritten aFproval of the City.
Any Transfer made in contravention of this Section 5.3 shall
at the City's discretion be void and shall be deemed to be a
default under this Agreement, whether or not the Developer knew
of or participated in such Transfer.
5.4 P e rmitt e d Tran s f e rs Without Prior City Approval.
The fol:owing Transfers shall be permitted at any time
without the prior approval of the City:
(a) the rental o f a Unit in the ordinary course of
business;
(b) the Transfer of a Security Financing Interest to
a lender making an Approved Development Loan;
(c) a Transfer pursuant to enforcement rights
associated with a Security Financing Interest, subject to Section
:i.6; and
(d) if the holder of a Security Financing Interest
acquires fee titl e to the Prop erty pur s uant to enforc~ment rights
19 0001>.l•So
06/14/?!, -22 -
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associated with the Security Financing Interest (as by
foreclosure or deed in lieu of foreclosure), then one (1)
subsequent Transfer, subject to Section 5.6;
(e) a Transfer to a nonprofit corporation affiliated
with Community Hou sing Developers, Inc. or to a partnership
having Community Housing Developers, Inc. or its affiliate as a
general partner;
5.5 Permitted Transfers With Prior City Approval i~ Its
Sole Discretion.
Except as permitted under Section 5.4, any Transfer shall be
permitted only after (a) the City, in its sole discretion, has
delivered to the Developer its prior written approval of such
Transfer, and (b) the transferee has assumed the Developer's
obligation5 under this Agreement by signing this Agreement or
such other reasonable documentation as the City may require.
5.6 Effectuation of certain Permitted Transfers.
Immediately upon a transferee described in Sections 5.4(c),
or (d) obtaining ownership of the Property, such transferee
shall, as a condition of the effe~tiveness of the Transfer,
assume the Developer's obljgations under this Agreement arising
from and after the date of the assumption by signing this
Agreement or such other reasonable documentation as the City may
require.
5.7 Release of Developer.
Upon all of the terms of this Article Five being satisfied
for a permitted Transfer to be effective, the Developer or the
successor transferor party, as applicable, shall be releaied from
all liability under this Agreement so transferred arising
subsequent to the effectiveness of such Transfer.
ARTICLE 6: DEFAULTS AND REMEDIES •
6.1 reveloper Event s of Default.
(a) Each of the following ~hall constitute a
"Developer Event of Default" under this Agreement:
(i) A failure by the Develo~er to complete
construction of the Improvements by the deadline set forth in
Section J.2.
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( ii) A L 1ilure by the Developer to make a
payment th a t is due and p~yable to the Cit; under the City Note.
(iii) A failure by the De veloper to comply
with the occu pancy and affo rd ability st andards of Article Four.
( iv) Any Transfer at.her than as permitted by
Article Five .
(v ) A failu re by the Developer to comply
with any oth er requirement of this Agreement or the City Deed of
Trust.
(vi) Any Developer representation or warranty
contained in this Agreement, or in any application, financial
statE:?ment, certificat.e, or report .submitted to _ the City in
connection with this Agreement, proving to have been incorrect in
any material respect when made.
(vii) Any monetary default by the Developer
under an instrume~t creating or secured by a Security Financing
Interest for which the holder has accelerated or has the right to
accelerate the repayment obligation.
(b) The Developer shall have a C\'.re period after
notice from the City before any facts set forth in subsections
(a) (i), (ii), (iii), (iv), or (v) constitute a Developer Event of
Default. With respect to fact~ set forth in subsecticn (a) (ii),
the cure period shall be five (5) days. With respect to facts
set forth in subsections (a) (i), (iii), (iv), and (v), tne cure
period shall be sixty (60) days, or such longer perio~ as may
reasonably be necessary to cure so long as the Developer
commences to cure within sixty (60) days and diligently
prosecutes the cure to c0mpletion.
(c) The existence of any Developer Event of Default
shall relieve the City of any obligation to make or continue
disbursements under this Agreenent, shall result in automatic
acceleration of the City Note (unless other~i5e specified in
writing by the City), shall give the City the right to terminate
this Agreement (except that a Developer Event of Default arising
solely under Section 6.l(a) (v) shall not give the City the right
to terminate this Agreement, and except that certain provisions
of this Agreement shall survive termination, as described in
Section 8.2(b)), ~nd shall give the City the right to proceed
with any and all remedies at law or in equity, including actions
for damages or s pecific per form ance (as specifically approved by
the Dev e loper in Section 4.22), 5ubject to Section 7.3.
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(d) Except as provided in Se~tion 6.l{e), the
Develop9r shall not have any direct or indirect personal
liability for payment of the principal of, or interest on, the
City Loan or the performance of the Devel0per's obligati c ns under
the City Deed of T=us t or this AgrPernent. ~~e sole re =c r se of
the City with respect to payment of the principal of, or interest
on, the City Loan, or the performance of the Dnveloper's
obligations under the City Deed of Trust or t~is Agreement, shall
be to the Property. t,o money judgment (or ~Y2cution on a money
judqment) entered in any action (whether legal or equitable) on
this Agreement or the City Deed of Trust shall be enforced
personally against the Developer and its officers, directors,
e~pl0yees, and agents, but shall be enforced only against the
Property and such other property as may from time to time be
hypothecated in connectioD with the Developer's obligations under
this As~eement and the City Deed of Trust. This Section 6.l(d)
does not limit or impair the enforcement against all such
security for the City Loan of all the rights and remedies of the
City, nor does it impair the right of the City to assert the
ur.paid principal amount of the City Loan as a demar.d for money
within the meaning of California Code of Civil Procedure Section
431.70 or ~ny successor provision.
(e) Sectlon 6.l(d) does not ~elieve the Developer of
personal liability for any of the following: (i) fraud or
willful wisrepresentation; (ii) the failure to pay taxes, ·
assessrnPn~s, or other charses that could create liens on the
Prope~ty ~nd that are payable or applicable prior to any
foreclosu~e under the City Deed of Trust; (iii) the fair market
value of a~y personal property or fixtures removed or dispcsed of
by the Developer oth~r than in accordance with the City Deed of
Trust; (i~) the misapplication of 'any proceeds ·under any
insurance policies or awards resulting from condemnation or the
exercise of the power of eminent dornain or by reason of damage,
loss, or destruction to any portion of the Property (to the ·
extent of the misapplied proceeds or awards); (v) any rental
income or other :ncome arising with ~espect to the Property
received by the Developer after the City h3s given notice to the
Developer of the occurrence of a Developer Event of Default and
not applied to pay debt service and other operating costs of the
Development; and (vi) the Developer's obligations under Sections
2.7, 4.6 and 4.7 of this Agreement.
(f) The director s of the Developer, as well as
Community Hou si ng Developers, Inc., and its officers, directors,
employees, and agents, shall in no event have any direct or
indirect personal liability for payment of the principal of, or
interest on, the City Loan or the performance of the Developer's
obligations under the City Deed of. Trust or this Agreement.
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6 .2 Citv Events of Dc fQult .
Each of the following shall con s titut e a "City Event of
Def au 1 t" und e r 'ch i s Agr eeme nt::
(a) A failure by the City to ~akc a di ~burse~cnt of
C i~y Lean f~nds as req ui~ed by Arti c l e T~o .
(b) A failu~e by th e Citi ~o comply ~it~ a ny other
requ i rc~cnt of this Agr ~e~e nt appli ca ble to th e City.
The City sh all have a cure period aft e r notice from the
D~veloper before any facts set forth in subsections (a) or (b)
constitute an City Event o f Default. The cure period shall be
sixty (60) days, or such lonser period as may reasonably be
nece ssary to cure so l ong as the City commences to cure within
sixty (60) days and diligently prosecutes the cure to completion.
The occurrenc e of any City Event of Default shall relieve
the Devel0per of any obligat i on to perform under this Agreement,
and shall give the Developer the right to proceed with any and
all remedi es at law or in equity, including actions for damages
or specific performance.
6.J No Defa ult Termin.:ltion.
Either Party may terminate this Agreement upon the
condemnation, seizure, or appropriati on of any part of the
Property in a manner that impairs the Developer's ability to
comply with the occupancy and affordability require~~nts of
Sections 4.10 through 4.21. The djsposition of coP.dernnation
proceeds shall be as ot herwise determined by law.
6.4 E_<:?rned ies Cu mulntivc .
No right, power, or remedy given to a Party by the terms of
this Agreement is intended to be exclusive of any other right,
power, or remedy; and e ach and every such right, power, or remedy
shall be cumulative and i n addition to every other right, power,
or remedy given to the Party. Heither the failure nor any delay
on the part of a Party to exercise any such rights and remedies
shall operate as a waive r thereof, nor shall any single or
partial excrci~e by a Party of any such right or remedy preclude
any other or further exercise of such right or remedy, or any
oth e r right or r e medy.
G.5 w.,i ver o f Terms and conditi...Qfil .
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A Party may at i~s discretion waive in writing a~y of the
tenrs and conditions of this Agreenent, without completing an
amendmnnt to this Agreemen~. No waiver of any default or breach
shall be implied from any omission by the non-breaching Party to
take action on account of such default if such default persists
or is repeated, and no express waiver shall aff~ct any default
other than the default specified in the waiver, and suet. waiver
shall be operative only for the time and to the extent therein
stated. Waivers of a~y ccvenant, term, or condition contained
herein shall not be construed as a waiver of any subsequent
breach of the same covenant, term, or condition. The consent or
approval by a Party to or of any act by the other Party requiring
further consent or apprcval shall not be deemed to waive or
render unnecessary the consent or approval to or of any
subsequent similar act. The exercise of any right, power, or
remedy shall in no event constitute a cure or a waiver of any
default under this Agreement, nor shall it invalidate any act
Cone pursuant to notice of detault, or prejudice the exercising
Party in the exercise of any right, powe=, or remedy hereunder.
ARTICLE 7: SECURITY Fil'JANCING AND RIGHTS OF HOLDERS
7.1 Encumbrances Only for Develoornent Purposes •
. ;
Notwithstanding any other provision of t~is Agreement, only
the following encumbrances are permitted to be placed upon the
Property:
(a) Security Financing Interests for the purpose of
securing Approved Development Loans;
(b) Other documents (such as reg~latory agreements}
required in connection with Approved Development Loans;
(c) Construction liens for the benefit of laborers or
suppliers, so long as they are in good faith contested or
discharged promptly; and
(d) Vendor liens for the benefit of suppliers of
fixtures such as washers and dryers obtained in the ordinary
course of business, or as approved by the City (in its reasonable
discretion) and by all holders of Security Financing Interests.
1.2 Holder Not Obligated to Construct.
The holder of any Security Financing Interest authorized by
this Agr~ement is not obligated to construct or complete any
improvements or to guarant ee s u~h construction or completion.
190000.l'SO
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How e ver n o th i n g in tr.is ;qrcer..e n t shi1l l be deemed to per.:iit or
authorize a n y sue t h o lder to devo~e th e P roperty or any portion
thereof to any u ses , er t o construc t any i ;n provements thereon,
other thaD t ti os 8 u ses or improveme nts provided for or authorized
by th is Agr ee ment.
7.J Hotice oLQ.§'_fo ul': ar.d Rig ht to Cure.
(a) Whenever the city delivers any notice of default
or demand to the Develop er , the City shall at the same time
deliver to each hold e r o f =2cord of any permitted Security
Finctncing Interest a copy of such notice or demand. Each such
holder shall (insofar as the rights of t~e City are concerned)
have the right (but not ~he obligation) to (i) cure the default
within ninety (90) days after the receipt of the notice or such
long£r period as may reasonably be necessary to cure so long as
(x) the holder commences to cure within ninety (90) days and
diligently prosecutes the cure to comp:etion, or (y) the holder
has commenced, within such ninety (90) day period, appropriate
proceedings, under the instrument creating its Security Financing
Inte~est, to obtain possession (through foreclosure or
appointment of a . receiver) of the Property, and diligently
prosecutes such proceedings and proceeds to cure after obtaining
possession an y default under this Agreement that can reasonably
be cured, and (ii) add the cost ~hereof 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 construction or completion of the
Improvements (beyond the extent necessary to conserve or protect
such improvements or construction already made) without fir~t
having express!y assumed in writing the Developer's obligations
relating to such improvements under this Agreement. A~y such
holder properly completing such improvements pursuant to this
paragraph sh.:lll be entitled, upon written request made to the
City, to an Estoppel Certificate of Completion from the City.
(b) Whenever t he Developer delivers any notice of
default or d ema nd to the City, the Developer shall at the same
time deliver to eac h hold er of rec::ird of any permitted Security
FinLlncing Interest a copy of such no'l.:ice or demand.
7.4 F.:1ilure •of Holder to Compl ete Improvements.
In any case where six (6) months after default by the
Developer in completion of construction of the Improvements under
this Agr eeme nt, the holder o f any permitted Security Financing
Interest, having first exercised its option to construct, has not
proceeded diligently with construction, the City shall be
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afforded those rights against such holder that it would othen.rise
have agai ns t th e Developer under this Agree me nt.
7.5 Rig ht o f City to Cur e .
In th e event of a default or breach by th e Developer of a
permitted Security Financing I nt erest , the City may cure the
default, prior to the completion o f an y foreclosure. In such
event the Ci ty shall be entitled to reimbursement from the
Developer o f all costs and ex~enses incurred by the City in
curing the default. The City sh al l also be er.titled to a lien
upon the Property to the extent o f such costs and disbursements.
Such lien shall be subordinate to any ~ermitted Security
Financing Interest, and the City shall execut~ from time to time
any documentation r eas onably requested by the ~eve!op~r to effect
such subordination.
7.6 Right of Git v to Satisfy Other Liens.
After the Developer has had a reasonable time to challenge,
CJre, or satisfy any liens or encumbrances on the Property, the
City shall have the right to sati s fy any ~uch lien or
encumbrances. Nothing in th i s Agreement shall require the
Developer to pay or ~ake prov ision for the payment of any tax,
assessmen t, lien or ~ha rge so long a~ the Developer in good faith
contests the v~lidity or amount therein and such delay in payment
does n ot subject the Property to forfeiture or sale.
7.7 Holder to b e Notifi~d.
In e a ch instrument creati~g or granting a Security Financing
Interest, the Developer shall either insert each tern of this
Article Seven or obtain the acknowledgment of each term of this
Article Seven by the holder of the Security Financing Interest.
ARTICLE 8: GE?,ERA L PR011ISIONS
8.1 ~otices, Dema nd s and commu n icati ons.
Formal not ices, demands, a nd comm unicat i ons between the City
and the Develop er s hall be sufficie ntl y given if, and shall not
be deemed given unle ss , dispatched by cert ified mail, return
receipt r e quest ed , or delivered by a n ex press delivery service
with a receipt sh owing date of delivery to the principal offices
of the Parties as follows:
City:
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City of Cup erti no
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Cupertino, Cal i ~o r~~a 9 ~014
Attn: f.!.9·~c.ing .s ,~rv i ccs
Developer: Community Housing De vel~pers , Inc.
255 ?lorth Market St::-cet
Suite 290
San ~ose, California 95110
Attn: Executive Director
Such written notices, deman d s and communications may be sent
in the same manner to such other addresses as the affected Party
may from time to time designate by mail as provided in this
Section 8.1. Delivery shall be deemed to have occurred ~t the
time indicated on the receipt for dcl~very or refusal of
delivery.
8.2 Ter~ination.
(a) Unless earlie= terminated pursuant to Section
7. 1, the term of this Agreement-. ( the "Term") shall commence as of
the Commencement Date and shall terminate on the date which is
the earlie~ of: (1) forty (40) years from the date at
commencement of the term of the CHFA Loan or (2) the date of
final repayment of all principal and interest due under the City
Note (the "Expiration Date"). Following the Expiration Oate,
neither party shall have any further rights or obligations under
the Agreem0nt except that the non-discrimination obligations set
forth in Section 4.8 and the indemnification oblig?tio~s set
forth in Sections 4.6(a) and 4.7 shall survive such termination.
(b) Upon the termination of this Agreement prior to
the Expiration Dat e pursuant 1:0 Section 7 .1, the ncn-
discrimination obligations set forth in Section 4.8 and the
indemnif i cation oblig~tion s set f~rth in Sections 4.6(a) and 4.7.
8.3 Non-Liability of Officials, Em ~loy ees and Agents.
No member, o fficial , cmplcyee or agert of the City shall be
personally liable to the Develo~er, or any suc~essor in interest,
~n the event of any default or breach by the City or for any
amount which may become due to the Developer or any successor or
on any obligation under the terms of this Agreement.
8.4 Forced Delay.
In addition to spe cific provisions of this Agreement,
p~rformance by either Party shall not be deemed to be in default
where delays or defnults are due to war; insurrection; strikes;
locY.-outs; riots; floods ; earthquakes ; fires; quarantine
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restrictions; freight embargoes; lack of tra nspor ta tion; or court
order; or any oth er s im il ar causes (oth er than la c K of funds of
the Develope~ or the De vel ope r's i n abi lity to fin anc e the
construction c..,f the Impro•Jements) beyond tr,e control or without
the fdult of the Party cl a i ming an extension of time to perform.
A~ extension of tim e for any Cduse will be deemed g ra nted if
notice by the Party clai mi ng such ext e nsion is sent to the other
within ter. (10) days from the cor:un en c e me nt of the cause and such
extension of time is not rejected in writing by the other Party
within ten (10) ~a ys 'of receipt of the notice .. In no event shall
the City be r~quired to agree to cumul a tive delays in excess of
three hundred sixty five (36 5 ) days.
8.5 Inspection of Books and Records.
The City has the right at all reasonable times to inspect on
a confidential basis the books, records, ar.d all other
documentation of the Developer pertaining to its obligations
,~nder this AgrLement. The Develcper also ha~ tne right at all
reasonable times to inspect the books, records, and all other
documentation of the City pertaining to its obligations under
this Agreement.
8.6 Title of Parts and Sections.
Any titles of the sections or subsections of this Agree~ent
are inserted for convenience of reference only and shall be
disre~arded in interpreting any part of its provision.
8.7 hpplicable Law.
This Agreement s~all be interpreted under and pursuant to
the laws of the State of California.
3.8 Severability.
If any term, provision, covenant or condition of this
Agreement is held in a final dispo s it5 ·n by a court of competent
jurisdiction to be invalid, void or ur~nforceable, the remaining
provisions shall continue in full force ~~d effect unless the
rights and obligations of the Parties have been materially
. alter~d or abridged by such invalidation, voiding or
unenforceability.
8.9 Legal Acti on s .
In the event any legal action is commenced to interpret or
to enforce the t erms of this Agr eeme nt or to collect damages as a
res ult of any br eac~ thereof, th e Party prev~iling in any such
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action shall b e entitled to recover against the Party not
prevailing all r en sonable attorneys' fees and costs incurred in
such action.
In the event legal action is commenced by a third party or
parties, the e ffect of which is to directly or indirectly
c h all e n g e or com promise the enforcP.ability, validity, or legality
of this Agre e n e nt and/or the power of the City to enter into this
Agreement or pe~form its obligations hereunder, either the City
or the Developer may (but shall have no obligation to) defend
such action. Upon co::nmencement of any such action, the City and
the Developer shall meet in good faith and seek to establish a
mutually acceptable method of defending such action.
8.10 Binding Uoon Successors; Covenants to Run With Land.
This Agreement shall be binding upon and inure to the
L ~nefit of the heirs, administrators, executors, successors, and
assigns of each of the Parties. However, there shall be no
Transfer except pursuant to the terms of this Agreement. Any
reference in this Agreement to a specifically named Party shall
be deemed to apply to any successor, heir, administrator,
execu~or, or assign of such Party who ha s acquired an interest in
compliance with the terms of this Agreement, or under law.
The covenants ari~ restrictioris set forth in this Agreement
shall run with the land, and shall bind all successors in title
to the Property. However, on the termination of this . Agreement,
such covenants and restrictions shall expire (except where
survival of such cov8nants and restrictions is otherwise
provided). Each and every contract, deed, or other instrument
hereafter executed covering or conveying the Property shall be
held conclusively to have been executed, delivered, and accepted
subject to such covenants and restrictions, regardless of whether
such covenants or r~strictions are set forth in such contract,
deed, or other instrument, unless the City expressly releases the
Property from the requirements of this Agreement.
8.11 Parties Not Co-V e nturers.
Nothing in this Agreement is intended to or does establish
the Parties as partners, co-venturers, or principal and agent
with one another.
8.12 Entire Understan d ing of the Parties.
Tnis Agreement constitutes the entire understanding and
agreem e nt of the Parties.
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8. lJ AP p r ov<l l.
Whenever t.his AJ reem e nt calls for City approval, consent,
or waiver, the approv~l, consent, 'or waiver of 'the City
Manag~r shall c onstitute the approval, consent,
or waiver of th e City, without furt he r authorization required
from the City Council. The City here by authorizes the City
Manag e r to deliver such approvals or consents
as are required b y this Agreement. or to waive requirements under
this Agreement, on behalf of the City, and to take such actions
and execute such documents on behalf of the City as may be
necessary to carry out this Agreement. Any consents 0r approvals
required under this Agreement shall not be unreasonably withheld
or made, except where it is specifically provided that a sole
discreticn standard applies. Except as expressly provided,
nothing in this Agreement limits the discretion of the City in
granting or withholding any approval in connection with
construction or operation of the Development.
8.14 Counterparts; Multiple Oriainals.
This Agreement may be executed in counterparts. This
Agreement may be executed in multiple originals, each of which is
deemed to be an original.
8.15 Amendments.
The Parties ca~ amend this Agreement, including any
deadlines provided in this Agreement, only by means of a writing
signed by both Parties.
BY SIGNING BELOW, the Parties ~gree to this Agreement as of
the date first written above.
City:
Developer:
190001).PSO
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CITY
By:
Its:
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City M~n~.e2_r~~~~~~~~~-
Community' Housing Deve·lopers, Inc.
By:&//~
Its: f::.-te , .. f;~ '/);,e,-fdY"
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;!:t i D esc ription of Property
TL: land is s 1tuatc:J :n the ( ·it, n!" l·11rcrtin,l. ( ·(,un t y nf Santa C br;1. S tate o f Ca li fo rn ia and is
(k:-,crihed a s folio\\:-,.
l'.-\RCEL ;-,,;o_ 2 :
l3cgi1111i :1g a t a ro int on the S o utherl y lin e nr" S teve ns C re e k Road at tho;
:;,..;or1JJ\\-cs tcrly corner of that cen:i in 1r ac t of la nd de scribed as Parcel One in the
deed from Lionel .I . Til so n. cl ux. 10 .iohn B . Shelt o n. d ux. d ated June 16. 1950
a nd reco rded June 20. 1950 in B oo k :woo of Officia l Record s . pa g e 506. Santa
Clara Count y R eco rd s: thenc e lc::iving sa id r1o int of be g inning a nd runnings. 89
deg. -l-l · W. alo n g the Southerly lin e of StcYens C reek Road for a distance of 152
feet. mo re o r le ss . 10 a r o int o n the line establi s hed by the Boundary Linc
Agreement by ::i nd tictwccn V icto r F:. Co rs igli a . c t ux. and Kenneth fvi.
Coykenda ll. ct al. d ate d IJc c cmbcr 9. 1948 a n d recorded January 3, 1949 in Book
1727 of Offic ial Record s . pa ge 52 . Sant a Clara Cou nt y Record s: thence leaving
sa id So uth e rl y line of S tcn~ns Creek Road a nd runnin g S. 0 deg . 2 3 · 12'' E. and ·
alo n g s aid line de sc ribed in sa id B o undary Li nc A g reement 30 8.68 feet to a point
in th e No rtherl y line of Lot l 35 . as sa id Lot is sho wn upon that certain Map
ent itl ed. T r ac t No . 550 Loree Es ta tes U nit No . 2 which map was filed for record in
th e office of the R eco rde r of the Co unty of Sant a Clara. State of California on
January 3 . I 9 4'J in B ook 22 of :-.bps. at p ~g e s 4 a!ld 5 : thence N. 89 deg. 37' E.
J long t h e Northerl y line or Lot 135. 134. a nJ co rn e r of L o t 128 of said Tract No.
550 . thence N. 0 Jcg . 2:; · \\I . :d u n g the Wes terly line of Lot 12S and its
p ro longation No rtherly fo r a Ji s la n c e of 308.39 feet to the po int o f beginning.
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EXHIBIT B
Promissory Note
$921,000 ~~~~~~~~-·, 1995
Cupertino, California
FOR VALUE RECEIVED, Community Housing Developers, Inc., a
California nonprofit public benefit corporation (the "Borrower"),
promises to pay to the City of Cupertino (the "City"), or order,
the pri~cipal sum of Eight Hundred Tio/enty-one Thousand Dollars
($821,000), plus interest at the rate of three percent (3%) per
annum, compounded annually.
1. Term. The term of this Note (the "Term") shall
commence on , 1995, and end on the date which is
forty (40) years from the date of commencement of the term of the
CHFA Loan {the "Due Date").
2. Payments. Commencing one {l) year following the
issuance of governmental certificates of occupancy for all units
in the Development, Borrower shall m?.k~ annual payments of
accrued interest to City at the address prcvided below or as
otherwise s~ecified by C:ty, but only to the extent of Surplus
Cash, as defined below.
"Surplus Cash'' means the operating income of the Development
for Borrower's previous fiscal year (but not including interest
income earned on tenant security deposits and Development reserve
accounts) that exceeas operating .expenses for.such previous
fiscal year of Borrower. For this purpose, operating expenses
shall include all costs and expenses related to operation of the
Development, including (without limitation) amounts necessary to
meet the CHFA requirement of a 1.05 debt service coverage ratio
and to pay all currently or past due debt service on loans,
deposits into reserves, taxes or other charges, and a reasonable
management fee and other expenses of a manager.
lJorrow er shall certify to City annually, in a form
reasonably acceptable to City and with such s upporting
documentation as tho City may reasonably require, the amount o!
current Surplus Cash bas~d on the income and cxpense3 of the
Borrower's previous fiscal ye~r.
190001>.P~O
06/14/95 B-1
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J. Lo i'l :1 1\crr0 <:>::i e n t . ':':1is tl o te is r.iade to evidence a loan
( t he "C ity LoZ!n") r.1Z1de pursu c:rnt to thc:i t certai n lo a n agreement
dated as of , between the Bo rrower and the City
(the "C i ty Loan Agreem e nt")·. Unless othec,.;ise .i ndicated,
capitZl l ized words not defin ed in thi s Note hav ~ the meaning given
in th e Cit y Loc:i n Agreem e nt .
4. Dee d of T!"ust. Th is :l ate is sec ur ed by a deed of
trust on the Property (t he "City Deed of Trust").
5. ~aturity. All unpaid principal and interest on this
l/ote shall be due and payable u po n the earlier of : (1) the Due
Date; (2 ) a Transf~r ,of any porti9n of the Property (as defined
in the City Loan Agreement); or (3) occurrence of an Event of
Default (as defined in Section 4 ).
6. Default. Any o f the following constitute an Event of
Default under this Note: (1) any failure to pay in full any
payment required under thi s Note; (2) any default or failure of
per!:ormance under this Note, the City Loan Agreement, or the City
Deed of Trust; or (3) any default or failure of performance under
any other loan agreement, note or deed of trust of the Borrower
with respect to the Property.
7. Accelera tion. Upon the occurrence of an Event of
Default, the Agency shall have the right to accelerate the Pue
Date and declare all of the unpaid principal and accrued interest
immediately due and payable. Any failure by the City to pursue
its legal and equitable remedies upon an Event of Default shall
not constitute a waiver of the city's right to declare a default
and exercise all of it s rights under this Note, the City Deed of
Trust, and the City Lo a n Agreement. Nor shall acceptance by the
City of any paym e nt provided for in this Note constitute a waiver
of the City's right to r e qu i re prompt payment of any remaining
p~incipc:il and i nter est o~ed.
8. t/o Offse t. Tr1e Borrowe r waives any rights of offset
it now h as or rnZly ~ater have agai nst th e City and its successors
a nd assi g ns .
9. Waiver ; Attorn eys ' Fees. T _he Borrower e .,d any
endors ers or guarantors of this Note, f or themselves and their
heirs, legal representatives, successors, and assigns,
respectively, ceverally ~aive the f ollO~ing: diligence;
presentment; protest; demand; notice o f protest, dishonor and
non~paym en t; a ny rights to be rel eased by reason of any extension
of time or change i n terms of payme nt, or change or release of
any security given for th e payments o f this tlote; and the right
to plead any ctatutc of limitjtio n s a~ a defense to any demand on
J ',10001) 1·~0
. 0/.,/ l 4°; ')~ 13-2
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this Note or a greeme n t to p a y th e sa me ; a nd jointly and severally
agree to p a y all cc 5 ts of c o lle ction when incurred, including
re a sun a ble attorneys' fees. If a~ action is instituted on this
Note, the Borrower promi ses to pa y, in addition to the costs and
disbursements allowed by l a w, such sum as a court may adjudge
re as onable as attorneys' fee s in such a ction.
10. Ma nner a n d Pl ac e o f Payme n t . All payments of
principal and inte r est du e un d er ~his Not e , as well as any
a ddition a l p a yment s se t fo r th i n the City Deed of Trust, shall be
paya ble in lawful mone y of the United States of America at the
off ice of the City of Cupertino, Finance De Dartment. 10300 Tocre Ave .•
Cupertino, California 9 50111 , or such other address as the City
may designate in writing.
11 . Nonrecour s e Obliga tion.
a. Except as provided in S e ction 9(b), the Borrower
shall not have any direct or i ndirect personal liability for
payment of the principal of, or interest on, the City Loan or the
performance of the Borrower's obligations under the City Deed of
Trust, the City Loan Agreement, or this Note. The sole recourse
of the City with respect to payment of the principal of, or
interest on, the City Loan, or the performance of the Borrower's
obligations under the city Deed of Trust, the City Loan
Agreement, or this Note, shall be to the Property. No money
judgment (or execution on a money judgment) entered in any action
(whether legal or equibable) on this Note, the City Loan
Agreement, or the City Deed of Trust shall be enforced personally
against the Bu ~rower and its officers, directors, employees, and
agents, but shall be enforced only against the Property and such
other property as may from time to time be hypothecated in
connection with the Borrower's obligations under this Note, the
City Loan Agreement, and the City Deed of Trust. This Ser.tion
9(a) does not limit or impair the enforcement against all such
security for the City Loan of all the rights and remedies of the
city, nor do es it impair the right of the City to assert the
unpaid principa l amount of th e City Loan as a demand for money
within the meaning of California Code of Civil Procedure Section
431.70 or any successor provi s ion.
b . Section 9 (a) do es not re lieve the Borrower of
p e r s onal lia bility for any o f t h e following : (i) fraud or
willful misr e presentation; or (ii) the failure to pay taxes,
a ssessment s , or other charge s th a t could create liens on the
Prope rty a n d that are paya bl e or applicable prior to any
f ore closure und e r the City De e d o f Tru s t.
19000 1>.1 '!,0
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c. T h e di r ec to r s of th e Borrower, as well as
Co ram unity Ho usi ng Deve lo pe rs, Inc. a nd its officers, directors,
e mployee s , a n d a ~e nt s , sh 3ll in r.o event have any direct or
i~direct pe rso n a l li a b i lity f or p a y ment of the principal of, or
i nterest on, th e City Lo a n or th e p ~r f ormance of the Borrower's
obligations un de r th e C ity Deed o f Tru st, the City Lo a n
Agreemen t , or this No te.
12.
190000.f'SO
Ot>/l-4/95
Miscellan e o us Provi siqns.
a. All notices to the Borrower or the City shall be
given in the manner and at the addresses set
forth in the City Loan Agreement.
b. No assignment of the Borrower's rights or
obliga tions u~der this Note, shall be made
voluntarily, or by operation of law without the
prior written consent of the City, and any
assignment without such consent shall be void.
c. This Note may be amended only by an agreement in
writing signed by both the Borrower and the Cit:~.
d. This Note shall be governed by and construed in
accordance with the laws of the State of
California.
e. If any provis i on of this Note shall be declared
invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining
provisions of this Note shall not be in any way
affected or imp~ired.
f. The times f or the perfor~ance of any obligations
under this Note shall be strictly construed, time
b e ing o f ~he essence.
Bo r ruwer:
::~mu~ing Developers,
Its : / e,-,-1-.·"~
Inc.
B-4
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Cupeitino
10 300 Torre Avenue
Cupertino, Cal.[f ornia 950111
Attn: Ye-a Gi 1
EXHIBIT C
DEED OF TRUST AND ASSIG ~'MENT OF RENTS
This Deed of Trust, made this day of , 1995,
by and between Community Housing Developers, Inc., a California
nonprofit public benefit corporation ("Truster"), whose address
is
. , Title
Company, a California corporation ("Trustee''), whose address is
, and the ~-------~-----~--,-------------,----City of Cupertino ("Beneficiary") , whose address is 10300 Torre
Av e nue , Cupertino, California, 950B ,
witnesseth: that Truster IRREVOCABLY GRANTS, TRANSFERS, AND
ASSIGNS TO THE TRUSTEE IN TRUST, WITH POWER OF SALE, that real
property situated in the Cjty of Cuper~ino, County of Santa
Clara, State of California, described in Exhibit A attached
hereto and made part hereof (the "Property").
TOGETHER WITH the rents, issues and profits thereof, SUBJECT
HOWEVER, to the right, power and authority given to and conferred
upon Beneficiary by subdivision B of that certain fictitious deed
of trust recorded in the office of the Recorder of the County of
Santa Clara in Book 6626 of Official Records, at Page 664
incorporated herein by re fer ence to collect and apply such rents,
issues and profits.
FOR THE PURPOSE OF SECURING payment of sums and performance
of each agreement of Truster set forth in ~~e Promissory Note and
the Loan Agreement executed by Truster and Beneficiary, dated of
even date herewith (the "Loan Agreement"), and performance of
each agreement o t Truster i ncorporated by reference or contained
herein.
190000.l'SO
06/14/9S C-1
. " . . .. ..·, ' .. •, ,
II • • •
•• ,, '. L._ I ' . ' . . . .......
. . . '. . ~ ·~· . . ~ . . .
TO P.ROTECT T l:E S :.C UR ITY OF TH IS C'EEO OF TRUST, .TRUSTOR
AGREES :
S ectio u 1 . ny the exe cuti cn and delivery of this Deed of
Trust and the Pror.iissory riote secured hereby, that the provisions
of s~bd iv isi ons A an d B inclusive, of the fictitious deed of
trust r ecorde d in the office of the ~ecorder of the County of
Sant~ Clara in Book 6626 of Offic ia l Reco rds, at Page 664, hereby
are adopted and incorporated h ~r ei n and made a part hereof as
fully as though s e t forth herein at length; that it will observe
and perform said provisions; and that th2 references to the
property, obligat ions , and parties in said provisions shall be
construed to refer to the property, obl~gations, and parties set
forth in this Deed of Trust.
Section 2. Except as permitted by the Loan Agreement,
Trustor shall not, voluntarily or involuntarily or by .Jperation
of law, sell, transfer, lease, pledge, encumber, create a
security interest in, or otherwise hypothecate or alienate all or
any part of the Security, without Beneficiary to any sale,
transfer, lease, pledge, encumbrance, creatjon of a security
interest in, or other hypothecation. Beneficiary may, at its
option, declare the ind,~btedness secured hereby immediately due
and payable, without no~ice to Trustor or any other person or
entity (except as provid~d herain), upon any such sale, transfer,
lease, plecige, encumbranCl!, creation of a security interest in,
or other hypothecation or alienation in violation hereof.
Without the written consent of Beneficiary, no sale, transfer,
lease, pl e dge, encumbrance, creation of a se~urity interest in,
or other hypothecation of, the Security shall relieve or release
Trustor fron primary liability under this D~ed of Trust or the
Promissory Note, as ~he case may be. As used in this Section 2,
the term "transfer" includes, without limitation, the following
transactions:
(a) Any total or partial sale, assignment or conveyance, or
creation of any trust or power, or any tr~nsfer in any other mode
or form with respect to the Security or any part thereof or any
interest ther e in, or any contract or agreemerit to do the same;
(b) The cumulative transfer of more than ten percent (10%)
of the capital stock, partnership profit and loss interest, or
other form of interest in Truster; and
(c) Any merger, consolidation, sale or lease of all or
substantially all of the assets of Truster provided that this
provision shall not be interpreted to prohibit leasing of the
Property to tenants leasing the individual units comprising the
Project located upon the Property.
I 9000ll 1·~0
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Section J. In the event of default by the Truster under
this Deed of Trust or the Loan Agreement, or if the Property or
any part thereof or any interest therein is sold, agreed to be
sold, conveyed, alienated or refinanced by the Truster, or by the
operation of law or othe1.-..,is<:?, without the .,-ritten consent of the
Benefici&ry, all obligations secured by this instr~ment
irrespective of the maturity dateG expressed therein, at the
option of the Benefi=iary hereof and without demand or notice
shall immediately b~corne due and payable.
Section 4. Recordation of this Deed of Trust provides
constructive notice of certain occupancy and affordability
restrictions appl <.cable to the ProPg, as srorth Jn that
certain loan agree:'.'Oent dated as of ,/ J\.L 0. J {/ {j..j ,
between Truster and Beneficiary. ~ ' _
The undersigned Truster requests that a copy of any Notice
of Default and of any Notice of Sale hereunder be mailed to
Truster at the address hereinabove set forth.
190000.f'SO
06/1'4/95
TRUSTOR:
Community Housing Developers, Inc.
By: &4 ft~
Its: t:xe <-~f.v-< ,JJ,·r~<-f-~
C-J
EX l!IBI T D
CD BG ASSURANCES
·111c Rt:cipient of CDl3G m o ni es hereby a ss ures a nd ce rtifies compliance with the regulations,
policies . guidel in es and requ irements (i ncludin g federal 0MB Circulars No. A-87, A-102, A-
l I 0 . and A-12::). as they rel a te to the a ppl ica tion. acce p tance ana use of Federal funds for this
assisted project. Al so the CONTRACTOR ass ures and certifies to the CITY that:
L
2.
3 .
It possesses legal a uth o ri ty to make a gra11t or loan submission and to execute a
community h o u s ing s ervices program;
It s govern in g bod y has duly adopted or passed a_,; an official act a resolution. motion or
s imilar ac t io n autLurizing the person identified as the official repre5entative of the
corporaticn to s utmit the final s tatem e nt and all understandings and assurances contained
therein. and c!ir cct ing a nd authorizin g the person identified as the official representative
o f the CONTRA CTOR to act in connection with the submission of the final application
and to provide s uc h add itional information as may be required ;
111e g rant wi ll be co nducted a nd administered in compliance with:
a. Ti tle V I o f the Civ il Rights Act of 1964 (Pub. L.88-352; 42 U.S.C. 2000d ~
~anJ
b . Title VJII of the C ivi l F.i g hts Act of 1968 (Pub . L. 90-2S4; 42 U.S.C. 3601 ~
~
4 . It will affirmJtivcly further fa ir hous ing .
11/0000 1'511
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190000 .PSO
06/14/95
EXHIBIT E
DEVELOPMENT BUDGET
E-1
t-
STEVENS CREEK/TANTAU BUDGET
•. . . . EXHIBI T E
COUNTY COUNTY
CITY HOME TRUST CONST
LAND 810,000 810,000
ARCH ITECTURE/ENGINEERING
ARCHITECT 77 ,804 77 ,804
RENDER ING 4,200 4,200
CIVIL 10,080 10,080
STRUCTURAL 13,430 13,430
SOILS 1,550 1,SSC
CONSUL TANT FEES
APPRAIS~L 6,470 6,470
MARK L T STUDY 1,600 1,600
NEPA 6,87:5 6,875
PHASE I ENVIRON 1,8J0 1,850
TESTING & INSPECTION 1Q.~OO 10,500
FEES & PERMITS
PD REZONING 3,137 3,137
PUBLIC WORKS
SANITARY CONNECT 32,720 32,720
STORM DRAIN 5,161 5,161
PUBLIC WORKS C:&I 16 ,8 00 16,8 00
PERMITS
BUILDINGS & STRUCT 6,591 6,591
~f! SEISMIC 420 420
ENERGY INSPECTION 1,809 1,809
BLDG DEPT PLAN CHECK 5,603 5,603
FIRE DEPT PLAN CHECK
TAXES & INSURANCE
PROPERTY TAX 10,500 10,500
SCHOOL TAX 51,520 51,520
INSURANCE & BONDS 8,400 8,400
LEGAL
LENDER 12,600 12,600
CITY DOCS . 25,000 11,051 13,949
CONSTRUCTION 4,200 4,200
LOAN FEES
CONSTRUCTION LOAN 13,134 13,134
PERMANENT LOAN 43,293 43,293
ADVERTISING 8,400 8,400
INTEREST RESERVE 82,497 82,497
TITLE FEES 16,800 11,000 5,800
CONTINGENCY (SOFT) 45,464 45,464
CONSTRUCTION
HARD COST CONTRACT 1,413,048 1,413,048
SITE WORK 126,000 126,000 l CONSTRUCTION MANAGEMEN 16,000 16,000
CONTINGENCY 70,652 70,652
OFFSJTES
STREET 151,200 151,200
DEVELOPER FEE 162,387 69,256 93,131
TOTAL 3,277,695 821,000 600,000 100,000 1,756,695