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11-067 Loan Agreement, Senior Housing Solutions Rehab, 19935 Price Avenue LOAN AGREEMENT Between City of Cupertino and Senior Housing Solutions (Senior Housing Solutions Rehab, 19935 Price Ave, Cupertino, CA) 394 \01 \666523.1 3/13/2009 TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS AND EXHIBITS 2 Section 1.1 Definitions 2 Section 1.2 Exhibits. 4 ARTICLE 2 LOAN PROVISIONS 4 Section 2.1 Loan. 4 Section 2.2 Interest 5 Section 2.3 Use of Loan Funds. 5 Section 2.4 Security. 5 Section 2.5 Conditions Precedent to Disbursement. 5 Section 2.6 Repayment Schedule 6 ARTICLE 3 LOAN REQUIREMENTS 7 Section 3.1 Use of Loan Proceeds. 7 Section 3.2 Compliance with the CDBG Project Agreement. 7 Section 3.3 Financial Accountings and Post - Completion Audits. 7 Section 3.4 Annual Operating Budget. 7 Section 3.5 Information. 7 Section 3.6 Records. 8 Section 3.7 CDBG Requirements. 9 Section 3.8 Hazardous Materials. 12 Section 3.9 Maintenance and Damage 14 Section 3.10 Fees and Taxes. 14 Section 3.11 Notice of Litigation 15 Section 3.12 Operation of Project. 15 Section 3.13 Nondiscrimination 15 Section 3.14 Transfer. 15 Section 3.15 Insurance Requirements. 16 Section 3.16 Anti - Lobbying Certification 17 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BORROWER 18 Section 4.1 Representations and Warranties 18 ARTICLE 5 DEFAULT AND REMEDIES 20 Section 5.1 Events of Default. 20 Section 5.2 Remedies. 21 Section 5.3 Right of Contest. 22 Section 5.4 Remedies Cumulative. 22 394\01\666523 1 3/13/2009 TABLE OF CONTENTS (continued) Page ARTICLE 6 GENERAL PROVISIONS 22 Section 6.1 Relationship of Parties. 22 Section 6.2 No Claims. 23 Section 6.3 Amendments. 23 Section 6.4 Indemnification. 23 Section 6.5 Non - Liability of City Officials, Employees and Agents. 23 Section 6.6 No Third Party Beneficiaries. 23 Section 6.7 Discretion Retained By City. 23 Section 6.8 Conflict of Interest. 24 Section 6.9 Notices, Demands and Communications. 24 Section 6.10 Applicable Law. 25 Section 6.11 Parties Bound. 25 Section 6.12 Attorneys' Fees 25 Section 6.13 Severability. 25 Section 6.14 Force Majeure. 25 Section 6.15 City Approval 25 Section 6.16 Waivers. 26 Section 6.17 Title of Parts and Sections. 26 Section 6.18 Entire Understanding of the Parties. 26 Section 6.19 Multiple Originals; Counterpart 26 EXHIBIT A: Legal Description of the Property EXHIBIT B: Approved Project Budget ii 394 \01 \666523.1 3/13/2009 LOAN AGREEMENT (Senior Housing Solutions Rehabilitation, 19935 Price Ave, Cupertino, CA) This Loan Agreement (the "Agreement ") i; entered into as of Junel (, 2011, by and between the City of Cupertino, a municipal corporation (the "City "), and Senior Housing Solutions, a California nonprofit public benefit corporation ( "Borrower "), with reference to the following facts: RECITALS A. The City has received funds from the United States Department of Housing and Urban Development ( "HUD ") under Title I of the Housing and Community Development Act of 1974, as amended (the "CDBG Funds "). The CD13G Funds must be used by the City in accordance with 24 CFR 570 et sue. B. The Borrower has acquired that certain real property located at 19935 Price Ave, Cupertino, CA 95014, County of Santa Clara, California, as set forth in greater detail in the legal description attached hereto as Exhibit A (the "Property"), and intends to rehab it to provide congregate senior housing units for up to five (5) very low- income households and/or individuals (the "Project "). C. The Project will consist of one (1) five- bedroom unit located within the Property, which will provide five (5) bedrooms (the "Units ") which will be occupied by a very low income household and/or an individual (the "Tenant "). The Project will be available to eligible senior individuals in need of affordable housing. D. The Borrower has applied to the City for a loan in the amount of One Hundred Ninety Six Thousand One Hundred Ninety Five Dollars and No Cents ($196,195) (the "Loan") to assist the Borrower in the rehabilitation of the Property. E. The Loan will be funded with CDBG Funds, and will be evidenced by a promissory note executed by Borrower in favor of City and secured by a deed of trust. F. The City and HUD entered into that certain CDBG Project Agreement pursuant to which the City received CDBG Funds, a portion of which will be used to assist Borrower in the Rehabilitation of the Property for the Project (the "CDBG Project Agreement "). G. As a condition of the Loan, the Borrower will execute a regulatory agreement (the "Regulatory Agreement ") which will regulate the Units of the Project to ensure that the Units within the Project are occupied by and affordable to very low income households or individuals for the term of the Loan. H. Pursuant to Section 15301 (a) of the CEQA Guidelines set forth at 14 California Code of Regulations Section 15000 et seq.; the Project is exempt from the requirements of the California Environmental Quality Act (Sections 2100 et seq. of the Public Resources Code). 1 394 \01 \666523.1 3/13/2009 I. The City has completed its environmental review on the Project pursuant to the National Environmental Policy Act (24 U.S.C. Section 4321 et seq.) and its implementing regulations ( "NEPA "), and determined that the Project is categorical exempt pursuant to 24 CFR 58.35(a)(3)(i). J. The Borrower's use of the CDBG Funds for the rehabilitation of a single family home for very -low income seniors is considered an eligible activity under 24 C.F.R. 570.202 and will meet a national objective under 24 C.F.R. 570.208(a)(2)(i)(A) in that it will benefit low and moderate income persons. NOW, THEREFORE, in consideration of the recitals, hereof, and other mutual covenants and promises contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Borrower hereby agree as follows: ARTICLE 1 DEFINITIONS AND EXHIBITS Section 1.1 Definitions. The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided: (a) "Agreement" shall mean this Loan Agreement between the City and Borrower. (b) "Approved Financing" shall mean funds obtained by the Borrower and approved by the City for the purpose of financing the Project and disbursed in the manner set forth in the Approved Project Budget. In addition to the Loan, the Approved Financing shall include: (1) Revocable Grant from the City of Cupertino in the amount of One Million Ninety Thousand Dollars ($1,090,000) in CDBG Funds (the "Cupertino Acquisition Loan "); (2) Loan from the Housing Trust of Santa Clara County in the amount of Forty Four Thousand Nine Hundred Eighteen Dollars ($44,918) (the "Housing Trust Acquisition Loan "); (3) Loan from the City of Cupertino in the amount of Two Hundred Thirty Nine Thousand Four Hundred Ninety One Dollars and No Cents ($239,491) of CDBG Funds, that the City loaned the borrower for Phase I of the rehabilitation (the "Phase I Rehab Loan "). (c) "Approved Project Budget" shall mean the proforma development budget, including sources and uses of funds, as approved by the City for the purposes of financing the Project, and attached hereto and incorporated herein as Exhibit B. (d) "Borrower" shall mean Senior Housing Solutions, a California nonprofit public benefit corporation. (e) "CDBG Funds" shall have the meaning set forth in Recital A above. 2 394\01\666523 1 3/13/2009 (f) "CDBG Project Agreement" shall rnean the CDBG Project Agreement between the City and HUD pursuant to which the City received CDBG Funds, a portion of which will be used to assist Borrower in the rehabilitation costs of the Property. (g) "CDBG" shall mean the Community Development Block Grant Program pursuant to Title I of the Housing and Community Development Act of 1974, as amended (the "CDBG Funds "). (h) "City" shall mean the City of Cupertino, a municipal corporation. (i) "City- Assisted Unit" shall mean all of the Units to be occupied by, or if vacant available for occupancy by, very low- income persons pursuant to the Regulatory Agreement. (j) "County" shall mean the County of Santa Clara in the State of California. (k) "Deed of Trust" shall mean the deed of trust that will encumber the Project to secure repayment of the Loan. The form of the Deed of Trust shall be provided by the City. (1) "Default" shall have the meaning set forth in Section 5.1 below. (m) "Hazardous Materials Claim" shall have the meaning set forth in Section 3.8 below. (n) "Hazardous Materials Law" shall have the meaning set forth in Section 3.8 below. (o) "Hazardous Materials" shall have the meaning set forth in Section 3.8 below. (p) "HUD" shall have the meaning set forth in Recital A above. (q) "Improvements" shall mean the existing improvements on the Property, including the minor rehabilitation planned for such improvements, which will consist of four (4) two -three bedrooms apartments with at least nine (9) transitional housing rooms, landscaping and any ancillary improvements. (r) "Loan Documents" shall mean this Agreement, the Note, the Regulatory Agreement, and the Deed of Trust. (s) "Loan" shall mean the City's loan of up to One Hundred Ninety Six Thousand One Hundred Ninety Five Dollars and No Cents (S196,195) of CDBG Funds, that the City is lending to the Borrower pursuant to this Agreement to enable the Borrower to rehabilitate the Property. (t) "NEPA" shall mean the National Environmental Policy Act (24 U.S.C. Section 4321 et seq.) and it's implementing regulations. (u) "Note" shall mean the promissory note that will evidence Borrower's obligation to repay the Loan. The form of the Note shall be provided by the City. 3 394\01\666523.1 3/13/2009 (v) "Parties" shall mean the City and Borrower. (w) "Project Agreement" shall have the meaning set forth in Recital C above. (x) "Project" shall mean the Property and the Improvements. (y) "Property" shall mean the real property located in the City of Cupertino, County of Santa Clara, California, more particularly described in the attached Exhibit A. (z) "Regulatory Agreement" shall mean the Regulatory Agreement and Declaration of Restrictive Covenants between the City and the Borrower associated with the Loan. (aa) "Requests for Notice of Default" shall mean the requests for notice of default for the benefit of the City that shall be recorded by Borrower in connection with any deed of trust secured against the Property. (bb) "Tenant" shall mean a person or household occupying a Unit. (cc) "Term" shall mean shall mean the 1:erm of the Loan, commencing on the date of this Agreement and continuing for fifty -five (55) years, unless the City and Borrower extend such term pursuant to Section 2.6(a). (dd) "Transfer" shall have the meaning set forth in Section 3.14 below. (ee) "Unit" shall mean one of nine (9) bedrooms in the Project subject to the Regulatory Agreement. Section 1.2 Exhibits. The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference: EXHIBIT A: Legal Description of the Property EXHIBIT B: Approved Project Budget ARTICLE 2 LOAN PROVISIONS Section 2.1 Loan. The City shall loan to the Borrower the Loan in the principal amount of up to One Hundred Ninety Six Thousand One Hundred Ninety Five Dollars and No Cents ($196,195) for the purposes set forth in Section 2.3 of this Agreement. The obligation to repay the Loan shall be evidenced by the Note in the form provided by the City. 4 394 \01 \666523.1 3/13/2009 Section 2.2 Interest. (a) Subject to the provisions of Section 2.2(b) below, the outstanding principal balance of the Loan shall accrue simple interest at a rate of three percent (3 %) per annum, commencing on the date of disbursement. (b) In the event of a Default, interest on the Loan shall begin to accrue, as of the date of Default and continuing until such time as the Loan funds are repaid in full or the Default is cured, at the default rate of the lesser of ten percent (10 %), compounded annually, or the highest rate permitted by law. Section 2.3 Use of Loan Funds. (a) The Borrower shall use the Loan funds for rehabilitation and related soft costs that are eligible under the applicable CDBG regulations, and consistent with the Approved Project Budget. (b) The Borrower shall not use the Loan funds for any other purpose without the prior written consent of the City. (c) The Borrower shall comply with the CDBG Project Agreement in the use of the Loan funds. Section 2.4 Security. (a) Borrower shall secure its obligation to repay the Loan, as evidenced by the Note, by executing the Deed of Trust and the Regulatory Agreement, and recording the Deed of Trust and the Regulatory Agreement as liens against the Property. (b) The Deed of Trust and the Regulatory Agreement shall be recorded against the Property. Section 2.5 Conditions Precedent to Disbursement. The City shall not be obligated to make any disbursements of Loan proceeds for the Project or take any other action under the Loan Documents unless the following conditions precedent are satisfied prior to each such disbursement of the Loan: (a) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement or the CDBG Project Agreement; (b) Borrower has executed and delivered to City all documents, instruments, and policies required under the Loan Documents; (c) A title insurer reasonably acceptable to the City is unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of insurance insuring the priority of the Deed of Trust in the amount of the Loan, subject only to the Regulatory Agreement, and such 5 394\01\666523.1 3/13/2009 exceptions and exclusions as may be reasonably acceptable to the City, and containing such endorsements as the City may reasonably require. (d) The Deed of Trust, the Regulatory Agreement and the Requests for Notice of Default have been recorded against the Property in the Office of the Recorder of the County of Santa Clara. (e) Borrower has closed all Approved Financing described in Section 1.1(b). (f) Borrower has furnished the City with evidence of the insurance coverage meeting the requirements of Section 3.15 below. (g) The Borrower has delivered to City a copy of its formation documents, evidence that the Borrower is in good standing, and a copy of a corporate authorizing resolution authorizing Borrower's execution of the Loan Documents. (h) The City has determined that the undisbursed proceeds of the Loan, together with other funds or firm commitments for the funds that the Borrower has obtained in connection with the Project, are not less than the amount that is necessary to pay for the rehabilitation of the Property. (i) The City has received a written draw request from the Borrower, including certification by the Borrower that the conditions set forth in this Section 2.5 are satisfied, and setting forth the expenses consistent with the Approved Project Budget, the amount of funds needed, and a copy of the bill or invoice covering the applicable cost. The Borrower shall apply all disbursements for the purpose requested. (j) The City has received a written draw request from the Borrower, including certification that the conditions set forth in Section 2.5 continue to be satisfied, and setting forth the proposed uses of funds consistent with the Approved Project Budget, the amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred. Section 2.6 Repayment Schedule. The Loan shall be repaid as follows: (a) The Loan and this Agreement shall have a term (the "Term ") that expires on the date fifty -five (55) years after the date of this Agreement. Notwithstanding the above, the Term may be extended at the City's sole discretion, provided Borrower is not in default under any of the Loan Documents. (b) All principal and accrued interest, if any, on the Loan shall be due in full on the earlier to occur of (i) the date of any Transfer not authorized by the City, (ii) the date of any Default, or (iii) at the expiration of the Term. 6 394 \01 \666523.1 3/13/2009 (c) The Borrower shall have the right to prepay the Loan at any time without premium or penalty. However, this Agreement an ad the Regulatory Agreement shall remain in effect for the entire Loan Term, regardless of any prepayment. ARTICLE 3 LOAN REQUIREMENTS Section 3.1 Use of Loan Proceeds. Borrower shall use the Loan proceeds in accordance with and in a manner that is consistent with the Home and CDBG regulations, as applicable. Section 3.2 Compliance with the CDBG Project Agreement. Borrower shall comply with the terms of the CDBG Project Agreement and any breach under the CDBG Project Agreement subject to the notice and cure periods set forth in Section 5.1(c) below, shall be considered a Default under this Agreement. The CDBG Project Agreement is hereby incorporated into this Agreement by this reference. Section 3.3 Financial Accountings and Post- Completion Audits. No later than sixty (60) days following completion of construction of the Project, Borrower shall provide to City a financial accounting of all sources and uses of funds for the Project. No later than one hundred fifty (150) days following completion of construction of the Project, Borrower shall submit an audited financial report showing the sources and uses of all funds utilized for the Project. Section 3.4 Annual Operating Budget. At the beginning of each fiscal year of the Term, Borrower shall provide to the City an annual budget for the operation of the Project. Unless rejected by the City in writing within fifteen (15) days after receipt of the budget, said budget shall be deemed accepted. If rejected by the City in whole or in part, Borrower shall submit a new or corrected budget within thirty (30) calendar days of notification of the City's rejection and the reasons therefor. The provisions of this Section relating to time periods for resubmission of new or corrected budgets shall continue to apply until such budget has been approved by the City. Section 3.5 Information. (a) Borrower shall provide notice to the City of all funding awards accepted and declined for the funding of the Project. (b) Borrower shall provide the City with copies of requests for disbursements or evidence of other disbursements of funds to Borrower from other funding sources providing assistance to Borrower in connection with the Project. 7 394 \01 \666523.1 3/13/2009 (c) Borrower shall provide any information reasonably requested by the City in connection with the Project, including (but not limited to) any information required by HUD in connection with Borrower's use of the Loan funds. Section 3.6 Records. The Borrower shall keep and maintain at the main office of the Borrower full, complete and appropriate books, record and accounts relating to the Project, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Borrower's compliance with the terms and provisions of this Agreement. Books, records and accounts relating to Borrower's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement. All such books, records, and accounts shall be open to and available for inspection and copying by the HUD, the City, its auditors or other authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that Borrower may be required to furnish to any governmental agency shall at all reasonable times be open for inspection by the City at the place that the books, records and accounts of the Borrower are kept. The Borrower shall preserve such records for a period of not less than five (5) years after the creation of such records in compliance with all HUD records and accounting requirements including but not limited to those set forth in 24 C.F.R. 570.506 and'. 570.502(b). If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loan is pending at the end of the completing the rehabilitation of the Property, then the Borrower shall retain such records until such action and all related issues are resolved. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate and current. Such records shall include but not be limited to: (a) Records providing a full description of the activities undertaken with the use of the CDBG Funds. (b) Records demonstrating that each activity undertaken meets one of the national objectives of the CDBG program set forth in 24 CFR 570.208; (c) Records required to determine the eligibility of activities; (d) Records documenting compliance with the fair housing and equal opportunity components of the CDBG program; (e) Financial records as required by 24 CFR 570.502, and OMB Circular A -110 (24 C.F.R. Part 84); and (f) Other records necessary to document compliance with Subpart K of 24 CFR 570. (g) The City shall notify Borrower of any records it deems insufficient. Borrower shall have fifteen (15) calendar days after the receipt of such a notice to correct any deficiency in 8 394\01\666523 1 3/13/2009 the records specified by the City in such notice, or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Borrower shall begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. Section 3.7 CDBG Requirements. (a) Borrower shall comply with all applicable laws and regulations governing the use of the Loan funds, including but not limited to the requirements of the Regulatory Agreement and the CDBG Project Agreement. In the event of any conflict between this Agreement and applicable laws and regulations governing the use of the Loan funds, the applicable laws and regulations shall govern. (b) The laws and regulations governing the use of the Loan funds include (but are not limited to) the following: (1) Environmental and Historic Preservation. Section 104(0 of the Housing and Community Residence Act of 1974 and 24 CFR Part 58, which prescribe procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 - 4361), and the additional laws and authorities listed at 24 CFR 58.5. (2) Applicability of OMB Circulars. The applicable policies, guidelines, and requirements of OMB Circulars Nos. A -87, A -102;, Revised, A -110, A -122, A -133, and A -128. (3) Debarred, Suspended or Ineligible Contractors. The use of debarred, suspended, or ineligible contractors set forth in 243 CFR part 5. (4) Civil Rights, Housing & Community Development, and Age Discrimination Acts. The Fair Housing Act (42 U.S.C. 3601 et seq.), and implementing regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended; Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794, et seq.); the Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and implementing regulations at 24 C.F.R. Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608. (5) Lead -Based Paint. The requirement of the Lead -Based Paint Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.), the Residential Lead -Based Paint Hazard Reduction Act (42 U.S.C. 4851 et seq.), and implementing regulations at 24 CFR Part 35. (6) Relocation. The requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, and similar state laws. If and to the extent that development of the Project results in the permanent or temporary displacement of residential tenants, homeowners, or businesses, then Borrower shall comply with all applicable local, state, and federal statutes and regulations with respect to relocation planning, advisory assistance, and 9 394\01\666523 1 3/13/2009 payment of monetary benefits. Borrower shall be solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying with such relocation laws. Borrower shall prepare and submit a relocation plan to the City for approval. Borrower shall be solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying with such relocation laws. The Borrower shall indemnify, defend (with counsel reasonably chosen by the City), and hold harmless the City against all claims which anise out of relocation obligations to residential tenants, homeowners, or businesses permanently or temporarily displaced by the Project'. (7) Discrimination against the Disabled. The requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), arid federal regulations issued pursuant thereto, which prohibit discrimination against the handicapped in any federally assisted program, the requirements of the Architectural Barriers Act of 1.968 (42 U.S.C. 4151, 4157), and the applicable requirements of Title II and /or Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12131 et seq.), and federal regulations issued pursuant thereto. (8) Clean Air and Water Acts. The Clean Air Act, as amended, 42 USC 1859 et seq., the Federal Water Pollution Control Act, as amended, 33 USC 1251 et seq., and the regulations of the Environmental Protection Agency with respect thereto, at 40 CFR Part 15, as amended from time to time. (9) Uniform Administrative Requirements. The requirements of 24 CFR 507.502(b) regarding cost and auditing requirements. (10) Training Opportunities. The requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u ( "Section 3 "), requiring that to the greatest extent feasible opportunities for training and employment be given to lower income residents of the project area and agreements for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in, the areas of the project. Borrower agrees to include the following language in all subcontracts executed under this Agreement: a. The parties to this contract agree to comply with HUD's regulations in 24 C.F.R. Part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. b. The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause; and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference; shall set forth minimum number and job titles subject to hire; availability of apprenticeship and training positions; the qualifications for each; the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. 10 394 \01 \666523.1 3/13/2009 c. The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations3 in 24 C.F.R. Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 C.F.R. Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R. Part 135. d. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 C.F.R. Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 C.F.R. Part 135. e. Noncompliance with HUD's regulations in 24 C.F.R. Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. f. With respect to work performed in connection with Section 3 covered Indian housing assistance, section 7(b) of the Indian Self - Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian -owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b).Training Opportunities. (11) Labor Standards. The prevailing wage requirements of the Davis -Bacon Act and implementing rules and regulations (40 L.S.C. 276a- 276a -5); the Copeland "Anti - Kickback" Act (47 USC 276(c)) which requires that workers be paid at least once a week without any deductions or rebates except permissible deductions; the Contract Work Hours and Safety Standards Act — CWHSSA (40 USC 327 -333) which requires that workers receive "overtime" compensation at a rate of 1 -1/2 times their regular hourly wage after they have worked 40 hours in one week; and Title 29, Code of Federal Regulations, Subtitle A, parts 1.3 and 5 are the regulations and procedures issued by the Secretary of Labor for the administration and enforcement of the Davis -Bacon Act, as amended. (12) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988 (P.L. 100 -690) and implementing regulations at 24 CFR Part 24. (13) Anti - Lobbying; Disclosure Requirements. The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 C.F.R. Part 87. (14) Historic Preservation. The Borrower shall comply with the historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. Section 470) and the procedures set forth in 36 C.F.R. Part 800. 11 394 \01 \666523.1 3/13/2009 (15) Religious Organizations. If Borrower is a religious organization, as defined by the CDBG requirements, Borrower shall comply with all conditions prescribed by HUD for the use of CDBG funds by religious organizations, including the First Amendment of the United States Constitution regarding church/state principles and the applicable constitutional prohibitions set forth in 24 C.F.R. Section 570.200(j). (16) HUD Regulations. Any other HUD regulations present or as may be amended, added, or waived in the future pertaining to the Loan funds, including but not limited to HUD regulations as may be promulgated regarding subrecipients. Section 3.8 Hazardous Materials. (a) Borrower shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Borrower shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials ") except such of the foregoing as may be customarily used in construction of projects like the Project or kept and used in and about property of this type. (b) Borrower shall immediately advise the City in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Borrower or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ( "Hazardous Materials Law "); (ii) all claims made or threatened by any third party against Borrower or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims "); and (iii) Borrower's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border -zone property" under the provision of California Health and Safety Code, Sections 25220 et seq. or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) The City shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Borrower. Borrower shall indemnify and hold harmless the City and its council members, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, 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 Hazardous Materials on, 12 394\01\666523 1 3/13/2009 under, or about the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by the City in connection with clauses (a) and (b), including but not limited to reasonable attorneys' fees. This obligation to indemnify shall survive termination of this Agreement. (d) Without the City's prior written consent, which shall not be unreasonably withheld, Borrower shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the City's reasonable judgment, impair the value of the City's security hereunder; provided, however, that the City's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the City's consent before taking such action, provided that in such event Borrower shall notify the City as soon as practicable of any action so taken. The City agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Borrower establishes to the reasonable satisfaction of the City that there is no reasonable alternative to such remedial action which would result in less impairment of the City's security hereunder; or (iv) the action has been agreed to by the City. (e) Borrower hereby acknowledges and agrees that (i) this Section is intended as the City's written request for information (and Borrower's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation a nd warranty) with respect to the environmental condition of the Property is intended by the Parties to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. (f) In the event that any portion of the Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the City's or the trustee's rights and remedies under the Deed of Trust, the City may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and remedies of an unsecured creditor, including reduction of its claim against the Borrower to judgment, and (b) any other rights and remedies permitted by law. For purposes of determining the City's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Borrower shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials 13 394\01\666523 1 3/13/2009 was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the Borrower knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the City in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the lesser of ten percent (10 %) or the maximum rate permitted by law, until paid, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the City upon its demand made at any time following the conclusion of such action. Section 3.9 Maintenance and Damage. (a) During the course of both construction and operation of the Project, Borrower shall maintain the Project and the Property in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if Borrower has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property. (b) Subject to the requirements of senior lenders, and if economically feasible in the City's reasonable judgment, if any improvement now or in the future on the Property is damaged or destroyed, then Borrower shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications approved by the City with such changes as have been approved by the City. Such work or repair shall be commenced no later than the later of one hundred twenty (120) days after the damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and shall be completed within one (1) year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then Borrower shall make up the deficiency. Section 3.10 Fees and Taxes. Borrower shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Project to the extent owned by Borrower, and shall pay such charges prior to delinquency. However, Borrower shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the City, Borrower deposits with the City any funds or other forms of assurance that the City in good faith from time to time determines appropriate to protect the City from the consequences of the contest being unsuccessful. 14 394\01\666523 1 3/13/2009 Section 3.11 Notice of Litigation. Borrower shall promptly notify the City in writing of any litigation materially affecting Borrower or the Property and of any claims or disputes that involve a material risk of such litigation. Section 3.12 Operation of Project. (a) Promptly after completion of construction, the Borrower shall operate the Project as a very low income transitional housing development consistent with (i) HUD's requirements for use of the CDBG Funds, and (ii) the Regulatory Agreement. (b) Before leasing any Unit in the Project, the Borrower shall submit its proposed form of lease agreement for the City's review and approval. The term of the form of lease agreement shall be for no less than one (1) year, except by mutual agreement between Borrower and the Tenant. Any Borrower termination of a lease or refusal to renew must be preceded by not less than thirty (30) days written notice to the tenant by the Borrower. (c) Before leasing any Unit, the Borrower must provide the City, for its review and approval, with the Borrower's written tenant selection plan. (d) The Borrower must determine the income eligibility of each Tenant in an Unit. The Borrower shall certify each Tenant's income on an annual basis. (e) The maximum household income of a Tenant occupying an Unit in the Project, and the total charges for rent, utilities, and related services to each Tenant occupying an Unit, shall be maintained as provided in the Regulatory Agreement. Section 3.13 Nondiscrimination. All of the Units shall be available for occupancy on a continuous basis to members of the general public who are homeless and income eligible. The Borrower shall not give preference to any particular class or group of persons in renting the Units or any part of the Project, except to the extent required by the Regulatory Agreement. The Borrower covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a groups of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, r..or shall the Borrower or any person claiming under or through the Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property. The foregoing covenant shall run with the land. Section 3.14 Transfer. (a) For purposes of this Agreement, "Transfer" shall mean any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any rights and /or duties under this Agreement, 15 394 \01 \666523.1 3/13/2009 and/or (ii) any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Project is transferred and Borrower retains title. The term "Transfer" shall exclude the leasing of any Unit in the Project to an occupant in compliance with the Regulatory Agreement. (b) No Transfer shall be permitted without the prior written consent of the City, which the City may withhold in its sole discretion. The Loan shall automatically accelerate and be due in full upon any unauthorized Transfer. (c) The City approves the grant of the security interests in the Property described in Section 1.1(d) above. Section 3.15 Insurance Requirements. The Borrower shall maintain the following; insurance coverage throughout the Term of the Loan: (a) Worker's Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident. (b) Comprehensive General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations. (c) Comprehensive 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 coverages for owned. non -owned and hired vehicles, as applicable; provided, however, that if the Borrower does not own or lease vehicles for purposes of this Agreement, then no automobile insurance shall be required. (d) Builders' risk insurance during the course of construction, and upon completion of construction, Property insurance covering the Project, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100 %) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations. (e) Blanket Fidelity Bond covering all officers and employees, for loss of Loan proceeds caused by dishonesty, in an amount not less than One Hundred Thousand Dollars ($100,000) naming the City a Loss Payee, as its interests may appear. (f) The Borrower shall ensure that any architect, design professional, engineer, consultant, and any other professional services provided to the Project carries professional liability insurance for errors and omissions with a limit of no less than One Million Dollars 16 394\01\666523.1 3/13/2009 ($1,000,000). Before any such professional begins work on the Project, the Borrower shall deliver to the City certificate(s) of insurance; on a binder followed within thirty (30) days by a certificate of insurance, evidencing the required coverage. The insurance required by this subsection shall name as additional insured, the City, its officers, agents and employees and members of the City Council. (g) The Borrower shall cause any general contractor, agent, or subcontractor working on the Project under direct contract with the Borrower or subcontract to maintain insurance of the types and in at least the minimum amounts described in subsections (a), (b), and (c) above, except that the limit of liability for comprehensive general liability insurance for subcontractors shall be One Million Dollars ($1,000,000), and shall require that such insurance shall meet all of the general requirements of subsections (g), (h) and (i) below, including, without limitation, the requirement of subsection (i). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the City, its officers, agents, employees and members of the City Council. (h) The required insurance shall be provided under an occurrence form, and Borrower shall maintain the coverage described in subsections (a) through (d) continuously so long as the Note is outstanding. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs are included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above. (i) Comprehensive General Liability, Comprehensive Automobile Liability and Property insurance policies shall be endorsed to name as an additional insured the City and its officers, agents, employees and members of the City Council. (j) All policies and bonds shall be endorsed to provide thirty (30) days' prior written notice of cancellation, reduction in coverage, or intent not to renew to the address established for notices to the City. Section 3.16 Anti - Lobbying Certification. The Borrower certifies, to the best of Borrower's knowledge or belief, that: (a) No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; (b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the Federal contract, grant, loan, or cooperative agreement, it will 17 394 \01 \666523.1 3/13/2009 complete and submit Standard Form -LLL, Disclosure Form to Report Lobbying, in accordance with its instructions. (c) This certification is a material representation of fact upon which reliance was placed when this Agreement was made or entered into. Submission of this certification is a prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for such failure. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BORROWER Section 4.1 Representations and Warranties. Borrower hereby represents and warrants to the City as follows: (a) Organization. Borrower is a duly organized California nonprofit public benefit corporation, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted. (b) Authority of Borrower. Borrower has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and'. on behalf of Borrower, and all actions required under Borrower's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. (d) Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of Borrower enforceable against it in accordance with their respective terms. (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a 18 394\01\666523 1 3/13/2009 breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Borrower, or any provision of the organizational documents of Borrower, or will conflict with or constitute a breach of or a default under any agreement to which Borrower is a party, or will result in the creation or imposition of any lien upon any assets or property of Borrower, other than liens established pursuant hereto. (0 Compliance With Laws; Consents and Approvals. The Project will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency. (g) Pending Proceedings. Borrower is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting Borrower or the Project, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Borrower, materially affect Borrower's ability to repay the Loan or impair the security to be given to the City pursuant hereto. (h) Title to Land. At the time of recordation of the Deed of Trust, Borrower will have good and marketable fee title to the Project and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of arty character whatsoever other than liens for current real property taxes and liens in favor of the City or approved in writing by the City. (i) Financial Statements. The financial statements of Borrower and other financial data and information furnished by Borrower to the City fairly and accurately present the information contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of Borrower from that shown by such financial statements and other data and information. (j) Sufficient Funds. Borrower holds sufficient funds and /or binding commitments for sufficient funds to complete the acquisition of the Property and the construction or rehabilitation of the Project in accordance with the plans and specifications approved by the City. (k) Taxes. Borrower and its subsidiaries have filed all federal and other material tax returns and reports required to be filed, and have paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against Borrower or any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries, taken as a whole, which would be expected to result in a material impairment of the ability of Borrower to perform under any Loan Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against Borrower of any Loan Document. 19 394 \01 \666523.1 3/13/2009 ARTICLE 5 DEFAULT AND REMEDIES Section 5.1 Events of Default. Each of the following shall constitute a "Default" by Borrower under this Agreement: (a) Failure to Rehabilitate. Failure of Borrower to rehabilitate the Property within one year (365 days) after the execution of the Agreement. (b) Failure to Make Payment. Failure to repay the principal and any interest on the Loan within ten (10) days of receipt of written notice from the City that such payment is due pursuant to the Loan Documents. (c) Breach of Covenants. Failure by Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Borrower or, if the breach cannot be cured within thirty (30) days, the Borrower shall not be in breach so long as Borrower is diligently undertaking to cure such breach and such breach is cured within ninety (90) days; provided, however, that if a different period or notice requirement is specified under any other section of this Article 5, the specific provisions shall control. (d) Default Under Other Loans. Failure to make any payment or perform any of Borrower's covenants, agreements, or obligations under the documents evidencing and securing the Approved Financing following expiration of all applicable notice and cure periods. (e) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Borrower to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Borrower or seeking any arrangement for Borrower under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower in bankruptcy or insolvency or for any of their properties, (iv) directing the winding up or liquidation of Borrower, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days; or (v) Borrower shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking, any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note. (f) Assignment; Attachment. Borrower shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note. 20 394 \01 \666523.1 3/13/2009 (g) Suspension; Termination. Borrower shall have voluntarily suspended its business or, if Borrower is a partnership, the partnership shall have been dissolved or terminated, other than a technical termination of the partnership for tax purposes. (h) Liens on Property and the Project. There shall be filed any claim of lien (other than liens approved in writing by the City) against the Project or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) days without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the City. (i) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Project. (j) Unauthorized Transfer. Any Transfer other than as permitted by Section 3.14. (k) Representation or Warranty Incorrect. Any Borrower representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the City in connection with any of the Loan Documents, proving to have been incorrect in any material respect when made. After issuance of the Certificate of Completion, Default may be declared under this subsection only if the failure of representation or warranty also has a material adverse effect on the operation of the Project. Section 5.2 Remedies. The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the Loan and shall give the City the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following: (a) Acceleration of Note. The City shall have the right to cause all indebtedness of the Borrower to the City under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. The Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the City Deed of Trust. The Borrower shall be liable to pay the City on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred by the City in connection with the collection of the Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Loan. (b) Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. 21 394\01\666523 1 3/13/2009 (c) Right to Cure at Borrower's Expense. The City shall have the right (but not the obligation) to cure any monetary default by Borrower under a loan other than the Loan. The Borrower agrees to reimburse the City for any funds advanced by the City to cure a monetary default by Borrower upon demand therefore, together with interest thereon at the lesser of the maximum rate permitted by law or ten percent (10 %) per annum from the date of expenditure until the date of reimbursement. (d) Special Remedy for Breach of Use Requirement. Pursuant to 24 CFR 570.503(b)(7)(ii), if after completion of construction of the Project, the Borrower ceases to use the Units to primarily benefit very low income persons, the City shall have the right to require the Borrower to pay to the City an amount equal to the current market value of the Property (as determined by appraisal) less any portion of that value attributable to non -City Loan funds used for the Project of the Project (based on a pro -rata allocation of funds used by Borrower in its development of the Project). Funds recovered from Borrower pursuant to this subsection shall be credited against amounts outstanding under the Note. Section 5.3 Right of Contest. Borrower shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder. Section 5.4 Remedies Cumulative. No right, power, or remedy given to the City by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Borrower and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. ARTICLE 6 GENERAL PROVISIONS Section 6.1 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and Borrower or its agents, employees or contractors, and Borrower shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Borrower has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to its 22 394 \01 \666523.1 3/13/2009 predevelopment, development and operational activities related to the Property and the Project, Borrower shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirerents in each contract that contractors shall be solely responsible for similar matters relating to their employees. Borrower shall be solely responsible for its own acts and those of its agents and employees. Section 6.2 No Claims. Nothing contained in this Agreement shall create or justify any claim against the City by any person that Borrower may have employed or with whom Borrower may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to predevelopment, development and operational activities related to the Property and the Project, and Borrower shall include similar requirements in any contracts entered into for the its predevelopment activities, the construction of the Improvements, or the operation of the Project. Section 6.3 Amendments. No alteration or variation of the terms of this Agreement shall be valid unless made in writing by the Parties. Section 6.4 Indemnification. The Borrower shall indemnify, defend and hold the City harmless against all claims made against it and expenses (including reasonable attorneys' fees) which arise out of or in connection with the predevelopment activities related to the Project, development, construction, marketing and operation of the Project, except to the extent such claim arises from the grossly negligent or willful misconduct of the City, its agents, and its employees. The provisions of this Section 6.4 shall survive the expiration of the Term and the reconveyance of the Deed of Trust. Section 6.5 Non - Liability of City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Borrower in the event of any default or breach by the City or for any amount which may become due to Borrower or its successor or on any obligation under the terms of this Agreement. Section 6.6 No Third Party Beneficiaries. There shall be no third party beneficiaries '::o this Agreement. Section 6.7 Discretion Retained By City. The City's execution of this Agreement in no way limits the discretion of the City in the permit and approval process in connection with development of the Project. 23 394 \01 \666523.1 3/13/2009 Section 6.8 Conflict of Interest. (a) Except for approved eligible administrative or personnel costs, no person described in Section 6.8(b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision - making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person's tenure. Borrower shall exercise due diligence to ensure that the prohibition in this Section 6.8(a) is followed. (b) The conflict of interest provisions of Section 6.8(a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the City, or any person related within the third (3rd) degree of such person. (c) In accordance with Government Code Section 1090 and the Political Reform Act, Government Code section 87100 et sue., no person who is a director, officer, partner, trustee or employee or consultant of the Borrower, or immediate family member of any of the preceding, shall make or participate in a decision, made by the County or a County board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Borrower. Interpretation of this section shall be governed by the definitions and provisions used in the Political Reform Act, Government Code Section 87100 et seq., its implementing regulations manual and codes, and Government Code Section 1090. Section 6.9 Notices, Demands and Communications. Formal notices, demands, and communications between the Parties shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows: City: Community Development Department City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 -3255 Attention: Senior Planner Borrower: Senior Housing Solutions 512 Valley Way Milpitas, California 95035 Attention: Executive Director 24 394\01\666523 1 3/13/2009 Such written notices, demands 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. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). Section 6.10 Applicable Law. This Agreement shall be governed by California law. Section 6.11 Parties Bound. Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, executors, administrators, legal representatives, successors, and assigns. This Agreement is intended to run with the land and shall bind Borrower and its successors and assigns in the Property and the Project for the entire Term, and the benefit hereof shall inure to the benefit of the City and its successors and assigns. Section 6.12 Attorneys' Fees. If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party. Section 6.13 Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability. Section 6.14 Force Majeure. In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock- outs; riots; floods; earthquakes; fires; quarantine restrictions; freight embargoes; lack of transportation; or court order; or any other similar causes beyond the control or without the fault of the Party claiming an extension of time to perform. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) days of receipt of the notice. In no event shall the City be required to agree to cumulative delays in excess of one hundred eighty (180) days. Section 6.15 City Approval. Whenever this Agreement calls for City approval, consent, or waiver, the written approval, consent, or waiver of the City Manager or his designee shall constitute the approval, consent, or waiver of the City, without further authorization required from the City Council. The City hereby authorizes the City Manager or his designee to deliver such approvals or consents as 25 394 \01 \666523.1 3/13/2009 are required by this Agreement, or to waive requirements under this Agreement, on behalf of the City. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies. The City Manager or his designee is also hereby authorized to approve, on behalf of the City, requests by Borrower for reasonable extensions of time deadlines set forth in this Agreement. The City shall not unreasonably delay in reviewing and approving or disapproving any proposal by Borrower made in connection with this Agreement. Section 6.16 Waivers. Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Borrower or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Borrower to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Borrower shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers. Section 6.17 Title of Parts and Sections. Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. Section 6.18 Entire Understanding of the Parties. This Agreement and the documents referenced herein constitute the entire understanding and agreement of the Parties with respect to the Loan. Section 6.19 Multiple Originals; Counterpart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. 26 394\01\666523 1 3/13/2009 WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written. APPROVED AS TO FORM: CITY: CITY OF CUPERTINO, a municipal corporation i I1 By: _ ._■1 ��. . ]3y: 3q,4../Lcit.4..) C4.. arol Korade David W. Knapp Its: City Attorney Its: City Manager BORROWER: SENIOR HOUSING SOLUTIONS, a California nonprofit hi fit co • • ... • ri — h v ' / - -- ]3y: /-- Ro eft G. C • 1 Its: Executive Director 2; 394 \01 \666523.1 3/13/2009 EXHIBIT A (Legal Description of the Property) All that certain real property situated in the City of Cupertino, County of Santa Clara, State of California, described as follows: LOT 81, "TRACT NO. 4461 WILLISTON PARK UNIT NO. 2 ", WHICH MAP WAS RECORDED IN BOOK 236, PAGE 19 AND 20 OF MAPS, RECORDS OF SANTA CLARA COUNTY, CALIFORNIA ". EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS, WITH NO RIGHT OF SURFACE ENTRY, AS CONVEYED OF CALIFORNIA WATER SERVICE COMPANY, A CALIFORNIA CORPORATION, BY DEED RECORDED IN BOOK 8119, PAGE 196 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS AS CONVEYED TO THE CITY OF CUPERTINO, A MUNICIPAL CORPORATION, BY DEED RECORDED IN BOOK 8140, PAGE 215 OF OFFICIAL RECORDS. APN: 369 -05- 035 -00 Approximately 2,002 square foot, 4 bedroom/two bath, single - family residence on a 7,405 square foot lot. A -1 394\01\666523 1 3/13/2009 Exhibit B PHASE II DIVISION 05: METALS 5.01 Metal Handrails: A. Install smooth, metal handrail @ side wall of stairs leading into garage and paint with "Kelly Moore,Teton Blue ", semi -gloss latex. $ 2,472.00 B. Install smooth, metal handrail @ new patio slab /stairs @ right side yard for bedroom exit door. Paint with "Kelly Moore, Teton Blue ", semi -gloss latex. Included in A C. Install handrail at handicap ramp and deck steps Included in A D. Paint handrails 268.00 Amount: $ 2,740.00 DIVISION 06: WOODS, PLASTICS & COMPOSITES 6.01 General: See "Structural Notes & Specifications" in plan set for Light Frame Wood Construction requirements, material specifications, minimum sizing & construction applications. See Framing Plans for specific information. 6.02 Rough Carpentry: Provide all necessary labor & materials for the following framing: Exterior: A. Frame deck substructure per Foundation Plan using 4x4 PTDF posts, 4x6 PTDF girder supports,2x6 PTDF deck joists & provide "Trex Decking" surface finish (color selected by owner). Frame new shade arbor /trellis per Framing Plans. (Optional item TBD later) $ 25,879.00 B. Frame ramp substructure per Foundation Plan using 4x4 PTDF posts, 4x6 PTDF girder supports, 2x ramp runners & provide "Trex Decking" surface finish (color selected by owner). Included in A C. Construct new 4' -0" x 8' -0" redwood planter boxes in rear yard. Typical Throughout: A. Frame all new interior walls & opening fills per plan using 2x4 DF studs, spaced @ 16 "OC typical /single sole plate & double top plates. B. Frame all new door & window openings per Floor Plan & Door/Window Schedules using 4x12DF #1 headers. Bedroom #1: A. Frame new rough opening per Window Schedules for new window to be installed. Use 4X DF #1 header. See Framing Plans. B. In fill frame existing exterior wall where doors are scheduled to be removed. Bedroom #2: A. Frame new rough opening per Window Schedules for new window to be installed. Use 4X DF #1 header. See Framing Flans. Bedroom #3: A. Lower existing sill @ existing window opening to accommodate new bedroom egress window. Bedroom #4: A. Frame new rough opening per Door Schedule for new closet slider to be installed. Use 4X DF #1 header. B. Rough frame new door opening per Door Schedule. C. Infill frame existing attic access @ closet ceiling. Bedroom #5: A. In fill frame existing exterior walls where doors /windows are scheduled to be removed. B. Frame new rough openings per Door & Window Schedules for new units to be installed. See Framing Plans. Use 4X DF #1 headers typ. C. Frame closet and all between Kitchen and Bedroom 5. Bedroom Hallways: A. Frame new 30" square attic access @ bedroom hallway to service attic installed FAU unit. Double framing members as required. Provide plywood platform from access to equipment at attic as - equired to access & service furnace. B. Frame (2) semi recessed niches for wall mounted fire extinguishers. (1) at hallway between Bath 1& 2. (1) at hallway near Bedroom #5. Entry: A. Widen (2) cased openings. Install new 4X DF #1 headers as required for new opening width. See Framing Plans. B. Reframe ceiling @ plate height. Use 2x6 DF #2 joists @ 16 "OC. Living Room: A. Raise existing header © sliding rear door of Living Room to allow for new raised floor installation. B. Raise existing floor @ Living Room to align with abutting floors by installing 3/4" T &G plywood(glued & nailed), over 2x6 DF #2 floor joists (ripped as required), over 2x4 sleepers. See Foundation Plan (Sheet S1) & details for additional information. C. In fill frame ceiling & roof @ Living Room /Entry where masonry fireplace is scheduled to be demolished. Match existing ceiling joist/roof rafter sizes. Kitchen /Dining: A. Install new structural beam(s) /posts per Framing Plans to support existing ceiling & roof. (3) 4x4 DF #1 posts & 3.5" x 9.5" PSL beam. Bathrooms: A. Frame (3) 24 "W x 4 "D x 30 "H recessed niches: (1) @ each bathroom for the installation of recessed medicine cabinets: Install in wall @ centerline of sink. See Division 12 "Furnishings" B. Install 2x DF #2 solid blocking @ all Bathroom walls, suitable for the addition of grab bars. See Floor Plan for locations. C. Frame new Bathroom doors at Bathrooms 1 & 2. Bath 3 and Utility Room: A. Frame new Garage addition to Bathroom 3 and Laundry wall, girders, joists, sub floor and ceiling rafters. Amount: $ 25,879.00 6.03 Finish Carpentry: Provide all necessary labor & materials for the following items: A. Install new 9/16" x 5 -1/4" Coronado MDF baseboards typical throughout project (except bathrooms). B. Provide & install all new architectural woodwork/casework as noted on the plans & in Division 12 "Furnishings ". C. Install new "Trex" exterior deck railing(s) per plan. D. Install new plastic laminate countertops in kitchen & hallway: Product: Nevemar or equal.Color: Canyon Blue typical. Amount: N/A DIVISION 08: OPENINGS 8.01 General: See Door & Window Schedules for additional information. All exterior doors shall be solid core, insulated & shall swing inside as applicable with weather tight thresholds. Install weather stripping around all exterior doors. New windows located in bedrooms shall comply with all CBC egress requirements. Provide tempered safety glazing as required by the CBC. Contractor shall field measure openings and verify sizes prior to placing door /window order. 8.02 Windows /Exterior Sliding Doors: All new windows shall be dual paned, "Low E" vinyl units manufactured by Milgard (Classic or Tuscany line) to match existing & equipped with corrosion resistant insect wire mesh screens. 8.03 Interior Doors: All new interior doors shall be 1 -3/8 ", hollow core, Masonite, 4- panel, paint grade doors. (panel design shall be approved by owner). Doors shall be pre -hung with paint grade, finger -joint jambs & specified hinges and lock sets. Installations shall include new jambs, casing & trim. If doors can be planed and /or ripped to fit in existing openings without removing trim, the owner and contractor may opt for this alternative. 8.04 Window Hardware: All window hardware shall be an integral part of the window unit and shall be provided by the window manufacturer. 8.05 Door Hardware: All new door hardware shall be either privacy, passage or keyed lock sets. Use "Schlage S Series ", Jupiter satin chrome lever type door sets. See door schedule for lock type designation (privacy, passage, keyed, etc...) 8.06 Provide all necessary labor & materials for the following construction: Includes new jams, casing and locks. Bedroom #1: A. Replace existing door with new 2668 keyed privacy bedroom door. $ 447.00 B. Replace existing closet slider with new 8068 mirrored closet slider. 561.00 C. Install new vinyl 51040 egress window. Bedroom #2: A. Provide all necessary labor & materials for the following construction: B. Replace existing door with new 2668 keyed privacy bedroom door. $ 447.00 C. Replace existing closet slider with new 5068 mirrored closet slider. 451.00 D. Install new vinyl 51040 egress window. Bedroom #3: A. Provide all necessary labor & materials for the following construction: B. Replace existing door with new 2668 keyed privacy bedroom door. $ 447.00 C. Replace existing closet slider with new 5068 mirrored closet slider. 450.00 D. Lower and replace with 5'10" x 4'0" egress wirdow Bath #1: A. Provide all necessary labor & materials for the following construction: B. Install new 2668 privacy bedroom door. $ 398.00 Bath #2: A. Provide all necessary labor & materials for the following construction B. Install new 2668 privacy bedroom door. $ 398.00 Bedroom #4: A. Provide all necessary labor & materials for the following construction: B. Install new 2668 keyed privacy bedroom door. $ 447.00 C. Replace existing closet slider with new 8068 mirrored closet sliding door. 561.00 Entry: A. Provide all necessary labor & materials for the following construction: B. Replace existing closet door with new 2468 passage closet door. $ 363.00 C. Widen (2) cased openings . Included D. Refinish existing entry door & sidelights. Included Living Room: A. Provide all necessary labor & materials for the following construction: B. Remove & replace existing 71068 French sliding door @ new floor elevation. Bedroom #5: A. Provide all necessary labor & materials for the following construction: B. Install new 3068 keyed privacy door. $ 452.00 C. Install new 5068 mirrored closet sliders. 450.00 D. Install new 3068 privacy bathroom door. 406.00 E. Install new 3068 solid core, keyed vinyl French patio door. Full light with mini - blind in glass F. Install (2) new vinyl 2040 windows. Bath #3: A. Provide all necessary labor & materials for the following construction: B. Install new vinyl 2030, opaque window. Utility Room: A. Provide all necessary labor & materials for the following construction: B. Install new 3068 passage door. $ 368.00 Garage: A. Provide all necessary labor & materials for the following construction: B. Install new 2868 solid core, 20 minute fire rated door with weather stripping & self closer. $ 818.00 C. Sand & paint existing roll up garage door. D. Verify condition of existing garage roll up door and provide estimate (option) for replacement. Door has stress cracks at hinge metal panels. Will have future problems soon. Includes windows and door opener. E. Provide and install 2'8" x 6'8" fiberglass door with 1/2 lite and mini - blinds in glass. Locks keyed to dead bolt. Value engineering $ (1,426.00) Amount: $ 6,038.00 8.07 Keying: Provide keying as follows: A. (1) set each for each of the five bedrooms that includes (1) key that opens the bedroom and storage locker and a separate key that opens all exterior doors and the garage man door between the inside of the house and the garage. B. Provide the owner with (1) complete set that includes (1) set each for each of the five bedrooms and lockers and (1) set for the exterior doors and the garage man door between the inside of the house and the garage. C. Re -key front door 8. Re -key to match - (5) storage locks $ 130.00 Amount: $ 130.00 DIVISION 09: FINISHES CEILINGS: 09.01 Sheet rock: Walls, ceilings and patching A. Install, repair and /or patch all sheet rock surfaces where required. Use 1/2" Gypsum board where framing is spaced @ 16 "OC & 5/8" Gypsum board where framing is spaced @ 24 "OC. Tape as required & prepare for new spray applied "Orange Peel" texture. Cover and /or mask all areas not be textured to protect from over spray. New sheet rock areas shall receive an approved sheet rock primer /sealant prior to texturing & painting. $ 8,066.00 Amount: $ 8,066.00 09.02 Painting: A. Ceilings shall be painted with (2) coats of "Kelly Moore - Bone ", egg shell Latex. $ 1,500.00 Amount: $ 1,500.00 WALLS: 09.03 Sheet rock: A. Install, repair and /or patch all sheet rock surfaces where required. Use 1/2" Gypsum board typical. Use rounded corner beads @ all non cased corners. Use 5/8" Type X Gypsum board @Garage /Living Space separations. Sheet rock shall be applied to both sides of the wall & shall extend to the full height of the roof to create a 1 -hour fire rated wall assembly. Tape as required &prepare for new spray applied "Orange Peel" texture. Garage side may be left taped only. Cover and /or mask all areas not be textured to protect from over spray. New sheet rock areas shall receive an approved sheet rock primer /sealant prior to texturing & painting. Included in 9.01 Amount: Included in 9.01 9.04 Tile: Contractor shall properly clean all surfaces to be covered & install appropriate underlayment per manufacturer's recommendations. Installation should be carried out with a slow setting cement adhesive, well mixed per manufacturer's recommendations. Grouting of control joints can be executed with cement based grout or resin based organic materials. 9.05 Tile: (Bathrooms 1, 2 & 3) A. Provide "Dal -Tile" 6" x 6" white undulated wall tiles over 1/2" thick cementous ceramic tile backerboard or trowel float @ shower stall. Tile shall extend 2" beyond the edge of the shower enclosure with a quarter round edge tile finisher. Tile shall extend from the base of the prefabricated shower pan to a point, 70" above the drain inlet minimum. Provide tile sill & returns @ window openings. $ 4,650.00 Amount: $ 4,650.00 9.06 Molding/Trim: A. Install 9/16" x 5 -1/4" Coronado MDF baseboards typical throughout project (Except bathrooms). Install door /window casing, sills and /or aprons @ new units to match existing. Clean & prepare existing molding and /or trim for new paint. $ 1,282.00 Amount: $ 1,282.00 9.07 Painting: A. Walls shall be painted with (2) coats of "Kelly Moore - Bone ", egg shell Latex. Except walls @Kitchen & bathrooms shall be painted with (2) coats of "Kelly Moore - Bone ", semi -gloss Latex. Interior trim & doors shall be painted with (2) coats of "Kelly Moore - Bone ", semi -gloss enamel. $ 4,500.00 Amount: $ 4,500.00 FLOORS: 9.08 General: Prepare a clean, dry & secure surface before installation. If filling compound is needed for floor leveling, a Latex: based subfloor filler shall be used. 9.09 Bedrooms & Bedroom Closets: A. Install new wall to wall, "Weave - Windswept Classic Surf" carpeting over a 1/2" thick, residential grade padding installed in the longest lengths possible & where possible, oriented @ 90° to carpeting. Do not locate padding seams directly under carpet seams. Provide new tack strips &metal edging where carpet abuts adjoining flooring material. Installation: Carpet shall be installed to produce a tight, smooth, secure & uniform surface. Owner shall select & approve color alternatives prior to installation. $ 2,232.00 Amount: $ 2,232.00 9.1 Bathrooms: 1, 2, 3, Utility Room A. Install new "Armstrong, Tough Guard" or approved equal seamless sheet vinyl floor covering with a cove base. Owner shall select & approve color /pattern prior to installation. $ 1,736.00 Amount: $ 1,736.00 9.1 All other Interior Areas: A. Install new "Columbia - Maryland Cherry Burgundy" laminate wood flooring. Use appropriate adhesive materials and /or follow manufacturer's installation recommendations. Owner shall select & approve color /pattern prior to installation. $ 7,642.00 Amount: $ 7,642.00 DIVISION 10: SPECIALTIES 10.01 General: Contractor shall review construction documents & provide all labor & materials pertaining to the specialties as required in said documents & as specified herein. 10.02 Bath Accessories: At each bathroom, Install the following accessories: A. Provide & install "Futura" toilet paper holders @ 15" above finished floor @ vanity cabinet end panels. $ 132.00 B. Provide & install (2) "Franklin Brass" 24" towel bars (side x side or over /under). $ 132.00 C. Provide & install a 24 "W x 4 "D x 30 "H "NuTone Gallery" oversized, white steel recessed medicine cabinet. Product # DIN003. Frame rough opening per "Division 06.02 ". $ 1,440.00 D. Provide & install "Franklin Brass" robe hook @! back of bathroom doors. 123.00 E. Provide & install "Franklin Brass" towel ring @ vanity sink side wall. 129.00 F. Provide & install "Franklin Brass" satin nickel finish 18" grab bar @ back wall of toilet. $ 261.00 G. Provide & install "Franklin Brass" satin nickel finish 36" grab bar @ shower wall. $ 270.00 H. Provide & install "Grohe Chira Neu" anti scalding faucet assembly & "Grohe Tempesta "handheld shower head. I. Provide & install "Grohe Chira Neu" single lever center set faucet assembly. Utility Room Accessories: A. Provide & install "Franklin Brass" 24" hanging bar. $ 47.00 Wardrobe & Closet Specialties: A. Install laminate solid shelving & clothes hanging rod in each bedroom closet & entry hall closet. Fasten to wall @ 32 "OC maximum. Provide 2x DF #2 solid blocking as required for support. $ 840.00 Amount: $ 3,374.00 10.03 Shower Door /Enclosures: At all bathrooms: 1, 2, 3 A. Provide & install 3/8" thick, frameless, satin frosted, glass shower door with chrome hardware &door mounted towel bar. Shower doors shall be constructed of tempered safety glass with all exposed edges polished & rounded. Caulk all joints with a mildew resistant, 100% silicon based caulk to assure a water tight seal. $ 1,275.00 Amount: $ 1,275.00 10.04 Address Numbers: A. Install 4" brass address numbers @ the entrance to the dwelling. Locate in a plainly visible location from the nearest public right of way (street, avenue, court, etc...) $ 37.00 Amount: $ 37.00 10.05 Room Identification: A. Affix room identification numbers on door jambs of each individual sleeping room ( #1- 5respectively). $ 39.00 Amount: $ 39.00 10.06 Window Coverings: A. Provide & install drapes for all sliding doors in "Delta Fabric ". Living Room & Bedroom 4 $ 750.00 B. Provide & install 1" "Mini- Blinds" and drapes in "Delta Fabric" for all bedroom windows /doors and common area windows. $ 2,728.00 C. Provide & install 1" "Mini- Blinds" in Kitchen. 120.00 Amount: $ 3,598.00 DIVISION 11: EQUIPMENT 11.01 General: Contractor shall provide all labor, materials & connections required for the complete &proper installation of the equipment per the manufacturer's installation instructions. 11.02 Appliances: Provide & install all appliances specified as follows: APPLIANCE Maytag Free Standing Range - MER8770WS ALLOWANCE $929 $ 1,022.00 Maytag Elec. Cook top - MEC7430WW ALLOWANCE $568 $ 597.00 Maytag Microwave /Hood - MMV5201 DW ALLOWANCE $437 $ 669.00 Maytag Downdraft Hood - HV303 ALLOWANCE $577 $ 751.00 Maytag Microwave - MMV5207BAS ALLOWANCE $248 $ 277.00 GE Refrigerator - PTS251 HSBW ALLOWANCE $2098 $ 2,414.00 GE Refrigerator - PTS251HSBW ALLOWANCE $2098 $ 2,414.00 Frigidaire Freezer - GLFH21 F8HW ALLOWANCE $940 $ 1,056.00 Maytag Dishwasher - MDB8859AWW ALLOWANCE $798 $ 1,135.00 Insinkeratc Garbage Disposal - Badger 5XP In Plumbing Included Maytag Clothes Washer - MHWZ400TQ ALLOWANCE $755 $ 931.00 Maytag Clothes Dryer - MGDZ600TW ALLOWANCE $875 $ 1,076.00 11.02 Appliances: Provide & install all appliances specified as follows: $ 12,342.00 Amount: $ 12,342.00 DIVISION 12: FURNISHINGS 12.01 General: Unless noted otherwise, all furnishings as specified in this division shall be provided by the contractor. 12.02 Casework: Install all custom & prefabricated cabinetry as specified in the Construction Documents & in this Scope of Work. Field verify all finished space dimensions prior to ordering modular units. Provide furring and /or scab strips to accommodate installation of modular sizing in irregular sized spaces. All cabinets & casework shall be secured to walls. 12.03 Casework: Provide & install new prefabricated "Merrilat Classic" cabinetry as specified below: Bathrooms: (3 Locations) A. 42" wide x 31 -1/2" high x 21" deep base cabinet - "Vanity Bowl Drawer" in cherry cider finish." Spring Valley Square" panel doors in cherry cider finish. Classic deluxe option with heavy duty hinges & drawer slides. "Top Knob" polished chrome door /drawer pulls (style selected by owner). Bath 1& 2 60" wide; Bath 3 48" wide $ 4,086.00 Kitchen: A. Modular base units x 34 -1/2" high x 24" deep in cherry cider finish. Modular upper units x 42" high 12" deep in cherry cider finish. Use 24" deep "Double Doors" over refrigerators. "Spring Valley Square" panel doors in cherry cider finish. Classic deluxe option with heavy duty hinges & drawer slides. "Top Knob" polished chrome door /drawer pulls (style selected by owner) 6' -8" length x 5' -0" width x 34 -1/2" high island with top mount downdraft range & personal storage lockers in cherry cider finish. "Spring \ /alley Square" panel doors in cherry cider finish. Classic deluxe option with heavy duty hinges & drawer slides. "Top Knob" polished chrome door /drawer pulls (style selected by owner). Includes pull out shelved at lover halt and arch top doors at uppers $ 14,424.00 Dining: A. 12" wide x 96" high x 24" deep "Utility Cabinet' in cherry cider finish. 36" wide x 96" high x 24" deep "Pantry Cabinet" in cherry cider finish. "Spring Valley Square" panel doors in cherry cider finish. Classic deluxe option with heavy duty hinges & drawer slides. "Top Knob" polished chrome door /drawer pulls (style selected by owner). Includes pull out shelved at lover half and arch top doors at uppers Included Hallway: A. 36" wide x 34 -1/2" high x 24" deep base cabinet - "Double Door, Single Tray" in cherry cider finish. 36" wide x 42" high x 12" deep upper wall cabinet - "Double Door" in cherry cider finish. 36" wide x 96" high x 24" deep "Personal Locker" in cherry cider finish ( *) "Spring Valley Square" panel doors in cherry cider finish. Classic deluxe option with heavy duty hinges & drawer slides." Top Knob" polished chrome door /drawer pulls (style selected by owner). Includes pull out shelved at lover half and arch top doors at uppers $ 2,072.00 ( *) Number storage lockers with 4" brass numbers & provide "Schlage S- Series Jupiter" satin chrome keyed lever set, keyed to match bedroom sets. Utility Room: A. (2) - 33" width x 30" high x 12" deep upper wall cabinet - "Double Door" in cherry cider finish." Spring Valley Square" panel doors in cherry cider finish. Classic deluxe option with heavy duty hinges & drawer slides. "Top Knob" . polished chrome door /drawer pulls (style selected by owner). Includes pull out shelved at lover half and arch top doors at uppers $ 1,244.00 Garage: A. Construct & install (5) additional 36" wide x 96' high x 24" deep personal lockers. Provide heavy duty hardware. Number storage lockers with 4" brass numbers & provide "Schlage S- Series Jupiter" satin chrome keyed lever set, keyed to match bedroom sets. Secure all lockers to wall. $ 5,756.00 Amount: $ 27,582.00 12.04 Countertops: Counter surfaces shall be glued or fastened on 3/4" plywood or other approved substrate as recommended by countertop material manufacturer. Bathrooms: (3 Locations) A. 42" wide x 22" deep cultured marble tops with integral sink bowls, 4" backsplash & 4" side splash. Compliment with Grohe "Chiara Neu" single lever center set faucet assembly $ 875.00 Kitchen: A. Verify length x 25" deep Nevemar or equal plastic laminate countertops with 2" edge detail. Color: "Canyon Blue ". All edges shall be rounded or chamfered to eliminate any sharp edges. Extend countertops by 1" at all sides of island w /2" edge detail. $ 1,800.00 Hallway: A. 36" wide x 25" deep Nevemar or equal plastic laminate countertops with 2" edge detail. Color: "Canyon Blue ". All edges shall be rounded or chamfered to eliminate any sharp edges. $ 300.00 Utility Room: A. 66" wide x depth of washer & dryer units Nevemar or equal plastic laminate countertops with 2" edge detail. Color: "Canyon Blue ". All edges shall be rounded or chamfered to eliminate any sharp edges. Provide ledger support rail to allow washer & dryer to slide in underneath countertop. $ 551.00 Amount: $ 3,526.00 DIVISION 15: MECHANICAL 15.01 General: All new mechanical construction shall be design build & shall comply with all requirements outlined in the CMC (California Mechanical Code) 15.02 Exhaust Ducting: A. Per CMC Section 504, provide & install new 4" diameter mechanical exhaust duct for dryer to exterior of building, strapped 1 floor framing as required. Provide hooded weatherproof exhaust hood C>. exterior wall with integral damper. Verify dryer manufacturer's venting requirements & allowances to assure compliance with CMC codes minimum B. Provide & install new Nutone or equal exhaust fan /light combos in all bathrooms (3) per Electrical Plan. C. Provide & install new exhaust ducting for downdraft cooktop vents & microwave. D. Hookup ducting for microwave range vent. $ 200.00 E. Provide and hookup under floor ducting to dryer. 2 00.00 Amount: $ 400.00 15.03 HVAC Ducting: A. Provide & install all required sheet metal ducting to new attic installed furnace location & any required attic venting required to provide combustion air for attic installed furnace. $ 500.00 Amount: $ 500.00 DIVISION 21: FIRE SUPPRESSION 21.01 Extinguishers: A. Provide & install (2) Type B -1, fire extinguishers in semi recessed cases @ hallways near bedrooms. See Floor Plan for locations. $ 200.00 Amount: $ 200.00 DIVISION 22: PLUMBING 22.01 General: Plumbing shall be a fully operational system of hot & cold water. Provide & install all piping, vents, drains, sewage removal & water systems to connect/reconnect new /existing plumbing fixtures with appropriate water supply, venting & sewage systems. 22.04 Plumbing Fixtures: Provide & install all necessary piping, drains, water supplies & venting for the following plumbing fixtures. Kitchen: A. 33" American Standard, "Culinaire ", self rimming stainless steel, one hole application, dual level bowl sink. Grohe "Ladylux Pro" stainless steel spray pull out faucet. Provide Insinkerator, 3/4 horsepower Badger 5XP garbage disposal w /air switch. Includes all rough plumbing for sink for venting. $ 2,132.00 Bathrooms: (3 Locations) B. American Standard "Champion" one piece, elongated, ADA toilet (white) with slow closing lid with seat & cover. Provide new angle stop, supply line, wax ring & non - corrosive fasteners. Caulk @ base of fixture. Kohler acrylic shower pan with integral seat & curb (white). Provide Grohe "Chira Neu" anti scalding faucet assembly & Grohe "Tempesta" handheld shower head. Vanity sinks are an integral part of the countertop but shall receive a Grohe "Chiara Neu" single lever center set faucet assembly. Includes all rough plumbing for new layout of 3 baths. Amount: $ 2,132.00 23.03 Equipment: A. Provide & install a new 95% AFUE energy efficient, horizontal, central gas forced air heating system in the attic with air conditioning capabilities. The furnace shall be capable of providing six separate heating /cooling zones. Provide a cold air return and supply for each zone (See Section 23.07 for Ducting). Replace the existing exterior air conditioning condenser @ left side of dwelling with a new 16 SEER, 4 ton air conditioning unit. Locate new AC condenser on existing concrete pad as applicable. Install new 4" concrete pad as required for unit size. $ 8,500.00 Amount: $ 8,500.00 23.05 Other Venting Equipment: See "Division 15" for additional mechanical venting items required. 23.06 Instrumentation & Controls for HVAC: A. Install new Pneumatic /Digital control system @ a central location to avoid conflicts with furnishings and /or uses for rooms for which the controls are located. Install new thermostat controls for each zone. $ 2,000.00 Amount: $ 2,000.00 26.03 Ground Fault Circuit Interrupter: A. Provide & install GFCI protected outlets per Electrical Plan in all locations per CEC 210.8. Locations included are bathrooms, garage, outdoors, crawl spaces, attic, kitchen & utility rooms. $ 1,500.00 Amount: $ 1,500.00 Kitchen: A. All outlets shall be GFCI protected. B. Confirm existing outlets to remain are GFCI protected & replace if not in compliance. C. Install (2) new outlets mounted @ sides of island cabinet. $ 160.00 D. Install new 220V outlet inside island for top mount downdraft range & venting. $ 320.00 E. Install new outlets @ South wall for refrigerators. Locate per manufacturer's location specifications. F. Install new outlets @ South wall above kitchen cabinets. G. Install new 220V outlet/electrical connection for slide in Range /Oven & hood vent/light. Hallway: A. Install new outlet above linen cabinet countertop. Bedroom 5: A. Install (2) new outlets @ North wall. Utility Room: A. Install new 220V outlet for dryer @ East wall. B. Install new GFCI protected outlet for washer @ East wall. Garage: A. Install (2) new outlets +48" above the finished slab height @ North wall. B. Amount: $ 480.00 26.07 Lighting: All luminaires shall be installed per CEC Article 410. Provide & install all necessary circuits & wiring for light fixtures as listed below: Reuse switching as applicable. See Electrical Plan Legend /Kitchen Lighting Table for required new switching types per Title 24 Energy Calculations. Final selection of all wall & ceiling mounted decorative fixtures shall be made by the owner. Exterior: A. Replace existing motion sensor light @ rear (North) wall & replace with decorative lighting fixture. ALLOWANCE - $75 each x 2 = $150 B. Provide multi location switching @ Bedroom 4 & Living Room. C. Install new wall mounted junction box @ right side (East) exterior wall & install decorative fixture for ramp lighting. ALLOWANCE - $75 each x 1 = $75 D. Install new wall mounted junction box @ front (South) exterior wall © right side of garage doors for new decorative fixture. Provide switch leg from Entry. Fixture ALLOWANCE $75 E. Rewire existing motion sensor fixture over garage door to be switched "hot" from new switch location in Garage. Upgrade motion sensor lighting fixture. Fixture ALLOWANCE $75 F. Install new wall mounted junction box @ side I,East) exterior wall of Courtyard entry walk. Install new decorative lighting fixture. Connect to other exterior lighting & switch back to Entry. Fixture ALLOWANCE $75 G. Install new wall mounted decorative lighting fixture @ existing wall mounted junction box. Fixture ALLOWANCE $75 All Bedrooms: (except Bedroom 4) A. Install new ceiling mounted junction boxes to provide electrical service for new ceiling fan /light combo units. Provide proper framing support as required. Check wiring @ existing junction box © Bedroom 4 & install new ceiling mounted ceiling fan /light combo. Fixture ALLOWANCE $275 each x 5 = $1375 $ 2,375.00 Bedroom 4: A. Relocate existing switch controlling exterior lighting @ rear (North) wall. B. Install new double switch bank @ West wall for new ceiling fan /light. All Bathrooms: (3 Locations) A. Install new recessed lighting fixture, listed for "wet" locations with lamp cover over shower. Fixture ALLOWANCE $90 each x 3 = $270 B. Install new wall mounted junction box over varsity for new decorative wall lighting fixture. Fixture ALLOWANCE $125 each x 3 = $375 $ 375.00 C. Install new triple switch bank for three switched electrical items in bathroom. Entry: A. Install new ceiling mounted decorative lighting fixture @ existing junction box. Fixture ALLOWANCE $125 $ 125.00 Living Room: A. Install (6) new recessed can lights @ ceiling. F=ixture ALLOWANCE $90 each x 6 = $540 B. Install new double switch bank @ East wall. Provide multi location switches. C. Install new switch @ North wall for multi switch application. Replace existing single switch to double switch bank. Kitchen: A. Install (8) new recessed fluorescent can lights @ ceiling. Fixture ALLOWANCE $90 each x 8 = $720 B. Install new under cabinet fluorescent strip lighting under upper cabinets. $ 630.00 Dining Room: A. Check wiring @ existing junction box & install new ceiling mounted ceiling fan /light combo. Fixture ALLOWANCE $275 $ 275.00 Hallways: A. Install new recessed fluorescent can lights @ ceiling. Provide new multi location switches as required. Fixture ALLOWANC $90 each x 7 =$630 Utility Room: A. Install new ceiling mounted junction box for new decorative lighting fixture. Fixture ALLOWANCE $140 $ 140.00 B. Install new under cabinet fluorescent strip lighting under upper cabinets. Fixture ALLOWANCE $90 $ 210.00 C. Provide new triple switch bank @ North wall. 200.00 Garage: A. Install new wall mounted junction box for new decorative wall lighting fixture @ garage /hallway man door. Fixture ALLOWANCE $80 each x 3 = $240 $ 240.00 B. Provide new double switch bank & wire in existing fluorescent hanging garage fixtures. Amount: $ 4,570.00 26.08 Special Electrical Items: Install all necessary special electrical fixtures as listed below: Rewire house for installation of new coaxial cable & CAT5 wiring for each bedroom & common space. All Bedrooms: (5 Locations) A. Install variable speed ceiling fan w /light (switched separately). Provide framing support as req. (x5) $ 800.00 B. Install smoke detector unit, line wired w /battery back -up. (x5) 1465.00 C. Install (1) telephone line w /jack. (x5) 830.00 D. Install (1) cable TV outlets. (x5) $ 535.00 Bathrooms: (3 Locations) A. Install NuTone or equal ceiling mounted air exhaust fan (80 CFM minimum) over toilet. Living Room: A. Install (1) telephone line w /jack $ 166.00 B. Install (1) cable TV outlet 107.00 Utility Room: A. Install NuTone or equal ceiling mounted air exhaust fan (80 CFM minimum) Bedroom Hallways: (2) Locations A. Install smoke detector /carbon monoxide combination unit, line wired w /battery back -up. Amount: $ 2,903.00 DIVISION 33: UTILITIES 33.01 Utilities: Install, upgrade and /or repair necessary utility services, such as electricity, water, natural gas, sanitary sewer. Coordinate all installations, upgrades and /or repairs with local service providers. Electrical /PG &E engineering & permits ALLOWANCE $4200; Electrical /Comcast/phone /piping and trenching ALLOWANCE $2900 33.02 Electrical: Upgrade existing 100A main electrical panel to 200A minimum. Correlate construction with photovoltaic solar system's inverter box as required. ALLOWANCE for solar interfacing. $ 400.00 Amount: $ 400.00 33.03 Natural Gas: Install "Earthquake I.Q." automatic seismically activated, gas shutoff safety valve @ the gas meter per manufacturer's installation instructions. Use horizontally or vertically installed safety valve as required based on PG &E's installation of the main gas meter. Call 1- 888 - 567 -4374 or go to www.earthquakeiq.com for scheduled installation. Amount: $ - Final janitorial clean up. $ 850.00 Amount: $ 850.00 TOTAL BASE BID $ 142,603.00 General Conditions $ 5,704.00 Supervision $ 8,898.00 Insurance $ 3,144.00 Overhead and Profit $ 13,515.00 General permits $ - TOTAL BID $ 173,864.00 ALTERNATES: 1. ADD French drain at West Side Yard. 2. ADD Decomposed granite fines, grey, at Wert Side Yard. 3. ADD Termite work - See break down 4. ADD Remove & install front lawn 5. ADD New planting - Front yard $ 885.00 6. ADD New planting - Back yard 7. ADD 2 blinds at Hallway Courtyard 8. ADD Demo siding at 3 sides and install 3/8" shear ply. New construction, windows, stucco with acrylic color coat sand finish. ($24,535 less credits) 9 ADD Spray texture at 4 Bedrooms, Hall, Entry and Living Room to match new construction. Prime before texture. 10 ADD Optional trellis at deck - 5' x 36' $ 3,610.09 11 ADD Provide and install standard 50 gallon water heater with circulating system= $3,263 DEDUCT in lieu of (2) tankles.s systems TOTAL ALTERNATES: $ 4,495.09 TOTAL BID WITH ALTERNATES: $ 178,359.09 10% CONTINGENCY AMOUNT $ 17,835.91 GRAND TOTAL FOR PHASE II CONSTRUCTION $ 196,195.00