09-164 Senior Housing Solutions, Inc., Revocable Grant Agreement REVOCABLE GRANT AGREEMENT
by and between
THE CITY OF CUPERTINO
and
SENIOR HOUSING SOLUTIONS,INC.
(19935Price Ave, Cupertino, CA)
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TABLE OF CONTENTS
Page No.
ARTICLE 1. DEFINITIONS AND EXHIBITS 1
1.1 Definitions 1
1.2 Exhibits. 3
ARTICLE 2. GRANT PROVISIONS 3
2.1 Grant. 3
2.2 Interest 3
2.3 Use of Grant Funds. 3
2.4 Regulatory Agreement. 4
2.5 Security. 4
2.6 Purchase Agreement. 4
2.7 Agency Approval of Necessary Financing and Additional
Financing 4
2.8 Term and Repayment Schedule. 5
2.9 Conditions Precedent to Disbursement of the Agency Grant. 5
ARTICLE 3. ACQUISITION AND REHABILITATION OF
IMPROVEMENTS 6
3.1 Purchase of the Property; Rehabilitation of Improvements. 6
3.2 Prevailing Wages. 6
ARTICLE 4. ADDITIONAL GRANT REQUIREMENTS 7
4.1 Use, Maintenance, and Operation. 7
4.2 Information. 7
4.3 Changes. 8
4.4 Notification of Litigation. 8
4.5 Entry by the Agency. 8
4.6 Indemnity. 8
4.7 Insurance. 8
4.8 Hazardous Materials. 10
4.9 Non-Discrimination. 12
4.10 Mandatory Language in All Subsequent Deeds, Leases and
Contracts. 12
4.11 Fees and Taxes. 14
4.12 Records. 14
4.13 Audits. 15
4.14 Compliance with Applicable Laws. 15
ARTICLE 5. TRANSFER 15
5.1 Acknowledgement by the Grantee. 15
5.2 Unauthorized Transfer is Event of Default. 16
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TABLE OF CONTENTS
Page No.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE
GRANTEE 16
6.1 Representations and Warranties 16
ARTICLE 7. DEFAULTS AND REMEDIES 18
7.1 Events of Default. 18
7.2 Remedies 19
7.3 Remedies Cumulative. 20
7.4 Waiver of Terms and Conditions. 20
ARTICLE 8. GENERAL PROVISIONS 21
8.1 Relationship of Parties. 21
8.2 No Claims. 21
8.3 Notices, Demands and Communications. 21
8.4 Non-Liability of Officials, Employees and Agents. 22
8.5 Enforced Delay. 22
8.6 Inspection of Books and Records. 22
8.7 Title of Parts and Sections. 22
8.8 Applicable Law. 23
8.9 Severability. 23
8.10 Binding Upon Successors. 23
8.11 Entire Understanding of the Parties. 23
8.12 Approval. 23
8.13 Discretion Retained by City 24
8.14 Amendments. 24
8.15 Counterparts; Multiple Originals.... 24
EXHIBIT A Legal Description of the Property
EXHIBIT B Approved Budget
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REVOCABLE GRANT AGREEMENT
(19953 Price Ave, Cupertino, CA)
THIS REVOCABLE GRANT AGREEMENT (the "Agreement") is made as of January
16, 2009, by and between the City of Cupertino, a political subdivision of the State of California
(the "City"), and Senior Housing Solutions, Inc., a California nonprofit public benefit
corporation(the "Grantee"), with reference to the following facts:
RECITALS
A. The City of City of Cupertino (the "City") established a Housing Mitigation
program in 1993 to collect fees from Commercial., Office and Industrial developers to offset the
need for affordable housing caused by new job creation.
B. The Housing Mitigation fees are collected and deposited into the Affordable
Housing fund to be used for the creation of affordable housing.
C. The Grantee desires to acquire certain real property located within the City as
more particularly described in Exhibit A (the "Property") to be used as affordable housing for
very low-income seniors.
D. Through this Agreement and accompanying documents, the City is providing a
grant to the Grantee in the amount of One Million Ninety Thousand Dollars and No Cents
($1,090,000) from the City's Affordable Housing Fund(the "Agency Grant").
E. The City Grant will be revocable in the event of default pursuant to this
Agreement, and secured by a deed of trust recorded against the Property. As a condition of
providing the City Grant, the Agency will impose occupancy and affordability restrictions on the
Property to ensure that the improvements remain affordable to very low-income households.
WITH REFERENCE TO THE FACTS RECITED ABOVE,the City and the Grantee
agree as follows:
ARTICLE 1. DEFINITIONS AND EXHIBITS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement,the following definitions
shall apply:
(a) "City Deed of Trust" means the deed of trust, in a form to be provided by
the City, encumbering the Property and securing (i)repayment of the City Grant following an
Event of Default as defined in Section 7.1; and (ii) performance under the City Regulatory
Agreement.
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(b) "City Grant" means the revocable grant to be made by the City to the
Grantee pursuant to this Agreement in the maximum principal amount of One Million Ninety
Thousand Dollars ($1,090,000), consisting of Affordable Housing Fund monies.
(c) "City Grant Documents" means this Agreement, the City Deed of Trust,
and the City Regulatory Agreement.
(d) "City Regulatory Agreement" means the regulatory agreement in a form to
be provided by the City,to be executed by the City and the Grantee and recorded against the
Property as a condition of the City funding of the City Grant.
(e) "Approved Budget" means the estimated budget for the development of
the Improvements as approved by the City and attached hereto as Exhibit B.
(f) "Approved Financing" means the financing (other than the City Grant) for
the acquisition of the Property and the development of the Improvements as approved by the
City pursuant to Section 2.7.
(g) "Control" means (i) direct or indirect management or control of the
managing member or members in the case of a limited liability company; (ii) direct or indirect
management or control of the managing general partner or general partners in the case of a
partnership and (iii) (a) boards of directors that overlap by fifty percent(50%) or more of their
directors, or(b) direct or indirect control of a majority of the directors in the case of a
corporation.
(h) "Development" means the Improvements and the Property.
(i) "Grantee" means Senior Housing Solutions, Inc., a California nonprofit
benefit corporation.
(j) "Improvements" means the single-family home on the Property to be
rehabilitated by the Grantee and used for affordable housing to senior households.
(k) "Purchase Agreement" means the purchase and sale agreement between
the current owner of the Property, as seller, and the Grantee, as buyer, for the Property.
(1) "Term" means the term of this Agreement which shall commence as of the
date set forth above and shall expire on the fifty-fifty (55th) anniversary of the recordation of the
City Deed of Trust and the City Regulatory Agreement against the Property.
(m) "Transfer" shall mean any sale, assignment, or transfer, whether voluntary
or involuntary, of: (i) any rights and/or duties under this Agreement; (ii) any interest in the
Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life
estate, a leasehold interest, a security interest, or an interest evidenced by a land contract by
which possession of the Development is transferred and Grantee retains title; or (iii) any interest
in the Grantee, including general and limited partnership interests. The term "Transfer" shall
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exclude the leasing of individual residential units within the Development pursuant to the
Agency Regulatory Agreement.
1.2 Exhibits.
The following exhibits are attached to and incorporated into this Agreement:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Budget
ARTICLE 2. GRANT PROVISIONS
2.1 Grant.
The City shall grant to the Grantee the City Grant in the principal amount of One Million
Ninety Thousand Dollars ($1,090,000), consisting of Affordable Housing Funds, to be used by
the Grantee for the purpose set forth in Section 2.3 below.
2.2 Interest.
(a) Subject to the provisions of Section 2.2(b) below, if an Event of Default
occurs hereunder pursuant to Section 7.1,the outstanding principal balance of the City Grant
shall be deemed to have accrued simple interest at the rate of five percent(5%)per annum,
commencing on the date of disbursement through the date of the Event of Default.
(b) If an Event of Default occurs, interest on the City Grant shall begin to
accrue as of the date of the Event of Default and continue until such time as the City Grant funds
are repaid in full or the Event of Default is completely cured, at the default rate of lesser than ten
percent(10%), compounded annually, or the highest rate permitted by law.
2.3 Use of Grant Funds.
The Grantee shall use the City Grant for the acquisition of the Property pursuant to the
Purchase Agreement approved by the City and Exhibit B in accordance with Section 2.6. No
other use of the City Grant is permitted without the prior written consent of the City, which may
be granted or denied in the City's sole discretion.
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2.4 Regulatory Agreement.
As a condition to disbursement of the City Grant, the Grantee shall execute the City
Regulatory Agreement and record it against the Property. The City Regulatory Agreement shall
impose affordability, operations, and maintenance covenants on the Development for the Term
of the City Grant. The City Regulatory Agreement shall include provisions required to meet the
affordability covenant requirements of the California Health and Safety Code Sections 33334.2
and 33334.3.
2.5 Security.
(a) The Grantee shall secure its obligation to repay the City Grant upon an
Event of Default by executing the City Deed of Trust, and recording it as a lien against the
Property,junior in lien priority to the deeds of trust executed by the Grantee securing necessary
financing for the acquisition of the Property and the development of the Improvements, as
reasonably determined by the Agency.
(b) The City shall evaluate subordinating the City Deed of Trust and the City
Regulatory Agreement on a case by case basis,provided that the City receives adequate notice
and cure rights and pursuant to a subordination agreement in a form approved by the City.
2.6 Purchase Agreement.
As of the date of this Agreement,the Grantee has submitted the Purchase Agreement to
the City and the City has approved the Purchase Agreement as consistent with the provisions of
this Agreement. The Grantee shall not amend (or permit the amendment of)the Purchase
Agreement without the prior written consent of the City, which shall not be unreasonably
withheld.
2.7 City Approval of Necessary Financing and Additional Financing.
No later than August 30, 2009 (or such later date as mutually acceptable to the Parties),
the Grantee shall secure the necessary financing (in addition to the City Grant) for the acquisition
of the Property and rehabilitation of the Improvements. The Parties anticipate that such
financing will be consistent with the Approved Budget attached as Exhibit B. Thereafter, the
Grantee shall submit evidence, reasonably acceptable to the City,that the Grantee has secured
such financing by providing a commitment letter or such other documentation evidencing that
funding has been committed or otherwise secured for the Development (each a "Commitment").
The City shall approve or disapprove each proposed Commitment within fifteen (15)business
days following the date of the submission of the proposed Commitment. The City's failure to
either approve or disapprove of the proposed Commitment within such fifteen (15)-day period
shall be deemed approval. Any disapproval of the proposed Commitment shall state in writing
the reasons for disapproval and the changes which.the City requests. The Grantee shall
thereafter submit revised Commitment to the City for its approval within ten(10) business days
after the City's notification of disapproval. If the revised Commitment is disapproved, then the
Grantee shall have an additional ten(10) business days to submit a further revised Commitment.
The periods for submission of a revised Commitment, review, and approval or disapproval shall
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continue to apply until each proposed Commitment has been approved or deemed approved by
the City provided that final approval is obtained no later than August 30, 2009 (or such later date
approved by the City pursuant to Section 8.12). Upon the City's approval (or deemed approval)
the Commitments shall be referred to as the "Approved Financing."
The Grantee shall not utilize any additional financing for the Development or place any
additional encumbrances on the Development other than the Approved Financing, without the
prior written consent of the City, which consent shall not be withheld unreasonably.
2.8 Term and Repayment Schedule.
This Agreement shall remain in effect for the entire Term. The City Grant shall be repaid
in full if an Event of Default occurs under the City Grant Documents.
2.9 Conditions Precedent to Disbursement of the City Grant.
The City Grant shall be disbursed by the City for the account of the Grantee to the title
company handling the escrow for the acquisition of the Property, provided that the conditions
precedent set forth in this Section 2.9 are met. The City shall have no obligation to disburse any
portion of the City Grant unless and until the Grantee has satisfied, or caused the satisfaction of
the following conditions precedent; provided, however, certain conditions may be satisfied
simultaneously with the disbursement of City Grant proceeds (as reasonably determined by the
City):
(a) The City has received evidence reasonably satisfactory to the City that the
Grantee exists in good standing at the time of the proposed disbursement, and that the Grantee
has duly authorized the execution of, and performance under, this Agreement.
(b) The Grantee has acquired (or will acquire concurrently with first
disbursement)the fee interest in the Property pursuant to the Purchase Agreement.
(c) The City Regulatory Agreement and the City Deed of Trust have been
executed by the Grantee and recorded against the Property in the official records of Santa Clara
County.
(d) A title insurer reasonably acceptable to the City is unconditionally and
irrevocably committed to issuing a 2006 ALTA Lender's Policy of title insurance (with
endorsement number 21, and such other endorsements reasonably requested by the City) insuring
the priority of the City Regulatory Agreement and the City Deed of Trust in the amount of the
City Grant, subject only to such exceptions and exclusions as may be reasonably acceptable to
the City, and containing such endorsements as the City may reasonably require.
(e) The Grantee has furnished the City with evidence of insurance coverage
satisfying the requirements of Section 4.7.
(f) The Grantee has closed the Approved Financing.
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(g) The undisbursed proceeds of the City Grant, together with other funds or
firm commitments for funds that the Grantee has obtained, are not less than the amount that the
City determines is necessary to pay for the acquisition of the Property, and the rehabilitation of
the Improvements and to satisfy all of the covenants contained in this Agreement.
(h) The City has received a written request from the Grantee: (i) reaffirming
the accuracy as of the date of the disbursement request of Grantee's representation, and
warranties set forth in Article 5 below; (ii) certifying that Grantee is not in default under the City
Grant Documents or documents for other Approved Financing; and (iii) setting forth the
proposed uses of funds consistent with Section 2.3 above, the amount of funds needed, and,
where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.
ARTICLE 3. ACQUISITION AND REHABILITATION OF IMPROVEMENTS
3.1 Purchase of the Property; Rehabilitation of Improvements.
The Grantee shall purchase the Property pursuant to the Purchase Agreement no later
than January 30, 2009 (or such later date approved by the City pursuant to Section 8.12).
Thereafter, the Grantee shall commence, or shall cause the commencement of, rehabilitation of
the Improvements no later than December 30, 2009 (or such later date approved by the City
pursuant to Section 8.12), and shall complete, or shall cause the completion of,the rehabilitation
no later than eight (8)months following commencement of rehabilitation(or such later date
approved by the City pursuant to Section 8.12). The Grantee shall rehabilitate the Improvements
in accordance with all applicable laws, including but not limited to the building permit to be
obtained by the Grantee.
3.2 Prevailing Wages.
The Grantee shall and shall cause the contractor and subcontractors to pay prevailing
wages on any construction work on the Development, as those wages are determined pursuant to
Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Sections
1777.5 et seq., and the implementing regulations of the Department of Industrial Relations (the
"DIR") and the Grantee shall and shall cause the contractor and subcontractors to comply with
the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and
implementing regulations of the DIR. The Grantee shall and shall cause any contractor and
subcontractors to keep and retain such records as are necessary to determine if such prevailing
wages have been paid as required pursuant to Labor Code Sections 1720 et sea., and apprentices
have been employed as required by Labor Code Sections 1777.5 et seq. Copies of the currently
applicable current per diem prevailing wages are available from the DIR. During any
construction work, Grantee shall or shall cause the contractor to post at the Property the
applicable prevailing rates of per diem wages. Grantee shall indemnify, hold harmless and
defend(with counsel reasonably selected by the City)the City against any claim for damages,
compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any
person or entity(including the Grantee, its contractor and subcontractors) to pay prevailing
wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices
pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to
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comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq.,
and the implementing regulations of the DIR in connection with any construction or any other
work undertaken or in connection with the Site.
ARTICLE 4. ADDITIONAL GRANT REQUIREMENTS
4.1 Use, Maintenance, and Operation.
(a) The Grantee shall operate and maintain the Development throughout the
entire Term in compliance with the requirements of the City Regulatory Agreement.
(b) The Grantee shall maintain the Development in good repair and in a neat,
clean and orderly condition. If there arises a condition in contravention of this Section 4.1, and if
the Grantee has not cured such condition within thirty (30) days after receiving City notice of
such a condition, then in addition to any other rights available to the City, the City shall have the
right to enter the Property and perform all acts necessary to cure such condition, and to establish
or enforce a lien or other encumbrance against the Property to collect its costs of cure. By
execution of this Agreement, the Grantee hereby irrevocably grants such right of entry to the
City.
(c) If any portion of the Development is damaged or destroyed, then the
Grantee shall, at its cost and expense, diligently undertake to repair or restore such improvement.
Such work or repair shall be commenced within one hundred twenty (120) days after the damage
or loss occurs (or such longer period of time as is reasonably necessary as approved by the City)
and shall be complete 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 the Grantee shall make up the
deficiency.
(d) The Grantee shall develop a management plan for the Development,
which shall be submitted to the City for review and approval. The Grantee shall operate the
Development in compliance with the management plan approved by the City.
(e) The Grantee shall operate and maintain the Development in full
compliance with all applicable local, state, and federal laws and regulations.
4.2 Information.
The Grantee shall provide any information reasonably requested by the City in
connection with the Development, including(but not limited to) any information required by the
State of California in connection with Grantee's use of the City Grant funds. Specific annual
reporting requirements regarding, among other things,the incomes and rents of all residential
tenants, shall be included in the City Regulatory Agreement.
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4.3 Changes.
The Grantee shall promptly notify the City in writing of any changes in the location of
any place of business of the Grantee, and of any other change in fact or circumstance (including
the Grantee's assets)that both (a) was represented or warranted at any time by the Grantee to the
City, and (b) will materially adversely affect the Grantee's capacity to perform its obligations
under this Agreement.
4.4 Notification of Litigation.
The Grantee shall promptly notify the City in writing of(a) any litigation that(i) affects
the Grantee or the Development and(ii)would materially adversely affect the Grantee's capacity
to perform its obligations under this Agreement, and(b) any claims or disputes that involve a
material risk of litigation that would materially adversely affect the Grantee's capacity to perform
its obligations under this Agreement.
4.5 Entry by the City.
After notice to the Grantee, the Grantee shall permit the City, through its officers, agents,
or employees, at all reasonable times, to enter onto the Development to inspect the Development
for compliance with the City Grant Documents. The City is under no obligation to supervise,
inspect, or inform the Grantee of the progress of any construction of the Development and the
Grantee shall not rely upon the City for any such activity. The City shall not unreasonably
disturb any residential tenants in the course of any inspection conducted pursuant to this Section
4.5.
4.6 Indemnity.
In consideration of the City's agreement to make the City Grant pursuant to this
Agreement, the Grantee agrees to indemnify, defend (with counsel reasonably chosen by the City
at the City's option) and hold harmless the City, City,their respective board members, council
members, commissioners, officers, agents, and employees: (i) from any and all claims and losses
accruing or resulting to any and all contractors, subcontractors,materialmen, laborers, and any
other person, firm or corporation furnishing or supplying work, services, materials, or supplies in
connection with the performance of this Agreement; and(ii) all claims which arise out of or in
connection with the ownership, operation, or occupancy of the Development by the Grantee or
the Grantee's contractors, subcontractors, agents, employees, or tenants. This indemnity shall not
extend to any claim arising solely from the City's or City's gross negligence or the City's failure
to perform its obligations under this Agreement. This Section 4.6 shall survive the termination
of this Agreement.
4.7 Insurance.
(a) Required Coverage. The Grantee, or its permitted successor and assigns,
shall maintain and keep in force, at the Grantee's (or such successor's) sole cost and expense,the
following insurance:
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(i) Worker's Compensation insurance, including Employer's Liability
coverage, with limits not less than One Million Dollars ($1,000,000) each accident, to the extent
required by law.
(ii) Comprehensive General Liability insurance with limits not less
than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations.
(iii) 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 Grantee does not own or lease vehicl- or purposes of
this Agreement, then no automobile insurance shall be required and th- ':;4 tes to is Agreement
shall initial this provision signifying same.
City: Li./ /,4v, ,;c Grantee: ..
(iv) During the course o f rehabilit•tion of the Improvements, Builders
Risk insurance, and following the completion of rehabilitation, Property insurance, covering the
Development covering all risks of loss, (excluding earthquake) and including flood (if required),
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 interest may appear.
(b) Contractor's Insurance. The Grantee shall cause any general contractor or
agent working on the Development, under direct contract with the Grantee to maintain insurance
of the types and in at least the minimum amounts described in subsections (a)(1), (a)(2), and
(a)(3) above, and shall require that such insurance shall meet all of the general requirements of
subsection(c) below. Subcontractors working on the Development under indirect contract with
the Grantee shall be required to maintain the insurance described in subsections (a)(1), (a)(2) and
(a)(3) above, except that the Comprehensive General Liability insurance limits shall not be less
than One Million Dollars ($1,000,000) each occurrence combined single limit. 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 board members,
officers, agents, and employees.
(c) General Requirements. The required insurance shall be provided under an
occurrence form, and the Grantee shall maintain such coverage continuously throughout the
Term. 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 be included
in such annual aggregate limit, such annual aggregate limit shall be three (3) times the
occurrence limits specified above.
Comprehensive General Liability, Comprehensive Automobile Liability and Property
insurance policies shall be endorsed to name as additional insureds the City and its board
members, officers, agents, and employees. All policies and bonds shall contain(i)the agreement
of the insurer to give the City at least thirty (30) days'notice prior to cancellation (including,
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without limitation, for non-payment of premium) or any material change in said policies; (ii) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the City; (iii) a provision that no act or omission of the Grantee shall affect or limit the
obligation of the insurance carrier to pay the amount of any loss sustained; and(iv) a waiver by
the insurer of all rights of subrogation against the City and its authorized parties in connection
with any loss or damage thereby insured against.
(d) Certificates of Insurance. Upon the City's request at any time during the
Term of this Agreement, the Grantee shall provide certificates of insurance, in form and with
insurers reasonable acceptable to the City, evidencing compliance with the requirements of this
Section, and shall provide complete copies of such insurance policies, including a separate
endorsement naming the City as additional insured.
4.8 Hazardous Materials.
(a) Certain Covenants and Agreements. The Grantee hereby covenants and
agrees that:
(i) The Grantee shall not knowingly permit the Development or any
portion thereof to be a site for the use, generation, treatment, manufacture, storage, disposal or
transportation of Hazardous Materials or otherwise knowingly permit the presence of Hazardous
Materials in, on or under the Development.
(ii) The Grantee shall keep and maintain the Development in
compliance with, and shall not cause or permit the Development or any portion thereof to be in
violation of, any Hazardous Materials Laws.
(iii) Upon receiving actual knowledge of the same the Grantee shall
immediately advise the City in writing of: (A) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened against the Grantee
or the Development pursuant to any applicable Hazardous Materials Laws; (B) any and all
claims made or threatened by any third party against the Grantee or the Development relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in the foregoing clause (A) and this clause (B) are hereinafter
referred to as "Hazardous Materials Claims"); (C) the presence of any Hazardous Materials in, on
or under the Development; or(D)the Grantee's discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Development classified as "borderzone property"
under the provisions of California Health and Safety Code, Sections 25220 et sea., or any
regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Development under any Hazardous Materials
Laws. 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 attorney's fees in connection therewith paid by the Grantee.
(iv) Without the City's prior written consent, which shall not be
unreasonably withheld, and which the City shall promptly grant or deny,the Grantee shall not
take any remedial action in response to the presence of any Hazardous Materials on, under, or
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about the Development (other than in emergency situations or as required by governmental
agencies having jurisdiction in which case the City agrees to provide its consent), nor enter into
any settlement agreement, consent decree, or other compromise in respect to any Hazardous
Materials Claims.
(b) Indemnity. Without limiting the generality of the indemnification set forth
in Section 4.6, above, the Grantee hereby agrees to indemnify,protect,hold harmless and defend
(by counsel reasonably satisfactory to the City) the City, its board members, officers, and
employees from and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders,judgments, remedial action
requirements, enforcement actions of any kind, and all costs and expenses incurred in connection
therewith(including, but not limited to, attorney's fees and expenses), arising directly or
indirectly, in whole or in part, out of:
(i) The failure of the Grantee, or any other person or entity to comply
with any Hazardous Materials Law relating in any way whatsoever to the handling, treatment,
presence, removal, storage, decontamination, cleanup, transportation or disposal of Hazardous
Materials into, on, under or from the Development; or
(ii) The presence in, on or under the Development of any Hazardous
Materials or any releases or discharges of any Hazardous Materials into, on, under or from the
Development; or
(iii) Any activity carried on or undertaken on or off the Development,
and whether by the Grantee or any successor in title or any employees, agents, contractors or
subcontractors of the Grantee or any successor in title, or any third persons at any time
occupying or present on the Development, in connection with the handling, treatment, removal,
storage, decontamination, cleanup,transport or disposal of any Hazardous Materials at any time
located or present on or under the Development; provided, however,that the indemnification for
activities undertaken off the Development shall only apply to activities undertaken by the
Grantees or their employees, agents, contractors or subcontractors.
The foregoing indemnity shall further apply to any residual contamination on or
under the Development, or affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the generation, use, handling,treatment,
storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any
of such activities were or will be undertaken in accordance with Hazardous Materials Laws. The
provisions of this subsection shall survive expiration of the Term or other termination of this
Agreement, and shall remain in full force and effect.
(c) No Limitation. The Grantee hereby acknowledges and agrees that the
Grantee's duties, obligations and liabilities under this Agreement, including, without limitation,
under subsection(b) above, are in no way limited or otherwise affected by any information the
City may have concerning the Development and/or the presence within the Development of any
Hazardous Materials, whether the City obtained such information from the Grantee or from its
own investigations.
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(d) The Grantee hereby acknowledges and agrees that(i)this Section 4.8 is
intended as the City's written request for information(and the Grantee'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 or any such representation and 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.
(e) 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 Grantee 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 Grantee 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 was knowingly or negligently caused or contributed to
by any lessee, occupant, or user of any portion of the Property and the Grantee 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
City 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.
4.9 Non-Discrimination.
The Grantee covenants by and for itself and its successors and assigns that there shall be
no discrimination against or segregation of a person or of a group of persons on account of race,
color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the
sale, lease, sublease, transfer, use, occupancy,tenure or enjoyment of the Property, nor shall the
Grantee or any person claiming under or through the Grantee 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 and shall survive termination of this Agreement.
4.10 Mandatory Language in All Subsequent Deeds, Leases and Contracts.
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All deeds, leases, or contracts entered into by the Grantee as to any portion of the
Property shall contain the following language:
In Deeds:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through them,that there shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision(a) and (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision(m) and paragraph(1) of subdivision(p) of Section 12955 and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment
of the property herein conveyed, nor shall the grantee or any person claiming under or through
the grantee, establish or permit any 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 herein conveyed. The foregoing covenant shall run with
the land.
(2)Notwithstanding paragraph (1), with respect to familial status, paragraph(1) shall not
be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in paragraph(1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision(d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1) "
In Leases:
"(1) Lessee herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision(a) and (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph(1) of subdivision (p) of Section 12955 and Section 12955.2 of
the Government Code in the leasing, subleasing, transferring, use, occupancy, tenure or
enjoyment of the premises herein leased nor shall the lessee or any person claiming under or
through the lessee, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, sublessees, subtenants, or vendees in the premises herein leased.
(2)Notwithstanding paragraph(1), with respect to familial status,paragraph(1) shall not be
construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and. Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1)
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In Contracts:
"(1)There shall be no discrimination against or segregation of, any person or group of
persons on account of any basis listed in subdivision (a) and (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision(m) and
paragraph(1) of subdivision (p) of Section 12955 and Section 12955.2 of the Government Code
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor
shall the transferee or any person claiming under or through the transferee establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
land.
(2)Notwithstanding paragraph(1), with respect to familial status, paragraph(1) shall not
be construed to apply to housing for older persons. as defined in Section 12955.9 of the
Government Code. With respect to familial status., nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision(d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1)
4.11 Fees and Taxes.
(a) The Grantee 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 Development, and shall pay such charges prior to delinquency. However, the
Grantee 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,the Grantee 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.
(b) During the rehabilitation of the Improvements, the Grantee shall require
that its contractors and subcontractors exercise their option to obtain a Board of Equalization
sub-permit for the development of the Improvements and allocate all eligible tax payments
pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law, as may be amended from
time to time, to the City. Prior to beginning the rehabilitation of the Improvements, the Grantee
shall require that its contractor and subcontractors provide the City with either a copy of the sub-
permit or a statement that sales and use tax does not apply to their portion of the rehabilitation of
the Improvements.
4.12 Records.
(a) The Grantee shall maintain complete, accurate, and current records
pertaining to the Development for a period of five (5) years after the creation of such records,
and shall permit any duly authorized representative of the City to inspect and copy records,
including records pertaining to rent, income, and household size of residents of the Development.
Records must be kept accurate and current.
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(b) The City shall notify the Grantee of any records it deems insufficient. The
Grantee shall have fifteen(15) business days after the receipt of such a notice to correct any
deficiency in the records specified by the City in such notice, or if a period longer than fifteen
(15) business days is reasonably necessary to correct the deficiency, then the Grantee shall begin
to correct the deficiency within fifteen (15) business days and correct the deficiency as soon as
reasonably possible.
4.13 Audits.
The Grantee shall make available for examination at reasonable intervals and during
normal business hours to the City all books, accounts, reports, files, and other papers or property
with respect to all matters covered by this Agreement, and shall permit the City to audit,
examine, and make excerpts or transcripts from such records. The City may make audits of any
conditions relating to this Agreement.
4.14 Compliance with Applicable Laws.
The Grantee shall cause the operation of the Development to be performed in compliance
with(1) all applicable laws, ordinances, rules and regulations of federal, state, county or
municipal governments or agencies now in force or that may be enacted hereafter, and (2) all
directions, rules and regulations of any fire marshal, health officer, building inspector, or other
officer of every governmental agency now having or hereafter acquiring jurisdiction.
ARTICLE 5. TRANSFER
5.1 Acknowledgement by the Grantee.
This Agreement is entered into solely for the purpose of providing the City Grant to the
Grantee and the Grantee's subsequent use of the City Grant in accordance with the terms hereof.
The Grantee recognizes that the qualifications and identity of the Grantee are of particular
concern to the City, in view of:
(a) importance of the development of the Development by the Grantee to the
general welfare of the community consistent with redevelopment purposes;
(b) the land acquisition assistance and other public aids that have been made
available by law and by the government for the purpose of making such redevelopment possible;
(c) the reliance by the City upon the unique qualifications and ability of the
Grantee to assure the quality of the affordability, use, operation, and maintenance of the
Development deemed critical by the City;
(d) the fact that a change of ownership or control of the owner of the
Development, or of a substantial part thereof, or any other act or transaction involving or
resulting in a significant change in ownership or with respect to the identity of the parties in
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control of the Grantee or the degree thereof is for practical purposes a transfer or disposition of
the Development;
(e) the fact that the Property is not to be acquired or used for speculation, but
only for operation by the Grantee in accordance with the City Grant Documents; and
(f) the importance to the City and the community of the standards of use,
operation and maintenance of the Development. The Grantee further recognizes that it is
because of such qualifications and identity that the City is entering into this Agreement with the
Grantee and that limited transfers are permitted only as provided in this Agreement.
5.2 Unauthorized Transfer is Event of Default.
Unless pre-approved by the City in writing, no Transfer shall be permitted during the
Term. An unauthorized Transfer shall constitute an Event of Default hereunder, pursuant to
Section 7.1(c) below, which shall cause the City Grant to be due and payable with interest
pursuant to Sections 2.2 and 7.2(a) of this Agreement.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE
6.1 Representations and Warranties.
The Grantee hereby represents and warrants to the City as follows:
(a) Organization. The Grantee is a duly organized, validly existing,
California nonprofit corporation 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 the Grantee. The Grantee 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 City Grant 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 City
Grant 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 the Grantee, and all
actions required under the Grantee 's organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the City Grant
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 City Grant
Documents and all other documents or instruments which have been executed and delivered
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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 the
Grantee 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 City Grant 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 violation of any statute, rule or regulation, or any judgment, decree or order of
any court, board, commission or agency whatsoever binding on the Grantee, or any provision of
the organizational documents of the Grantee, or will conflict with or constitute a material breach
of or a default under any agreement to which the Grantee is a party, or will result in the creation
or imposition of any lien upon any assets or property of the Grantee, other than liens established
pursuant hereto.
(f) Compliance With Laws; Consents and Approvals. The development of
the Development 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. The Grantee 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 the Grantee,
threatened against or affecting the Grantee or the Development, at law or in equity, before or by
any court, board, commission or agency whatsoever which might, if determined adversely to the
Grantee, materially affect the Grantee's ability to repay the City Grant or impair the security to
be given to the City pursuant hereto.
(h) Title to Land. At the time of recordation of the City Deed of Trust,
Grantee will have good and marketable fee title to the Property and there will exist thereon or
with respect thereto no mortgage, lien,pledge or other encumbrance of any character whatsoever
other than those liens approved by the City under Section 2.5 of this Agreement, liens for current
real property taxes and assessments not yet due and payable, and liens in favor of the City or
approved in writing by the City.
(i) Financial Statements. The financial statements of the Grantee and other
financial data and information furnished by the Grantee to the City fairly 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 the Grantee from that shown by such financial statements
and other data and information.
(j) Sufficient Funds. Upon the Grantee obtaining fee title to the Property, the
Grantee hold sufficient funds and/or binding commitments for sufficient funds to complete the
rehabilitation of the Improvements.
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ARTICLE 7. DEFAULTS AND REMEDIES
7.1 Events of Default.
Each of the following shall constitute an "Event of Default" by the Grantee under this
Agreement:
(a) Failure to Acquire the Property. A failure by the Grantee to acquire the
Property within the time set forth in Section 3.1.
(b) Failure to Rehabilitate Improvements. A failure by the Grantee to
commence or complete the rehabilitation of the Improvements within the time set forth in
Section 3.1.
(c) Breach of Covenants. Failure by the Grantee to duly perform, comply
with, or observe any of the material conditions, terms, or covenants of any of the City Grant
Documents, and such failure having continued uncured for thirty(30) days after receipt of
written notice thereof from the City to the Grantee.
(d) Unauthorized Transfer. Any Transfer other than as permitted by Article 5.
(e) Representation or Warranty Incorrect. Any Grantee 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 City Grant Documents,proving to
have been incorrect in any material respect when made.
(f) Default Under Other Financing. Failure to make any payment or perform
any of the Grantee's covenants, agreements, or obligations under the documents evidencing and
securing the Approved Financing.
(g) Insolvency. A court having jurisdiction shall have made or entered any
decree or order(i) adjudging the Grantee (or any general partner of the Grantee)to be bankrupt
or insolvent, (ii) approving as properly filed a petition seeking reorganization of the Grantee (or
any general partner of the Grantee) or seeking any arrangement for the Grantee 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 the
Grantee (or any general partner of the Grantee) in bankruptcy or insolvency or for any of their
properties, or (iv) directing the winding up or liquidation of the Grantee (or any general partner
of the Grantee), if any such decree or order described in clauses (i)to (iv), inclusive, shall have
continued unstayed or undischarged for a period of thirty (30) days; or the Grantee (or any
general partner of the Grantee) 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 cause the City Grant to be immediately due and payable, with
interest, without the need for any action by the City.
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(h) Assignment; Attachment. The Grantee (or any general partner of the
Grantee) 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
thirty (30) days after such event or prior to sooner sale pursuant to such sequestration,
attachment, or execution. The occurrence of any of the events of default in this paragraph shall
cause the City Grant to be immediately due and payable, with interest, without the need for any
action by the City.
(i) Suspension. The Grantee (or any general partner of the Grantee) shall
have voluntarily suspended its business.
(j) Liens. There shall be filed any claim of lien(other than liens approved in
writing by the City) against the Property or any part thereof, or any interest or right made
appurtenant thereto, or the service of any notice to withhold proceeds of the City Grant and the
continued maintenance of said claim of lien or notices to withhold for a period of twenty (20)
days without discharge or satisfaction thereof or provision therefore satisfactory to the City.
(k) Condemnation. The condemnation, seizure, or appropriation of all or, in
the opinion of the City, a substantial part of the Development.
7.2 Remedies.
The occurrence of any Event of Default will either, at the option of the City or
automatically where so specified, relieve the City of any obligation to make the City Grant and
shall give the City the right to proceed with any and all remedies set forth in this Agreement and
the City Grant Documents, including but not limited to the following:
(a) Repayment of Grant, Foreclosure. The City shall have the right to require
immediate repayment of the City Grant, together with any accrued interest thereon as described
in Section 2.2. above. The Grantee waives all right to presentment, demand, protest or notice of
protest or dishonor. The City may proceed to enforce repayment of the City Grant 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 Grantee 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 City Grant and the preservation, maintenance,
protection, sale, or other disposition of the security given for the City Grant. Except as provided
below, Grantee shall not have any direct or indirect personal liability for any required repayment
of the Grant and the sole recourse of the City with respect to the repayment of the City Grant
following an Event of Default shall be to the property described in the City Deed of Trust;
provided, however,that nothing contained in the foregoing limitation of liability shall (a) limit or
impair the enforcement against all such security for the repayment of the grant of all the rights
and remedies of the City thereunder, or(b) be deemed in any way to impair the right of the City
to assert the unpaid amount of the City Grant, following an Event of Default, as demand for
money within the meaning and intendment of Section 431.70 of the California Code of Civil
Procedure or any successor provision thereto. The foregoing limitation of liability is intended to
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apply only to the obligation for the repayment of the City Grant following an Event of Default;
nothing contained herein is intended to relieve the Grantee of its obligation to indemnify the City
under Sections 3.2, 4.6, and 4.8 of this Agreement, or under the City Regulatory Agreement, or
liability for(i) fraud or willful misrepresentation; (ii)the failure to pay taxes, assessments or
other charges which may create liens on the Property that are payable or applicable prior to any
foreclosure under the City Deed of Trust (to the full extent of such taxes, assessments or other
charges); (iii) the fair market value of any personal property or fixtures removed from the
Property or disposed of other than in accordance with the City Deed of Trust; and (iv)the
misappropriation of any proceeds under any insurance policies or awards resulting from
condemnation or the exercise of the power of eminent domain or by reason of damage, loss or
destruction to any portion of the Property. The foregoing limitation of liability shall not apply if
the City is prevented, hindered or opposed by Grantee from foreclosing under the City Deed of
Trust.
(b) Specific Performance. The City shall have the right to mandamus or other
suit, action or proceeding at law or in equity to require the Grantee to perform its obligations and
covenants under the City Grant Documents or to enjoin acts on things which may be unlawful or
in violation of the provisions of the City Grant Documents.
(c) Right to Cure at Grantee's Expense. The City shall have the right(but not
the obligation)to cure any monetary default by the Grantee under a loan secured by the Property.
The Grantee agrees to reimburse the City for any funds advanced by the City to cure a monetary
default by the Grantee upon demand therefore, together with interest thereon at the lesser of ten
percent (10%)per annum or the maximum rate permitted by law, from the date of expenditure
until the date of reimbursement.
7.3 Remedies Cumulative.
No right, power, or remedy given to a party by the terms of this Agreement is intended to
be exclusive of any other right,power, or remedy; and each and every such right, power, or
remedy shall be cumulative and in addition to every other right,power, or remedy given to the
party. Neither the failure nor any delay on the part of a Party to exercise any such rights and
remedies shall operate as a waiver thereof, nor shall any single or partial exercise by a Party of
any such right or remedy preclude any other or further exercise of such right or remedy, or any
other right or remedy.
7.4 Waiver of Terms and Conditions.
A party may at its discretion waive in writing any of the terms and conditions of this
Agreement, without completing an amendment to this Agreement. No waiver of any default or
breach shall be implied from any omission by the non-breaching Party to take action on account
of such default if such default persists or is repeated, and no express waiver shall affect any
default other than the default specified in the waiver, and such waiver shall be operative only for
the time and to the extent therein stated.
Waivers of any covenant, term, or condition contained herein shall not be construed as a
waiver of any subsequent breach of the same covenant,term, or condition. The consent or
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approval by a Party to or of any act by the other party requiring further consent or approval shall
not be deemed to waive or render unnecessary the consent or approval to or of any subsequent
similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a
waiver of any default under this Agreement, nor shall it invalidate any act done pursuant to
notice of default, or prejudice the exercising Party in the exercise of any right, power, or remedy
hereunder.
ARTICLE 8. GENERAL PROVISIONS
8.1 Relationship of Parties.
Nothing contained in this Agreement or any City Grant Document 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 the Grantee or its agents, employees or contractors, and the Grantee 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 and the
City Regulatory Agreement for the acquisition and operation of the Development.
The Grantee 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 the acquisition and operation of the Development, the Grantee 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 requirements in each contract that contractors shall be solely responsible for similar
matters relating to their employees. The Grantee shall be solely responsible for its own acts and
those of its agents and employees.
8.2 No Claims.
Nothing contained in this Agreement shall create or justify any claim against the City or
the City by any person that the Grantee may have employed or with whom the Grantee 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 the purchase of the Property, or the
rehabilitation or operation of the Improvements, and the Grantee shall include similar
requirements in any contracts entered into for the such purposes.
8.3 Notices, Demands and Communications.
Formal notices, demands, and communications between the City and the Grantee shall be
sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, return
receipt requested, or delivered by an express delivery service with a receipt showing date of
delivery, or hand delivered with a receipt showing date of delivery,to the principal offices of the
Parties as follows:
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City: City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
Attn: Housing Division
Grantee: Senior Housing Solutions, Inc.
512 Valley Way
Milpitas, CA 95035
Attn: Executive Director
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. Delivery shall be deemed to have occurred at the time indicated on the receipt for
delivery or refusal of delivery.
8.4 Non-Liability of Officials, Employees and Agents.
No member, official, employee or agent of the City shall be personally liable to the
Grantee, or any successor in interest, in the event of any default or breach by the City or for any
amount which may become due to the Grantee or any successor or on any obligation under the
terms of this Agreement.
8.5 Enforced Delay.
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 (other than lack of funds of the Grantee
or the Grantee's inability to finance the acquisition of the Property or rehabilitation or operation
of the Development) 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 twenty(120) days.
8.6 Inspection of Books and Records.
The City has the right at all reasonable times to inspect on a confidential basis the books,
records, and all other documentation of the Grantee pertaining to its obligations under this
Agreement. The Grantee also has the right at all reasonable times to inspect the books, records,
and all other documentation of the City pertaining to its obligations under this Agreement.
8.7 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 its provision.
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8.8 Applicable Law.
This Agreement shall be interpreted under and pursuant to the laws of the State of
California.
8.9 Severability.
If any term, provision, covenant or condition of this Agreement is held in a final
disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining 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.
8.10 Binding Upon Successors.
This Agreement shall be binding upon and inure to the benefit of the heirs,
administrators, executors, successors, and assigns of each of the parties. However, there shall be
no Transfer except pursuant to the terms of this Agreement. Any reference in this Agreement to
a specifically named party shall be deemed to apply to any successor, heir, administrator,
executor, or assign of such Party who has acquired an interest in compliance with the terms of
this Agreement, or under law.
8.11 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the parties. This
Agreement shall not be construed as if it had been prepared by one of the parties, but as if both
parties had prepared it. The parties to this Agreement(and their counsel) have read and
reviewed this Agreement and agree that any rule of construction to the effect that ambiguities are
to be resolved against the drafting party (including, but not limited to, Civil Code Section 1654,
as may be amended form time to time) shall not apply to the interpretation of this Agreement.
8.12 Approval.
Whenever this Agreement calls for City approval, consent, or waiver, the approval,
consent, or waiver of the City Manager 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 or her designee to deliver such approvals or consents as are required by
this Agreement, to extend time deadlines, or to waive requirements under this Agreement, on
behalf of the City(including, but not limited to the requirements set forth in Sections 2.6, 2.7,
2.9, and 3.1), and to take such actions and execute such documents on behalf of the City as may
be necessary to carry out this Agreement. Any consents 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.
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8.13 Discretion Retained by City.
The Grantee acknowledges that execution of this Agreement by the City does not
constitute approval by the City of any required permits, applications, or allocations, for the
Development, and in no way limits the discretion of the City in the permit allocation and
approval process regarding the Project or the Development.
8.14 Amendments.
The parties can amend this Agreement, including any deadlines provided in this
Agreement, only by means of a writing signed by both Parties.
8.15 Counterparts: Multiple Originals.
This Agreement may be executed in counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original.
SIGNATURES ON FOLLOWING PAGE
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BY SIGNING BELOW, the parties agree to this Agreement as of the date first written
above.
CITY:
City of Cupertino, a municipal corporation
By: C �Cwt . Co�7loGQ
Name: 24-ROL A-. ,4 7cc/
Its: 1)_- s Ar . .. _
/ I
GRANTEE:
SENIOR HOUSING SOLUTIONS, INC., a California
nonprofit corporation
By: `
Name: 74i2 '"Vt;2f3L (.(
"r1 vL-1 i rt c? 2
25
103\06\459746.1
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
103\06\459746.1
EXHIBIT B (Approved Budget)
SENIOR HOUSING SOLUTIONS Purchase and Rehab
CUPERTINO SENIOR RESIDENCE PROJECT To Develop a 5 Bedroom, 3 bath home
SOURCES AND USES Cupertino Senior Residence
19935 Price Ave.
City of GAP Housing Senior
Cupertino to fill by Trust of Housing
BMR Funds Cupertino SCC Solutions TOTALS
Acquisition $ 990,615.00 $ 89,385.00 $ 1,080,000.00
Rehabilitation $ 200,000.00 $ 200,000.00
Closing Costs & Fees $ 113,415.00 $ 97,635.00 $ 5,165.00 $ 10,615.00 $ 113,415.00
appraisal&inspections $ 2,575.00 $ 2,575.00 $ 2,575.00
escrow&title $ 4,100.00 $ - $ 4,100.00 $ 4,100.00
Loan Fees $ 6,515.00 $ 6,515.00 $ 6,515.00
prepaid insurance $ 2,100.00 $ 2,100.00 $ - $ 2,100.00
Developer Fee $ 98,125.00 $ 92,960.00 $ 5,165.00 $ 98,125.00
Vacancy reserve $ 4,200.00 $ 4,200.00 $ 4,200.00
Predeveloomemnt&Start $ 35.350.00 $ 1,750.00 _ $ 29,850.00 $ - $ 3,750.00 $ 35,350.00
program supplies $ 3,000.00 $ - $ 3,000.00 $ 3,000.00
communications &cable 5 $ 750.00 $ - $ 750.00 $ 750.00
Equipment/House Furnish purchase $ 7,950.00 $ - $ 7,950.00 $ - $ 7,950.00
A&E Contract Services $ 21,400.00 $ - $ 21,400.00 $ 21,400.00
utilities $ 2,250.00 $ 1,750.00 $ 500.00 $ 2,250.00
TOTAL $ 1,090,000.00 $ 235,015.00 $ 100,000.00 $ 7,950.00 $ 1,432,965.00
STATUS OF FINANCING Committed GAP Approved Committed
TYPE OF FINANCING Grant Grant *Loan Cash
* LOAN REQUIREMENTS -All loans will be deferred or residual reciepts