96-028 Cupertino Community ServicesAGREEMENT BY A..'ID BElWEEN THE
CITY OF Cl.JPERTINO, CALIFORNIA
AND CUPERTTN O COJ\-fMlJNiiY SERVICES
This agreement (herein "AGREEMENT"), is made and e:-1cered into on this _il;t day of
~--.. 19 .::f0 by and between ihc CITY OF CUPERTINO, CALIFORNIA, a municipal
( c}q,orat10n (he ;-e m "CITY"), and CUPERTINO COMMUNITY SERVICES, a non-profit
-housing developer (here:in "CONTRACTOR") and assigns. CITY and CONTRA..CTOR may
herein be referred to individually as a "Party" er collectively as "Par:.ies".
RE(JTAL5
The Parties agree as follows:
WHEREAS,
A. CITY has received Community Development Block Grant funds (herein "CDBG")
through a Joint Powers Agreement with the County of Santa Clara, which is an Urbtm
County entitled to CDBG fund.s from tl,c United States Department of Housing and
Urban Development (herein "P.UD"); and
B. CITY has a;:propriated funds in an amount not to exceed THREE HUNDRED
TWENTY THOUSA~D DOLLARS ($320,000), to be utilized during the time period
between J1me l, 1996 and May 3 I, 1997 (herein "Utilization Period") for the purr..ose cf
meeting the goals and objectives outlined in EXHrnIT A, SCOPE OF AFFORDABLE
HOUSING PROJECT \herein "PROJECT"), attached hereto and incorporated herein by
reference, primarily benefiting very low and low income Cupertino resident<;.
AGREEMENT PROVISIONS
In consideration of the following mutual covenants, agreements, and obligations, the Parties agree
as follows;
L _•._ DEFINITIONS
\\!hcncvcr used in this AGREEMENT and its atta.:hments. the terms below, ~hen
initially capitalized, s hall have the following meanings:
A. AfTordanility : Sha.II meun the len gth of tjmc this AGREEMENT is in effect and
rents are limited as de sc ribed in EX HIBIT 8, BUDGET, RENTS AND
REIMBURSEM ENT OF CITY LOAN, ntlll c hcd her.;to and incorporated herein
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B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
by reference. This period shall be for at lea.st thirty (30) years after the Effective
Date.
Annual Income : Shall r.1Cilll the in corr.e of all hou sehold mem~'TS as defined in
Federal regulations 24 CFR 570 .3.
Clien:.S: Shall mean very low and low income households who reside in CDBG
assisted UnilS and at Project Property, either at the time of occupai!cy or the
Effective Date, whichever is later.
Effective Date: Shall mean the date that CONTRACTOR takes title to Pfe,ject
Property. The first p .. yment to CONTRACTOR by CITY may occur before this
dat<!.
CDBG: Shall mean the federal regulations (24 CFR Part 570) governing the CDBG
Program. These regulations include HUD memos ;i.,d other correspondence
explaining or otheiwise commenting on CDBG regulations.
CDBG Rent: Shall mean the maximum re:its .1llowable by HUD for the CDBG
Progran;. These rents will be periodically r:.;vised by CITY.
Very Low Income Household: Shall mean a 1-!ousehold whose Annual Income does
not exccP..d 50% of the a.--ca median income, adjusted for household siz(, as
determined and· made available by, HUD. CITY shall provide CONTRACTOR
with a current schedule of income limits, adjusted for household size.
Low Income Housel10Jd-, Shall mean a household whose Annual Income does not
exceed 80% of the area median income, adjusted for household size, as determined
and made available :'v HUD-CITY shall provide CONTRACTOR with a current
schedule of income limits, adjusted for household size.
0MB: Shall mean the Federal Office of Management and Budget.
Pro1cct Propc-t_y: Shall mean the four-unit multi-family structures located at
10311 Greenwood CourL, Cupertino, California (APN 369-14-25).
Conventional Loan: Shall mean the loan of funds to CONTRACTOR through
Sumitomo Bank of California in the original principal amount of $225,000 to be
used to pay a portion of the acquisition costs. sccur,:d by a first deed of trust on
th e Project Prupcrty .
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L. Unit: Shall mean a dwe llin g unit occupied or a vailc:ble to be occupied by a low or
very low income hou.:,ehold .
PROJECT COORDINATION
A .
B.
C.
CITY : Plann.::r 1·1 (Housinr. Se;-vice~) or his/her designee, ~IJali be the PROGRAM
MANAGER for CITY anrl shall render overall supervision of the progre3s and
performance of this AGREEMENT by CITY. All services agreed to be
perfonned by CITY :::;hall be under the overall directi,m of the PROGRAM
MANAGER .
cm· JTRACTOR: CONTRACTOR shall assign a single PROJECT DIRECTOR
who shall have overall re3!)0nsibility for the progress and execution of this
AGREEMENT. Should i::ircumstances or conditions subsequent to the execution
of t:1is AGREEMENT · equire a substitute PROJECT DIRECTOR,
CONTRACTOR shall notify Ci TY immediately of such occurrence. PROJECT
DIRECTOR W1d CONTRACTOR staff will cooperate with CITY's PROGRAM
MANAGER relating to the PROJECT, areas of concern, and the impact of
PROJECT on residents of CITY.
NOTICES: All notices or other correspondence required or contemplated by this
AGREEMENT shall be sent to the Parties at the following addresses:
CITY:
CONTRACTOR:
Planner II (Housing Services)
City of Cupertino
10300 Torre Avenue
Cupertino, California 95014
Executive Director
Cupertino Community Services
IO 185 North Stelling Road
Cupertino, CA 95014
OBLIGATION OF CONTRACTOR
A. Organization of CONTRACTOR :
CONTRACTOR shall:
I) Provid e CITY with :
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a)
b)
c)
d)
e)
f)
A copy of Articles of Incorporation 1Jnder the laws of the State of
California;
A copy of currem Bylaws of CONTRACTOR;
Verification and documentation of Inter:ial Revenue Service
nonprofit status under Title 26, Section 501 (c) of the Tnternal
Revenue Code of 1986;
Verification and docwnentation of State of California Franchise Tax
Board tax exempt status under Section 2370I(d), Revenue and
Taxation Code;
Names and addresses of current Board of Directors of
CONTRACTOR;
A copy of the adopted personnel policies and procedures including
a.~ Affirmative Action Plan if staff exceeds fifteen (I 5) employees;
g) An organizational chart and staffing profile; and,
h) Any other documents required by HUD
2) Report in writiug an:,· changes in the CONTRACTOR's Articles of Incorporation,
Bylaws, tax exempt status and/or Board membership within thirty (30) calendar
days to the CITY's PROGRA.i\1 MANAGER.
3) Abide hy the conflict of interest provisions 0MB Circular A-110. These rules
apply to any person currently being compensated by the CONTRACTOR for
services rendered to it within the previous twelve (12) months, whether as a full
or part time employee, officer, independent contractor or otherwise. Any such
persons who have exercised or exercise any decision-making functions or
responsibilities with respect to CITY's administration of CDBG or gain inside
information with regard to that process, are prohibited f1um obtaining any
financial interest or benefit for themselves or those with whom they have family
or business tics during their tcn~ire with CONTRACTOR and for one year
thereafter.
4) Incl1Jdc on the Board of Directors rr;prescntation from a broad cross section of the
community, including: those \.vith ,~xp:;rtisc and interest in the CONTRACTOR's
services, representatives from ct,mmunity organizations interested in
CONTRACTOR's scrvic•:s, and users ,Jf CONTRACTOR's services.
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B.
5) Open to the public all meetings of the Board of Directors, except meetings, or
portions thereof, dealing with pe:-sonnel or litigation matters or to instruct
negotiators.
6) Keep minutes, approved by the Board of Directors, of all regular and special
meetings .
7) Encourage public participation in ?ianning and implementing services provided
w1der this AGREEMENT.
8) Utilize minority and/or female owned businesses, vendors, suppliers, and
CONTRACTOR's to the maximum extent feasible, for itl!ms funded under this
AGREEMENT.
Assumption of Owners hip of Project Property by CONTRACTOR:
Title to th t.: Project Property shail be transferred to CONTRACTOR upon initial
payment from CITY under this AGREEMENT. Title shall be transferred clear of all
liens on said Project Property other than the conventionai loan as described in EXIIlBIT
B. CITY investment in the PROJECT shall be secured by a Promissory Note (EXHIBIT
E) and Deed of Trust (EXHIBIT F ,, attached hereto and incorporated herein by reference.
C. Project Performance of CONTRACTOR
During the Affordability Period, CONTRACTOR shall:
1) Submit to CITY all documentation required by CITY to assure compljance with
CDBG Affordability Period requirements of the PROJECT as described in
EXHIBIT A;
2) Beginning in 2001, pay to the CITY by July 15 of each year during the
Afforriability Period, an annual mortgage payment as described in EXHIBIT B; .
3) Submit to CITY by July 15 of each year an annual report, that:
a) Lists all vacancies that occurred in the designated Units during the
previous fiscal year (defined herein as the period July I through the next
June 30). as well as the demographics and Annual Income of the new
tenant s filling s uch vacancies, and,
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5)
6)
b) Lists all current tenants in the designated Units with an update of their
demographics, Annual Income and rcr.t;
Collect all required data on new tenants of the designated Units. Such data shall.
be on forms approved by the CITY and shall be made available to CITY by
CONTRACTOR for review during the monitoring process;
Affirmatively market all vacancies consistent with the CITY's Housing Procedural
Manual, provided to CONTRACTOR hy CITY's PROGRAM MANAGER.
CITY shall provide CONTRACTOR with any and all updates or changes to this
guide to assist CONTRACTOR in complying with this Policy;
Cooperate with CITY staff conducting on-site inspection to determine compliance
with the standards established by the Uniform Housing Code as adopted by
CITY. CiTY shall conduct such inspections during normal business hours after
providing one ( l) working day's prior notice;
7) Maintain all required insurance coverage as specified in EX1-IlBIT C,
INSURANCE REQUIREMENTS, attached hereto and incorporated herein by
reference;
8) Maintain the appearance of Project Property consistent with surro,mding
properties and undertake major repairs as necessary to maintain the habitability of
the Project Property;
9) Cooperate, when appropriate, witii the CITY's Ten.mt-Landlord Rent Mediation
Program to resolve disputes with any tenants;
JO) Assist CITY in notifying all tenants of their rights under the Uniform Relocation
Assistance and Real Property Act of 1970, as amended, including noticing of any
new tenants who move into Project Property during and after the escrow period.
CITY shall provide ~ONTRACTOR with any and al.I written materials to be
distributed to ten.ints regarding relocation assistance;
11) Include an acknowledgment of CITY fonding and support on all appropriate
PROJECT publicity an<l publications using words to the effect that services are
funded by City of Cupertino; and,
12) Implement any changes required by CITY or HUD to maintain compliance with
CDBG requirements and any other applicable statutes or regulations. CITY and
CONTRACTOR will seek remedies to nddress any required changes that impact
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the financi a l viabili ty o f th e PROJECT, includin g , but not limited to reduced
installment pay ment s on the mortg a ge de scribed in EXHIBIT B.
Fiscal Respo nsibilities of CONTRA CTOR:
CONTRACTOR shall :
1) Appoint and submit the name of a Fiscal Officer who shall be responsible for the
financial and accounting activities of the CONTRACTOR, including !h'! receipt
and disbursement of CONTRACTOR funds;
2) Establish and maintain a system of accounts that ~hall be in conformance with
generally accepted principle~ of accounting for budgeted funds. Such system of
accounts :;hall be subje~t to review and approval by CITY and shall be consistent
with the requirements of EXI IIBIT B. Any CITY review of CONTRACTOR's
accounting syste-n shall be done during normal business hours after one (1)
working day's prior written notice;
3) Document all costs by maintaining complete and accurate reccrds of all :financial
transactions, including, but not limited to, contracts, invoices, time cards, cash
rcce!pts, vouchers , canceled checks, bank statements, and/or other · official
docUP1entation evidencing in proper detail the nature and propriety of all charges;
4) Perform an independent fiscal audit at least every year, in conformance with the
generally accepted standard accounting principles. Such audits mast identify the
total fands receivej and disbursed and funds granted and · expended relating to this
/\GREEMENT. The costs for such audits shall be at CONTRACTOR's expense,
1Jnless otherwise provided for in this AGREEMENT. Copies of the completed
audits must be provided to the CITY; and ,
5) Be liable for any e xpenses charged to the PROJECT that are disallowed by CllY.
Disallowed expenses shall be any that do not fall within the definition of
Operating Expenses in EXHIBIT B. CITY shall notify . CONTRAC", JR, in
writing, of any expense it intends to disallow [..fld the reason(s) for the
disallowanc<:. CONTRACTOR shall have seven (7) working days from receipt of
sai d 11oticc of disallowance to appeal the CITY's decision. Said appeal shall be in
writing and set forth CONTRACTOR's reasons for considering the expense in
question allowable under the AGREEMENT. Upon receipt of said appeal, CITY
shall have fourteen ( 14) working days to respond in writ ing. Said response shall
state the final deci s ion of CITY to .illow or disallow, in whole in part, the
cxpens e(s) s ubmitt ed for re vi ew, with th e reasons for the ClTY's d 1.:cision .
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E. R eco rds. Re po rt s and Audits o f C0NTRACTOR:
I) CONTRACTOR shall comply with all applicable federal Unifonn Administrative
Requirements ns defeated in 24 CFR 570.502.
2) Establishment an'd Maintenance of Rt:cords: CONTRACTOR shall maintain
recNds, including but not limited to books, financial records, supporting
documents, statistical records, personnel, property and all other pertinent Records
sufficient to reflect properly (a) all direc~ and indirect costs of whatever nature
claimed to have been incurred and anticipated to be incurred to perform this
AGREEMENT, and (b) all other matters covered by this AGREEMENT.
3) Preservation of, Records: CONTRACTOR shall preserve and make its records
available during normal business hours upon one (I) working day's prior written
notice from CITY:
4)
a) Until the expiration of three (3) years from the anniversary of the Effectiv~
Date that immediately follows the activity that produced the record;
b) For such longer period, if any, 15 is required by applicable law; or
c) If this AGREEMENT is completely or partially tenninated, the records
relating to the work terminated shall be preserved and made available for a
period of three years from the date of any resulting final settlement.
Ex.amination of Records and Facilities: At any time during norn;al business hours
and as often as may be deemed necessary, with at least one working day notice by
CITY, CONTRACTOR agrees that CITY, and/or any duly authoriz.;d
representatives of CITY shcll, until expiration of (a) three years after the
con,;iusion of the Affordability Period, or (b) such longer period as may be
prescribed by law, have access to and the right to exa.-nine its offices and facilities
engaged in performance of this AGREEMENT and all its records with respect to
all mat1crs covered by this AGREEMENT, excepting those falling \l.ithin the
attorney-client privilege and those falling within the attorney work -product
privilege, provided that in the event of a di!ipute regarding the applicability of the
attorney work-product privilege to specific records, the Partic c; agree to submit
the dispute to fill impartial arbitrator agreeable to both Parties. Agreement
regarding the arbitrator shall not be withheld unreasonably . Costs of such
arbitration s hall be divided equally between the Parties.
CONTRACTOR also agrees that the CITY, or any d~ly authorized
representatives, have the right to audit examine and make excerpts or transcripts
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of and from, such r~cord s, and to mal.::e audits of al! contracts and subcontracts,
ir.voices. payrolls, records of personnel. conditions of employment, materials and
all other data relating to matters covered by this AGREEMENT.
CONTRACTOR or its repre sentatives shall be given access to and the
cooperntion of CITY, including all excerpts, trans,.ripts and audits made during
any examina,ion of CONTRACTOR's records or facilities .
Citv Audits: Th e CITY may require an indepe nd ent audit. Such audits may cover
PROJECT compliancr, as well as focal matters regarding the operation of the
PROJECT. CONTRACTOR v.ill be notified at least one ( l) working day in
advance that an audi '( will be conducted. Cost of such audits will be borne by the
CITY.
If CONTRACTOil chooses to respond to any audit finding, CONTRACTOR or
its representati·;e shall be given access t0 and the cooperation of CITY's auditors,
including all working papers of said audi.ors. CONTRACTOR shall then have a
reasonable time within which to review the audit and its findiugs, and have its
responses includ,ed in the final audi~ report.
Non-Reli1Zious Activity : In aidition to, a... I not in substitution for, other provi~ions of
this AGREEMENT regarding the provision of services with CDBG funds, the
CONTRACTOR:
1) Agrees that, in connection with such services:
a) It will not discriminate against any employee or applicant for employment
on the basis of religion and will not limit employment or give preference in
employment to persons on the basis of religion;
b) it will not discriminate against any person applying for housing on the
basis of religion and will not limit such services or give preference to
persons on the basis of religion;
c) It will provide no religious instruction or counseling, conduct, no religious
worship or services, engage in no religious proselytizing, and exert .io other
religious influence on or in the Project Property; and,
d) ·n1e commc,n portion of the Project Property shall contain no sectarian or
religious symbols or decorations .
4. CONTRACT COMPLIANCE:
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A.
B.
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Monitoring and Evaluation of PROJECT :
Evaluation of the PROJECT performan ce shall be the mutual responsibility of
b0th Pmies. CONTRACTOR s hall furnish 2.lJ tenant and service data,
st~1tements, records, information and reports necessary for PROGRAM
MANAGER to moni•or, rev~ew and evaluate the performance of
CONTRACTOR with respect to the PROJECT and its components. CITY shall
have the right to request the services of an outside agent to assist in any such
evaluation. Such service s shail be paid for by CITY.
Contract Noncompiiance:
With rece ipt by CITY of any information that evidences a failure or deficiency by
CONTRACTOR to comply with any provision of this AGREEMENT, the
CITY shall have the right to require corrective action to enforce compliauce with
such provision . Corrective action shall be taken if any of the folloYting, as
examples only, occur:
I) If CONTRACTOR (with or without knowledge) has made any material
misrepresentation of any nature with respect to any information or data
r:imished to CITY in connection with the PROJECT;
2) If there is pending litigation with respect to the performance by
CONTRACTOR of any of its duties or obligations under this
AGREEMENT which may materially jeopardize or adversely affect the
undertaking of or the carr1ing out of the PROJECT;
3) If CONTRACTOR shall have taken any action peruurung to the
PROJECT which requires CITY approval without having obtained such
approval;.
4) If CONTMCTOR 1s m material default under the provisions of this
AGREEMENT;
5) If CONTRACTOR makes improper use of CDBG funlls and PROJE'.:T
mcomc;
6) If CONTRACTOR fails to comply with any of the tenns and conditions
of this AGREEMENT in such a manner as to constitute material breach
th ereof, or,
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7) If CONTR...\CTOR submits to CfTY any reports which are incorrect or
incomplete in any material respect.
Corrective Actio11 :
After all admini:;trative remcciies have becil exhausted, CITY shall have tbe right to
require tk presence of any of CONTRACTOR's officers at any hearing or
meeting called for the purpose of considering corrective action within seven (7)
working days of issuing such notice. CONTRACTOR will be infonned of and
have an opportunity to participate fully in corrective action deliberations.
Upon completidn of corrective 'action deliberations, CITY shall notify
CONTRACTOR, in writing. of any noocompliance and shall piovide to
C01\1RACTOR a set of specific corrective action recommendations relative to
PROJECT noncomplia.,ce and a timetable for implementing the specified
ccrrective action recorrunendations; such timetable shall aUow CONTRACTOR
not less than seven (7) working days to comply with the specified corrective
actio!l recommendations. If CONTRACTOR wishes to appeal any finding of
noncompliance, it shall have seven (7) worki11g day~ from receipt of said notice of
noncompliance to appt:al the CITY's decision. Said appeal shall be in writing and
set forth CONTRACTOR's reasons for considering the action or inaction cited by
CITY as complying with the AGREEMENT. Upor, receipt of said appeal; CITY
shall hdve fourteen (14) working days to respond in writing. Said response shall
state the fmal decision of CITY to require corrective action and the timetable for
implementation. During this appeal process, CONTRACTOR shall make good
faith effort to cure the noncompliance issues that are not in question.
Following implemi:ntation of the corrective actions. CONTRACTOR shall
forward to CITY, within tJ1t> time specified by CITY, any documentary ~;dence
required by CITY to verify that the corrective actions have been taken. In the
event CONTRACTOR does not implement the corrective action
recommendations in accordance with the corrective action timetable, CITY may
disallow all or part of the cost of the activity or action in noncompliance, provide
notice of intent to terminate this AGREEMENT as specified in Section 14, and/or
take other remedies that may be legally available.
5. OBLIGATIONS OF CITY
A. Contract Compliance:
CITY s taff shall provide as s istance to CONTRACTOR in connection with:
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I ) Obtaining conformity of the PROJECT with the ClTY's policies and
procedures and all CITY codes, ordiranc<.:s, directives and laws; activities
conducted by contractor(s); and
2) Obtaining c onfo rmity of the PROJECT with CDBG requirements; and~
3) Review of ..A .GREEMENT for compliance purposes and evaluating
PROJECT based on annual reports received from CONTRACTOR a-id
on-site monitoring of tenant and Project Prop,_rty data.
B. Method of Pavment :
CITY shall p ay CONTP.ACTOR a total sum not to exceed THREE HUNDRED
TI'lENTY THOUSAND DOLLARS ($320,000). CITY shall make its initial
payment of CDBG funds directly into a'l escrow acc01.mt for acquisition of the
Project Property, in a manner specified by the title company administering the
transfer of title. The lom shall be utilized for the ai.:quisition of subject property.
AJI tenants residing in Units during the AffoiClability Period must be of an income
level as described in EXHIBIT B. Tenants, who meet this standard at the
beginning of their residency at the Project Property, but later exceed this standard
shall be considered in compliance as long as they are in continuous residence at thr,
Project Property. Failure of CONTRACTOR to achieve this standard slcll be
considered contract noncompliance. In the event of such noncompliance, any and
all payments made by CITY to CONTRACTOR under this AGREEMENT shall
be considered di~lowed co sts and subject to full re;-ayrnent to CITY by
CONTRACTOR within thirty (30) calendar days of such notice by ClTY of
n')P.compliance .
6. PROJECT
A . All rents collected from PROJECT tenants during the Affordability Period shall
be r\!tainc<l by tl1c CONTRACTOR. These PROJECT rents shall be expended as
described in EXHIB1T B.
B. R.enL'> collected that rema in un s pent al the conclusion of the Affordability Period
shall be available to CONTRACTOR to use as described in EXHIBIT B.
C. Rent received s ubseq uent to t.h e Affordability Period shall not be subject to this
AGREEMENT.
7. DIS CLOSURE OF CONF ID ENT IA L TENANT INFORMATION
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8.
C IT Y a grees to ,naintain the confidentiality of any i!lformation regarding tenants or
app licants for tenancy under this P ROJECT, or their immediate families, pursuant to this
AGRE E MENT, which ma y be obtained throug h application forms, interviews, tests,
re po rts , from public age nc ies o r c o1:r.'.::c:0rs, o r any other source. Without the written
pe rm ission of the apptica."'1, such information shall be divulged only as necessary for
purr,0ses rdated '.o the performance or e valuation of the services and work to be provided
pursuant to thi~ AGREEMENT, and th e n only to persons having responsibilities tmder
the AGREEMENT, including those furnishing services under the PROJECT through
subcontracts .
ASSJ GN ABILITY A N D INDEPENDENT CONTRACTOR REQUIREMENTS
Th e relationship of CONTRACTOR to CITY is that of an independent
co ntractor. CONTRACTOR has full rights to manage its employees and tenants
s ubject to the requirements of the law. All persons employed by
CONTRACTOR in connection with this AGREEMENT shall be employees of
CONTRACTOR and not employees of CITY in any respec1. CONTRACTOR
shall be responsible for all employee lr-nefits, including, tmt not limited to,
s ta tutory worker's compensation benefiu;.
B. N o ne of the work or services to be performed hen:,tr•der :-:f-iall be delegated or
subcontracted to third parries wi:hout prior wri·,ien CITY approval, which
approval shall not be unreasonably withheld.
C . No subcontrnctor of CONTRACTOR will be recognized by CITY as having any
e mployment relationship with CITY. For the protection of both
C O N TRACTOR and CITY, CONTRACTOR agrees that, prior to allowing
subc ontractor(s) to enter \lJlto the Proj e ct Property to perform services, such
su bcontractor(s) shall be required to acquire, or show proof tr.at he/she has
p urchased and is maintaining commercial general liability, automobile, and
workers' compensation (if applicable) insurance policies, with coverage lin1its
which meet or e xceed th e requirements for CONTR...\CTOR set forth in Exhibit C.
9 . COMPLI ANCE WITH LAW
A . C ompli a nc e: C.ONTRACTOR shall b1."Come familiar and comply w;th and cause
a ll its s ubcont ~ctor's and cmploy'ecs, if any , to become familiar and comply with
all appli cabl e fed e ral , s tate and loc al laws, ordinances, codes, regulations, and
d ecree s , in c ludin g but not limited to , tho se fed e ral rules and re gulations outlined in
EX HIBIT D, ASSU RANCE S, att ac hed hereto an d in corp orat ed here in by
re feren c e .
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B. Assurances: Failure of CONTRACTOR, in any manner, t'..> observe and ;;dhere to
law as described herein or as amended shall in no way rdieve CONTRACTOR of
its responsibility to adhere to same and CONTRACTOR herein acknowledges
this responsibility. CONTRACTOR shall held ClTY, its City council, officers,
employees and boards and commissior • .3 harmless from CONTRACTOR's
failure(s) to comply with any requirement imposed on CONTRACTOR by virtue
o f the utilization of CITY funds. CONTRACTOR shall reimburse CITY for any
disallowed cosu. Jnd!or penalties imposed on CITY because of CONTRACTOR's
failure to comply with all applic~ble fe.:!cral, state and local laws, ordiru.nces,
codes, regulations and ciecrees.
TERMS AND AMENDMENTS
Amendments to the ti-.:rms and conditions of this AGREEMENT shall be requested in
writi.r!g by the Party desiring s~ch revision, and any such adjustment to this
AGREEMENT shall be determined and ef:ective only upon the mutual agreement in
writing of the Parties hereto unless the amendments are made by HUD, in which case
they will be adopted as ordered.
11. INTEGRATED DOCUMENT
12.
This AGREEMENT embodies the agreement between CITY and CONTRACTOR and
its terms and conditions. No verbal agreements or conversations with any officer, agent
or employee of CITY prior to execution of th.is AGREE1\1ENT shall affect or modify any
of the terms or obligations contained in any documents comprising this AGREEMENT.
Any such verbal agreement shall be considered as unofficial information and in no way
binding upon CITY.
HOLD HARMLESS
CONTRACTOR hereby releases and agrees to protect, defend, hold harmless and
indemnify CITY, its City Council, its officers, employees and elected officials, boards
and commissions, from and against all claims, injury, ::ability, loss, cost and expense, or
damage, however same may be caused, including all cost and reasonable attorney's tees in
providing the defense to any cla.im arising therefrom, for W1Y lms of or damage to
propcrty(rcal and/or personal) or for personal injury to c,r death of any person or persons
arising out of, occurring by reason of. or in anyway connected with CONTRACTOR's
PROJECT activities, or in consequence of CONTR.ACTOR's negligence or willful
misconduct
13. WHEN RIGHTS AND Rl:MEDI ES \V AIVED
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In no event shall any payment by CITY ,r any acceptance of payment by
CONTRACTOR hereunder constitute or be construed to be a waiver by CITY or
CONTRACTOR of any breach of covenants or conditions of this AGREEMENT or any
default wrJch may then exist on the pyt o[ CITY or CONTRACTOR, and the making of
any such payment while a.PY such breach or default exists shall in no way impair or
prejudice any right or remedy available to CITY or CONTRACTOR with respect to such
breach or default.
14. TERMINATION
A Termination for Cause:
CITY may terminate this AGREEMENT for cause if:
I) CONTRACTOR fails to comply with material existing conditions of the
AGREEMENT; or,
2) CONTRACTOR refuses to accept any additional conditions that may be
imposed by CITY or tbt! Federal government, except those which would
impose an undue financial burden on CONTRACTOR; or,
3) CONTRACTOR fails to implement required corrective actions in a timely
and sufficient fashion.
Before terminating this AGREEMENT for cause, CITY shall provide
notice to CONTRACTOR, in writing. of the reasons for termination.
Upon receipt of such termination notice, CONTRACTOR shall have
seven (7) working days to provide a Mitten appeal of CITY's termination
decision. · Such \Witten appeal shall state CONTRACTOR's reasons for
consid::ring the termination improper or invalid under the AGREEMENT.
Upon receipt of such appeal. CITY shall have fourteen (14) working days
to respond to the appeal. in writing, and make a final decision regarding its
reasons for terminating the AGREEMENT.
B. Tennin '.ion for Convenience:
CITY anci COJ.JTRACTOR may tcm1inate or suspend this AGREEMENT in
who!,· or in p.1rt when both Parties agn.-c that the cvnrinuation of the PROJECT
would not produce bcncfici~l results commensurate with the further expenditure
of funds. The two Parties shall ngn.-c upon the tcnninnlion conditions, including
1'11gc 15 of •15
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C.
the effective date and . m the c;:isc of partial te:rnination, the portion to be
terminated.
Upon Tenni:.ct iion CONTRACTOR Shall:
I) Not incur ncv. obligat ion s and sl1aii cancel as many outstanding obligations
as pos sible; and,
2) Pay to the CITY an y remai ning principal plus interest on the CITY Loan.
D. Termination does not impair the CITY's right to subsequently require repayment
by CONTRACTOR for di sallowed costs or other a<ljustments dt:termined by
audit findings.
15. MiSCELLA°N'EOlJS PROVISIONS
A . The Captions: The captions of the various sections, paragraphs, and
subparagra phs of the AGREEMENT are for convenience only and shall not be
considered nor referred to fo r resolving questions of interpretation.
B. No Third Party Beneficiary: This AGREEMENT shall not be construed or
deemed to be an agreement for the benefit of any third party or parties, and no
third party or parties shall have any claim or right of action hereunder for any
cause whatsoever.
.
C. Severability Clause: In case any one or more of the provisions contained herein
shall, for any reason , be held invalid. illegal, or unenforcc..ible in any respect. it
shall not affect the validity of the other provisions which shall remain in full force
and effect.
D. No Pledging CITY's Credit: Under no circumstances shall CONTRACTOR have
the authority or power to pledge the credit of CITY or incur any obligation in the
name of CITY . CONTRACTOR s hall save and hold hiur.iless CITY, its City
Council, its officers, employees, and boards and commissions for expenses arising
out of this AGREEMENT.
E. Corporation Financial Disclosure R:quirements: CONTRACTOR services to be
re ndere d under the provisions of this AGREEMENT are excluded from the
requirement of filing a Financial Disclosure Statement by Title 2, Cdifornia Code
of Regulations, Section 18,700(2) (A) and (B).
Page 16 of 4S
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s
16. ENTIRE AGREEMENT
This AGREEMENT, consisting of 45 pages, contain~ the entire agreement betw.!en the
CITY and CONTRACTOR respecting the matters herein set forth and supersedes any
prior agreement betwee:1 the CITY and CONTRACTOR respecting such matters.
CONTRACTOR has executed this AGREEMENT on this J.::f_ day of {LAA-,. o ..
19~. ~
By: "CUPERTINO COMMUNITY SERVICES"
-~~./ -----
xecutive Director
CITY has e:<ecuted t.rus AGREEMENT on t.rus I() ti;-day of (}-rc1. ,., ,19~
APPROVED AS TO F01?1:
vLJ~
Charles Kilian, City Attorney
A TIESTED BY:
Page 17 of 45
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I.
II.
EXlllBIT A
CUPERTINO COMMUNIT I SERv1CES
10311 GREEJ'{WOOD COURT,,CUPERTINO, C..\LIFORNIA
SCOPE OF AFFORDABLE HOUSING SERVICES
PURPOSE OF PROJECT
CONTRACTOR shall implement 'his AGREEMENT in accordance with the provisions
of federal CDBG regulations as set forth in 24 CF Part 570, and all other ruies and
regulations pc:rtaining thereto. All these elements shall be collectively called CDBG.
The purpose of this PROJECT is to provide affordable housing for very low and low
income households. The Proj~ct Property, 10311 Greenwood Court, Cupertino,
California, shall be used for this purpose for a period of thirty (30) years. During that
period, the CITY investment shall be secured by a Deed of Trust and a Promissory Note.
City funds will be used to assist in the acquisition of the Project Property by
CONTRACTOR.
ACTIVITIES TO BE PERFORMED BY CONTRACTOR
A. Except as specifically defined, restricted, or otherwise limited by the terms of this
AGREEMENT, CONTRACTOR shall be considered o,,ner and landlord of
Project Property, with all of the rights and responsibilities normally associated
with those terms.
B. Client Selection Criteria: CO:-.JTRACTOR shall adopt written tenant selection
criteria and submit same to CITY for approval prior to receiving funds for the
Down payment from CITY. These criteria shall, at minimum:
1 .
2.
3.
Affirmatively market the units according to the CITY's Housing
Procedural Manual, provided to CONTRACTOR by CITY's PROGRAM
MANAGER; ;
Be consistent with the purpose of providing· affordable hom;_'in_g_fr_· ~_1_o_w _____
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income households; ~
Be reasonably related to the purpo ses of the PROJECT and the applicant
s ability to perform the obligations of the lease;
Page 18 of -15
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D.
4 . Give reasonable consideration to the housing needs of families who would
have priority according to the CITY's Housing Procedural Manual.
provided to CONTRACTOR by CiTY's PROGRAM MANAGER;
5. Select tenants from CONTRACTOR's written waiting list in the
chronological order of application , in so far as possible; and ,
6. Give prompt, written notice to any rejected applicant with grounds for
rejection.
Tenant Lease: CONTRACTOR shall adept a :,t2ndard tenant lease <lnd submit
same to CITY for approval prior to the Effective Date. This lease must be for not
less than one year, un]Pss reduced by mutual, written agreement of
CONTRACTOR ~d Client. The lease must allow for rent increases as described
in EXHIBIT B.
CONTRACTOR may not te1minate the tenancy or refuse to renew the iease of a
Client except fo; serious or repeated ~iolations of the terms of the lease; violation
of applicable federal, state, or local law; other good cause. Any termination or
refuse to renew must be preceded by not less than three (3) calendar days by the
CONTRACTOR's service of a written notice upon the Client specifying the
groW1ds for the action.
Tenant ParticLQation Plan: CONTRACTOR shall establish a fair lease and
grievance procedure and provide a plan for and follow a program of teL.mt
participation in management decisions.
E. Maintenance: CONTRACTOR shall maintain the Project Property in compliance
with all federal, state, and local housing GJality standards and code requirements.
CONTRACTOR shall cooperate with CITY staff conducting on-site im,pections
. to determine compliance with this section.
F.
In addition, CONTRACTOR must r:mintain the appearance of the Project
Property consistent with sun-0W1ding properties and U!ldertake major repairs as
necessary to maintain the habitability of L1e Project Property.
Rents: CONTRACTOR shall set rents as required in EXHIBIT B. As landlord,
CONTRACTOR shall be responsible for tile collection of all rents due. Failure of
CONTRACTOR to collect rents due shall in no way reduce CONTRACTOR's
obligation to repay the CITY Loan as described in EXHIBIT B.
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III.
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REPORTING REQUIREMENTS
A. Corporate Dornments: As specified in Section 2, Paragraph A (2) of this
AGREEMENT, CONTRACTOR :,hail report to CITY in writing within thirty
(30) days of effective change in any one of the following documents: Articles of
Incorporation, bylaws, tax-exempt Status, Board of Direccor membership,
Personnel Policies and Procedures, Affirmative Action Plan, Organizational Chart
and other documents that may be required to verify a!; the owner of the Project
Property.
B. Budget, Revenu,; and Expenditure Documents
C.
I. By September 15 of each year during the Affordability Period,
CONTRACTOR shall submit to CITY a Statement of all revenues
and expenses of the PROJECT during the succeeding fiscal year.
Tenant Incomes, Demographics a11.J Rents
I. By March 15 of each year during the Affordability Period,
CONTRACTOR shall submit to CITY a report of all tenants in Units
current as of February oft.hat same year. This report shall be submitted on
forms provided by the CITY and shall include a list of current tenants with
an update of their Annual Income and demographics.
2. By September 15 of each year during the Affordability Period,
CONTRACTOR shall submit to CITY a list of all vacancies that occurred
in Units and during the immediately precedinr, period of July I to June 30.
This list shall include the Annual Income of the new tenants as well as
their demographics.
3. CON1 R..'\CTOR shall maintain a waiting list of applicants for tenancy in
the PDject Property. This waiting list shall Ix~ available at
CONTR/\CTOR's administrative office for CITY review at any time.
4. CONTRACTOR shall maintain a list of all applicants rejected for tl!nancy
in the Project Property with a statement of the reason for rejection and
documentation that the applicant was properly notified of the reasons for
the rejection. This list shall be available at CONTRACTOR's
.!dministrative office for CITY review at any time.
Page :w of ~5
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D. Other Reporting Requirements: In order to comply with CDBG and other
applicable federal, state, and local requirements and to efficiently monitor
compliance wit11 thi s AGREEMENT, CITY may require additional reporting
elements from CONTRACTOR.
Pa ge 2 1 of ,15
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II.
III.
LXHIBITB
CUPERTINO COM.MUNJTY SERVICES
10311 GREENWOOD COURT DRIVE, CUPERTINO, CA 95014
BUDGET AND BASIS FOR REPA \'ME!'4T OF CITY LOAN
PROJECT FISCAL YEAR
A. The PROJECT Fiscal Year shall run from July I to the next June 30 of each
calendar year during the Affordability Period.
APPROPRI1\TJON BUDGET
A. The CITY appropriation of $320,000 is from the CDBG portion of the
Affordable Housing Fund. These funds shall be used :o assist the acquisition of
Project Property This appropriation of funds is provided as a secured loan to
CONTRACTO~,.
B. Acquisition funds may be used for any expense normally related to the close of
escrow. CITY shall make its payment of CDBG funds directly into the escrow
account for purchase of the !>roject Property, in a matter designated by the title ·
company admini'stering th~ L.ansfdof title.
C. It is the CITY's intention that CONTRACTOR maintain and operate the 'Project
Property in a self-supporting manner. To this eud. CITY shall be under no
obligation to provide additional funds to maintain and operate the Project
Property except for rehabilitation funds to be provided in 1997.
?ROJECT RENTS
A . During the Affordability Period, CONTRACTOR may charge, depending on the .
type of unit, maximum rents ar, dest.:ribed below.
B. Initial-rents must be set at a level that does not trigger economic displacement
under the Uniform Relocation Assistance and Real Property Act of 1970, o.s
amended . Thi s Act s11tes that rents charged to existing tenants can only be
Pa~c 22 of .;5
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increased to a le ve l ;10t to exceed 30% of the Annu;iJ Income of those tenants, less
adjustments for utility pay ments as described below.
Unjt Rents: These maximum rents arc clefined by HUD as ser.ing Low and Very
L<-w Income families or individuals under the CDBG Logram. Four (4) Units
must be designatea as Units serving LOW Income families on the Effective Date.
I. These un.its must be initially occupied by Low Income Households;
tenants filling va<.:ancies in these units must also be Low Income
Households.
2. Low income rents shall not exceed 30% of the individual or household
i~come including a utility a!lowa..,ce.
3 On an annual basis, CITY shall provide CONTRACTOR with tlle me.st
recent HUD Income guidelines and a utility allowance schedule.
4. The "Schedule of Allowances for Tenant Purchased Utilities and other
Services for Santa Clara County" shall be used for purposes of determining
utility allowances.
rv. THE Cin' LOAN
A. Terms of the Loan
I. 1 he CiTY Loan shall be evidenced by a Promissory l'Jote, atta, bed herrto
as EXHIBIT E and inr.or.porated herein by reference. Two hundred and
twenty thousand dollars ($220,000) of the CITY Loan :shall acc;-ue interest
at the rate of three percent (3%). The remaining one hundred thousand
dollars (S 100,000.00) shall accrue interest at .a rate percent 0%) and be
deferred until the entire loan amount becomes due and payable under the
terms that follow. The principal balance and a!J accrued interest shall be
du-: a.Pd payable on the car!ier of the following: ·
a. .Thirty (30) years from the Effective Date· or,
b. The date the Project Property or any portion thereof or interest
tlicrcin is sold, tr.msfcrred, as signed, leased ( .. · .ccpt for leases of
individual Units pursuant to the tcnns of this AGREEMENn or
refinan ced . without the prio r written approval of CITY.
G ;/Pli111r,mg/,\grcc I .doc
2. In addition, the CITY, at its option, may declare the entire CITY Loan
due and payable if there is a Termination of this AGREEMENT and
its attached exhibit'-, the Promissory Note and the Deed of Trust,
attached h ereto as EXHIBIT F and incorpor:ited herein by reference.
3 . Starting with the fiscal year beginning July I, 200 I, and throughout . the
term of the CITY Loan, CONTRACTO.: shall repay the loan
in annual instaJlments as provided below.
4 . Tne Prowissory Note evidencing the CITY Loan shall be secured
by the Deed of Trust on the Project Property. Such Deed of Trust
shall be recorded prior to any other interest in the Project Property
(except the Deed of Tnist securing the Swnitomo Bank of California
convention21 loa.,), and CONTRACTOR shall not place any inferior
lien on the Project Property without the prior written consent of C!TY.
The CITY shall not s~bordinate its position to any future loans on subject
property .
B. Amortized Loan Payments
1. CITY shall defer S 100,000 of the original CITY loan until the loan
becomes due and payable as described in Section IV, Paragraph A.
Ho':,ever, the $100,000 shall accrue interest at a rate of three percent (3%).
~-CONTRACTOR shall make annual amortized payments on the $220,000
portion of the CITY Loan beginning on July 1, 2001.
3 . The CITY Loan shall be due and payable as follows:
a Commencing in 2001, CONTRACTOR installment payments shall
be due on the 15th day (herein the "Payment Date") of each month
that an outstanding loan balance exists. The interest acrrued during
loan years one through five shall be calculatec! at three percent (3%)
simple interest. The total accrued interest amount of $33,000 shall
be divided into monthly payments over the remaining 25 years of
the loan and added to the amortized loan payment. Payments shall
be made in arrears. A penalty of one percent (1 %) of the payment
shall be charged for every seven (7) ca1enda: days, or part ther(of,
CITY receives payment after the Payment Date.
b. The amount paid to CITY shall be amortized payments cruculate,:l
at 3% intere st on the partial loan aniount ($220,000.00) plus an
Page 24 of-15
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additional interest payment of $11000 per month. The total
month)) y ment is S 1,153.26.
c. Annu a lly , no t later tha n the Fayment Date, CONTRACTOR shall
submit to CITY a S ta tement of all revenues and expenses of the
PROJECT durin g the preceding fiscal year.
d. CONTRACTOR shall not be required to make loan payments
greater than the remaining loan balance plus accrued interest.
e. All loan payments made by CONTRACTOR to CITY shall be
applied first to accrued interest, and then to reduce the principal
balance owed. In the event that the amount of the loan payment is
insufficient to pay the accrued interest, any unpaid interest shall
oe added to the CITY Loan balance.
g. The CITY Loan shall be due and payable immediately if an Event
of Default, as describe'l in the Promissory Note occurs.
h. In the event of any sale, transfer, or refinancing prior to the time
the CITY Loan is paid in full {whether or not approved by CITY),
the proceeds of such sale, transfer or refinancing, less re.asonable
and normal costs of such transaction, shall be paid as follows:
I.
i. Repayment of the Conventional Loan; th.!11,
2. Repayment of th e CITY Loan; then,
3. To CONTRACTOR.
The CITY Loan shall be a nonrecourse loan and no judgment, or
execution th<:r eon, entered in any action, legal or equitable7 on any
note evidencing such loan or deed of trust securing such loan shall
be enforced personally against CONTRACTOR or any principals
of CONTRACTOR, but shall only be enforced against the Project
Property.
G:/J>l ,mnin &f A~c I .d oc
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EXiilBff C
CUPERTINO COMMUNITY SERVICES
10311 GREENWOOD COURT, CUPERTINO, CA 95014
l!'c'SUR.\NCE REQUIREMENTS
Insurance Requirements for CONTRACTOR.
A. CONTRACTOR, at its sole cost and expense and for the Effective Period , of . this
AGREEMENT or any rene,...-aJ thereof, shall purchase and maintain not less than the
following minimwn insurance coverage and limits of insurance which shall be maintained
with insurers and under forms of policies sa~~sfactOI/ to CITY.
1. An EXTENDED BROAD FORM COMPREHENSIVE GENERAL
LIABILITY INSURANCE POLICY covering Bodily Injury and Property
Damage including an all risk property damage policy, with a combined
single limit of at lea.St Two Million Dolla.s ($2,000,COO) per occurrence
providing the following coverages:
2.
3 .
a) Premises operations
b) Independent CONTRACTOR's
c) Broad Fonn Property Damage Endorsement
d) Personal Inj,,ry Endorsement
A C0t-.1PREHENS1VE AUTOMOBILE POLICY with a minimwn
combined single limit of not less than One Millior. f>ol)ars ($1,000,000) for
bodily injury and/or property damage, applicable to vehicles used in
pursuit of any of the activities x;~0ciated vljth this AGREEMENT and
providing the follo""i11g covernges (without deductibles) :
a) All owned vehicles
b) Employer's Non-ownership Lial>ility
c) Hired Automobiles
A WORKERS' COMPENSATION AND EMPLO .'{ERS., LIABILITY
POLICY (if re quir ed by Stat e Jaw ) wr itt en in nccordancc with the law s of
the State of California and providing the following coverages for any and
all employee s of CONTF.ACTOR: . '
G-/Plonnin g/ Agree I .doc
a) Statutory '.'v'orkers' Compensation Coverage A (statutory limit)
b) Employers' Liability Insurance -Coverage B. Not less than: one
Million Dollars ($1 ,000,000) each accident/Bodily Injury (BI), One
Million Dollars ($1,000,000) policy limit BI by disease, and One
Million Dollars ($1,000,000 each employee BI by Disease.
4. A FIRE AND CASUAL TY INSURANCE POLICY with coverage
amounts adequate to cover full replacement cost of Project Property in the
event the Project Property is damaged or destroyed by causes or events
sm;h as, but not limited to: fire, wind, earthquake, flood, etc. Flood
insurance shall be obtained only to the degree required by CDBG rules ,.i.Ud
regulations.
5. ENDORSEMENTS. All of the follov.ing clauses and endorsements, or
similar provisions, are required to be made a part of each of the above
required policies:
a) The City of Cupertino, and their respective officers, employees,
agents and CONTRACTOR...; are hereby added as additional
named insured as respects all liabilities arising out of
CONTRACTOR's l'Jerformance of work under this
AGREEMENT; a,.. · '
b) This policy shall be considered primary insurance as respects to
any other valid and collectible insurance the CITY may possess,
including any self-insured retention the CITY may have, and any
other insurance the CITY docs possess shall be considered excess
insurance only; and
c) No cancellation or non-renewal of this policy or modification of
the covernge afforded under the this endorsement, shall be effective
until v.Titten notice has been given at least thirty (30) days prior to
the effective date of such modification or cancellation to the
COMMUNITY DEVELOPMENT DEPARTMENT, CITY OF
CUPERTINO, I 0300 TORRE AVENUE, CUPERTINO,
CALIFORN IA 95014.
Pa ge ~7 of ,15
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B. PROOF OF INSURANCE COVERAGE AND COVERAGE VERIFICATION. A copy
of the Certificate of Insurance and completed coverage verification shall be provided to
CITY by each of the CONTRACTOR's insurance companies as evidence of the
stipulated coverages within thirty (30) days of the effective date of this AGREEMENT.
The Certificate(s) of Insi'.irance and coverage verification shall be mailed to:
Community De velopment Department
City of Cupertino
I 0300 Torre A venue
Cupertino, CA 95014
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: FEET? 3CTFE535SF!7'11 ; '-l, • •' I ' "I. ' '-' ~ ' ' ' : .. • --·-
EXHIBIT D
CUPERTINO COMMUNITY SERVICES
10192 and 10194 GREENWOOD COURT DRIVEt CUPERTINO, CA 95014
ASSURANCES
The Recipient of CDBG monies hereby assures and certifies compliance with the regulations,
policies, guidelines and requirements (including federal Otvffi Circulars No. A-'e.'/, A-102, A-110,
and A-122), as they relate to the application, acceptance and use of Federal funds for this
assisted project. Also the CONTRACTOR assures and certifies to the CITY that:
1 . It possesses legal authority to make a grant or loan submission and to execute a
community housing services program;
2. Its governing body has duly adopted or passed as an official act a resolution, motion or
similar action authorizing the person identified as the official representative of the
corporation to submit the final statement and all understandings and assurances contained
tht!rein, and directing and authorizing the person identified as the official representative of
the CONTRACTOR to act in connection with the submission of the final application and
to provide such additional information as may be required;
3. The grant will be conducted and administered in compliance with:
a Title VI of the Civil Rights Act of I 964 (Pub. L.88-352; 42 U.S.C. 2000d et seq.)• and
b. Title VIII of tlie Civil Rights Act of 1968 (Pub. L. 90-284; 42 U.S.C. 360 I et seq.);
4. It will affirmatively further fair housing.
P· ge 29 of 45
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Recording Reque11ted by and
When Recorded Mail to:
THE CITY OF CUPERTINO
Community Development Dcparfment
10300 Torre Avenue
Cupertino, CA 95014
Attention: Vera Gil
OFFICIAL BUSINESS: Document entitled to free recording per Government Code
Section 6I03
SPACE AIJOVE TIIIS LINE
FOR RECORDING USE
DEED OF TB UST
s~curing City Loan
with Assi~nme~i of Rents
ll1is Deed of Trust is made !hisj_!{ day of Ju ,1 C ., J 91, by and between
CUPERTINO COMMUNITY SERVICES, a non-profit Ca~ corporation (herein
"Contractorffrustor"), Commonwealth Title Company, Inc., a California corporation
(herein Trustee"), and THE CITY Of CUPERTINO. CJ\LlfORNIA. a chartered.
California municipal corporation. o•g.ini/,ed and existing in lhe County of Santa Ciara
lllader and by virtue of the la\VS of the State of ~alifornia. (herein ''City/Ucneliciary").
Contraclorffrustor grants, transfers and assigns lo Truslce in trust. upon the tru~ts.
covenants, conditions and agreements and for the uses and purposes hueinalkr
contained, with power of sale, and right of entry and possession all of its title and interest
in that real property (herein "Project Property") in the City of Cupertino, Santa Clara
County, State of California, described in Attachment I, attached hereto and incorporated
herein by reference, logcthzr with City/Beneficiary's interest in all t:uildings. structures
and imprcwcmcnts of every nalure whatsoever now or hcrealler situated on the Project ""'i..~
Property; and together with the following: · . ;.'}'':,;,,.\·
1 " ,..I/<,...,.. ,.· ·x., c,'-.)
I . ·me rcnls, issues and profits thereof; and ,o"<7
0
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2. All buildings and improvements of every ki11d and de~fr'fP!{+ln ~n~4,,\' ,r
hcrcaflcr erected or pla ced thereon. and all lixlurclf.,1l1wlut11vi:-~f l 11 •
limited t~, all gas nnd .electric. fixtures. c11gines~~.~\!,ifh8tctf. radi, rs.
hcatcrn, furnaces. heat111g equipment, laundry\1:4~pm~w.t·steam il hot-
\~ (}'.
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4.
water boilers, stoves. ranges . elevators amJ motors, bathtubs. sinks. water
closets. ba s ins, pipes. faucet ~ a nd other plumbi!lg and healing fixtures.
111a111lcs. cabinets. refrigerating equipment and refrigerators. whether
mechanical or nlhcrwi sc . cooking app :i ratu s and appurtenances. anti all
shades, awning s, succns. blinds an<l other furnishings. it hcing hereby
agreed that all suc h fixtures anJ furnishings shall lo the extent pcrmitte<l
by law be deemed to he permanently affixed lo and a part or the rcaliy;
and
All b,1iluing nptcrials and equinmcnt now or hcrcnftcr delivered to said
premises and intended h> he installed therein; and
All plans, drawings. spcci ft cations, etc., and articles of personal property
now or 11crcaftcr attached lo or u::·:d in and about the building c.r buildings
now erected or hcrcalkr It' be t. :cd on the Project Properly ·.vhich arc
necessary lo the completion and comfortable use and occupancy of such
building or builllings for the purposes for which they were or arc lo he
creeled, including all other goods and chattels and personal property as arc
ever used or furnished in operating a building. or the activities wnduelcd
therein, similar to the one herein descril:;::d and referred to. and a!l
renewals or rcplaccmen;s thereof nr articles in substitution therefor.
whether or nol the same arc, or shall be attached to .,;aid building or
buildings in any manner.
To have and to hold lhe property hcrcinbcforc described (including the site and all
appurtenances), all such property being referred to cullcct1vcly herein as the "Projec.:t
Property", to Trustee, its successors and assigns forever.
FOR THE PURPOSE OF SECURING:
I.
2.
3.
Payment of inJeble<lncss of Conlractor/l'rustor lo the City in the principal sum of
TIIREE IIUNDRED TWENTY THOUSAND DOLLARS AND N0/100
($320,000.00) or so much thereof as shall be advanced hy City lo
Conlraclorff'ruslor, (lir.cin the "City L,xm") . evidenced hy a promissory note of
same <late herewith between Contractorff'ruslor and City, together with all sums
due thereunder incluJing intere s t and other charges; ~~~'\.
. ~~~-,,:v ~·
The performance of each agrc.:cmc111 of Contrnctorfl'rustor in this Deed or Trus~,~s-'b "' 01\.1,;~
and the City Loan Promi ssory Note (herein "Note"): ,o"I'..··~ \:• \'. ~ e,O· /
,'!f' o9"\
0
"'-~\; ·•
The performance of cac.:h agrcc111c11l of Co111ruclorfl'rus1or undc.r 1hh't~et:r1.~·~~ :v /_.,,/'
"AUREEMENT BY AND BETWEEN TIIE C ITY Ol\,ClWP.1r~-. < . .f"-:/
CALIFORNIA AN() ('IJl'ERTINO. '_cc~MMU~ITY. -~\~t~~;·.,_,, • t~~/
."A.u...J:~..J . .'.LrJ'lJ!..,.._ .. lo acqutrc 11111ll1·lamily rcs1Jc111J,W',J1ii,~~(ly al -~__(), f I
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G :/1' Ianni ng/dee<ltrus .<l, le
Greenwood Court, Cupcrlino , California 95014. and to provide affordable. rentai
housing for low income and very-low income households (herein
"CONTRACT"), by and between Contractorff rustor ("CORPORATION" therein)
and City/Deneficiary ("CITY" therein). on file in the office of City;
4. All extensions. amendments . modification s or renewals of the CONTRACT .md
Promissory Note, however evicJcnccd. and additional advances cvidcncc<l hy a
note reciting that it is secured hereby .
Page 3 of I 3
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TO PROTECT Tl.IE SECURITY OF THIS DEED OF TRUST,
ft \ ' •
CONTRACTOIVfRU.STOR COVENANTS AND AGREES:
I. Thal il will pay ll1c City Loan al the lime and in lhc manner provided therein:
2. That it will not permit or suffer the use of any of the Project Property for any
purpose other than ihe use for which the same was intended at the time this Deed
of Trust was executed;
3. TI1at the Note and the CONTRACT, including attached exhibits. arc incorporated
herein and made a part of this Deed of Trust. Upon default under the Note or this
Deed of Trust or upon violation of the covenants contained in the CONTR/\CT.
City/Beneficiary, al its option , may declare th~ whole of the indebtedness secured
hereby to be due and payable. Provided, however. that the CONTRACT shall
only be effecti,~ until the issuance by city of a Certificate of Completion as
therein provided;
4. That all rents, profits and inco,.•c from the Properly covered by this Deed of Trust
arc hereby assigned lo City/Dencficiary for the purpose of discharging the dent
hereby secured. Permission is hereby given to Contractorffrustor so long as no
default exists hereunder. to collect rnch rents, profits and income, as specified in
the CONTRACT and its attachments;
5 . That upon default hcre1 ;:,Jcr or under the Note or the CONTRACT.
City/Beneficiary shall be entitled to the appointment of a receiver by any court
having jurisdicticn, without notice, to take possession ~md protect the Pwjecl
Properly described here> and operate same and collect the rents. prolils .md
income therefrom;
6. That Contractorff rustor will keep the Project Property induding any
improvements now existing or hercaf1er erected insured against loss by lire .ind
such other hazards, casualties and contingencies as may be required in writing
from time to time by City/Beneficiary, and all such insurance shall be evidem:cJ
by standard fire and <~xtenJcd coverage insurance policy or policies. In no event
shall the amour.t s 0f ;:overage be less than one hundred percent ( I 00%) of the
insurable value or not les ::; than the unp.1id balance or this Deed of Trust. ·<~"'~ ..
whichever is more. (For purposes of this Deed of Trust insurable value shall ,m.:~n .\~">:~(\~·
the total replacement cost of the Project Property, including imprnvcments.) ~~h o<'~.
policies shall be endorsed with standard mortgage clause with loss pu~~ t..1f:. ,J, /
Ci ty/Beneficiary an<l ccrtifknlcs th ereof tog e th er with c opies of ori ~r\'fif ~ic~~\'\ ./
shall be deposi ted with City/Ucneficiary; . ._1 ~ .r,1,,'-~S\ ~· //
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0:/Planning/dccdtrus.dc,c
7 To pay, at lea s t JO days before delinquency. a ny taxes and assessments affecting
said Project Property when du e. all encumbrances, charges and liens. with
interes t, on said Project Property or any oart thereof wiii c h appc.ir to he prior or
superior hereto, all costs. fe es and cxrcnscs of thi s Trust:
8. To keep said Projec t Property in good condition and repair. not to remove or
demo lish any buildin gs there o n; lo complete or rcrlorc promptly and in good and
workmanlike 111:inn <-r a ny trni lding whic.h may be damaged or destroyed thereon
and to pay whei1 due:: all claims for labor ~rformcd and materials furni!;hed
therefore (unless contested in good faith if Co ntractorffrustor provides security
satisfactory lo City/lkndicia,-y th at any amounts found lo be due will be paid and
no sal e of the Project Property v o:bcr impairment of the security hcreunde, will
o cc ur) ; to comply with all laws affecting said Project Property or requiri:ig any
alteration5 or improvements to be maJc thereon: not to commit or permit was~c
thereof; not ,o commH. suffer or permit ~my act upon said Project Property in
violation of law and/or covenant s, co:iditions and/or restrictions affecting said
Project Property; not lo permit or suffer any ,tltcration of or addi.tion lo the
buildings or improvements in or 'J pon said PrJject Property without the written ·
consent of City/Beneficiary;
9. To appear in and defend any action or proceeding purporting to uffect the security
hereof or the rights or powers of Ci!y/Bcneficiary or Trustee, and lo pay all cust:-
and expenses . including c ost of evidence of title ,ind attorneys' Ices in .i
reasonable sum, in any !:uch action or proceeding in ·,,hich City/Ucncliciary nr
Trustee may appear;
I 0. Should Contraclortf rustor fail to make any paymc11t or do nny act us herein
provided, then City/Ueneficiary or Tru s tee, but without obliga•ion so lo du .md
without notice lo or demand upo, Contractorfl"rustor and without rclc,ising
Contractorff ruslor from any obligation hereof, rnay make or do the same in such
manner and lo such extent as either may deem necessary lo protect the security
hereof. City/Beneficiary or Trns lce being authorized to enter upon said Projcd
Property for s uch purpo ses , ma y commence. appear in and/or defend any action or
proceeding purporting lo afTecl the scn•rity hereof or the rights or p,,wc:-s of
City/Beneficiary or Trns tcc; may pay, pureha <:e, contest .. ,r compromise .my 0~'-
encumbrancc, c hurge, or lien which in the judgment of citlu:r appems lo he prior .,·<<,~
. 1 d . . . I ·,,:.' \<:-or s11pcnor 1crcto; an , 111 excrc1s111g any sue 1 powers. may pay ncccss.i ry, ,}<'->
cxpccscs , employ counsel, anti pay hi s reasonable fee s. Cos ts of such uctio.nl h .l<',z. . 'vo·
C ity/Bcrwficiary or Trustee shall he ncJdcJ to Ilic prim:ipal sum includcd,~~~ri:Ry~ ., """ .{, ,.,o~ ,,_,,_
11 . Ci ty/U cncficiary s hull ha ve lh e ri ght lu pay lire und other Pi~PctiYl ii~· ~1
premiums when <lut> s hould Co nlrnclorffru s lor foil to mukc un t,'t~u'ir.;c.J'lf'n.:
payments. All s uch pa y m cnl s mad e hy C i1y /lk11cficiarv r~~l~t1H<lcJ
~ti, • . ~:\~· prin~1p a l s um sec ured her e by; ' .• ~ · , p ,' ,., ....
Pa ge 5 of I J
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12. To pay immediately an<l without . demand all sums so expcnd~d hy
City/Beneficiary or . Trustee, under ~rmission given under this Deed of Trust.
with interes~ from date of expenditure .at the rate specified in the Note; .
. IJ. ·mat the . City Loan advanced hereunder is to he used in the acquisition and
rehabilitat.ion of Project Property in accordance with the CONTRACT; and upon
the failure of Contractorrrrustor to keep .md perform all the covenants. conditions
and restrictions of said CONTRACT, the principal sum and all interest and other
charges p. 1ided for in the Note shall at the option of City/Deneticiary become
due and r -· ·•le, anything contained herein to the contrary notwithstanding;
14. Contracta1, i rustor further covenants that it will not voluntarily create. suffer or
pem1it to be created against the Project Property, subject lo this Deed of Trust.
any lien or liens except as authorized by City/13eneficiary and further that it will
keep a11d maintain the Project Property free from the claims of all persons
supplying: labor ur n,::itcrials which will enter into the n.:habilitation and repair of
any and af.J buildings on the Project Property;
. 15. That any and all improvements made or about to be made upon the Project:
Property, and all plans and specifications. comply with all applicable municipal
ordinances and regulations and al: other regulations made or promulgated. now or
hereafter, by lawful authority, and 1l.1al the same will, upon completion comply
with all such municipal oruinances and regulation:; ancJ with the rules of the
applicable fire raling or inspection organi:t..alion, bur:au, association or office;
16. Contractorffru s tor herein agrees to pay to City/Bencliciary or lo the authorized
loan servicing reprcspllativc of City/l3<;nefrciary a charge . not to exced $15.00
for providing a statement rcgardini the obl:gation secured by this Deed c,r Trust
as provideJ hy Section 2954, Article 2. Chapler 1.. Tille 14. Oivision 3 of.the
California Civil Code.
IT IS MUTUALLY AGREED TIIAT:
If the construction of any impro vements as herein referred to shaU not he carrico · ~
on with reasonahle diligence, or shall. be discontinued al any time for uny reason ,;,~?>~
other than strike!-or loikouls, City/Ucncficiary, after Jue notice 1~-,~'-}·.~i'""i'·
Contraclorrf rustor or any subsequent owner, is hereby invested with lull ,qH' 0 <:l•'·' ti, . . . ._\',. \:. C .·
complete authority lo enter upon the l'roJccl Properly, employ wal_c~,\,cr~No ':'-."'~ /
proltct such i111provcme11ts f,om depreciation or injury onJ lo prcscr~~'"~~i,~i'' /
the personal property therein, mid lo continue u11y nnd all outstai~1i~~IJ!l_'-:~l,ir
the rehabilitation and_ rci,_uir of said builJing or bui~Jing~, bq "'~ ~-~~\le~(
any contract s 11ml obl1gatw11 s wherever ncccssnry, c11he~iff\_~~~JrJ'tn'l11c or 11.:
name of Co111nic1orffru s lor, and IO pay u11J dischnrg~,-1lf> d~~; obli1r · ms nnd
l'a gc <, of 13 _.,. ,:,{·
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liabilities incurred thereby . All such sums so advanced by City/Bcncriciary
(exclusive of advances of the principal of the indehtcdncss secured hereby) :,;hall
be added lo the principal of the indchtedncss secured hereby and shall he secured
by this Deed of Trust and shall he due and payahle on demand wirh interest al the
rate specified in the Nole ;
Should the Project Prnpcrly or any part thereof be taken or damaged hy reason of v
any public improvement or condemnation proceeding, or damaged by lire. or
earthquake, or in any other manner. City/l.3cneficiary shall be cnlillcd lo all
compensation, awards, and other payments or relief therefor. and shall be entitled
at its option lo commence. appear in and prosecute in its own name, any action or
proceedings, or to make any compromise or settlcrncnl, in. connection with sui;h
taking or damage. All such compcnsat;on. awards, damages. rights of action and
proceeds, including !he proceeds of any policies of fire and other insurance
afTecting said ProJccl Property, arc hereby assigned lo City/Beneficiary. Alkr
deducting therefrom all its expenses, including attorneys' fees, the balance or the
proceeds shall be .ipplied lo the amount due under the Note secured hereby. No
amount applied lo the reduction of th, principal shall relieve Contrndor/l'rnslor
from making additiona1 payments as required by the Note;
Upon default by Contraclorff ruslor in making any payments provided for herein
or in the CONTRACT or Nole secured hcrehy, and if such default is not made
good within tifken (15) days of !he due dale, or ifConlraclorffrustor shall foil lo
perform any eovc11a11t or agreement in this Deed of Trust or the CONTRACT
within thirty (JO) Jays after wrilten demand therefor by Cily/l3encliciary (or, in
the event that more than 30 days is reasonably required to cure such <..L:fi.1ult.
should Contractorffruslor fail lo promptly commence such cure, and di 'igcntly
prosecute same to completion) , City/l3cneticiary may declare all sums secured
hereby immediately due a;1d payable by delivery lo Trustee of wrillcn declaration
of default and demand for sale, and of \vrillen notice ol default and of election to
cause the Project Property to be sold. which notice Trustee shall cause to be duly
filed for rcwrd and City/Beneficiary may foreclose this DecJ of Trust.
City/l.3eneficiary shall also deposit with Trustee this Deed of Trust, the Note and
all documents evidencing costs secured hi::rcby;
,'-
20. Afler the lapse of such time as may then he required by law rollowi11g the '"' .. §'~c::.·
recordation of sa;J notice of default, and notice of sale having lx:cn given as tlw11-·\(',~~
required by la·w, Trustee, without demand on Conlractor/f'ruslor, shall s~l-~i.J 0 \ 6)-
Projcet Properly al the lime and place lixc<l hy it in said notice of salcW tthe1:>'u~ t\\.~ /
wlmlc Of in separate pan:cls, anJ in Slll.:h order US ii lll..l)' deleR,_~).il\c~~~.\ ~bv~~
auction to the highest biodl'r for cash in lawlul money or .~,c'\ ~kin~ tat. \.
payable al time of s:ilc. Truslee may poslponc sale of nll/Jf-t'\'~.,C~~,Ci<ln f ),'
Project Property by public announcement al the lime ~.p,JP<:'t ~~ale, un -fr'.um
time to time lhcrcufler nny po s tpone the sule hy pullli~ iu111~:.jfc111e~<i'he time
l'agc 7 of 13 /
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fixed by the preceding postpo nement. Trus tee s hall deliver to the purchas;;r its
deed conveying the property so sold , but without any covenant or warr.mty.
express or implied. The recitals in the <lccJ of any matters or facts shall he
conclusive proof or the truthfulnes s thereof. /\ny person. ind.uding ·
Contractorffrustor, Trustee or City/Bene ficiary. ma'/ purchase at the sale. Trustee
shall apply the procee<ls or sale to payment or.
n . The expenses or such sale. together wi1h the reasonnble expenses or this
trust inclu<ling therein reasonable Trustee's Ices or attorneys' Ices !tir
conducting the snle and the actu:il cost of publishing, recording, mailing
and posting notice or the sale;
b. The cost of any search and/or other evidence of title procured in
connection with such sale and revenue stamps 011 Tn,slec's deed;
c. All sums expcn<led under the terms hereoL not then repaid, with accrued
interest at the rate specified in the Note;
d. · All other sums then secured hereby; and
c. The remainder, if any, to the rcrwn or pcr;;ons legally entitled therclo.
21. City/Beneficiary may from time le time substit•·tc a successor or successors to
any Trustee 1ia111ed herein or acting hereundc . to execute this Deed of Trust.
Upon such appointment, w1d without conveyance to :he successor trustee, the
latter shall be vested with all title. pO\V!:'rs. and duties conferred upon any Trustee
herein named or acting hereunder. Each sllch appointment and substitution shall
b•! made by written instrument executed by City/fJencliciary, containing reference
to this Deed of Trust and its place of record. which, when duly recorded in the
proper office of the county in which the property is situated. shall he conclusive
proof of proper appointment of the successor trustee;
22. The pkading of any statute of limitations as a defense to any and all ohligations
secured by this Deed (!f Tru:-.t is hereby •:v.iivcd to the l'ull extent permissible hy
law;
23. UpCln written reques t of City/Beneficiary slating that all sum!> sccun:•J l1erehy ~,~
have been paid. and upon surrcn<lcr of thi s Deed of Trust and !ht.: Nole "' Trustee."~·· ~-
for cancellation an<l retention and upon payment of its li:es. Truskc slH,,\l ''0<./:f
reconvcy, witlmul wurra11ty. the property then held hereunder. The rc\Hi1fr iJ)C ~ c})-/
such rcconvcyance of any mntlcrs of foci shall be conclusive prQ,~f N{<'i!~,\\: /~
lrulhfulncs s tli,:rcof. The g rantee in s uch rcconveyance may be U<.~f~~:if',~t'ific
per son or pcrsu11s legally c11titlcd thereto: i)"i <.r>" · ,...,\\ti~/ ,L.V
,\ c; ,.,?-, ,.J ,~ I / /'
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Page Hof 13 \'•"' &t'/
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24. The trus, created hereby is irrecoverable by Contractorffrustor;
25. This Deed of Trust applies lo. inures lo the benefit of, and binds all parties hereto.
their heirs, legatees, devisees, administrators, executors, successors. and assigns .
The term "C ity" shall include not only the original City/lkncliciary hcrcumkr hut
nlso any future owner and holder including plcdgces, of the Note secured hereby .
Jn this Deed of Trust, whenever the context s o requires, the masculine gcnJcr
includes the feminine and/or neuter, and the singular number includes the plural.
All obli1:,ations of each Contractorffrustor hereunder arc joint and several;
26. Trustee accepts this trust when this Deed of Trust. duly e~ccutcd .m<l
acknowledged, is made public record .. s provided by law. Exci::pi as otherwise
provided by law Trustee is not obligated to notify any pmty hereto of nc11ding s.1lc
under this Deed of. Trust or of a,ny action or proceeding in which
Contractor/frustor, City/lkneficiary, or Trustee shall be a party unless brought by
Trustee;
27. The undersigned Contractorff rustor requests that copies of any notice of ddaull
and of any notic.:e of sale hereunder be mailed to it at IO 185 North Stelling Road.
Cupertino, California 95014.
28 . Contraclor/rrustor agrees at any time and from -time to time upon receipt of a
written request from City/Ucneficiary, to furnish to City/Beneficiary detailed
statement in writing of incnmc, rents, profits. anJ opcrati1;g expem;~s of the
premises, and the names of the occupants and tenants in possession, together wilh
the cxpirajun dates of their leases and full information regarding all rental ,m<l
occupancy agreement.;, and the rents provided for by such leases m1<.J rental and
u.::cupancy ag,eemenls, an<l such other information regarding the Project Property
and their use as may be requcs!c<l by City/llcneliciary.
29. Transfer of Properly by Contractorffruslor. In order lo induce City/Beneficiary lo
make the loan secured hereby Contractor/rrustor agrees that in the event of any
transfer of the Property without the prior wrilten consent of Cily/Bcneli,·imy.
Cily/l3cncficiary shall have the absolu!e right al its option. without prior demand '<''
or notice, to declare all sums secured hereby immediately due and payahk. c,\-<~\\':
Consent to one such transaction s!mll not he deemed lo be a waiver of the right lµ,_<& \~ ,\'f;~~ · <>'' C' require consent to future or successive transac t ions. City/Beneficiary may,._(1tt'Jll"-~" (.,0'
or deny s uch consent in it s so le discretion and. if consent should hc'-bffl:~'\.i'i\y .,-,,,\.~
such transfer s hall be s ubjt:cl to this Deed of Trust, and any suclM~~c.~Jc su.\'tt
assume :,II ohligalion s hereunder and agree to h1.: htnmde,~0 1rff ~... ·s rn~~
contained herein . Such a ssulll pli on ~hall not, how1:vcr. -~~~t,~~}l(tJClll r' r!). -t
or any maker or guarantor of the Nole from any liabt1!J;'~~(;e,b,ticr will / the
prior wrillcn c onsent of City/Bcncficinry. As used lwrc1i1, "trrl11slcr':J · udcs the
sale, agreement lo sell. trnn slc r or conveyance of the Prnr.~wyrCr any portion
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thereof or interest therein. whether voluntary. involuntary, by operation of law or
otherwise. the execution of any inslallmenl lanJ sale ccnlract or similar
instrument affecting all or a portion of the Project Property, or the lease of all or
substantially all of the l'rojcct Property . "Transfer" shall also include the: transfer.
assignment, hypothecation or conveyance l'f legal or hcncliciary ownership of .my
interest in Contraclorffrustor or any conversion of ConlraclorfJ'rustor to an cnlily
form other than ;f ;al of Contractorn·rustor at the time of execution of the
CONTRACT. "Transfer" shali not indude tl>c leasing of individual residential
unils,. or o:her rentable area on the Project Property. so long as Contrnctor/fruslor
complies with the provisions of the Agreement rda!ing to such leasing activity.
In the event of any refinancing or partial refinancing (including any additional
financing) , without the prior written sonscnt of bcncliciary (which consc1!l
City/13cncficiary may grant or deny in its sole <liscrclion), then the entire
outstand;nc balance of the Note together with all accrued and unpaid inh:rest.
shall be repaid lo the City/Beneficiary al the time of eat:h refinancing or partial
refin..incing. In no event shall the total loan-to-value ratio for all linancing exceed
ninety percent (90%), nor shall the City/Beneficiary's proportio:1 of the total
encumbrances increase as a result of any refinancing or partial refinancing.
Contractorffruslor shall pe;inil City/Beneficiary and its agents or representatives.
to i11spect the Project Properly at any and all-reasonable times, with 24 hours
advance notice. Inspections shall be conduclctl so as not to interfere with the
tenants' use antl enjoyment of the property.
The Nole provitled for herein shall be subject to the restriciions set forth in !he
CONTRACT antl Contractorff ruslor hereby consents lo such restrictions antl
ugrees to be bound thereby. Such restrictions shall be in addition to and not in
limitation of the rigf1ts of City/Beneficiary expressly sd forth in tliis Deed or
T fl.iSl.
It is hereby expressly agreed and at:knowlcdgcd by Conlraclorrrruslor and
City/Beneficiary that the City Lo.:m and this Deed of Trusl arc subject aml
subordinate to and shall continue lo be subject and subordinate lo that certain lirsl
deed of trust on the l'rojecl Property in the amount of Tl IREE I IUNDRED
TWENTY THOUSAND DOLLARS AND NO/IOO ($320.000 .00) executed hy.
dated in the Orficial Record s of the Recorder of the County of Santa Clara.
California, us File No. .,~0
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Nothi11g herein shall be construed to subordinate the covenants. condilion\&t : o'\~ 0 .
restrictions of the CON l'ltACT or the c.:oru.lilions of the CONnt1c-.'Cf ~,j\ '!,..'\.<,,, G /
pertaining lo repayment of the City Loan. This Deed of Trust ~1?itl ofi.\t l)C '\ /
subordinu~c~.10 ~ny o!h~r interest in the Project Properly withot~._~1~prf<lr~y 11'tc en ,
COII SCn( ol C 1ty/(jc11cf u.:1ary . _... c." ~~,., .• 0 ~--(1 \)~
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34. For purposes of this Deed of Tru s t. "1 laz.ardcms Materials" mean and include any
hazardous, toxic or dangerous waste, substance or material including. without
limitation, flammable explos ives, radioactive materials .. asbestos. ha:1.ar<lous
wastes, toxic substances and any materials or suhstanccs Jcfined as ha:t.ardous
materials, hazardous substances or to x ic subs tance s in (or for purposes or) the
Comprehensive Environmental Response, Co mpensation and Liability /\ct or
1980 (CERCLA). as amended (42 U.S .C. 960 I. ct seq.). the llazardous Materials
Transportation /\cl ( 49 U.S.C. 180 I cl , seq .). the Resource Conservation an<l
Recovery Act (42 U.S.C. 6901 cl seq.) and those substances defined as hazard<>Us
wastes in 25117 of the California Health and Safety Code or as. hazardous
substances in 25316 of the California Ilea Ith and Safety Code or in any
regulations promulgntcd under either such law, any so-called ''Superfund" or
"Supcrlicn" law, or any other federal, slate or local statute, law, ordinance. code.
rule, regulation, order or decree regulating, relating to. or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous waste.
substance or material, as riow or al any time hercafier in effect.
35 . In addition to the general and specific representations, covenants and warmnlics
sel forth iia the Deed of Trust or otherwise, Contraclorff rustor represents.
covenants and warrants, with respect to Hazardous Materials, as follows:
a. Neither Contractornrustor nor, to the best knowledge or
Contraclorfl'rustor, any other person, has ever caused or permitted any
I lazar<lous Materials lo be manufactured. placc<l, held, located or disposed
of on, under or at the Proj..:ct Property or any part thereof: and neither the
Project Property nor any part thereof, or any properly adjacent thereto, has
ever been used (whether by the Contractorfl"rustor or, to the hcsl
knowledge of the Conlraclorrrrustor. by any other person) as a
manufacturing site, dump site or storage site (whether permanent or
temporary) f<.>r any I lazardous Materials;
b. Contractorffruslor hereby agrees to imknrnily City/Bencliciary. its
officers. employees. CONTRACTOR's and agents. and hold
City/Ucneficiary, its officers, employees, CONTRACTOR's an<l agents
harmless from and against any anJ all losses, liabilities. damages, injuries.
costs, expenses und claims of any and every kind whatsoever paid. ~et-\.
incurrc<l or suffered by, or asserted ngainst City/Beneliciary. its onicers. \~~J<~ 1J.\,
employees, CONTRACTOR's or agents for. with respect to. or as a direct ~cJ(',~ o<'ef>~
or indirect result of', the p1escncc or use. gencrntion, sturnge, rclSf~~ o\ \"-'e. ~ ,;J)•
threatened rclea ;;c or disposal of I luzardous Malcrinls on or i~c1 <.Ufi\ 0 '\"0\;
P,, .. ,•ct Property or the escape. 'seepage, lcakt:gc.· spilln~ ~ijµcf~~t~ .t-:;\
,.. 11 ,;ion or rcl.:ase or ;1ny I lazmdous Materials from ilti4 P,:~ec\ J~>~ ~
I ling, with1111t limitation, any losses. liohil~~~fh.q~~j/',njurie
·xpcnscs or claims asserted or arising undor C[UtCLA. any so-.. ,,,,-
Page 11 of lJ . / ~'i ·
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called "Superf un<l" or "Superlien" law, or any other lc<lernl. stale c,r local
statute, law, ordinance, code, rule, regulation, order or <lecrec regulating.
relating lo or imposing liability or standards of conduct concerning any
Hazardous Materials) regar<lks s or whether or not caused by. or within the
c.:.ntrol of Contractorff rustor.
c. Contracto,ffrustor hns not recei ved nny Notice of,
<l.
C.
I) "fhe happening of any event involving the use, spillage, <lischargc.:
or clca11 11 n of any Hazardous Materials ("llazar<lous Discharge.:")
affectir,...; ...:ontractorffruslor or the Project Property; or
2) Any complaint. order, citation or notice with regard lo air
emissions, water <lischargcs. 1101sc emissions or any other
environmental, health or safety matter affecting
Contractorffrustor or the Project Property ("Environmental
Complaint") from any person or entity, inclt:ding, without
limit.ation, the United St.ites Environment::!! Protection Agency
(EJ>J\). if Contracturffrustor receives any such notice alter the
date hereof, then Conlraetorffrustor will give, within seven (7)
busi11c~s days there~ftcr: oral and written notice of · smne to
City/Beneficiary.
Withoul limitation of City/Beneficiary's rights un<ler this Occ<l or Tru.st.
City/Beneficiary shall have the righl, but not the obligation, lo enter
onto the Project Property or lo take such other actions as ii deems
necessary or advisable to clean up, remove, resolve or minimize the
impact of, or olherwise deal with, any such I lazardous Materials c,r
Environmental Complaint upon its receipt of any notice from any person
or entity, including without li,nitation, !he EPA, asserting the existence or
any I lazar<lous Materials or any Environmental Complaint on or
pertaining lo the Project Property which. if true, could result in an orJcr.
suit or other aclion against Contrnclorffruslor affecting any part or the
Project Property by any governmental agency or otherwise, which. in the
sole opinion of City/Beneficiary, could jeopardize its security under this
Deed of Trust. All re.isonable costs and expenses incurred hy
City/l3encficiary in the exercise ... >f any such rights shall be secured hy this ~'\.
Deed of Trust anti slwll he payabli.: by Contrnctor/l'ruslor upon demand~.;.~~\,
together with interest thereon al u rate equal lo the highest rule pav,...k1.\. cl'-~ W:;e ..-0• under lhc 1wlc secured ln:rehy. ,01. \ ~ "i:.. v / ~ -0~ ('; "'-'"\~ /
-~~(. ,r"', ,,
The fr>regoing rcprescnlalion. covenants, indernni.lies a~wlii, t_i.c i r;·~hi\l~ //
be continuing and s hall be true and correct for. ~~ ~l~t .'J>nt·lh\; du~f/
hereof lo the relea se of 1his Deed of Trust (~~tK ,,pnymcnl o ·the
\ 'c, ~,:\, /
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indehtedness secured hereby or forccio s urc or action in lieu !hereof). and
these representation s , covenant s , indemnities and warranties shall survive
such release. •
36 . A material violation of the term s . conditions or covenants of the CONTRt\(T.
Note. or this Deed of Trus t shall be an E ·•1c11t or Default (provided ., however. that a
material violation of the terms, cnnditions or covenants of the CONTRACT or
Note shall only be an E·1ent of Default under this Deed of Trust if such violation
occurs before lhc issuance of a Certificate of Co1J1plction by Ci'.y/Ocncfici.1.ry).
37. Upon the occurrence of an Event of Default as described in Sl·.:lion 35.
Conlractorffrustor shall be obligated to repay the Note and Cily/Benclicinry may.
by action, suit or proceeding nt law or in equity. sue for. <1.nd enforce payment of
any and a:1 amounts due by Co11tractorffrw:1nr pursuant \o the term·, or the Note
and/or sue to enforce the pcrformnnce of tile obligations of Contractorffrustor
under the CONTRACT, subject to the terms and conditions or said agreement.
38. The Note secured by this Deed \if Trnst evidences a non-recoursi! only obligation
of Co,1tractorff rnstor.
39. A II expenses (including reasonable attorneys' fees and cm.ts and allowances)
incurred in connection with an action to foreclose. or the exercise of any other
remedy pro v idcJ by :hi s Deed of Trust. including the c11ring of any E\'cn1 of
Default., shall be ti1c respo ns i b ility of Contractorffrustor.
40. Each successor owner of an interes t in the Project Prnix:rty other than through
foreclosure or deed in lieu of foreclosure , shall take its interest suhjccl lo this
Deed of Trust.
CUPERTINO COMMUNITY SERVICES
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TITLE:
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"CONTRACTORfrR,USTOH ''
Page 13 of 13
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
0 personally known to me -OR -D proved to me on the basis of satisfa~qry evidence
' to be the person(s) whose name(s) is/are
subscribed to !he within instrunent and ac-
knowledged to me that he/she/they executed
Ille same in his/her/their authorized
capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s),
or th .. , entity upon behalf of which the
persvri(s ; acted, executed the instrument.
------------OPTIONAL------------
Though the data below is not required by law, ii may provn valuable lo persons relying on tho document and could prevenl
fraudulonl reallachmenl cl this lorm .
CAPACITY CLAIMED BY SIGNER
D INDIVIDUAL
0 conPonATE 0FF1crn
------------------
0 PAnTNEn(S)
D ATIOllNEY -IN -FACT
0 TAUSTEE(S)
lllLE(S J
[] LIMII ElJ
0 G[NEn/\L
D GUAnDtANtcor-1sEnvATon
· 0 OTHER: ___________ ··-·---·---···--
SIGNER IS REPRESENTING:
14MA( Of' l 'fll50tl(t:JOII [11111 Y(lf.flJ
DESCRIPTION OF ATIACUED DOCUMENT
TITLE OR TYPE.. OF DOCUMEN r
1
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PROMISSORY NOTE SECURF,I) DY DEED OF TRUST
$320,000.00 (TIIREE IIUNDHEI> TWENTY TIIOUSAND DOL! ARS AND
N0/100)
Date: ):~-e_ / 'I , ! 996
.)
Cupertino, California
FOR VALUE RECEIVED, CUPERTINO COMMUNITY SERVICES, a non-profit
corporation organized and existing by virtue of 1he laws of ~he State of Californin
(herein "CONTRACTOR") promises to pay to the order of the city of Cupertino,
California, a chartered, municipal corporation (herein "CITY"), the sum of
THREE HUNDRED TWENTY THOUSAND DOLLARS AND NOdOO
(S320,000.00) at the Office of the Director of Finance of the city of Cupertino, 10300
Torre Avenue, Cupertino, CA 95014, or such other place as CITY may from time to
time dc.11ignate, with inter·est on the unpaid balance accruing a• the rate of three
. per~ent (3.0%).
This Promissory Note is made in wnncdion with a certain "/\GRE[MENT BY AND
BETWEEN THE CITY OF CUPERTINO, C/\LIFORNI/\. AND CUPLRTINO
COMMUNITY SERVICES, dated 1..-/1,1 _, 19_1k__ (herein "CONTRACT") to m.:4uirc
a multifamily residential property at I 0311 Greenwood Court, Cupertino, California
(herein ''Project Property") ~ 'and le provide affbrdable, rental housing for very low un<l
low income households under the Community Development Block Grant Program. The
CONTRACT rrovides that CONTRACTOR is lhc recipient of certain COMMUNITY
DEVELOPMENT BLOCK GRANT funds (herein "CDBG") for the acquisition of lhe
Project Property, for the purpose o f providing (30) years of affordable. rental housing.
Repayment of this Promissory Note shall he subject to the term s and condilions .,;ct forth
in the CONTRACT. ,# ~-
This Nole shall, at the option of CITY any time prior 10 thirty (JO) years ancr trm,sl-'#1°;~,}·
title of Project Property to CONTRACTOR, become irnm cJiatcly due and payabkt.{'\4P4'Ml:<5>·
(a) a change in the use of the Project Property without the prior written conscn~~Zefr~
or (b) the sale, tran s for , lea se or other di s po c.ition or the Project ,,Jf<Jfl.(!hv\~y
CO NTRACTOR without the prior wrilll'II con se nt of CITY: or ;(~) cfuitJc of
CONTRACTOR to file reports as rcquircJ i11 EXI IIBIT /\ of the ~~JR~· ·-~~
acceptance by CONTRACTOR of any tcnnnls who do not mcctJAc J nc~t i1•1 11 set
forth in EXI IIBIT B of the CO NTRACT: or (c) foilurc of CON..iJL1~°GR to sc · n~jcct
Property rml s us dcscribcu in EXI IIBIT B ol' the CONlt{,i~J~~ :,~ .. ~ iailun: of
CO NTRACTOR to 111akc repayment s of lhc City l.o ;.111 as s~~11th ~ E~1UT n of the
">-\'
.,,,ti; 1 ' • ~ . , ,~ ' _ , ' ', ~ ,, JI I ' , ' :l, \. .. I ' " r ~ • • ,, ' • '• • 1'tf,
1~1~·:,l , $ • ' • r" i ~ ' ' '' ' •
•
CONTRAC..1; or (g) any oth:r material contract n o ncompliance with the CONTR/\(T
nnd its exhibits .
. The entire principal balance shall he cons idered paid in full if any of the contingencies sci
forth in (a). (h), (c), (d). (e), (f). and (g) ahovc hav e not occurred or have occurred hut
been cured any lim -:irior lo thirty (30) years alkr tran s fer of title of Project Property to
CONTRACTOR.
CONTRACTOR, ar,y endorser of 1:1is Note. and all others who may become liahlc for all
or any part of the o~ligatiom; evidenced by this Note hereby severally waive demand.
presentment for payment. dcm;md and protest, notice of protest. demand and or dishonor
and non-payment and conscnl to any number of rc11ewals or exlensions of t.imc hereof.
/\ny such renewals or extensions may be made without notice to any of said parties and
without affecting their liability. ll1e pleading of any statute of limitations as a <lcli:nsc to
any dem2nd against the CONTR/\C'TOR is expressly waived by CONTRACTOR.
ll1is is a non-recourse note.
In the event of default under this Note, CONTRACTOR further promises lo pay
reasonable attorneys fees and costs and expenses incurred by the CITY in connection
with any such default or any other action or other proceeding brought to enforce any of
the provisions of this Note. ll1c City/Bcneficiary·s right lo such fees shall not he limited
to or by its representation hy staff counsel, and such n:prcscntalion shall be valued .,:
customary and reasonable rates for private sector legal services.
It is the intent of the Parties that the rcla~ionship evidenced by this Nole shall be deemed
to be one of debtor/creditor, and not of partnership or joint venture.
This Note may not be modified or amended except by an instrument in writing c.xpressing
such intention executed by the Parties sough! to 11<: hound thereby, which writing must he
so firmly attached lo this Note so as to hccome a pcrmanc.it part thereof.
/\ny failure of the CIT1 or other holder to exercise any rights hcrcuntlcr sh.ill not
constitute a waiver of s ur.h rights or of a11y other right under this Note.
Thi s Note shal I be gClvcmed by and wnstruc<l in accordance with the laws of the Slate or
California .
l'ng c :! of J
G :/Plarmin g.l promnot .d<1c
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To the extent assig11ment is pcrmilled. the tr:rms of this Note shall apply lo. inure lo the
benefit of, and binu all Parties thereto. their heirs, :rncccssors and assigns.
Executed by CONTRACTOR on the dale first hcrcinabovc wrillcn.
CUPERTINO COMMUNITY SERVICES
Oy:_
Title:
G:/l 1 l1.1niling/promnot.Joc
~ ~.er,-c;L~-
c~x;Lc, -( _tG:; .... c ft:1 cc {o '--
CONTRACTOR!fRUSTOR
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