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HomeMy WebLinkAboutRESOLUTIONS - 09122017 - 2017/323C.141 03007:03:J14809 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Paul J. Thimmig Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, California 94920-1726 TERMINATION AGREEMENT by and among the COUNTY OF CONTRA COSTA, THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Successor Trustee, and CYPRESS MEADOWS ANTIOCH, LLC dated October ___, 2017 relating to the Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, dated as of September 1, 1998 -1- TERMINATION AGREEMENT This TERMINATION AGREEMENT, dated October ___, 2017 (the “Agreement”), is by and among the COUNTY OF CONTRA COSTA, a political subdivision and body corporate and politic, duly organized and existing under the laws of the State of California (the “County”), THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., successor to U.S. Trust Company, National Association, as trustee (the “Trustee”), and CYPRESS MEADOWS ANTIOCH, LLC, a California limited liability company (the “Owner”). RECITALS: WHEREAS, pursuant to a Trust Indenture, dated as of September 1, 1998 (the “Indenture”), between the County and U.S. Trust Company, National Association, as trustee, the County issued its County of Contra Costa Residential Rental Facility Revenue Bonds (Cypress Meadows Project) 1998 Series E and its County of Contra Costa Taxable Residential Rental Facility Revenue Bonds (Cypress Meadows Project), 1998 Series F (collectively, the “Bonds”); and WHEREAS, the proceeds of the Bonds were loaned (the “Loan”) by the County to Skyline Crest Enterprises, LLC, a California limited liability company (the “Borrower”) pursuant to a Loan Agreement, dated as of September 1, 1998 (the “Loan Agreement”), between the County and the Borrower, and the Borrower used the proceeds of the Loan to finance a multifamily rental housing facility located on the site described in Exhibit A hereto, currently known as Cypress Meadows Assisted Living Facility (the “Project”); and WHEREAS, in connection with the issuance of the Bonds, the County, U.S. Trust Company, National Association, as trustee, and the Borrower entered into (a) an Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, dated as of September 1, 1998 (the “Regulatory Agreement”), which was recorded on September 21, 1998 in the official records of the County of Contra Costa, State of California, as Instrument No. DOC-98-227519-00, and (b) a First Amendment to Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, dated as of November 1, 2004 (the “First Amendment”; and the Regulatory Agreement, as amended by the First Amendment, being referred to herein as the “Amended Regulatory Agreement”), which was recorded on December 30, 2004 in the official records of the County of Contra Costa, State of California, as Instrument No. DOC-2004-0501387-00, which Amended Regulatory Agreement sets forth certain terms and conditions relating to the operation of the Project; WHEREAS, in 2002, the Trustee succeeded to the interests of U.S. Trust Company, National Association, as trustee under the Indenture and the Amended Regulatory Agreement; and WHEREAS, in December of 2004, the Owner acquired the Project from the Borrower and became the successor to the Borrower under the Amended Regulatory Agreement, and in connection with the transfer of the Project to the Owner the Loan and the Bonds were repaid in full; and WHEREAS, the “Qualified Project Period,” as defined in the Amended Regulatory Agreement, has ended; and WHEREAS, the Owner is now selling the Project to TREG Antioch I Prop Co LP, a Delaware limited partnership (the “New Owner”), and the New Owner and the County have -2- entered into a Project Agreement, dated October 3, 2017, pursuant to which the New Owner has agreed to certain matters related to the Project; and WHEREAS, the County and the Owner now desire to provide for the termination of the Amended Regulatory Agreement as provided herein, and they have requested that the Trustee execute this Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing and for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Termination. (a) The County, the Trustee and the Owner hereby agree that the Amended Regulatory Agreement shall cease and terminate. (b) In accordance with the foregoing, the Regulatory Agreement recorded on September 21, 1998, as Instrument No. DOC-98-227519-00 in the Official Records of Contra Costa County, State of California, and the First Amendment, recorded on December 30, 2004, as Instrument No. DOC-2004-0501387-00 in the Official Records of Contra Costa County, State of California, each are hereby terminated and each are of no further force and effect. (c) From and after the date hereof, none of the County, the Trustee or the Owner shall have any further rights or obligations under the Regulatory Agreement or the First Amendment. Section 2. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Signature page to Termination Agreement for Cypress Meadows Assisted Living Facility] S-1 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above. COUNTY OF CONTRA COSTA, CALIFORNIA By: John Kopchik, Director, Department of Conservation and Development U.S. BANK NATIONAL ASSOCIATION, as Successor Trustee By: Authorized Signatory CYPRESS MEADOWS ANTIOCH, LLC, a California limited liability company By: Vincent Malfitano, Member Manager 03007:03:J14809 [Notary page to Termination Agreement] NOTARY ACKNOWLEDGMENT State of California ss. County of On , before me, Date Name and Title of Officer (e.g., “Jane Doe, Notary Public") personally appeared Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [Seal] Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that docu ment. [Notary page to Termination Agreement] NOTARY ACKNOWLEDGMENT State of California ss. County of On , before me, Date Name and Title of Officer (e.g., “Jane Doe, Notary Public") personally appeared Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [Seal] Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that docu ment. [Notary page to Termination Agreement] NOTARY ACKNOWLEDGMENT State of California ss. County of On , before me, Date Name and Title of Officer (e.g., “Jane Doe, Notary Public") personally appeared Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [Seal] Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that docu ment. Exhibit A EXHIBIT A LEGAL DESCRIPTION REAL PROPERTY in the City of Antioch, County of Contra Costa, State of California, described as follows: Parcels 2A and 2B, as shown on the Parcel Map M.S. - 5-75, filed March 26, 1976, in Book 44 of Parcel Maps, Page 5, Contra Costa County Records. A.P. Nos.: 072-011-052 and 053 03007.03:J14816 PROJECT AGREEMENT The Project Agreement (the “Agreement”) dated October ___, 2017, is by and between the County of Contra Costa, California (the “County”), and TREG Antioch I Prop Co LP, a Delaware limited partnership (“TREG”). RECITALS: WHEREAS, TREG is purchasing the property and improvements thereon currently known as Cypress Meadows Assisted Living Facility (the “Project”); and WHEREAS, in connection with the issuance in 1998 of its Residential Rental Facility Revenue Bonds (Cypress Meadows Project) 1998 Series E and its Taxable Residential Rental Facility Revenue Bonds (Cypress Meadows Project) 1998 Series F (collectively, the “Bonds”), the County, the trustee for the Bonds, and Skyline Crest Enterprises, LLC, a prior owner of the Project, entered into an Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, dated as of September 1, 1998 (as amended by the First Amendment to Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, dated as of November 1, 2004, the “Regulatory Agreement”), which Regulatory Agreement imposed certain restrictions on the operation of the Project; and WHEREAS, the Bonds have been paid in full and the Qualified Project Period, as defined in the Regulatory Agreement, has ended, but certain provisions of the Regulatory Agreement have not yet been fully satisfied; and WHEREAS, Cypress Meadows Antioch, LLC, the current owner of the Project, and TREG have requested that the County terminate the Regulatory Agreement, and the County is willing to do so contingent upon the execution of this Agreement by TREG with respect to certain matters related to the operation and rehabilitation of the Project referred to herein, and payment of amounts owing to the County under the Regulatory Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing and for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Restrictions on Operation of the Project. Notwithstanding any termination of the Regulatory Agreement, TREG agrees, consistent with the provisions of Section 6(f) of the Regulatory Agreement, that except in the event of foreclosure, deed in lieu of foreclosure, eminent domain, or action of a federal agency preventing enforcement, the twenty percent or more of the dwelling units in the Project that were required by the Regulatory Agreement to be reserved for occupancy by individuals whose income is fifty percent or less of area median income shall remain available to any eligible household occupying a reserved unit as of August 31, 2015, being the date of expiration of the Qualified Project Period (an “Eligible Unit”), at a rent (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to those occupants or on behalf of the units) not greater than thirty percent of fifty percent of area median income, until the earliest of any of the following occur: -2- (a) The household's income exceeds 140 percent of fifty percent of area median income. (b) The household voluntarily moves or is evicted for “good cause.” “Good cause” for the purposes of this section means the nonpayment of rent or allegation of facts necessary to prove major, or repeated minor, violations of material provisions of the occupancy agreement which detrimentally affect the health, safety, occupancy or quiet enjoyment of other persons or the structure, the fiscal integrity of the Project or the purposes or special programs of the Project. (c) Thirty years after November 30, 1999 (being the date of the commencement of the Qualified Project Period). (d) TREG pays the relocation assistance and benefits to tenants as provided in subdivision (b) of Section 7264 of the California Government Code. Section 2. Compliance With Government Code Provisions. TREG agrees to comply with the provisions of Sections 65863.10 and 65863.11 of the California Government Code as applicable to the Project. Section 3. Rehabilitation Expenditures. TREG agrees to use commercially reasonable efforts to expend, during the 36 month period beginning with its obtaining title to the Project, at least $1,500,000 on facility upgrades to the Project, which upgrades shall be determined by TREG in its reasonable business judgement, and which may include the following: • Upgrade of life safety components • Repair and replacement of the roof • New common area fixtures, furniture and equipment • Update and upgrade the dining room • Upgrade the existing courtyard to useable space • Paint the inside and outside of the Project • Install all new kitchen equipment From time to time, but no sooner than 18 months after TREG acquires title to the Project and no more often than every 9 months thereafter, upon the County’s written request, TREG shall provide the County with a written summary of the amount that TREG has theretofore expended towards upgrades to the Project, and a description of such upgrades, in furtherance of its obligations under the preceding paragraph. Section 4. Certain Tennant Assistance. If any resident occupying a unit as of the date TREG acquires title to the Project expresses to TREG such resident’s intent to move out of the Project, TREG shall provide the resident with two written handouts, one of which shall be a list of alternate facilities which may fit the needs of the resident (and which list shall include any facilities that the County advises TREG in writing to include on the list), and the other of which shall provide the resident with current contact information for the County’s Area Agency on Aging (whose current website is located at http://ehsd.org/elderly-disabled/area-agency-on- aging/). Section 5. Indemnification. TREG hereby covenants and agrees that it shall hold harmless, defend and indemnify the County its Supervisors, officers and employees (individually and collectively, the “Indemnitee”) from and against all claims, liabilities, obligations, damages, penalties, litigation, costs, charges and expenses (including without limitation reasonable attorneys), imposed on, incurred by or asserted against an Indemnitee and arising from, resulting -3- from, or in any way connected with or related to a breach by TREG of its obligations under Sections 1, 2, 3 or 4 of this Agreement; provided, however, that this provision shall not require TREG to indemnify any Indemnitee from any claims, costs, fees, expenses or liabilities arising solely from the willful misconduct of the Indemnitee or arising from, or resulting from, or in any way connected with or related to, any action or any inaction by any prior owner of the Project or the termination of the Regulatory Agreement. In the event that any action or proceeding is brought against the County or any of its Supervisors, officers or employees with respect to which indemnity is sought hereunder, TREG, upon written notice from the Indemnitee, shall assume the investigation and defense thereof, including the employment of counsel selected by the Indemnitee and the payment of all expenses related thereto. The Indemnitee shall have the right to employ separate defense counsel at the sole cost and expense TREG, upon the Indemnitee's reasonable determination that such separate counsel is necessary to provide the Indemnitee with an adequate defense to any such action or proceeding. Section 6. Termination of Agreement. This Agreement shall terminate on the latest to occur of: (a) the fulfillment of any of the conditions set forth in Section 1(a)-(d) as to each Eligible Unit, (b) the date that TREG certifies in writing to the County that it has fully complied with Sections 65863.10 and 65863.11 of the California Government Code with respect to the Project, or (c) the satisfaction of TREG’s obligation to expend the funds described in Section 3; provided, however, at the time of termination there are no pending matters for which any Indemnitee has sought indemnity under Section 5 by written notice theretofore given to TREG. The County agrees to execute any commercially reasonable documents requested in writing by TREG to effectuate or acknowledge such termination. Section 7. Representations. Each party to this Agreement, by its execution hereof, represents and warrants to each other party hereto that this Agreement has been executed by its duly authorized officer and that this Agreement is a legal, valid and binding obligation of it, enforceable against it in accordance with the terms hereof. Section 8. Execution in Counterparts. This Agreement may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all together shall constitute but one and the same Agreement. Section 9. Entire Agreement; Assignment. It is understood that there are no oral agreements between the parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations and understandings, if any, among the parties hereto and none will be used to interpret or construe this Agreement. TREG may assign its obligations under this Agreement to any subsequent owner of the Project, upon written notice to the County of any such assignment and execution by the subsequent owner of a written acceptance of such assignment (a copy of which shall be provided to the County). -4- IN WITNESS WHEREOF, the County and TREG have executed this Agreement, in each case as of the date indicated below the signatures of their respective representative below. TREG ANTIOCH I PROP CO LP, a Delaware limited partnership By: Its: Date of Execution: COUNTY OF CONTRA COSTA, CALIFORNIA By: Its: Date of Execution: