HomeMy WebLinkAboutMINUTES - 03092010 - C.48RECOMMENDATION(S):
1. APPROVE and AUTHORIZE the Conservation and Development Director, or designee,
to execute required legal documents to provide $293,884 in Mental Health Services Act
(MHSA) and $300,000 in Housing Opportunities for Persons with HIV/AIDs (HOPWA) for
the Lillie Mae Jones Plaza development in Richmond.
2. FIND, as the responsible agency, that the Notice of Exemption prepared by the City of
Richmond, as the lead agency, is adequate for purposes of compliance with the California
Environmental Quality Act; and
3. DIRECT the Conservation and Development Director, or designee, to file a Notice of
Exemption for this project with the County Clerk; and
4. DIRECT the Conservation and Development Director, or designee, to arrange for
payment of the $50 handling fee to the County Clerk for filing such Notice of Exemption.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 03/09/2010 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I
Supervisor
Gayle B. Uilkema, District II
Supervisor
Mary N. Piepho, District III
Supervisor
ABSENT:Susan A. Bonilla, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Kara Douglas 335-7223
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the
Board of Supervisors on the date shown.
ATTESTED: March 9, 2010
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: EMY L. SHARP, Deputy
cc:
C.48
To:Board of Supervisors
From:Catherine Kutsuris, Conservation & Development Director
Date:March 9, 2010
Contra
Costa
County
Subject:APPROVAL OF HOUSING OPPORTUNITY FOR PERSONS WITH HIV/AIDS AND MENTAL HEALTH
SERVICES ACT FUNDING LEGAL DOCUMENTS FOR LILLIE MAE JONES PLAZA, RICHMOND
FISCAL IMPACT:
No General Fund impact. MHSA funds are provided to the County on a formula
allocation basis through the State Department of Mental Health. HOPWA funds are
provided to the County on a formula allocation basis from the City of Oakland. (CFDA#
14.241)
BACKGROUND:
On May 15, 2007, the Board of Supervisors allocated $293,884 in County “one-time”
MHSA capital funds to Community Housing Development Corporation of North
Richmond (CHDC) for this project. On June 13, 2006, the Board of Supervisors
allocated $300,000 in HOPWA funds to CHDC for this project. CHDC is working with
East Bay Asian Local Development Corporation (EBALDC) to finance and develop
Lillie Mae Jones Plaza. CHDC and EBALDC have formed Lillie Mae Jones Plaza, L.P.,
a California Limited Partnership. The County legal documents will be entered into with
Lillie Mae Jones Plaza, L.P.
Lillie Mae Jones Plaza involves the new construction of 26 units on three contiguous lots
between 1st and 2nd Streets on MacDonald Avenue in the City of Richmond. The
development will include one, two, three and four bedroom units, along with a
community room and a manager’s office. Thirteen of the units will be designated as
supportive housing units for the homeless and disabled. Of those units, eight will be
designated for persons living with mental illness and five will be designated for persons
HIV/AIDs. Construction is scheduled to begin March 2010.
The development budget for this project is $12,053,535. Additional sources of funds
include City of Richmond ($4,124,074), State MHP ($2,583,332), ARRA tax credit
assistance program ($3,962,656), AHP funds ($500,000), and Cal ReUse ($289,589). The
project has also been awarded 20 project based Section 8 vouchers through the Richmond
Housing Authority.
MHSA funds will be lent at an interest rate of one percent for 20 years. The legal
documents allow that the County may extend the term for an additional 20 years in the
event the CHDC/EBALDC is not in default and agrees to also extend the regulatory
agreement. HOPWA funds will be lent with no interest and a term of 55 years.
The County legal documents are attached and include the following documents for both
the HOPWA and MHSA loans (the “Loan Documents”):
• Promissory Note
• Loan Agreement
• Regulatory Agreement
• Construction Deed of Trust and Security Agreement
This recommended action includes authorization to execute any and all documents and to
take any and all actions necessary to implement the activities authorized under the Loan
Documents, including execution of loan amendments or modifications for the purposes of
agreeing to reasonable extensions of time deadlines, and estoppel certificates concerning
the status of the loan and the existence of Borrower defaults under the Loan Documents.
CEQA Determination
The City of Richmond is the responsible agency for purposes of compliance with the
California Environmental Quality Act (CEQA). The City determined that the project is
exempt from CEQA pursuant to CEQA Guidelines Section 15332. County staff reviewed
the City’s CEQA review and concurs with the City’s determination.
ATTACHMENTS
HP deed of Trust
HP Loan Agreement
HP Promissory Note
HP Reg Agreement
MHSA Deed of Trust
MHSA Loan Agreeement
MHSA promissory Note
MHSA Reg Agreement
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Department of Conservation and Development
Redevelopment Division
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director - Redevelopment
No fee for recording pursuant to
Government Code Section 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
(Lillie Mae Jones Plaza – HOPWA Loan)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING ("Deed of Trust") is made as of _____________ __,
2010, by and among LILLIE MAE JONES PLAZA,L.P., a California limited partnership ("Trustor"),
OLD REPUBLIC TITLE COMPANY, a California corporation ("Trustee"), and the COUNTY OF
CONTRA COSTA, a political subdivision of the State of California ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property located in the County of Contra Costa,
State of California, that is described in the attached Exhibit A, incorporated herein by this
reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said property and intended to be installed therein;
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TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefore, whether or not the same are, or will be, attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the
"Secured Obligations"):
A. Payment to Beneficiary of all sums at any time owing under or in connection with
the Note (defined in Section 1.4 below) until paid or cancelled and any other amounts owing
under the Loan Documents (defined in Section 1.3 below). Said principal and other payments
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are due and payable as provided in the Note or other Loan Documents, as applicable. The Note
and all its terms are incorporated herein by reference, and this conveyance secures any and all
extensions thereof, however evidenced;
B. Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
C. Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Loan Documents; and
D. All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a different rate of
interest, or (ii) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms have
the following meanings in this Deed of Trust:
Section 1.1 The term "Loan" means the loan made by the Beneficiary to the Trustor in
the amount of Three Hundred Thousand Dollars ($300,000).
Section 1.2 The term "Loan Agreement" means that certain HOPWA Loan Agreement
between Trustor and Beneficiary, of even date herewith, providing for the Beneficiary to loan to
the Trustor Three Hundred Thousand Dollars ($300,000) for the construction of twenty-six (26)
apartment units and appurtenant improvements on the Property.
Section 1.3 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, and the Regulatory Agreement, and any other debt, loan or security instruments
between Trustor and the Beneficiary relating to the Loan.
Section 1.4 The term "Note" means the promissory note in the principal amount of
Three Hundred Thousand Dollars ($300,000) of even date herewith, executed by Trustor in favor
of the Beneficiary, as it may be amended or restated, the payment of which is secured by this
Deed of Trust. (A copy of the Note is on file with the Beneficiary and terms and provisions of
the Note are incorporated herein by reference.)
Section 1.5 The term "Principal" means the amount required to be paid under the
Note.
863\80\735876.3 3
Section 1.6 The term "Regulatory Agreement" means the regulatory agreement of
even date herewith by and between the Beneficiary and the Trustor.
ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE PROPERTY
AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agrees that at all times prior to full payment and performance of the Secured
Obligations, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the
Security or cause the Security to be maintained and preserved in good condition. The Trustor
will from time to time make or cause to be made all repairs, replacements and renewals deemed
proper and necessary by it. The Beneficiary has no responsibility in any of these matters or for
the making of improvements or additions to the Security.
Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary exercises its rights as agent of Trustor
only in the event that Trustor fails to take, or fails to diligently continue to take, those actions as
hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary specifies upon laborers, materialmen, subcontractors or other persons who
have furnished or claim to have furnished labor, services or materials in connection with the
Security. Nothing herein contained requires Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently contesting provided that Trustor
shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the
Recorder of Contra Costa County, a surety bond in an amount 1 and 1/2 times the amount of
such claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law, and
as approved, in writing, by Beneficiary.
863\80\735876.3 4
Section 2.3 Assignment of Rents.
As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and
revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents
and revenues so collected to the Secured Obligations with the balance, so long as no such breach
has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this
assignment of rents constitutes an absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor
of any covenant or agreement of Trustor in the Loan Documents, and without the necessity of
Beneficiary entering upon and taking and maintaining full control of the Property in person, by
agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to possession of
all rents and revenues of the Property as specified in this Section 2.3 as the same becomes due
and payable, including but not limited to, rents then due and unpaid, and all such rents will
immediately upon delivery of such notice be held by Trustor as trustee for the benefit of
Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the
breach by Trustor contains a statement that Beneficiary exercises its rights to such rents. Trustor
agrees that commencing upon delivery of such written notice of Trustor's breach by Beneficiary
to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to
Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant therefore,
delivered to each tenant personally, by mail or by delivering such demand to each rental unit,
without any liability on the part of said tenant to inquire further as to the existence of a default by
Trustor.
Trustor hereby covenants that Trustor has not executed any prior assignment of said
rents, that Trustor has not performed, and will not perform, any acts or has not executed and will
not execute, any instrument which would prevent Beneficiary from exercising its rights under
this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no
anticipation or prepayment of any of the rents of the Property for more than two (2) months prior
to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept
payment of any rents of the Property more than two (2) months prior to the due dates of such
rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further
assignments of rents and revenues of the Property as Beneficiary may from time to time request.
Upon Trustor's breach of any covenant or agreement of Trustor in the Loan Documents,
Beneficiary may in person, by agent or by a court-appointed receiver, regardless of the adequacy
of Beneficiary's security, enter upon and take and maintain full control of the Property in order to
perform all acts necessary and appropriate for the operation and maintenance thereof including,
but not limited to, the execution, cancellation or modification of leases, the collection of all rents
and revenues of the Property, the making of repairs to the Property and the execution or
863\80\735876.3 5
termination of contracts providing for the management or maintenance of the Property, all on
such terms as are deemed best to protect the security of this Deed of Trust. In the event
Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of
any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to
the appointment of such receiver. Beneficiary or the receiver will be entitled to receive a
reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice by Beneficiary
to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents are to applied first to the costs, if any, of taking control of and managing the Property
and collecting the rents, including, but not limited to, attorney's fees, receiver's fees, premiums
on receiver's bonds, costs of repairs to the Property, premiums on insurance policies, taxes,
assessments and other charges on the Property, and the costs of discharging any obligation or
liability of Trustor as lessor or landlord of the Property and then to the sums secured by this deed
of Trust. Beneficiary or the receiver is to have access to the books and records used in the
operation and maintenance of the Property and will be liable to account only for those rents
actually received. Beneficiary is not liable to Trustor, anyone claiming under or through Trustor
or anyone having an interest in the Property by reason of anything done or left undone by
Beneficiary under this Section 2.3.
If the rents of the Property are not sufficient to meet the costs, if any, of taking control of
and managing the Property and collecting the rents, any funds expended by Beneficiary for such
purposes will become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless
Beneficiary and Trustor agree in writing to other terms of payment, such amounts are payable by
Trustor to Beneficiary upon notice from Beneficiary to Trustor requesting payment thereof and
will bear interest from the date of disbursement at the rate stated in Section 3.3.
If the Beneficiary or the receiver enters upon and takes and maintains control of the
Property, neither that act nor any application of rents as provided herein will cure or waive any
default under this Deed of Trust or invalidate any other right or remedy available to Beneficiary
under applicable law or under this Deed of Trust. This assignment of rents of the Property will
terminate at such time as this Deed of Trust ceases to secure the Secured Obligations.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes,
assessments, charges and levies imposed by any public authority or utility company that are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor is
not required to pay and discharge any such tax, assessment, charge or levy so long as (a) the
legality thereof is promptly and actively contested in good faith and by appropriate proceedings,
and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this
Section 3.1. With respect to taxes, special assessments or other similar governmental charges,
Trustor shall pay such amount in full prior to the attachment of any lien therefore on any part of
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the Security; provided, however, if such taxes, assessments or charges can be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this Section 3.1 must not be construed to require
that Trustor maintain a reserve account, escrow account, impound account or other similar
account for the payment of future taxes, assessments, charges and levies.
In the event that Trustor fails to pay any of the items required by this Section to be paid
by Trustor, Beneficiary may (but is under no obligation to) pay the same, after the Beneficiary
has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within
seven (7) business days after receipt of such notice. Any amount so advanced therefore by
Beneficiary, together with interest thereon from the date of such advance at the maximum rate
permitted by law, will become part of the Secured Obligations secured hereby, and Trustor
agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
Trustor agrees to provide insurance conforming in all respects to that required under the
Loan Documents during the course of construction and following completion, and at all times
until all amounts secured by this Deed of Trust have been paid, all Secured Obligations secured
hereunder have been fulfilled, and this Deed of Trust has been reconveyed.
All such insurance policies and coverages are to be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, are to be delivered to the Beneficiary upon demand therefore at any time
prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances.
In the event the Trustor fails to maintain the full insurance coverage required by this
Deed of Trust or fails to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven (7) days prior notice to Trustor, may (but is under no obligation
to) (i) take out the required policies of insurance and pay the premiums on the same, and (ii)
make any repairs or replacements that are necessary and provide for payment thereof. All
amounts so advanced by the Beneficiary will become part of the Secured Obligations (together
with interest as set forth below) and will be secured hereby, which amounts the Trustor agrees to
pay on the demand of the Beneficiary, and if not so paid, will bear interest from the date of the
advance at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.
ARTICLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.
All judgments, awards of damages, settlements and compensation made in connection
with or in lieu of (1) the taking of all or any part of or any interest in the Property by or under
assertion of the power of eminent domain, (2) any damage to or destruction of the Property or
any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the
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Property (collectively, the "Funds") are hereby assigned to and are to be paid to the Beneficiary
by a check made payable to the Beneficiary. The Beneficiary is authorized and empowered (but
not required) to collect and receive any Funds and is authorized to apply them in whole or in part
to any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary
determines at its sole option. The Beneficiary is entitled to settle and adjust all claims under
insurance policies provided under this Deed of Trust and may deduct and retain from the
proceeds of such insurance the amount of all expenses incurred by it in connection with any such
settlement or adjustment. All or any part of the amounts so collected and recovered by the
Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for
its disposition. Application of all or any part of the Funds collected and received by the
Beneficiary or the release thereof will not cure or waive any default under this Deed of Trust.
The rights of the Beneficiary under this Section 4.1 are subject to the rights of any senior
mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to reconstruct the
improvements on the Property provided that Beneficiary reasonably determines that Trustor
(taking into account the Funds) has sufficient funds to rebuild the improvements in substantially
the form that existed prior to the casualty or condemnation.
ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor shall duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under the Loan Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses.
In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the
Beneficiary employs attorneys or incurs other expenses for the collection of amounts due
hereunder or the enforcement of performance or observance of an obligation or agreement on the
part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefore, pay
to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so
incurred by the Beneficiary. Any such amounts paid by the Beneficiary will be added to the
Secured Obligations, and will bear interest from the date such expenses are incurred at the lesser
of ten percent (10%) per annum or the maximum rate permitted by law.
Section 5.3 Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust is deemed to be fixtures and part of the real property and this Deed of Trust constitutes a
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fixtures filing under the California Commercial Code. As to any personal property not deemed
or permitted to be fixtures, this Deed of Trust constitutes a security agreement under the
California Commercial Code.
Section 5.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor shall
perform all acts that the Beneficiary reasonably requests so as to enable the Beneficiary to
maintain a valid perfected security interest in the Security in order to secure the payment of the
Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it deems appropriate from time to time in order to
protect the security interest established pursuant to this instrument.
Section 5.6 Operation of the Security.
The Trustor shall operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Loan Documents.
Section 5.7 Inspection of the Security.
At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and
its duly authorized agents, attorneys, experts, engineers, accountants and representatives, may
inspect the Security, without payment of charges or fees.
Section 5.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there will be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor will the Trustor itself
or any person claiming under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants
will run with the land.
ARTICLE 6
HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, and shall not cause or
permit the Property to be in violation of any federal, state or local laws, ordinances or regulations
relating to industrial hygiene or to the environmental conditions on, under or about the Property
including, but not limited to, soil and ground water conditions. Trustor shall not use, generate,
manufacture, store or dispose of on, under, or about the Property or transport to or from the
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Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or
related materials, including without limitation, any substances defined as or included in the
definition of "hazardous substances", hazardous wastes", "hazardous materials", or "toxic
substances" under any applicable federal or state laws or regulations (collectively referred to
hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily used
in construction or operation of a multi-family residential development.
Trustor shall immediately advise Beneficiary in writing if at any time it receives written
notice of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Trustor or the Property pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party
against Trustor or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) Trustor's discovery
of any occurrence or condition on any real property adjoining or in the vicinity of the Property
that could cause the Property or any part thereof to be classified as "border-zone property" (as
defined in California Health and Safety Code Section 25117.4) under the provision of California
Health and Safety Code Section 25220 et seq., or any regulation adopted in accordance
therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
Beneficiary has the right to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials Claims and to have
its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall indemnify
and hold harmless Beneficiary and its boardmembers, supervisors, directors, officers, employees,
agents, successors and assigns from and against any loss, damage, cost, expense or liability
directly or indirectly arising out of or attributable to the use, generation, storage, release,
threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about
the Property including without limitation: (a) all foreseeable consequential damages; (b) the
costs of any required or necessary repair, cleanup or detoxification of the Property and the
preparation and implementation of any closure, remedial or other required plans; and (c) all
reasonable costs and expenses incurred by Beneficiary in connection with clauses (a) and (b),
including but not limited to reasonable attorneys' fees and consultant's fees. This
indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision
include, but are not limited to: (1) losses attributable to diminution in the value of the Property;
(2) loss or restriction of use of rentable space on the Property; (3) adverse effect on the
marketing of any rental space on the Property; and (4) penalties and fines levied by, and remedial
or enforcement actions of any kind issued by any regulatory agency (including but not limited to
the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the
Property and surrounding properties).
Without Beneficiary's prior written consent, which may not be unreasonably withheld,
Trustor may not take any remedial action in response to the presence of any Hazardous Materials
on, under or about the Property, nor enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Material Claims, which remedial action, settlement,
863\80\735876.3 10
consent decree or compromise might, in Beneficiary's reasonable judgment, impairs the value of
the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent is not
necessary in the event that the presence of Hazardous Materials on, under, or about the Property
either poses an immediate threat to the health, safety or welfare of any individual or is of such a
nature that an immediate remedial response is necessary and it is not reasonably possible to
obtain Beneficiary's consent before taking such action, provided that in such event Trustor
notifies Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to
withhold its consent, where such consent is required hereunder, if (i) a particular remedial action
is ordered by a court of competent jurisdiction; (ii) Trustor will or may be subjected to civil or
criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the
reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial
action which would result in less impairment of Beneficiary's security hereunder; or (iv) the
action has been agreed to by Beneficiary.
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section
726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its
rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) any other rights and remedies permitted by law. For purposes of determining
the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced
in a release or threatened release of hazardous materials, within the meaning of California Code
of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials
was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any
portion of the Property and the Trustor knew or should have known of the activity by such
lessee, occupant, or user which caused or contributed to the release or threatened release. All
costs and expenses, including (but not limited to) attorneys' fees, incurred by the Beneficiary in
connection with any action commenced under this paragraph, including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to which the
Property is environmentally impaired, plus interest thereon at the default rate specified in the
Loan Agreement until paid, will be added to the indebtedness secured by this Deed of Trust and
will be due and payable to the Beneficiary upon its demand made at any time following the
conclusion of such action.
863\80\735876.3 11
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
The following are events of default ("Events of Default") following the expiration of any
applicable notice and cure periods: (i) failure to make any payment to be paid by Trustor under
the Loan Documents; (ii) failure to observe or perform any of Trustor's other covenants,
agreements or obligations under the Loan Documents, including, without limitation, the
provisions concerning discrimination; (iii) failure to make any payment or observe or perform
any of Trustor's other covenants, agreements, or obligations under any Secured Obligations,
which default is not cured within the times and in the manner provided therein; and (iv) failure to
make any payments or observe or perform any of Trustor's other covenants, agreements or
obligations under any other debt instrument or regulatory agreement secured by the Property,
which default is not cured within the time and in the manner provided therein.
Section 7.2 Acceleration of Maturity.
If an Event of Default has occurred and is continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured
Obligations are immediately due and payable, and no omission on the part of the Beneficiary to
exercise such option when entitled to do so will be construed as a waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default has occurred and is continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Property and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts that it deems necessary
or desirable to preserve the value or marketability of the Property, or part thereof or interest
therein, increase the income therefrom or protect the security thereof. The entering upon and
taking possession of the Security will not cure or waive any Event of Default or Notice of Sale
(as defined in Section 7.3(c), below) hereunder or invalidate any act done in response to such
Event of Default or pursuant to such Notice of Sale, and, notwithstanding the continuance in
possession of the Security, Beneficiary will be entitled to exercise every right provided for in this
Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise
the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in
the Official Records of Contra Costa County; or
863\80\735876.3 12
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with
Trustee this Deed of Trust which is secured hereby (and the deposit of which will be deemed to
constitute evidence that the Secured Obligations are immediately due and payable), and such
receipts and evidence of any expenditures made that are additionally secured hereby as Trustee
may require.
(a) Upon receipt of such Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as is then required
by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after the lapse of
that amount of time as is then required by law and after recordation of such Notice of Sale as
required by law, sell the Security, at the time and place of sale set forth in the Notice of Sale,
whether as a whole or in separate lots or parcels or items, as Trustee deems expedient and in
such order as it determines, unless specified otherwise by the Trustor according to California
Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of
the United States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed or any matters
of facts will be conclusive proof of the truthfulness thereof. Any person, including, without
limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured
Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured
hereby; and (iv) the remainder, if any, to Trustor.
(c) Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver.
If an Event of Default occurs and is continuing, Beneficiary, as a matter of right and
without further notice to Trustor or anyone claiming under the Security, and without regard to
the then value of the Security or the interest of Trustor therein, may apply to any court having
jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor
hereby irrevocably consents to such appointment and waives further notice of any application
therefore. Any such receiver or receivers will have all the usual powers and duties of receivers
863\80\735876.3 13
in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided
herein, and will continue as such and exercise all such powers until the date of confirmation of
sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy will be cumulative and concurrent and will be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default will exhaust or impair any such right, power or
remedy, or will be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder will not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, will not constitute a waiver by the Beneficiary of
its right hereunder or impair any rights, power or remedies consequent on any Event of Default
by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the
payment or performance of any Secured Obligation, (ii) takes other or additional security or the
payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the
Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents,
(v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or
consents to any agreement subordinating the lien hereof, any such act or omission will not
release, discharge, modify, change or affect the original liability under this Deed of Trust, or any
other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or
any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor must any
such act or omission preclude the Beneficiary from exercising any right, power or privilege
herein granted or intended to be granted in any Event of Default then made or of any subsequent
Event of Default, nor, except as otherwise expressly provided in an instrument or instruments
executed by the Beneficiary, will the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security.
The Beneficiary has the power to (a) institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
863\80\735876.3 14
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 7.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, will be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount that becomes due and payable by the
Trustor hereunder after such date.
Section 7.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in
taking any action to collect any Secured Obligations or in proceedings against the Security, in
connection with the delivery, acceptance, performance, default, endorsement or guaranty of this
Deed of Trust.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendments.
This Deed of Trust cannot be waived, changed, discharged or terminated orally, but only
by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all Secured Obligations have been paid
or forgiven, and all obligations under the Loan Documents have been performed in full, and
upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment
by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the
person or persons legally entitled thereto.
Section 8.3 Notices.
If at any time after the execution of this Deed of Trust it becomes necessary or
convenient for one of the parties hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication must be in writing and is to be served
personally or by depositing the same in the registered United States mail, return receipt
requested, postage prepaid and (1) if intended for Beneficiary is to be addressed to:
863\80\735876.3 15
County of Contra Costa
Department of Conservation and Development
Redevelopment Division
2530 Arnold Dr., Suite 190
Martinez, CA 94553
Attention: Deputy Director – Redevelopment
and (2) if intended for Trustor is to be addressed to:
Lillie Mae Jones Plaza, L.P.
c/o Community Housing Development
Corporation of North Richmond
1535-A Third Street
Richmond, CA 94801
Attn: Executive Director
Any notice, demand or communication will be deemed given, received, made or communicated
on the date personal delivery is affected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either
party may change its address at any time by giving written notice of such change to Beneficiary
or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the
date such change is desired to be effective.
Section 8.4 Successors and Joint Trustors.
Where an obligation created herein is binding upon Trustor, the obligation also applies to
and binds any transferee or successors in interest. Where the terms of the Deed of Trust have the
effect of creating an obligation of the Trustor and a transferee, such obligation will be deemed to
be a joint and several obligation of the Trustor and such transferee. Where Trustor is more than
one entity or person, all obligations of Trustor will be deemed to be a joint and several obligation
of each and every entity and person comprising Trustor.
Section 8.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity will not affect the balance of
the terms and provisions hereof, which terms and provisions will remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, will be considered to have been first
863\80\735876.3 16
paid or applied to the full payment of that portion of the debt that is not secured or partially
secured by the lien of this Deed of Trust.
Section 8.7 Governing Law.
This Deed of Trust is governed by the laws of the State of California.
Section 8.8 Gender and Number.
In this Deed of Trust the singular includes the plural and the masculine includes the
feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage also refers to a deed of trust and any
reference to a deed of trust also refers to a mortgage.
Section 8.10 Actions.
Trustor shall appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11 Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter will be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution is to be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, will be conclusive proof of proper
appointment of the successor trustee.
Section 8.12 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 8.13 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law, the Trustee is not
obligated to notify any party hereto of a pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee is a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions.
Notwithstanding anything to the contrary contained herein or in any documents secured
by this Deed of Trust or contained in any subordination agreement, and to the extent applicable,
863\80\735876.3 17
the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of
foreclosure (collectively, "Foreclosure") with respect to the Security encumbered by this Deed of
Trust, the following rule contained in 26 U.S.C. Section 42(h)(6)(E)(ii), as amended, applies:
For a period of three (3) years from the date of Foreclosure, with respect to any unit that
had been regulated by the Regulatory Agreement with the California Tax Credit Allocation
Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be
evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be
increased except as otherwise permitted under Section 42 of the Internal Revenue Code.
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863\80\735876.3 18
863\80\735876.3 19
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first
above written.
TRUSTOR:
LILLIE MAE JONES PLAZA, L.P., a California limited
partnership
By: CHDC Lillie Mae Jones LLC, a California limited liability
company, its managing general partner
By: Community Housing Development Corporation of
North Richmond, a California nonprofit public
benefit corporation
By:
Name: ______________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a California limited
liability company, its co-general partner
By: East Bay Asian Local Development Corporation, a
California nonprofit public benefit corporation, its
sole member
By: ________________________
Name: _________________________
Its: Executive Director
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
863\80\735876.3
EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, County of Contra Costa, and is described as
follows:
A-1
863\80\735876.3
HOPWA LOAN AGREEMENT
(Lillie Mae Jones Plaza Apartments)
This HOPWA Loan Agreement (the "Agreement") is dated ____________ __, 20__, and
is between the COUNTY OF CONTRA COSTA, political subdivision of the State of California (the
"County"), and LILLIE MAE JONES PLAZA,L.P., a California limited partnership (the
"Borrower").
A. Defined terms used but not defined in these recitals are as defined in Article 1 of
this Agreement.
B. The County has received funds from the United States Department of Housing
and Urban Development ("HUD") pursuant to the Housing Opportunities for Persons with AIDS
Program ("HOPWA Funds"). Pursuant to the AIDS Housing Act, as amended by the Housing
and Community Development Act of 1992, the HOPWA Funds are available to and administered
by the County, as the subrecipient of the City of Oakland, as representative for the Alameda-
Contra Costa County Eligible Metropolitan Area. Such funds must be used by the County in
accordance with 24 C.F.R. Section 574 et seq.
C. The Borrower intends to acquire real property located at 116 MacDonald Avenue
in the City of Richmond, County of Contra Costa, State of California, as more particularly
described in Exhibit A (the "Property"). The Borrower intends to construct twenty-five (25)
multifamily housing units affordable to very-low income households and one manager’s unit on
the Property (the “Development”). The Development, as well as any additional improvements
on the Property, including all landscaping, roads and parking spaces on the Property, are referred
to as the "Improvements".
D. The County and the Borrower have entered into a HOPWA Project Agreement
HP-07-05, dated March 1, 2005 pursuant to which the County committed HOPWA Funds to
assist the Borrower to be used in the construction of the Development (the "Project Agreement").
E. In furtherance of the Project Agreement, Borrower desires to borrow from the
County and the County desires to lend to the Borrower a loan of Three Hundred Thousand
Dollars ($300,000) of HOPWA Funds (the "Loan"). The Loan will be evidenced by the Note
and secured by the Deed of Trust.
F. The County has the authority to lend the Loan to the Borrower pursuant to
Government Code Section 26227 which authorizes counties to spend county funds for programs
that will further a county's public purposes. In addition, the County has the authority to loan the
HOPWA Funds to provide housing to Persons with HIV/AIDS pursuant to 24 C.F.R. 574.300.
G. The Loan is to be applied toward the construction of the Development in order to
help achieve financial feasibility for the Development. The Development will increase the
supply of affordable rental housing for persons in Contra Costa County. Due to the assistance
provided Borrower pursuant to this Agreement, Borrower is required to make five (5) units in the
Development available exclusively to persons with HIV/AIDS.
863\80\735461.6
1
H. The project underlying this Agreement is exempt from California Environmental
Quality Act (California Public Resources Code Section 21000 et seq) requirements under the
class 32 categorical exemption set forth in 14 California Code of Regulations (C.C.R.) Section
15332.
I. The City of Richmond prepared a Finding of No Significant Impact as allowed by
the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321-4347) ("NEPA")
for the Development. HUD issued a Release of Funds on August 27, 2009 for the HOPWA
Funds.
The parties therefore agree as follows:
ARTICLE 1 DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.
The following terms have the following meanings:
(a) "Agency" means the Richmond Community Redevelopment Agency, a
public body, corporate and politic.
(b) "Agreement" means this HOPWA Loan Agreement.
(c) "Approved Development Budget" means the proforma development
budget, including sources and uses of funds, as approved by the County, and attached hereto and
incorporated herein as Exhibit B.
(d) "Approved Financing" means:
(i) A HOME/Housing Fund Loan from the Agency in the approximate
amount of Two Million Four Hundred Ten Thousand Dollars ($2,410,000) (the "Agency Loan").
(ii) A loan of American Recovery and Reinvestment Act of 2009 (Public
Law 111-5) (“ARRA”) Section 1602 program funds from the California Tax Credit Allocation
Committee, a public agency of the State of California in the amount of Three Million Nine Hundred
Sixty-Two Thousand Six Hundred Fifty-Six Dollars ($3,962,656) (the "TCAC Loan").
(iii) A loan of Mental Health Services Act funds from the California
Housing and Finance Agency in the amount of Seven Hundred Fifteen Thousand Dollars
($715,000) (the "CalHFA MHSA Loan").
(iv) A loan of Mental Health Services Act funds from the County in the
amount of Two Hundred Ninety-Three Thousand Eight Hundred Eighty-Four Dollars ($293,884)
(the "County MHSA Loan").
863\80\735461.6
2
(v) A grant of Cal ReUse funds from the California Department of
Toxic Substances Control in the amount of Two Hundred Eighty-Nine Thousand Five Hundred
Eighty-Nine Dollars ($289,589) (the "Cal ReUse Grant").
(vi) A Multifamily Housing Program loan from the California
Department of Housing and Community Development in the amount of Two Million Five
Hundred Eighty-Three Thousand Three Hundred Thirty-Two Dollars ($2,583,332) (the "MHP
Loan").
(vii) An Affordable Housing Program Loan in the amount of Five
Hundred Thousand Dollars ($500,000) (the "AHP Loan").
(viii) Capital contribution from CHDC Lillie Mae Jones LLC, one of the
Borrower's general partners, in the amount of Thirty-Six Thousand Two Hundred Twenty-Five
Dollars ($36,225) (the "General Partner Equity").
(e) "Bid Package" means the Borrower's proposed bid package to be made
available to potential bidders. The contents of the Bid Package are more particularly described
in Section 3.2.
(f) "Borrower" has the meaning set forth in the first paragraph of this
Agreement.
(g) "City" means the City of Richmond, a municipal corporation.
(h) "County" has the meaning set forth in the first paragraph of this
Agreement.
(i) "County-Assisted Units" means the five (5) units whose occupancy and
rental charges are restricted pursuant to the Loan Documents.
(j) "County MHSA Operating Reserve" has the meaning set forth in Section
4.1.
(k) "Deed of Trust" means the Deed of Trust with Assignment of Rents,
Security Agreement, and Fixture Filing of even date herewith among Borrower, as Trustor, Old
Republic Title Company, as trustee, and the County, as beneficiary, that will encumber the
Property to secure repayment of the Loan and performance of the covenants of the Loan
Documents. The form of the Deed of Trust will be provided by the County.
(l) "Default Rate" has the meaning set forth in Section 6.2(c).
(m) "Development" has the meaning set forth in Paragraph C of the Recitals.
(n) "Event of Default" has the meaning set forth in Section 6.1.
(o) "Hazardous Materials" has the meaning set forth in Section 4.9.
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(p) "Hazardous Materials Claims" has the meaning set forth in Section 4.9.
(q) "Hazardous Materials Law" has the meaning set forth in Section 4.9.
(r) "HOPWA" means Housing Opportunities for Persons with AIDS Program
pursuant to the AIDS Housing Opportunity Act (42 U.S.C. 12901 et. seq.), as amended by the
Housing and Community Development Act of 1992 (42 U.S.C. 5301 et. seq.).
(s) "HOPWA Funds” has the meaning set forth in Paragraph B of the
Recitals.
(t) “HOPWA Term” means the period beginning on the date of the execution
of the Regulatory Agreement and ending on the tenth (10th) anniversary of the date of the
Regulatory Agreement.
(u) “HOPWA Units” shall mean a Unit restricted to occupancy by a HOPWA-
Eligible Household, as further defined in Section 1.1 of the Regulatory Agreement.
(v) "HUD" has the meaning set forth in Paragraph B of the Recitals.
(w) "Loan" has the meaning set forth in Paragraph E of the Recitals.
(x) "Loan Documents" means this Agreement, the Note, the Regulatory
Agreement, and the Deed of Trust.
(y) "Marketing Plan" has the meaning set forth in Section 3.8(a).
(z) "Note" means the promissory note that evidence Borrower's obligation to
repay the Loan.
(aa) "Project Agreement" has the meaning set forth in Paragraph D of the
Recitals.
(bb) "Property" has the meaning set forth in Paragraph C of the Recitals.
(cc) "Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants, of even date herewith, between the County and the
Borrower related to the Loan, to be recorded against the Property.
(dd) Retention Amount" means Ten Thousand Dollars ($10,000) of the Loan,
the disbursement of which is described in Section 2.7.
(ee) "RWP" has the meaning set forth in Section 4.9.
(ff) "Social Services Plan” has the meaning set forth in Section 3.8(b).
(gg) "Tenant" means the tenant household that occupies a unit in the
Development.
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(hh) "Term" has the meaning set forth in Section 2.8(a).
(ii) "Transfer" has the meaning set forth in Section 4.15.
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Development Budget
Exhibit C: Description of Operating Reserve Accounts
ARTICLE 2 LOAN PROVISIONS
Section 2.1 Loan.
The County shall lend to the Borrower the Loan for the purposes set forth in Section 2.3
of this Agreement. Borrower's obligation to repay the Loan is evidenced by the Note.
Section 2.2 Interest.
(a) Subject to the provisions of Subsection (b) below, the HOPWA Funds will
not bear interest.
(b) Upon the occurrence of an Event of a Default, interest on the Loan will
begin to accrue, beginning on the date of such occurrence continuing until the date the Loan is
repaid in full or the Event of Default is cured, at the lesser of ten percent (10%), compounded
annually, and the highest rate permitted by law.
Section 2.3 Use of Loan Funds.
(a) The Borrower shall use the Loan to fund the construction of the
Development consistent with the Approved Development Budget.
(b) The Borrower may not use the Loan proceeds for any other purposes
without the prior written consent of the County.
Section 2.4 Security.
(a) Borrower shall secure its obligation to repay the Loan, as evidenced by the
Note, by executing the Deed of Trust, and causing or permitting it to be recorded as a lien against
the Property.
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Section 2.5 Subordination.
During the Term, the Deed of Trust and/or Regulatory Agreement may be subordinated
to Approved Financing (in each case, a "Senior Loan"), provided that all of the following
conditions are satisfied:
(a) All of the proceeds of the proposed Senior Loan, less any transaction
costs, are used to provide acquisition, construction and/or permanent financing for the
Development.
(b) The proposed lender of a Senior Loan (each a "Senior Lender") is a state
or federally chartered financial institution, a nonprofit corporation or a public entity that is not
affiliated with Borrower or any of Borrower's affiliates, other than as a depositor or a lender.
(c) Borrower demonstrates to the County's reasonable satisfaction that
subordination of the Deed of Trust and the Regulatory Agreement is necessary to secure
adequate acquisition, construction, rehabilitation and/or permanent financing to ensure the
viability of the Development, including the operation of the Development as affordable housing,
as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the
County, in addition to any other information reasonably required by the County, evidence
demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate
acquisition, construction, rehabilitation and/or permanent financing to ensure the viability of the
Development, and adequate financing for the Development would not be available without the
proposed subordination.
(d) The subordination agreement is structured to minimize the risk that the
Deed of Trust and the Regulatory Agreement will be extinguished as a result of a foreclosure by
the Senior Lender or other holder of the Senior Loan. To satisfy this requirement, the
subordination agreement must provide the County with adequate rights to cure any defaults by
Borrower, including: (i) providing the County or its successor with copies of any notices of
default at the same time and in the same manner as provided to Borrower; and (ii) providing the
County with a cure period of at least sixty (60) days to cure any default.
(e) The subordination of the Loan is effective only during the original term of
the Senior Loan and any extension of its term that is approved in writing by the County.
(f) The subordination does not limit the effect of the Deed of Trust and the
Regulatory Agreement before a foreclosure, nor require the consent of the Senior Lender prior to
the County exercising any remedies available to the County under the Loan Documents.
Upon a determination by the County's Deputy Director – Redevelopment that the
conditions in this Section have been satisfied, the Deputy Director – Redevelopment or his/her
designee will be authorized to execute the approved subordination agreement without the
necessity of any further action or approval.
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Section 2.6 Conditions Precedent to Disbursement of Loan Funds.
The maximum amount of funds to be disbursed pursuant to this Section 2.6 may not
exceed the amount of the Loan less the Retention Amount. The County is not obligated to make
any disbursements of Loan funds for construction of the Development or to take any other action
under the Loan Documents unless the following conditions precedent are satisfied prior to each
disbursement of Loan funds:
(a) There exists no Event of Default nor any act, failure, omission or
condition that would constitute an Event of Default under this Agreement or the Project
Agreement;
(b) The Borrower holds title to the Property or is acquiring title
simultaneously with the disbursement of the Loan proceeds;
(c) There exists no material adverse change in the financial condition of
Borrower from that shown by the financial statements and other data and information furnished
by Borrower to the County prior to the date of this Agreement;
(d) Borrower has delivered to the County a copy of a corporate resolution
authorizing Borrower's execution of the Loan Documents;
(e) Borrower has caused to be executed and delivered to the County the Loan
Documents and any other instruments and policies required under the Loan Documents;
(f) A title insurer reasonably acceptable to the County is unconditionally and
irrevocably committed to issuing an LP-10 ALTA Lender's Policy of title insurance insuring the
priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and
exclusions as may be reasonably acceptable to the County, and containing such endorsements as
the County may reasonably require. The Borrower shall provide whatever documentation
(including an indemnification agreement), deposits or surety is reasonably required by the title
company in order for the County's Deed of Trust to be senior in lien priority to any mechanics
liens in connection with any start of construction that has occurred prior to the recordation of the
Deed of Trust against the Property in the Office of the Recorder of the County of Contra Costa;
(g) The Deed of Trust and the Regulatory Agreement have been recorded
against the Property in the Office of the Recorder of the County of Contra Costa;
(h) Borrower has furnished the County with evidence of the insurance
coverage meeting the requirements of Section 4.16 below.
(i) The County has determined the undisbursed proceeds of the Loan,
together with other funds or firm commitments for funds that the Borrower has obtained in
connection with the Development, are not less than the amount that the County determines is
necessary to pay for construction of the Development and to satisfy all of the covenants
contained in this Agreement and the Regulatory Agreement;
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(j) Borrower has obtained all permits and approvals necessary for the
construction of the Development, as required by Section 3.1, and County has received a copy of
the building permit required to construct the Development (required for disbursements for
construction costs only);
(k) The County has received and approved the Bid Package for the
subcontractors for the construction of the Development, as required pursuant to Section 3.2
below;
(l) The County has received and approved the general contractor's
construction contract that the Borrower has entered or proposed to enter for construction of the
Development as required pursuant to Section 3.3 below;
(m) The County has received copies of labor and material (payment) bonds
and performance bonds as required pursuant to Section 3.4 below;
(n) Borrower has closed all loans that are part of the Approved Financing
described in Section 1.1(d)(i), (ii), (iv), (v) and (vii) and is eligible to receive the proceeds of
those loans;
(o) Borrower has provided to the County a commitment letter for the CalHFA
MHSA Loan from CalHFA;
(p) Borrower has received the funds from the Cal Reuse Grant and the
General Partner Equity;
(q) The County has received evidence of compliance with NEPA; and
(r) The County has received a written draw request from the Borrower,
including certification that the condition set forth in Section 2.6(a) continues to be satisfied, and
setting forth the proposed uses of funds consistent with the Approved Development Budget, the
amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost
incurred or to be incurred. When a disbursement is requested to pay any contractor in
connection with improvements on the Property, the written request must be accompanied by (i)
certification by the Borrower's architect reasonably acceptable to the County that the work for
which disbursement is requested has been completed (although the County reserves the right to
inspect the Property and make an independent evaluation); and (ii) lien releases and/or
mechanics lien title insurance endorsements reasonably acceptable to the County.
Section 2.7 Conditions Precedent to Disbursement of Retention.
The County is not obligated to disburse the Retention Amount unless the following
conditions precedent are satisfied:
(a) The County has received a completion report from the Borrower setting
forth (i) the income, household size, and ethnicity of Tenants of the County-Assisted Units, (ii)
and the unit size, rent amount and utility allowance for all County-Assisted Units.
863\80\735461.6
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(b) The County has received an audited final budget for the Development
from the Borrower showing all uses and sources.
(c) The County has received from the Borrower copies of the final permit
sign-offs for the Development.
(d) The County has received for the Borrower current evidence of the
insurance coverage meeting the requirements of Section 4.16 below.
(e) The County has received from Borrower a form of lease and marketing
plan for the County-Assisted Units.
(f) The County has received from Borrower a form of lease, Marketing Plan
and Social Services Plan, as such terms are defined in Section 3.8 below.
(g) The County has received from Borrower evidence of marketing for any
vacant County-Assisted Unit in the Development such as copies of flyers, list of media ads, list
of agencies and organizations receiving information on availability of such units, as applicable.
(h) The County has received from Borrower all relevant contract activity
information, including compliance with Section 3 and MBE/WBE requirements.
(i) If the Borrower was required to comply with relocation requirements, the
County has received from the Borrower evidence of compliance with all applicable relocation
requirements.
(j) The County has received from Borrower a copy of the management
agreement and contact information for the property manager of the Development and the name
and phone number of the on-site property manager.
(k) If the Borrower is required to pay prevailing wages under the Davis-Bacon
Act (40 U.S.C. 3141-3148), the County has received confirmation that the Borrower has
submitted all certified payrolls to the City, and any identified payment issues have been resolved,
or the Borrower is working diligently to resolve any such issues.
(l) The County has received a written draw request from the Borrower,
including certification that the condition set forth in Section 2.6(a) continues to be satisfied, and
setting forth the proposed uses of funds consistent with the Approved Development Budget, and,
where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.
Borrower shall apply the disbursement for the purpose(s) requested.
Section 2.8 Repayment Schedule.
(a) Term. The "Term" of the Loan and this Agreement has a term that expires
on the date fifty-five (55) years from the date first listed above which is ___________, 2065.
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(b) Payment in Full. Borrower shall pay all principal and accrued interest on
the Loan, in full, on the earliest to occur of (i) the date of any Transfer not authorized by the
County, (ii) the date of an Event of Default, and (iii) the expiration of the Term.
(c) Prepayment. Borrower may prepay the Loan at any time without premium
or penalty. However, the Regulatory Agreement and the Deed of Trust will remain in effect for
the entire Term, regardless of any prepayment.
Section 2.9 Utilization of Residual Receipts.
(a) Special Definitions. Except as otherwise noted, the following definitions
shall apply to this Section 2.9:
(i) "Annual Operating Expenses" with respect to a particular calendar
year shall mean Operating Expenses as defined in 25 California Code of Regulations Section
8301(j), subject to the following: (i) debt service payments, which shall only include mandatory
payments on loans associated with the Development and approved by the County; (ii) property
management fees and reimbursements which may not exceed fees and reimbursements which are
standard in the industry and is pursuant to a management contract approved by the County; (iii)
reserve deposits in amounts required by the MHP Loan (which is currently Six Hundred Dollars
($600)/unit); and (iv) any extraordinary operating costs approved by the County.
(ii) "Residual Receipts" in a particular calendar year means Operating
Income (as defined in 25 California Code of Regulations Section 8301(k)) remaining after
payment of the Annual Operating Expenses.
(b) Utilization of Residual Receipts. No later than May 15 of each calendar
year, commencing on May 15 of the year following the calendar year in which the Development
is placed in service, Borrower shall utilize any Residual Receipts to pay the following items in
the order provided below:
(i) payment of partnership management fees and asset management
fees, in any combination, which may not exceed the amount approved by the Agency;
(ii) payment to the Agency pursuant to the terms of the Agency Loan.
Section 2.10 Non-Recourse.
Except as provided below, neither the Borrower, nor any partner of the Borrower, has any
direct or indirect personal liability for payment of the principal of, and interest on, the Loan or
the performance of the covenants of the Borrower under the Deed of Trust. Following
recordation of the Deed of Trust, the sole recourse of the County with respect to the principal of,
or interest on, the Note and defaults by Borrower in the performance of its covenants under the
Deed of Trust will be to the property described in the Deed of Trust; provided, however, that
nothing contained in the foregoing limitation of liability limits or impairs the enforcement of all
the rights and remedies of the County against all such security for the Note, or impairs the right
of County to assert the unpaid principal amount of the Note as demand for money within the
meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any
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successor provision thereto. The foregoing limitation of liability is intended to apply only to the
obligation to repay the principal of, and payment of interest on the Note and the performance of
the Borrower's obligations under the Deed of Trust. Except as hereafter set forth; nothing
contained herein is intended to relieve the Borrower of its obligation to indemnify the County
under Sections 3.7, 4.8, 4.9, and 7.4 of this Agreement, or liability for (i) fraud or willful
misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create
liens on the Property that are payable or applicable prior to any foreclosure under the Deed of
Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of
any personal property or fixtures removed or disposed of by Borrower other than in accordance
with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance
policies or awards resulting from condemnation or the exercise of the power of eminent domain
or by reason of damage, loss or destruction to any portion of the Property.
ARTICLE 3 CONSTRUCTION OF THE DEVELOPMENT
Section 3.1 Permits and Approvals.
Borrower must obtain all permits and approvals necessary for the construction of the
Development on the Property must be received no later than May 1, 2010, or such later date that
the County may approve, or the County, at its option, and with thirty (30) days written notice and
opportunity to cure, may declare Borrower in default hereunder.
Section 3.2 Bid Package.
(a) Not later than thirty (30) days prior to the Borrower's proposed date for
advertising the Bid Package, the Borrower shall submit to the County Department of
Conservation and Development - Redevelopment Division a copy of the Borrower's proposed
Bid Package that the Borrower shall utilize to select the subcontractors for the Development.
The Bid Package includes, but is not limited to: (i) a copy of the proposed construction contract,
(ii) a copy of the proposed invitation to bid, (iii) other procurement documentation reasonably
requested by the County, including, but not limited to, evidence that Borrower obtains a bid
guarantee (in a form reasonably acceptable to the County) from each bidder equivalent to five
percent (5%) of the bid price, and (iv) all Construction Plans for the Development. As used in
this Agreement, "Construction Plans" means all construction documentation upon which
Borrower and Borrower's contractor, if any, relies on in constructing all the Improvements on the
Property (including the units in the Development, landscaping, parking, and common areas) and
includes, but is not limited to, final architectural drawings, landscaping plans and specifications,
final elevations, building plans and specifications (also known as "working drawings").
(b) The County Department of Conservation and Development -
Redevelopment Division shall, if the Bid Package submitted conforms to the provisions of this
Agreement, approve in writing the Bid Package. Unless rejected by the County Department of
Conservation and Development - Redevelopment Division for its failure to comply with the
foregoing requirements within fifteen (15) days after receipt by the County, the Bid Package will
be deemed accepted.
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(c) If rejected by the County Department of Conservation and Development -
Redevelopment Division in whole or in part, Borrower shall submit a new or a corrected Bid
Package within fifteen (15) days after notification of the County's rejection and the reasons
therefor. The County will then have fifteen (15) days to review and approve Borrower's new or
corrected Bid Package. The provisions of this Section relating to time periods for approval,
rejection, or resubmission of a new or corrected Bid Package continues to apply until the Bid
Package has been approved, or is deemed approved by the County Department of Conservation
and Development - Redevelopment Division, and Borrower may not publish the Bid Package
until the County Department of Conservation and Development - Redevelopment Division has
approved the Bid Package (or the Bid Package has been deemed approved pursuant to this
Section).
Section 3.3 Construction Contract.
(a) Not later than thirty (30) days prior to the proposed commencement of
construction of the Development, the Borrower shall submit to the County for its approval the
proposed construction contract for the Development. All construction work and professional
services are to be performed by persons or entities licensed or otherwise authorized to perform
the applicable construction work or service in the State of California. Each contract that the
Borrower enters for construction of the Development is to provide that at least ten percent (10%)
of the costs incurred will be payable only upon completion of construction, subject to early
release of retention for specified subcontractors upon approval by the County. The construction
contract will include all applicable HOPWA requirements set forth in Section 4.8 below. The
County's approval of the construction contract may not be deemed to constitute approval of or
concurrence with any term or condition of the construction contract except as such term or
condition may be required by this Agreement.
(b) Upon receipt by the County of the proposed construction contract, the
County shall promptly review same and approve or disapprove it within ten (10) working days.
If the construction contract is not approved by the County, the County shall set forth in writing
and notify the Borrower of the County's reasons for withholding such approval. The Borrower
shall thereafter submit a revised construction contract for County approval, which approval is to
be granted or denied in ten (10) working days in accordance with the procedures set forth above.
Any construction contract executed by the Borrower for the Development is to be in the form
approved by the County.
Section 3.4 Construction Bonds.
Prior to commencement of construction of the Development, the Borrower shall deliver
to the County copies of labor and material bonds and performance bonds for the construction of
the Development in an amount equal to one hundred percent (100%) of the scheduled cost of the
Development. Such bonds must name the County as a co-obligee.
Section 3.5 Commencement of Construction.
Borrower shall cause the commencement of construction of the Development no later
than June 31, 2010 or such later date that the County approves.
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Section 3.6 Completion of Construction.
Borrower shall diligently prosecute construction of the Development to completion, and
shall cause the completion of the construction of the Development no later than December 31,
2011, or such later date that the County approves.
Section 3.7 Construction Pursuant to Plans and Laws; Prevailing Wages;
Accessibility.
(a) Borrower shall construct the Development in conformance with the plans
and specifications approved by the City's Building Inspection Department. Borrower shall notify
the County in a timely manner of any changes in the work required to be performed under this
Agreement, including any additions, changes, or deletions to the plans and specifications
approved by the County. A written change order authorized by the County must be obtained
before any of the following changes, additions, or deletions in work for the Development may be
performed: (i) any change in the work the cost of which exceeds Twenty-Five Thousand Dollars
($25,000); or (ii) any set of changes in the work the cost of which cumulatively exceeds Seventy-
Five Thousand Dollars ($75,000) or ten percent (10%) of the Loan amount, whichever is less; or
(iii) any material change in building materials or equipment, specifications, or the structural or
architectural design or appearance of the Development as provided for in the plans and
specifications approved by the County. Consent to any additions, changes, or deletions to the
work does not relieve or release Borrower from any other obligations under this Agreement, or
relieve or release Borrower or its surety from any surety bond.
(b) Borrower shall cause all work performed in connection with the
Development to be performed in compliance with:
(i) all applicable laws, ordinances, rules and regulations of federal,
state, county or municipal governments or agencies now in force or that may be enacted
hereafter, including without limitation and to the extent applicable, the prevailing wage
provisions of the federal Davis-Bacon Act and implementing rules and regulations, as further set
forth in subsection (c) below, and state prevailing wages pursuant to California Labor Code
Section 1770 et seq., and the regulations pursuant thereto, as further set forth in subsection (d)
below;
(ii) the property standards set out in 24 C.F.R. Section 5.701 et seq.
and 24 C.F.R. Section 574.310; and
(iii) all directions, rules and regulations of any fire marshal, health
officer, building inspector, or other officer of every governmental agency now having or
hereafter acquiring jurisdiction. The work will proceed only after procurement of each permit,
license, or other authorization that may be required by any governmental agency having
jurisdiction, and Borrower shall be responsible to the County for the procurement and
maintenance thereof, as may be required of Borrower and all entities engaged in work on the
Development.
(c) The Borrower shall cause construction of the Development to be in
compliance with the prevailing wage requirements of the federal Davis-Bacon Act (40 U.S.C.
863\80\735461.6
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(d) The Borrower shall pay and shall cause the contractor and subcontractors
to pay prevailing wages in the construction of the Development as those wages are determined
pursuant to California Labor Code Section 1720 et seq., to employ apprentices as required by
California Labor Code Sections 1777.5 et seq., and the implementing regulations of the
Department of Industrial Relations (the "DIR"). The Borrower shall and shall cause the
contractor and subcontractors to comply with the other applicable provisions of California Labor
Code Sections 1720 et seq., 1777.5 et seq., and implementing regulations of the DIR. The
Borrower shall and shall cause the contractor and subcontractors to keep and retain such records
as are necessary to determine if such prevailing wages have been paid as required pursuant to
California Labor Code Section 1720 et seq., and apprentices have been employed are required by
California Labor Code Section 1777.5 et seq. Copies of the currently applicable current per
diem prevailing wages are available from DIR. During the construction of the Development,
Borrower shall or shall cause the contractor to post at the Property the applicable prevailing rates
of per diem wages. The Borrower shall indemnify, hold harmless and defend (with counsel
reasonably acceptable to the County) the County against any claim for damages, compensation,
fines, penalties or other amounts arising out of the failure or alleged failure of any person or
entity (including Borrower, its contractor and subcontractors) to pay prevailing wages as
determined pursuant to California Labor Code Section 1720 et seq., to employ apprentices
pursuant to California Labor Code Section 1777.5 et seq., and implementing regulations of the
DIR or to comply with the other applicable provisions of California Labor Code Sections 1720 et
seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the
construction of the Development or any other work undertaken or in connection with the
Property. The requirements in this Subsection survive the repayment of the Loan, and the
reconveyance of the Deed of Trust.
Section 3.8 Marketing Plan and Social Services Plan.
(a) Marketing Plan.
(i) No later than six (6) months prior to the projected date of the
completion of the Development, Borrower shall submit to the County for approval its plan for
marketing the Development to income-eligible and HOPWA Eligible Households as required
pursuant to the Regulatory Agreement, including information on affirmative marketing efforts
and compliance with fair housing laws (the "Marketing Plan").
(ii) Upon receipt of the Marketing Plan, the County will promptly
review the Marketing Plan and will approve or disapprove it within fifteen (15) days after
submission. If the Marketing Plan is not approved, Borrower shall submit a revised Marketing
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Plan within fifteen (15) days. If the County does not approve the revised Marketing Plan,
Borrower will be in default hereunder.
(b) Social Services Plan.
(i) No later than four (4) months prior to the projected date of the
completion of the Development, Borrower shall submit to the County for approval its plan for
social services for residents of the Development as required pursuant to the Regulatory
Agreement (the “Social Services Plan”).
(ii) Upon receipt of the Social Services Plan, the County will promptly
review the Social Services Plan and will approve or disapprove it within fifteen (15) days after
submission. If the Social Services Plan is not approved, Borrower shall submit a revised Social
Services Plan within fifteen (15) days. If the County does not approve the revised Social
Services Plan, Borrower will be in default hereunder.
Section 3.9 Equal Opportunity.
During the construction of the Development, discrimination on the basis of race, color,
creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability
in the hiring, firing, promoting, or demoting of any person engaged in the construction work is
not allowed.
Section 3.10 Minority and Women-Owned Contractors.
Borrower shall use its best efforts to afford minority-owned and women-owned business
enterprises the maximum practicable opportunity to participate in the construction of the
Development. Borrower shall, at a minimum, notify applicable minority-owned and women-
owned business firms located in Contra Costa County of bid opportunities for the construction of
the Development. A listing of minority owned and women owned businesses located in the
County and neighboring counties is available from the County. Documentation of such
notifications must be maintained by Borrower and available to the County as requested.
Section 3.11 Progress Reports.
Until such time as Borrower has received a certificate of occupancy from the City for the
Development, Borrower shall provide the County with quarterly progress reports regarding the
status of the construction of the Development, including a certification that the actual
construction costs to date conform to the Approved Development Budget, as it may be amended
from time to time pursuant to Section 3.15 below.
Section 3.12 Construction Responsibilities.
(a) Borrower is responsible for the coordination and scheduling of the work to
be performed so that commencement and completion of the construction of the Development
will take place in accordance with this Agreement.
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(b) Borrower is solely responsible for all aspects of Borrower's conduct in
connection with the Development, including (but not limited to) the quality and suitability of the
plans and specifications, the supervision of construction work, and the qualifications, financial
condition, and performance of all architects, engineers, contractors, subcontractors, suppliers,
consultants, and property managers. Any review or inspection undertaken by the County with
reference to the Development is solely for the purpose of determining whether Borrower is
properly discharging its obligations to the County, and may not be relied upon by Borrower or by
any third parties as a warranty or representation by the County as to the quality of the design or
construction of the Development.
Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop notice affecting
the Loan is served on the County or any other lender or other third party in connection with the
Development, then Borrower shall, within twenty (20) days after such filing or service, either
pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by
delivering to the County a surety bond in sufficient form and amount, or provide the County with
other assurance satisfactory to the County that the claim of lien or stop notice will be paid or
discharged.
(b) If Borrower fails to discharge any lien, encumbrance, charge, or claim in
the manner required in this Section, then in addition to any other right or remedy, the County
may (but is under no obligation to) discharge such lien, encumbrance, charge, or claim at
Borrower's expense. Alternately, the County may require Borrower to immediately deposit with
the County the amount necessary to satisfy such lien or claim and any costs, pending resolution
thereof. The County may use such deposit to satisfy any claim or lien that is adversely
determined against Borrower.
(c) Borrower shall file a valid notice of cessation or notice of completion
upon cessation of construction on the Development for a continuous period of thirty (30) days or
more, and take all other reasonable steps to forestall the assertion of claims of lien against the
Property. Borrower authorizes the County, but County has no obligation, to record any notices
of completion or cessation of labor, or any other notice that the County deems necessary or
desirable to protect its interest in the Development and Property.
Section 3.14 Inspections.
Borrower shall permit and facilitate, and shall require its contractors to permit and
facilitate, observation and inspection at the Development by the County and by public authorities
during reasonable business hours for the purposes of determining compliance with this
Agreement.
Section 3.15 Approved Development Budget; Revisions to Budget.
As of the date of this Agreement, the County has approved the Approved Development
Budget set forth in Exhibit B. Borrower shall submit any required amendments to the Approved
Development Budget to the County for approval within five (5) days of the date Borrower
receives information indicating that actual costs of the Development vary or will vary from the
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costs shown on the Approved Development Budget. Written consent of the County will be
required to amend the Approved Development Budget.
Section 3.16 Developer Fee.
The maximum cumulative developer fee that may be paid to any entity or entities
providing development services to the Development, whether paid up-front or on a deferred
basis, may not exceed Five Hundred Forty-Six Thousand Dollars ($546,000). Partnership
management fees, asset management fees and any other fees for the general partner of the
Borrower may not exceed the amounts approved by the Agency.
Section 3.17 Capital Contributions.
The Borrower shall cause one of its general partners to contribute the General Partner
Equity to the Borrower (as defined in Section 1.1(d)(viii) above), and shall utilize such funds to
pay costs of the Development, consistent with the Approved Development Budget.
Section 3.18 NEPA Mitigation Requirements.
Borrower shall comply with the following NEPA mitigation requirements in the
construction of the Development, as set forth in the Environmental Assessment prepared by
AEM Consulting dated September 2007:
(a) Historic Resources. If historic or archaeological resources are encountered
during construction activities, all activity in the project area shall cease and the City shall be
notified and a qualified archaeologist shall be contacted to evaluate the situation. Project
personnel may not alter any of the uncovered materials or their context. If resources are
encountered, the project applicant, in consultation with a qualified archaeologist shall prepare a
resource inventory, declaration, and mitigation plan and submit it to the City for review and
approval prior to continuation of construction activity at the discovery site.
(b) Soils and Geology. All construction activities are to occur in accordance
with the design standards established and used by the City. Those standards include but are not
limited to soil compaction, load-bearing base materials, addition of structural reinforcement and
compliance with earthquake standards. Implementation of sound construction practices would
be employed in compliance with the Uniform Building Code.
(c) Storm Water Runoff. Affected applicants for development approvals must
submit a Stormwater Control Plan in accordance with the criteria identified by the City and the
Contra Costa Clean Water Program’s Stormwater C.3 Guidebook.
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ARTICLE 4 LOAN REQUIREMENTS
Section 4.1 Operating Reserve Accounts.
The Borrower shall create and maintain operating reserve accounts as described in the
attached Exhibit C, which Borrower shall use to fund operating deficits for the Development.
The County, Borrower and CalHFA will enter into an Operating Reserve Agreement in
connection with the operating reserves for the County MHSA Loan (the " County MHSA
Operating Reserve ). The Operating Reserve Agreement will contain the terms and requirements
for the County MHSA Operating Reserve and will be executed by the County, Borrower and
CalHFA as soon as practicable, but in no event later than six months from the date of this
Agreement.
Section 4.2 Compliance with Project Agreement
Borrower shall comply with the terms of the Project Agreement, and any breach under
the Project Agreement subject to the notice and cure periods set forth in Section 6.1(c) below,
will be considered an Event of Default under this Agreement. The Project Agreement is hereby
incorporated into this Agreement by this reference.
Section 4.3 Financial Accounting and Post-Completion Audits.
No later than sixty (60) days following completion of construction of the Development,
Borrower shall provide to County a financial accounting of all sources and uses of funds for the
Development. No later than one hundred fifty (150) days following completion of construction
of the Development, Borrower shall submit an audited financial report showing the sources and
uses of all funds utilized for the Development.
Section 4.4 Annual Operating Budget Audited Financial Statements.
At the beginning of each year of the Term, Borrower shall provide to the County an
annual budget for the operation of the Development. Unless rejected by the County in writing
within fifteen (15) days after receipt of the budget, the budget will be deemed accepted. If
rejected by the County in whole or in part, Borrower shall submit a new or corrected budget
within thirty (30) calendar days of notification of the County's rejection and the reasons therefor.
The provisions of this Section relating to time periods for resubmission of new or corrected
budgets will continue to apply until such budget has been approved by the County.
Section 4.5 Information.
Borrower shall provide any information reasonably requested by the County in
connection with the Development, including (but not limited to) any information required by
HUD in connection with Borrower's use of the Loan funds.
Section 4.6 Records.
(a) The Borrower shall keep and maintain at the Development, or elsewhere
with the County's written consent, full, complete and appropriate books, record and accounts
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relating to the Development, including all such books, records and accounts necessary or prudent
to evidence and substantiate in full detail Borrower's calculation of Residual Receipts,
disbursements made from Residual Receipts in compliance with Section 2.9(b) of this
Agreement. Books, records and accounts relating to Borrower's compliance with the terms,
provisions, covenants and conditions of this Agreement are to be kept and maintained in
accordance with generally accepted accounting principles consistently applied, and are to be
consistent with requirements of this Agreement. All such books, records, and accounts are to be
open to and available for inspection and copying by HUD, the County, its auditors or other
authorized representatives at reasonable intervals during normal business hours. Copies of all
tax returns and other reports that Borrower may be required to furnish to any governmental
agency are to be open for inspection by the County at all reasonable times at the place that the
books, records and accounts of the Borrower are kept. The Borrower shall preserve such records
for a period of not less than five (5) years after the creation of such records in compliance with
all HUD records and accounting requirements including. If any litigation, claim, negotiation,
audit exception, monitoring, inspection or other action relating to the use of the Loan is pending
at the end of the record retention period stated herein, then the Borrower shall retain the records
until such action and all related issues are resolved. The records are to include all invoices,
receipts, and other documents related to expenditures from the Loan funds. Borrower shall cause
records to be accurate and current and in such a form as to allow the County to comply with the
recordkeeping requirements contained in 24 C.F.R. 574.450 and 24 C.F.R. 574.530. Such
records are to include but are not limited to:
(i) Records providing a full description of the activities undertaken
with the use of the Loan;
(ii) Records demonstrating that each activity undertaken meets one of
the eligible activities of the HOPWA program set forth in 24 C.F.R. Section 574.300 and 24
C.F.R. Section 574.310;
(iii) Records demonstrating compliance with affordability and income
requirements for Tenants;
(iv) Records required to determine the eligibility of activities;
(v) Records documenting compliance with the fair housing and equal
opportunity requirements, as applicable;
(vi) Financial records and other documents necessary to document
compliance with the requirements of 24 C.F.R. Part 574 et. seq. and by OMB Circular A-110 (24
C.F.R. Part 84);
(vii) Records documenting compliance with the Social Services Plan
approved by the County; and
(viii) Certified payrolls from the Borrower's general contractor
evidencing that applicable prevailing wages have been paid.
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(b) The County shall notify Borrower of any records it deems insufficient.
Borrower has fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the County in such notice, or if a period longer than fifteen
(15) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct
the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
Section 4.7 County Audits.
Each year, Borrower shall provide the County with a copy of Borrower's annual audit,
which is to include information on all of Borrower's activities and not just those pertaining to the
Development. In addition, the County or any designated agent or employee of the County at any
time is entitled to audit the Residual Receipts, disbursements made from Residual Receipts in
compliance with Section 2.9(b), and all of Borrower's books, records, and accounts pertaining
thereto. Such audit is to be conducted during normal business hours at the principal place of
business of Borrower and other places where records are kept. Immediately after the completion
of an audit, the County shall deliver a copy of the results of the audit to Borrower. The Borrower
shall also follow audit requirements of the Single Audit Act and OMB Circulars A-122 and 110
as set forth in 24 C.F.R. 574.605 and other audit requirements of 24 C.F.R. 574.650.
Section 4.8 HOPWA Requirements.
(a) Borrower shall comply with all applicable laws and regulations governing
the use of the HOPWA Loan Funds, as set forth in 24 C.F.R. Part 574 et. seq., including but not
limited to the requirements of the Regulatory Agreement and the Project Agreement. In the
event of any conflict between this Agreement and applicable laws and regulations governing the
use of the Loan funds, the applicable laws and regulations govern. During the HOPWA Term,
these requirements are federal requirements, implemented by the County; thereafter, these
requirements are deemed local County requirements.
(b) The laws and regulations governing the use of the Loan funds include (but
are not limited to) the following:
(i) Environmental and Historic Preservation. 24 C.F.R. Part 58,
which prescribes procedures for compliance with the National Environmental Policy Act of 1969
(42 U.S.C. 4321-4361), and the additional laws and authorities listed at 24 C.F.R. Section 58.5.
(ii) Applicability of OMB Circulars. The applicable policies,
guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and
A-133.
(iii) Debarred, Suspended or Ineligible Contractors. The prohibition on
the use of debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24.
(iv) Civil Rights, Housing and Community Development, and Age
Discrimination Acts. The Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing
regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII
of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the
Housing and Community Development Act of 1974 as amended; Section 504 of the
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Rehabilitation Act of 1973 (29 USC 794, et seq.); the Age Discrimination Act of 1975 (42 USC
6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and implementing
regulations at 24 C.F.R. Part 107; Executive Order 11246 as amended by Executive Orders
11375, 12086, 11478, 12107; Executive Order 11625 as amended by Executive Order 12007;
Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608.
(v) Lead-Based Paint. The requirement of the Lead-Based Paint
Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.), the Residential Lead-Based
Paint Hazard Reduction Act (42 U.S.C. 4851 et seq.), and implementing regulations at 24 C.F.R.
Part 35.
(vi) Relocation. if applicable, the requirements of the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601, et
seq.), and implementing regulations at 49 C.F.R. Part 24; Section 104(d) of the Housing and
Community Development Act of 1974 and implementing regulations at 24 C.F.R. Part 42; 24
C.F.R. 574.630; and California Government Code Section 7260 et seq. and implementing
regulations at 25 California Code of Regulations Sections 6000 et seq. If and to the extent that
development of the Development results in the permanent or temporary displacement of
residential tenants, homeowners, or businesses, then Borrower shall comply with all applicable
local, state, and federal statutes and regulations with respect to relocation planning, advisory
assistance, and payment of monetary benefits. Borrower shall prepare and submit a relocation
plan to the County for approval. Borrower is solely responsible for payment of any relocation
benefits to any displaced persons and any other obligations associated with complying with such
relocation laws. The Borrower shall indemnify, defend (with counsel reasonably chosen by the
County), and hold harmless the County against all claims that arise out of relocation obligations
to residential tenants, homeowners, or businesses permanently or temporarily displaced by the
Development.
(vii) Discrimination against the Disabled. The requirements of Section
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), and federal regulations issued pursuant
thereto, which prohibit discrimination against the disabled in any federally assisted program, the
requirements of the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157) and the applicable
requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990 (42
U.S.C. 12131 et seq.), and federal regulations issued pursuant thereto.
(viii) Clean Air and Water Acts. The Clean Air Act, as amended, 42
U.S.C. 7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et
seq., and the regulations of the Environmental Protection Agency with respect thereto, at 40
C.F.R. Part 1500, as amended from time to time.
(ix) Housing Quality Standards. The housing quality standards set
forth in 24 C.F.R. Section 574.310(b).
(x) Supportive Services. The supportive service requirements of 24
C.F.R. Section 574.310(a)(1). The Borrower shall procure services to satisfy such service
requirements.
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(xi) Training Opportunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u ("Section 3"),
requiring that to the greatest extent feasible opportunities for training and employment be given
to lower income residents of the project area and agreements for work in connection with the
project be awarded to business concerns which are located in, or owned in substantial part by
persons residing in, the areas of the project. Borrower agrees to include the following language
in all subcontracts executed under this Agreement:
(1) The work to be performed under this contract is subject to
the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended,
12 U.S.C. 1701u. The purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall,
to the greatest extent feasible, be directed to low- and very low-income persons, particularly
persons who are recipients of HUD assistance for housing.
(2) The parties to this contract agree to comply with HUD's
regulations in 24 C.F.R. Part 135, which implement Section 3. As evidenced by their execution
of this contract, the parties to this contract certify that they are under no contractual or other
impediment that would prevent them from complying with the Part 135 regulations.
(3) The contractor agrees to send to each labor organization or
representative of workers with which the contractor has a collective bargaining agreement or
other understanding, if any, a notice advising the labor organization or workers’ representative of
the contractor's commitments under this Section 3 clause; and will post copies of the notice in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3 preference;
shall set forth minimum number and job titles subject to hire; availability of apprenticeship and
training positions; the qualifications for each; the name and location of the person(s) taking
applications for each of the positions; and the anticipated date the work shall begin.
(4) The contractor agrees to include this Section 3 clause in
every subcontract subject to compliance with regulations in 24 C.F.R. Part 135, and agrees to
take appropriate action, as provided in an applicable provision of the subcontract or in this
Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24
C.F.R. Part 135. The contractor will not subcontract with any subcontractor where the contractor
has notice or knowledge that the subcontractor has been found in violation of the regulations in
24 C.F.R. Part 135.
(5) The contractor will certify that any vacant employment
positions, including training positions, that are filled (1) after the contractor is selected but before
the contract is executed, and (2) with persons other than those to whom the regulations of 24
C.F.R. Part 135 require employment opportunities to be directed, were not filled to circumvent
the contractor's obligations under 24 C.F.R. Part 135.
(6) Noncompliance with HUD's regulations in 24 C.F.R. Part
135 may result in sanctions, termination of this contract for default, and debarment or suspension
from future HUD assisted contracts.
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(7) With respect to work performed in connection with Section
3 covered Indian housing assistance, section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract.
Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of contracts
and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises.
Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to
comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with
section 7(b).
(xii) Labor Standards. The Borrower shall comply with applicable
labor requirements set forth in 24 C.F.R. Section 574.655. The prevailing wage requirements of
the Davis-Bacon Act and implementing rules and regulations (40 U.S.C. 3141-3148); the
Copeland "Anti-Kickback" Act (40 U.S.C. 276(c)) which requires that workers be paid at least
once a week without any deductions or rebates except permissible deductions; the Contract Work
Hours and Safety Standards Act – CWHSSA (40 U.S.C. 3701-3708) which requires that workers
receive "overtime" compensation at a rate of 1-1/2 times their regular hourly wage after they
have worked forty (40) hours in one (1) week; and Title 29, Code of Federal Regulations,
Subtitle A, Parts 1, 3 and 5 are the regulations and procedures issued by the Secretary of Labor
for the administration and enforcement of the Davis-Bacon Act, as amended.
(xiii) Drug Free Workplace. The requirements of the Drug Free
Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 C.F.R. Part 24.
(xiv) Anti-Lobbying; Disclosure Requirements. The disclosure
requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 C.F.R.
Part 87.
(xv) Historic Preservation. The Borrower shall comply with the historic
preservation requirements set forth in the National Historic Preservation Act of 1966, as
amended (16 U.S.C. Section 470) and the procedures set forth in 36 C.F.R. Part 800.
(xvi) Faith Based Activities. The requirements of 24 C.F.R. Section
574.300(c) regarding eligible use of funds by organizations that are religious or faith-based.
(xvii) HUD Regulations. Any other HUD regulations present or as may
be amended, added, or waived in the future pertaining to the Loan funds, including but not
limited to HUD regulations as may be promulgated regarding subrecipients.
Section 4.9 Hazardous Materials.
(a) Borrower shall keep and maintain the Property in compliance with, and
may not cause or permit the Property to be in violation of any federal, state or local laws,
ordinances or regulations relating to industrial hygiene or to the environmental conditions on,
under or about the Property including, but not limited to, soil and ground water conditions.
Borrower may not use, generate, manufacture, store or dispose of on, under, or about the
Property or transport to or from the Property any flammable explosives, radioactive materials,
863\80\735461.6
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hazardous wastes, toxic substances or related materials, including without limitation, any
substances defined as or included in the definition of "hazardous substances," hazardous wastes,"
"hazardous materials," or "toxic substances" under any applicable federal or state laws or
regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the
foregoing as may be customarily used in construction of projects like the Development or kept
and used in and about residential property of this type.
(b) Borrower shall immediately advise the County in writing if at any time it
receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against Borrower or the Property pursuant
to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"), (ii) all claims made or threatened by any third party
against Borrower or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above are hereinafter referred to as "Hazardous Materials Claims"), and (iii) Borrower's
discovery of any occurrence or condition on any real property adjoining or in the vicinity of the
Property that could cause the Property or any part thereof to be classified as "border-zone
property" (as defined in California Health and Safety Code Section 25117.4) under the provision
of California Health and Safety Code, Section 25220 et seq., or any regulation adopted in
accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
(c) The County has the right to join and participate in, as a party if it so elects,
any legal proceedings or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attorneys' fees in connection therewith paid by Borrower. Borrower
shall indemnify and hold harmless the County and its boardmembers, supervisors, directors,
officers, employees, agents, successors and assigns from and against any loss, damage, cost,
expense or liability directly or indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on,
under, or about the Property including without limitation: (i) all foreseeable consequential
damages, (ii) the costs of any required or necessary repair, cleanup or detoxification of the
Property and the preparation and implementation of any closure, remedial or other required
plans, and (iii) all reasonable costs and expenses incurred by the County in connection with
clauses (i) and (ii), including but not limited to reasonable attorneys' fees and consultant's fees.
This indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision
include, but are not limited to: (1) losses attributable to diminution in the value of the Property,
(2) loss or restriction of use of rentable space on the Property, (3) adverse effect on the marketing
of any rental space on the Property, and (4) penalties and fines levied by, and remedial or
enforcement actions of any kind issued by any regulatory agency (including but not limited to
the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the
Property and surrounding properties). This obligation to indemnify will survive termination of
this Agreement.
(d) Without the County's prior written consent, which will not be
unreasonably withheld, Borrower may not take any remedial action in response to the presence
of any Hazardous Materials on, under or about the Property, nor enter into any settlement
863\80\735461.6
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agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
which remedial action, settlement, consent decree or compromise might, in the County's
reasonable judgment, impair the value of the County's security hereunder; provided, however,
that the County's prior consent is not necessary in the event that the presence of Hazardous
Materials on, under, or about the Property either poses an immediate threat to the health, safety
or welfare of any individual or is of such a nature that an immediate remedial response is
necessary and it is not reasonably possible to obtain the County's consent before taking such
action, provided that in such event Borrower shall notify the County as soon as practicable of
any action so taken. The County agrees not to withhold its consent, where such consent is
required hereunder, if (i) a particular remedial action is ordered by a court of competent
jurisdiction, (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it
fails to take a required action, (iii) Borrower establishes to the reasonable satisfaction of the
County that there is no reasonable alternative to such remedial action which would result in less
impairment of the County's security hereunder, or (iv) the action has been agreed to by the
County.
(e) Borrower hereby acknowledges and agrees that (i) this Section is intended
as the County's written request for information (and Borrower's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Agreement (together with any
indemnity obligation applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Property is intended by the Parties to be an
"environmental provision" for purposes of California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be
"environmentally impaired" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of
Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the
County's or the trustee's rights and remedies under the Deed of Trust, the County may elect to
exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien
on such environmentally impaired or affected portion of the Property and (2) exercise (i) the
rights and remedies of an unsecured creditor, including reduction of its claim against the
Borrower to judgment, and (ii) any other rights and remedies permitted by law. For purposes of
determining the County's right to proceed as an unsecured creditor under California Code of
Civil Procedure Section 726.5(a), the Borrower will be deemed to have willfully permitted or
acquiesced in a release or threatened release of Hazardous Materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
Hazardous Materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and the Borrower knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred
by the County in connection with any action commenced under this paragraph, including any
action required by California Code of Civil Procedure Section 726.5(b) to determine the degree
to which the Property is environmentally impaired, plus interest thereon at the lesser of ten
percent (10%) and the maximum rate permitted by law, until paid, will be added to the
indebtedness secured by the Deed of Trust and is due and payable to the County upon its demand
made at any time following the conclusion of such action.
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(g) The County and Borrower acknowledge the need for Borrower to perform
Hazardous Materials remediation on the Property prior to commencement of construction of the
Development. As documented in the remediation work plan dated August 7, 2009, prepared by
PES Environmental, Inc, a portion of the soil on the Property contains lead contamination (the
"RWP"). The Borrower shall perform the remediation of the Property in compliance with the
RWP. Furthermore, the Borrower shall comply with the requirements of the California
Department of Toxic Substances Controls and all applicable laws in completing such
remediation work. Borrower shall commence and complete the remediation work in a timely
fashion.
Section 4.10 Maintenance and Damage.
(a) During the course of both construction and operation of the Development,
Borrower shall maintain the Development and the Property in good repair and in a neat, clean
and orderly condition. If there arises a condition in contravention of this requirement, and if
Borrower has not cured such condition within thirty (30) days after receiving a County notice of
such a condition, then in addition to any other rights available to the County, the County may
perform all acts necessary to cure such condition, and to establish or enforce a lien or other
encumbrance against the Property.
(b) Subject to the requirements of senior lenders, and if economically feasible
in the County’s reasonable judgment after consultation with the Borrower, if any improvement
now or in the future on the Property is damaged or destroyed, then Borrower shall, at its cost and
expense, diligently undertake to repair or restore such improvement consistent with the plans and
specifications approved by the County with such changes as have been approved by the County.
Such work or repair is to be commenced no later than the later of one hundred twenty (120) days,
or such longer period approved by the County in writing, after the damage or loss occurs or thirty
(30) days following receipt of the insurance proceeds, and is to be complete within one (1) year
thereafter. Any insurance proceeds collected for such damage or destruction are to be applied to
the cost of such repairs or restoration and, if such insurance proceeds are insufficient for such
purpose, then Borrower shall make up the deficiency. If Borrower does not promptly make such
repairs then any insurance proceeds collected for such damage or destruction are to be promptly
delivered by the Borrower to the County as a special repayment of the Loan, subject to the rights
of the Senior Lenders, if any.
Section 4.11 Fees and Taxes.
Borrower is solely responsible for payment of all fees, assessments, taxes, charges, and
levies imposed by any public authority or utility company with respect to the Property or the
Development, and shall pay such charges prior to delinquency. However, Borrower is not
required to pay and discharge any such charge so long as (a) the legality thereof is being
contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the
County, Borrower deposits with the County any funds or other forms of assurance that the
County in good faith from time to time determines appropriate to protect the County from the
consequences of the contest being unsuccessful.
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Section 4.12 Notice of Litigation.
Borrower shall promptly notify the County in writing of any litigation that has the
potential to materially affect Borrower or the Property and of any claims or disputes that involve
a material risk of such litigation.
Section 4.13 Operation of Development as Affordable Housing.
(a) The Borrower shall operate the Development as an affordable housing
development consistent with (i) HUD's requirements for use of the HOPWA Funds for the
County-Assisted Units, and (ii) the Regulatory Agreement.
(b) No later than ninety (90) days prior to the completion of the Development,
the Borrower shall submit its proposed form of lease agreement for the County's review and
approval. The term of the form of lease agreement for the County-Assisted Units is to be for no
less than one (1) year, except by mutual agreement between Borrower and the Tenant. Any
Borrower termination of a lease agreement for the County-Assisted Units, or refusal to renew
must be preceded by not less than sixty (60) days written notice to the Tenant by the Borrower
specifying the grounds for the action.
(c) No later than ninety (90) days prior to the completion of the Development,
the Borrower shall provide the County, for its review and approval, with the Borrower's written
tenant selection plan. Borrower's tenant selection plan must, at a minimum, meet the
requirements for tenant selection set out in 24 C.F.R. Part 574, and any modifications thereto.
(d) Borrower shall evaluate the income eligibility of each Tenant household in
a County-Assisted Units pursuant to the County's approved tenant certification procedures within
sixty (60) days before the household's expected occupancy of one of the County-Assisted Units.
Borrower shall certify each Tenant household's income on an annual basis. In accordance with
the Regulatory Agreement, the Borrower shall make annual certifications as to whether a Tenant
of a HOPWA Unit is a HOPWA Eligible Household (as such terms are defined in the Regulatory
Agreement)
(e) Information documenting the maximum household income of a household
occupying a County-Assisted Unit, and the total charges for rent, utilities, and related services to
each household occupying the Development, it to be maintained as provided in the Regulatory
Agreement.
(f) Throughout the HOPWA Term, Borrower shall ensure that social services
are provided to Tenants of the HOPWA Units in accordance with Section 4.8(b)(x) above.
Section 4.14 Nondiscrimination.
(a) The Borrower covenants by and for itself and its successors and assigns
that there will be no discrimination against or segregation of a person or of a group of persons on
account of race, color, religion, creed, age, familial status, disability, sex, sexual orientation,
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marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Property, nor may the Borrower or any person claiming under or
through the Borrower establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the Property. The foregoing covenant will run with
the land.
(b) Nothing in this Section prohibits the Borrower from requiring the
HOPWA Units in the Development to be available to and occupied by HOPWA Eligible
Households.
Section 4.15 Transfer.
(a) For purposes of this Agreement, "Transfer" means any sale, assignment,
or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this
Agreement, and/or (ii) any interest in the Development, including (but not limited to) a fee
simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a
security interest, or an interest evidenced by a land contract by which possession of the
Development is transferred and Borrower retains title. The term "Transfer" excludes the leasing
of any single unit in the Development to an occupant in compliance with the Regulatory
Agreement. The County Deputy Director – Redevelopment is authorized to execute assignment
and assumption agreements on behalf of the County to implement any approved Transfer.
(b) No Transfer is permitted without the prior written consent of the County,
which the County may withhold in its sole discretion. The Loan will automatically accelerate and
be due in full upon any Transfer made without the prior written consent of the County.
(c) The County approves the granting of a security interest in the Property in
connection with the Approved Financing.
(d) The County hereby approves the Transfer of the general partner interest in
Borrower to a nonprofit affiliate of Community Housing Development Corporation of North
Richmond, a California nonprofit public benefit corporation ("CHDC"), controlled by CHDC.
(e) The County hereby approves a Transfer of the Property from the Borrower
to CHDC or a non-profit affiliate of CHDC, and an assumption of the Loan by such transferee,
pursuant to an option agreement, provided that the transferee expressly assumes the obligations
of the Borrower under the Loan Documents, utilizing a form of assignment and assumption
agreement to be provided by the County.
Section 4.16 Insurance Requirements.
(a) The Borrower shall maintain the following insurance coverage throughout the
Term of the Loan:
(i) Worker's Compensation insurance to the extent required by law,
including Employer's Liability coverage, with limits not less than One Million Dollars
($1,000,000) each accident.
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(ii) Comprehensive General Liability insurance with limits not less
than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations.
(iii) Comprehensive Automobile Liability insurance with limits not less
than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable.
(iv) Builders' Risk insurance during the course of construction, and
upon completion of construction, property insurance covering the Development, in form
appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for
one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the
County, naming the County as a Loss Payee, as its interests may appear. Flood insurance must
be obtained if required by applicable federal regulations.
(v) Blanket Fidelity Bond covering all officers and employees, for loss
of Loan proceeds caused by dishonesty, in an amount not less than Three Hundred Thousand
Dollars ($300,000) naming the County a Loss Payee, as its interests may appear.
(b) The Borrower shall cause any general contractor, agent, or subcontractor
working on the Development under direct contract with the Borrower or subcontract to maintain
insurance of the types and in at least the minimum amounts described in subsections (i), (ii), and
(iii) above, except that the limit of liability for comprehensive general liability insurance for
subcontractors must be One Million Dollars ($1,000,000), and must require that such insurance
will meet all of the general requirements of subsections (d) and (e) below.
(c) The required insurance must be provided under an occurrence form, and
Borrower shall maintain the coverage described in subsections (a) continuously throughout the
Term. Should any of the required insurance be provided under a form of coverage that includes
an annual aggregate limit or provides that claims investigation or legal defense costs be included
in such annual aggregate limit, such annual aggregate limit must be three times the occurrence
limits specified above.
(d) Comprehensive General Liability, Comprehensive Automobile Liability
and Property insurance policies must be endorsed to name as an additional insured the County
and its officers, agents, employees and members of the County Board of Supervisors.
(e) All policies and bonds are to contain (i) the agreement of the insurer to
give the County at least thirty (30) days notice prior to cancellation (including, without
limitation, for non-payment of premium) or any material change in said policies; (ii) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the County; (iii) a provision that no act or omission of the Borrower shall affect or
limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a
waiver by the insurer of all rights of subrogation against the County and its authorized parties in
connection with any loss or damage thereby insured against.
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Section 4.17 Anti-Lobbying Certification.
The Borrower certifies, to the best of Borrower's knowledge or belief, that:
(a)No Federal appropriated funds have been paid or will be paid, by or on
behalf of it, to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification of any Federal contract,
grant, loan, or cooperative agreement;
(b)If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, grant, loan, or
cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to
Report Lobbying, in accordance with its instructions.
This certification is a material representation of fact upon which reliance was placed
when this Agreement was made or entered into. Submission of this certification is a prerequisite
for making or entering into this Agreement imposed by Section 1352, Title 31, U.S. Code. Any
person who fails to file the required certification shall be subject to a civil penalty of not less
than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars
($100,000) for such failure.
Section 4.18 Payment of Other Indebtedness; Notice of Default
(a) Borrower shall promptly pay the principal and interest when due on any
other indebtedness related to the Development.
(b) Borrower shall promptly notify the County in writing of any defaults
declared under any other financing for the Development by the lender of such financing.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1 Representation and Warranties.
Borrower hereby represents and warrants to the County as follows:
(a) Organization. Borrower is duly organized, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted.
(b) Authority of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
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delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and
observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all
actions required under Borrower's organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the Loan
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Borrower enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Loan Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Borrower, or any provision of the organizational
documents of Borrower, or will conflict with or constitute a breach of or a default under any
agreement to which Borrower is a party, or will result in the creation or imposition of any lien
upon any assets or property of Borrower, other than liens established pursuant hereto.
(f) Compliance with Laws; Consents and Approvals. The construction of the
Development complies with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government
or agency.
(g) Pending Proceedings. Borrower is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened
against or affecting Borrower or the Development, at law or in equity, before or by any court,
board, commission or agency whatsoever which might, if determined adversely to Borrower,
materially affect Borrower's ability to repay the Loan or impair the security to be given to the
County pursuant hereto.
(h) Title to Land. At the time of recordation of the Deed of Trust, Borrower
will have good and marketable fee title to the Development and there will exist thereon or with
respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever
other than liens for current real property taxes and liens in favor of the County or approved in
writing by the County.
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(i) Financial Statements. The financial statements of Borrower and other
financial data and information furnished by Borrower to the County fairly and accurately present
the information contained therein as of the date thereof. As of the date of this Agreement, there
has not been any material adverse change in the financial condition of Borrower from that shown
by such financial statements and other data and information.
(j) Sufficient Funds. Borrower holds sufficient funds and/or binding
commitments for sufficient funds to complete the acquisition of the Property and the
construction of the Development in accordance with the plans and specifications approved by the
County.
(k) Taxes. Borrower and its subsidiaries have filed all federal and other
material tax returns and reports required to be filed, and have paid all federal and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them or their
income or the Property otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been provided in
accordance with generally accepted accounting principles. There is no proposed tax assessment
against Borrower or any of its subsidiaries that could, if made, be reasonably expected to have a
material adverse effect upon the Property, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower and its subsidiaries, taken as a whole,
which would be expected to result in a material impairment of the ability of Borrower to perform
under any Loan Document to which it is a party, or a material adverse effect upon the legality,
validity, binding effect or enforceability against Borrower of any Loan Document.
ARTICLE 6 DEFAULT AND REMEDIES
Section 6.1 Events of Default.
Each of the following constitutes an " Event of Default" by Borrower under this
Agreement:
(a) Failure to Construct. Failure of Borrower to commence and complete
construction of the Development within the times set forth in Article 3 above.
(b) Failure to Make Payment. Failure to repay the principal and any interest
on the Loan within ten (10) days after receipt of written notice from the County that such
payment is due pursuant to the Loan Documents.
(c) Breach of Covenants. Failure by Borrower to duly perform, comply with,
or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such
failure continues uncured for thirty (30) days after receipt of written notice thereof from the
County to the Borrower or, if the breach cannot be cured within thirty (30) days, the Borrower
may not be in breach so long as Borrower is diligently undertaking to cure such breach and such
breach is cured within ninety (90) days; provided, however, that if a different period or notice
requirement is specified under any other section of this Article 6, the specific provisions will
control.
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(d) Default Under Other Loans. A default is declared under any other
financing for the Development by the lender of such financing.
(e) Insolvency. A court having jurisdiction makes or enters any decree or
order (i) adjudging Borrower or Borrower's general partner, to be bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization of Borrower or Borrower's general
partner, or seeking any arrangement for Borrower or Borrower's general partner, under the
bankruptcy law or any other applicable debtor's relief law or statute of the United States or any
state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower
or Borrower's general partner, in bankruptcy or insolvency or for any of their properties, (iv)
directing the winding up or liquidation of Borrower or Borrower's general partner, if any such
decree or order described in clauses (i) to (iv), inclusive, is unstayed or undischarged for a period
of ninety (90) calendar days; or (v) Borrower or Borrower's general partner, admits in writing its
inability to pay its debts as they fall due or will have voluntarily submitted to or filed a petition
seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The
occurrence of any of the Events of Default in this paragraph will act to accelerate automatically,
without the need for any action by the County, the indebtedness evidenced by the Note.
(f) Assignment; Attachment. Borrower or Borrower's general partner assign
its assets for the benefit of its creditors or suffers a sequestration or attachment of or execution
on any substantial part of its property, unless the property so assigned, sequestered, attached or
executed upon is returned or released within ninety (90) calendar days after such event or, if
sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of
any of the events of default in this paragraph shall act to accelerate automatically, without the
need for any action by the County, the indebtedness evidenced by the Note.
(g) Suspension; Termination. Borrower or Borrower's general partner
voluntarily suspends its business or, the partnership is dissolved or terminated, other than a
technical termination of the partnership for tax purposes.
(h) Liens on Property and the Development. Any claim of lien (other than
liens approved in writing by the County) is filed against the Development or any part thereof, or
any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds
of the Loan and the continued maintenance of said claim of lien or notice to withhold for a
period of twenty (20) days, without discharge or satisfaction thereof or provision therefor
(including, without limitation, the posting of bonds) satisfactory to the County.
(i) Condemnation. The condemnation, seizure, or appropriation of all or the
substantial part of the Property and the Development.
(j) Unauthorized Transfer. Any Transfer other than as permitted by
Section 4.15.
(k) Representation or Warranty Incorrect. Any Borrower representation or
warranty contained in this Agreement, or in any application, financial statement, certificate, or
report submitted to the County in connection with any of the Loan Documents, proves to have
been incorrect in any material respect when made. After issuance of the certificates of
occupancy for the Development, an Event of Default may be declared under this subsection only
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if the failure of representation or warranty also has a material adverse effect on the operation of
the Development.
Notwithstanding anything to the contrary contained herein, the County hereby agrees that
any cure of any Event of Default made or tendered by one or more of Borrower's limited partners
shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as
if made or tendered by Borrower.
Section 6.2 Remedies.
The occurrence of any Event of Default hereunder following the expiration of all
applicable notice and cure periods will, either at the option of the County or automatically where
so specified, relieve the County of any obligation to make or continue the Loan and will give the
County the right to proceed with any and all remedies set forth in this Agreement and the Loan
Documents, including but not limited to the following:
(a) Acceleration of Note. The County may cause all indebtedness of the
Borrower to the County under this Agreement and the Note, together with any accrued interest
thereon, to become immediately due and payable. The Borrower waives all right to presentment,
demand, protest or notice of protest or dishonor. The County may proceed to enforce payment of
the indebtedness and to exercise any or all rights afforded to the County as a creditor and secured
party under the law including the Uniform Commercial Code, including foreclosure under the
Deed of Trust. The Borrower is liable to pay the County on demand all reasonable expenses,
costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or
incurred by the County in connection with the collection of the Loan and the preservation,
maintenance, protection, sale, or other disposition of the security given for the Loan.
(b) Specific Performance. The County has the right to mandamus or other
suit, action or proceeding at law or in equity to require Borrower to perform its obligations and
covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in
violation of the provisions of the Loan Documents.
(c) Right to Cure at Borrower's Expense. The County has the right (but not
the obligation) to cure any monetary default by Borrower under a loan other than the Loan. The
Borrower shall reimburse the County for any funds advanced by the County to cure a monetary
default by Borrower upon demand therefor, together with interest thereon at the lesser of the
maximum rate permitted by law and ten percent (10%) per annum (the "Default Rate") from the
date of expenditure until the date of reimbursement.
Section 6.3 Right of Contest.
Borrower may contest in good faith any claim, demand, levy, or assessment the assertion
of which would constitute an Event of Default hereunder. Any such contest is to be prosecuted
diligently and in a manner unprejudicial to the County or the rights of the County hereunder.
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Section 6.4 Remedies Cumulative.
No right, power, or remedy given to the County by the terms of this Agreement or the
Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and
every such right, power, or remedy will be cumulative and in addition to every other right,
power, or remedy given to the County by the terms of any such instrument, or by any statute or
otherwise against Borrower and any other person. Neither the failure nor any delay on the part
of the County to exercise any such rights and remedies will operate as a waiver thereof, nor does
any single or partial exercise by the County of any such right or remedy preclude any other or
further exercise of such right or remedy, or any other right or remedy.
ARTICLE 7 GENERAL PROVISIONS
Section 7.1 Relationship of Parties.
Nothing contained in this Agreement is to be interpreted or understood by any of the
Parties, or by any third persons, as creating the relationship of employer and employee, principal
and agent, limited or general partnership, or joint venture between the County and Borrower or
its agents, employees or contractors, and Borrower will at all times be deemed an independent
contractor and to be wholly responsible for the manner in which it or its agents, or both, perform
the services required of it by the terms of this Agreement. Borrower has and retains the right to
exercise full control of employment, direction, compensation, and discharge of all persons
assisting in the performance of services under the Agreement. In regards to the construction and
operation of the Development, Borrower is solely responsible for all matters relating to payment
of its employees, including compliance with Social Security, withholding, and all other laws and
regulations governing such matters, and must include requirements in each contract that
contractors are solely responsible for similar matters relating to their employees. Borrower is
solely responsible for its own acts and those of its agents and employees.
Section 7.2 No Claims.
Nothing contained in this Agreement creates or justifies any claim against the County by
any person that Borrower may have employed or with whom Borrower may have contracted
relative to the purchase of materials, supplies or equipment, or the furnishing or the performance
of any work or services with respect to the purchase of the Property, the construction or
operation of the Development, and Borrower shall include similar requirements in any contracts
entered into for the construction or operation of the Development.
Section 7.3 Amendments.
No alteration or variation of the terms of this Agreement is valid unless made in writing
by the Parties. The County Deputy Director – Redevelopment is authorized to execute on behalf
of the County amendments to the Loan Documents or amended and restated Loan Documents as
long as any material change in the amount or terms of this Agreement is approved by the County
Board of Supervisors, or in the event the amounts or terms of financing provided by other parties
for the Development is revised, requiring conforming amendments to the Loan Documents.
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Section 7.4 Indemnification.
The Borrower shall indemnify, defend and hold the County harmless against any and all
claims, suits, actions, losses and liability of every kind, nature and description made against it
and expenses (including reasonable attorneys' fees) which arise out of or in connection with this
Agreement, including but not limited to the purchase of the Property, development, construction,
marketing and operation of the Development, except to the extent such claim arises from the
grossly negligent or willful misconduct of the County, its agents, and its employees. The
provisions of this Section will survive the expiration of the Term and the reconveyance of the
Deed of Trust.
Section 7.5 Non-Liability of County Officials, Employees and Agents.
No member, official, employee or agent of the County is personally liable to Borrower in
the event of any default or breach by the County or for any amount that may become due to
Borrower or its successor or on any obligation under the terms of this Agreement.
Section 7.6 No Third Party Beneficiaries.
There are no third party beneficiaries to this Agreement.
Section 7.7 Discretion Retained By County.
The County's execution of this Agreement in no way limits the discretion of the County
in the permit and approval process in connection with construction of the Development.
Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person
described in Section 7.8(b) below who exercises or has exercised any functions or
responsibilities with respect to the activities funded pursuant to this Agreement or who is in a
position to participate in a decision-making process or gain inside information with regard to
such activities, may obtain a personal or financial interest or benefit from the activity, or have an
interest in any contract, subcontract or agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with whom they have family or business ties, during,
or at any time after, such person's tenure. Borrower shall exercise due diligence to ensure that
the prohibition in this Section 7.8(a) is followed.
(b) The conflict of interest provisions of Section 7.8(a) above apply to any
person who is an employee, agent, consultant, officer, or any immediate family member of such
person, or any elected or appointed official of the County, or any person related within the third
(3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the
Political Reform Act, California Government Code section 87100 et seq., no person who is a
director, officer, partner, trustee or employee or consultant of the Borrower, or immediate family
member of any of the preceding, may make or participate in a decision, made by the County or a
County board, commission or committee, if it is reasonably foreseeable that the decision will
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have a material effect on any source of income, investment or interest in real property of that
person or Borrower. Interpretation of this section is governed by the definitions and provisions
used in the Political Reform Act, California Government Code Section 87100 et seq., its
implementing regulations manual and codes, and California Government Code Section 1090
(d) The Borrower shall comply with the conflict of interest provisions set
forth in 24 C.F.R. Section 574.625.
Section 7.9 Notices, Demands and Communications.
All notices required or permitted by any provision of this Agreement must be in writing
and sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by
express delivery service, return receipt requested, or delivered personally, to the principal office
of the Parties as follows:
County: County of Contra Costa
Department of Conservation and Development
Redevelopment Division
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director – Redevelopment
Borrower: Lillie Mae Jones Plaza, L.P.
c/o Community Housing Development
Corporation of North Richmond
1535-A Third Street
Richmond, CA 94801
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section. Receipt will be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 7.10 Applicable Law.
This Agreement is governed by the laws of the State of California.
Section 7.11 Parties Bound.
Except as otherwise limited herein, this Agreement binds and inures to the benefit of the
parties and their heirs, executors, administrators, legal representatives, successors, and assigns.
This Agreement is intended to run with the land and to bind Borrower and its successors and
assigns in the Property and the Development for the entire Term, and the benefit hereof is to
inure to the benefit of the County and its successors and assigns.
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Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing
Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other
Party.
Section 7.13 Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions will continue in full force and effect
unless the rights and obligations of the Parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 7.14 Force Majeure.
In addition to specific provisions of this Agreement, performance by either Party will not
be deemed to be an Event of Default where delays or defaults are due to war, insurrection,
strikes, lock-outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack
of transportation, or court order. An extension of time for any cause will be deemed granted if
notice by the Party claiming such extension is sent to the other within ten (10) days from the
commencement of the cause and such extension of time is not rejected in writing by the other
Party within ten (10) days of receipt of the notice. In no event is the County required to agree to
cumulative delays in excess of one hundred eighty (180) days.
Section 7.15 County Approval.
The County has authorized the County Deputy Director-Redevelopment to execute the
Loan Documents and deliver such approvals or consents as are required by this Agreement, and
to execute estoppel certificates concerning the status of the Loan and the existence of Borrower
defaults under the Loan Documents.
Section 7.16 Waivers.
Any waiver by the County of any obligation or condition in this Agreement must be in
writing. No waiver will be implied from any delay or failure by the County to take action on any
breach or default of Borrower or to pursue any remedy allowed under this Agreement or
applicable law. Any extension of time granted to Borrower to perform any obligation under this
Agreement does not operate as a waiver or release from any of its obligations under this
Agreement. Consent by the County to any act or omission by Borrower may not be construed to
be consent to any other or subsequent act or omission or to waive the requirement for the
County's written consent to future waivers.
Section 7.17 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and are to be disregarded in interpreting any part of the Agreement's provisions.
863\80\735461.6
38
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39
Section 7.18 Entire Agreement of the Parties.
This Agreement, the Note, the Regulatory Agreement and the Deed of Trust constitute
the entire agreement of the Parties with respect to the Loan.
Section 7.19 Multiple Originals; Counterpart.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Remainder of Page Intentionally Left Blank
WHEREAS, this Agreement has been entered into by the undersigned as of the date first
above written.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: _________________________________
James Kennedy
Deputy Director - Redevelopment
Approved as to form:
SHARON L. ANDERSON
County Counsel
BORROWER:
LILLIE MAE JONES PLAZA, L.P., a California
limited partnership
By:
Kathleen Andrus
Deputy County Counsel
By: CHDC Lillie Mae Jones LLC, a California
limited liability company, its managing
general partner
By: Community Housing Development
Corporation of North Richmond, a California
nonprofit public benefit corporation
By: ___________________________
Name: __________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a California
limited liability company, its co-general partner
By: East Bay Asian Local Development
Corporation, a California nonprofit
public benefit corporation, its sole
member
By: ________________________
Name: _________________________
Its: Executive Director
863\80\735461.6
40
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land is situated in the State of California, County of Contra Costa, City of Richmond,
and is described as follows:
A-1
863\80\735461.6
EXHIBIT B
APPROVED DEVELOPMENT BUDGET
B-1
863\80\735461.6
EXHIBIT C
DESCRIPTION OF OPERATING RESERVE ACCOUNTS
C-1
863\80\735461.6
COUNTY HOPWA LOAN AGREEMENT
by and between
THE COUNTY OF CONTRA COSTA
and
Lillie Mae Jones Plaza, L.P.,
a California limited partnership
(Lillie Mae Jones Plaza)
863\80\735461.6
TABLE OF CONTENTS
Page
i
863\80\735461.6
ARTICLE 1 DEFINITIONS AND EXHIBITS............................................................................2
Section 1.1 Definitions................................................................................................... 2
Section 1.2 Exhibits....................................................................................................... 5
ARTICLE 2 LOAN PROVISIONS..............................................................................................5
Section 2.1 Loan............................................................................................................ 5
Section 2.2 Interest......................................................................................................... 5
Section 2.3 Use of Loan Funds...................................................................................... 5
Section 2.4 Security....................................................................................................... 5
Section 2.5 Subordination.............................................................................................. 6
Section 2.6 Conditions Precedent to Disbursement of Loan Funds............................... 7
Section 2.7 Conditions Precedent to Disbursement of Retention.................................. 8
Section 2.8 Repayment Schedule................................................................................... 9
Section 2.9 Utilization of Residual Receipts............................................................... 10
Section 2.10 Non-Recourse. .......................................................................................... 10
ARTICLE 3 CONSTRUCTION OF THE DEVELOPMENT...................................................11
Section 3.1 Permits and Approvals.............................................................................. 11
Section 3.2 Bid Package. ............................................................................................. 11
Section 3.3 Construction Contract............................................................................... 12
Section 3.4 Construction Bonds................................................................................... 12
Section 3.5 Commencement of Construction.............................................................. 12
Section 3.6 Completion of Construction...................................................................... 13
Section 3.7 Construction Pursuant to Plans and Laws; Prevailing
Wages; Accessibility................................................................................. 13
Section 3.8 Marketing Plan and Social Services Plan................................................. 14
Section 3.9 Equal Opportunity..................................................................................... 15
Section 3.10 Minority and Women-Owned Contractors............................................... 15
Section 3.11 Progress Reports....................................................................................... 15
Section 3.12 Construction Responsibilities................................................................... 15
Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion.................... 16
Section 3.14 Inspections................................................................................................ 16
Section 3.15 Approved Development Budget; Revisions to Budget............................. 16
Section 3.16 Developer Fee........................................................................................... 17
Section 3.17 Capital Contributions................................................................................ 17
Section 3.18 NEPA Mitigation Requirements............................................................... 17
ARTICLE 4 LOAN REQUIREMENTS.....................................................................................18
Section 4.1 Operating Reserve Accounts..................................................................... 18
Section 4.2 Compliance with Project Agreement........................................................ 18
Section 4.3 Financial Accounting and Post-Completion Audits. ................................ 18
Section 4.4 Annual Operating Budget Audited Financial Statements......................... 18
Section 4.5 Information. .............................................................................................. 18
Section 4.6 Records. .................................................................................................... 18
Section 4.7 County Audits........................................................................................... 20
Section 4.8 HOPWA Requirements............................................................................. 20
Section 4.9 Hazardous Materials................................................................................. 23
Section 4.10 Maintenance and Damage......................................................................... 26
TABLE OF CONTENTS
(continued)
Page
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863\80\735461.6
Section 4.11 Fees and Taxes.......................................................................................... 26
Section 4.12 Notice of Litigation................................................................................... 27
Section 4.13 Operation of Development as Affordable Housing.................................. 27
Section 4.14 Nondiscrimination..................................................................................... 27
Section 4.15 Transfer..................................................................................................... 28
Section 4.16 Insurance Requirements............................................................................ 28
Section 4.17 Anti-Lobbying Certification..................................................................... 30
Section 4.18 Payment of Other Indebtedness; Notice of Default.................................. 30
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER........................30
Section 5.1 Representation and Warranties................................................................. 30
ARTICLE 6 DEFAULT AND REMEDIES...............................................................................32
Section 6.1 Events of Default...................................................................................... 32
Section 6.2 Remedies................................................................................................... 34
Section 6.3 Right of Contest........................................................................................ 34
Section 6.4 Remedies Cumulative............................................................................... 35
ARTICLE 7 GENERAL PROVISIONS....................................................................................35
Section 7.1 Relationship of Parties.............................................................................. 35
Section 7.2 No Claims................................................................................................. 35
Section 7.3 Amendments............................................................................................. 35
Section 7.4 Indemnification......................................................................................... 36
Section 7.5 Non-Liability of County Officials, Employees and Agents...................... 36
Section 7.6 No Third Party Beneficiaries.................................................................... 36
Section 7.7 Discretion Retained By County................................................................ 36
Section 7.8 Conflict of Interest.................................................................................... 36
Section 7.9 Notices, Demands and Communications.................................................. 37
Section 7.10 Applicable Law......................................................................................... 37
Section 7.11 Parties Bound............................................................................................ 37
Section 7.12 Attorneys' Fees.......................................................................................... 38
Section 7.13 Severability............................................................................................... 38
Section 7.14 Force Majeure........................................................................................... 38
Section 7.15 County Approval....................................................................................... 38
Section 7.16 Waivers..................................................................................................... 38
Section 7.17 Title of Parts and Sections. ....................................................................... 38
Section 7.18 Entire Agreement of the Parties................................................................ 39
Section 7.19 Multiple Originals; Counterpart................................................................ 39
Exhibit A: Legal Description of the Property
Exhibit B: Approved Development Budget
Exhibit C: Description of Operating Reserve Accounts
PROMISSORY NOTE
(HOPWA Loan)
Lillie Mae Jones Plaza
$300,000 Martinez, California
_________ __, 2010
FOR VALUE RECEIVED, the undersigned LILLIE MAE JONES PLAZA,L.P., a California
Limited Partnership ("Borrower") hereby promises to pay to the order of the COUNTY OF CONTRA
COSTA, a political subdivision of the State of California ("Holder"), the principal amount of
Three Hundred Thousand Dollars ($300,000). All capitalized terms not defined in this Note
have the meanings set forth in the Loan Agreement.
1. Borrower's Obligation. This Note evidences Borrower's obligation to repay
Holder the principal amount of up to Three Hundred Thousand Dollars ($300,000) for the funds
loaned to Borrower by Holder to finance the development of the Property pursuant to the
HOPWA Loan Agreement between Borrower and Holder of even date herewith (the "Loan
Agreement").
2. Interest.
(a) This Note does not bear any interest, except as provided in Section 2(b)
below.
(b) If an Event of Default occurs, interest will accrue on all amounts due
under this Note at the Default Rate until such Event of Default is cured by Borrower or waived
by Holder.
3. Term and Repayment Requirements. The unpaid principal balance hereunder,
together with accrued interest thereon, is due and payable no later than the date that is the fifty-
fifth anniversary of this Note (the "Term"). This Note is due and payable as set forth in Section
2.8 of the Loan Agreement.
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder.
5. Security. This Note, with interest, is secured by the Deed of Trust. Upon
execution, the Deed of Trust will be recorded in the official records of Contra Costa County,
California. Upon recordation of the Deed of Trust, this Note will become nonrecourse to
Borrower, pursuant to and except as provided in Section 2.10 of the Loan Agreement. The terms
of the Deed of Trust are hereby incorporated into this Note and made a part hereof.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at Department of Conservation and Development –
863\80\735875.4
1
Redevelopment Division, 2530 Arnold Drive, Suite 190, Martinez, CA 94553, Attention:
Deputy Director-Redevelopment, or to such other place as Holder may from time to time
designate.
(b) All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including re-conveyance fees and reasonable attorney's fees of
Holder, incurred in connection with the payment of this Note and the release of any security
hereof.
(c) Notwithstanding any other provision of this Note, or any instrument
securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment
of any sums by Borrower pursuant to the terms of this Note would result in the payment of
interest that exceeds the amount that Holder may legally charge under the laws of the State of
California, then the amount by which payments exceed the lawful interest rate will automatically
be deducted from the principal balance owing on this Note, so that in no event is Borrower
obligated under the terms of this Note to pay any interest that would exceed the lawful rate.
(d) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7. Event of Default.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal
balance, together with all interest thereon, and together with all other sums then payable under
this Note and the Deed of Trust will, at the option of Holder, become immediately due and
payable without further demand.
(b) Holder's failure to exercise the remedy set forth in Subsection 7(a) above
or any other remedy provided by law upon the occurrence of an Event of Default does not
constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the
same or any other Event of Default. The acceptance by Holder of any payment that is less than
the total of all amounts due and payable at the time of such payment does not constitute a waiver
of the right to exercise any of the foregoing remedies or options at that time or at any subsequent
time, or nullify any prior exercise of any such remedy or option, without the express consent of
Holder, except as and to the extent otherwise provided by law.
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
(b) Any extension of time for payment of this Note or any installment hereof
made by agreement of Holder with any person now or hereafter liable for payment of this Note
863\80\735875.4
2
must not operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may
therein designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e) The Loan Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the parties.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
863\80\735875.4
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863\80\735875.4
4
BORROWER:
LILLIE MAE JONES PLAZA, L.P., a California limited
partnership
By: CHDC Lillie Mae Jones LLC, a California limited
liability company, its managing general partner
By: Community Housing Development
Corporation of North Richmond, a
California nonprofit public benefit
corporation
By:
Name: ______________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a California
limited liability company, its co-general partner
By: East Bay Asian Local Development
Corporation, a California nonprofit public
benefit corporation, its sole member
By: ________________________
Name: _________________________
Its: Executive Director
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Department of Conservation and Development
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attn: Deputy Director- Redevelopment
This instrument is exempt from Recording:
No fee for recording pursuant to
Government Code Section 27383
__________________________________________________________________________
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Lillie Mae Jones Plaza HOPWA Loan)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is dated ____________ __, 20__, and is between the COUNTY OF CONTRA COSTA, a political
subdivision of the State of California (the "County"), and LILLIE MAE JONES PLAZA, L.P., a
California limited partnership ("Borrower").
RECITALS
A. Defined Terms used but not defined in these recitals are as defined in Article 1 of
this Agreement.
B. The Loan that is the subject of this Agreement will be funded with Housing
Opportunities for Persons with AIDS funds (the "HOPWA Funds"), received by the County as a
subrecipient of the City of Oakland, as representative for the Alameda-Contra Costa County
Eligible Metropolitan Area, pursuant to the AIDS Housing Opportunity Act (42 U.S.C. 12901,
et. seq.), as amended by the Housing and Community Development Act of 1992 (42 U.S.C.
5301, et. seq.).
C. The Borrower intends to acquire real property located at 116 MacDonald Avenue
in the City of Richmond, County of Contra Costa, State of California, as more particularly
described in Exhibit A (the "Property"). The Borrower intends to construct twenty-five (25)
multifamily housing units that are affordable to very-low income households and one manager’s
unit on the Property (the “Development”). The Development, as well as any additional
improvements on the Property, including all landscaping, roads and parking spaces on the
Property, are the "Improvements".
1
863\80\735195.7
D. The County and the Borrower are parties to a HOPWA Loan Agreement of even
date herewith (the “Loan Agreement”), pursuant to which the County will lend Borrower Three
Hundred Thousand Dollars ($300,000) of HOPWA Funds (the “Loan”) to be applied toward the
construction of the Development.
E. The County has the authority to lend the Loan to the Borrower pursuant to
Government Code Section 26227 which authorizes counties to spend county funds for programs
that will further a county's public purposes. In addition, the County has the authority to loan the
HOPWA Funds to provide housing to Persons with HIV/AIDS pursuant to 24 C.F.R. 574.300.
F. The County has agreed to make the Loan on the condition that the Development
be maintained and operated in accordance with restrictions concerning affordability, operation,
and maintenance of the Development, that are set forth in this Agreement and in the Loan
Agreement.
G. In consideration of receipt of the Loan at an interest rate substantially below the
market rate, Borrower agrees to observe all the terms and conditions set forth below.
The parties therefore agree as follows.
ARTICLE 1
DEFINITIONS
1.1 Definitions.
The following terms have the following meanings:
(a) "Actual Household Size" means the actual number of persons in the
applicable household.
(b) "Adjusted Income" means the total anticipated annual income of all
persons in the Tenant household as defined under the Section 8 Housing Assistance Payment
programs in 24 C.F.R. 5.609 and calculated pursuant to 24 C.F.R. 5.611, and as further
referenced in 24 C.F.R. 574.310(d)(1).
(c) "Agreement" has the meaning set forth in the first paragraph of this
Agreement.
(d) "Assumed Household Size" means the household size "adjusted for family
size appropriate to the unit" as such term is defined in Health & Safety Code Section 50052.5(h).
(e) "Certificate of Occupancy" means the certificate of occupancy, or
equivalent document, issued by the City of Richmond, certifying that the Development may be
legally occupied.
(f) "Completion Date" means the date the Certificate of Occupancy is issued.
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863\80\735195.7
(g) "County- Assisted Units" means the five (5) units within the Development
designated as assisted by the County pursuant to this Agreement, which during the HOPWA
Term will be HOPWA Units.
(h) "Deed of Trust" means the Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing of even date herewith by and among the Borrower, as
trustor, Old Republic Title Company, as trustee, and the County, as beneficiary, that will
encumber the Property to secure repayment of the Loan and Borrower's performance of the
covenants set forth in the Loan Agreement. The form of Deed of Trust will be provided by the
County.
(i) "Development" has the meaning set forth in Paragraph C of the Recitals.
(j) "HOPWA" means the Housing Opportunities for Persons with AIDS
program pursuant to the AIDS Housing Opportunity Act (42 USC 12901, et seq.), as amended by
the Housing and Community Development Act of 1992 (42 USC 5301, et seq.).
(k) "HOPWA Eligible Household" means a household that includes at least
one Person with HIV/AIDS.
(l) "HOPWA Term" means the period beginning on the date of this
Agreement and ending on the tenth (10th) anniversary of the date of this Agreement.
(m) "HOPWA Unit" means a unit within the Development restricted to
occupancy by a HOPWA Eligible Household.
(n) "HUD" means the United States Department of Housing and Urban
Development.
(o) "Loan" has the meaning set forth in Paragraph D of the Recitals.
(p) "Loan Agreement" has the meaning set forth in Paragraph D of the
Recitals.
(q) "Median Income" means the median gross yearly income, adjusted for
Actual Household Size as specified herein, in the County of Contra Costa, California, as
published from time to time by HUD. In the event that such income determinations are no
longer published, or are not updated for a period of at least eighteen (18) months, the County
shall provide the Borrower with other income determinations that are reasonably similar with
respect to methods of calculation to those previously published by HUD.
(r) "Note" means the promissory note that evidences Borrower's obligation to
repay the Loan.
(s) "Person with HIV/AIDS" means a person with the disease of acquired
immunodeficiency syndrome or any conditions arising from the etiological agent for acquired
immunodeficiency syndrome, including infection with the human immunodeficiency virus
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863\80\735195.7
(HIV), as confirmed by a certification of HIV-positive test status to be delivered to and
maintained on file by the Borrower as such definition may be amended as set forth in 24 C.F.R.
574.3.
(t) "Property" has the meaning set forth in Paragraph C of the Recitals.
(u) "Remainder Term" means the period commencing on the date of the
expiration of the HOPWA Term and continues until the expiration of the Term.
(v) "Rent" means the total monthly payments by the Tenant of a Unit for the
following: use and occupancy of the Unit and land and associated facilities, including parking;
any separately charged fees or service charges assessed by the Borrower which are required of
all Tenants, other than security deposits; an allowance for the cost of an adequate level of service
for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and any
other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a
public or private entity other than the Borrower, and paid by the Tenant.
(w) "Social Services Plan" has the meaning set forth in the Loan Agreement.
(x) "Tenant" means the tenant household that occupies a Unit in the
Development.
(y) "Term" means the term of this Agreement, which shall commence on the
date of this Agreement and continues until the fifty-fifth (55th) anniversary of the Completion
Date.
(z) "Twenty Percent Income Household" means a household with an Adjusted
Income that does not exceed twenty percent (20%) of Median Income, adjusted for Actual
Household Size.
(aa) "Unit(s)" means one (1) or more of the units in the Development,
including the HOPWA Units.
(bb) "Very Low Income Household" means a household with an Adjusted
Income that does not exceed fifty percent (50%) of Median Income, with adjustments for smaller
and larger families, except that HUD may establish income ceilings higher or lower than fifty
percent (50%) of Median Income on the basis of HUD findings that such variations are necessary
because of prevailing levels of construction costs or fair market rents, or unusually high or low
family incomes.
(cc) "Very Low Income Rent" means the maximum allowable monthly Rent
pursuant to Section 2.2(a)(2)(B).
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ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) County-Assisted Units.
(1) HOPWA Term. During the HOPWA Term, Borrower shall rent
three (3) one-bedroom units in the Development and two (2) two-bedroom units in the
Development and shall ensure that these units are occupied by, or if vacant, available for
occupancy by Twenty Percent Income Households that are HOPWA-Eligible Households.
(2) Remainder Term. During the Remainder Term, the occupancy
requirement may be adjusted such that all of the County-Assisted Units which become vacant
during the Reminder Term are made available for occupancy by Very Low Income Households,
who are not required to be HOPWA-Eligible Households.
(b) Intermingling of Units. The County-Assisted Units are to be intermingled
throughout the Development and of comparable quality to all other units. All Tenants must have
equal access to and enjoyment of all common facilities in the Development.
(c) Disabled Persons Occupancy. The Borrower shall cause the Development
to be operated at all times in compliance with the provisions of: (i) the Unruh Act, (ii) the
California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of
1973, (iv) the United States Fair Housing Act, as amended, and (v) any other applicable law or
regulation (including the Americans With Disabilities Act, to the extent applicable to the
Development). Borrower shall agree to indemnify, protect, hold harmless and defend (with
counsel reasonably satisfactory to County) County, and its boardmembers, officers and
employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens
arising out of Borrower's failure to comply with applicable legal requirements related to housing
for persons with disabilities. The provisions of this subsection will survive expiration of the
Term or other termination of this Agreement, and remain in full force and effect.
2.2 Allowable Rent.
(a) County-Assisted Units Rent.
(1) HOPWA Term Rent. During the HOPWA Term, subject to the
provisions of Section 2.3 below, the total monthly Rent (including utility allowance) paid by
Tenants of the HOPWA Units will be equal to the greater of:
(A) thirty percent (30%) of the household's monthly Adjusted
Income, as adjusted pursuant to 24 C.F.R. 574.310(d)(1);
(B) ten percent (10%) of the household's monthly gross
income; and
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863\80\735195.7
(C) if the household is receiving payments for welfare
assistance from a public agency and a part of the payments, adjusted in accordance with the
household's actual housing costs, is specifically designated by the agency to meet the household's
housing costs, the portion of the payments that is so designated.
(2) Remainder Term Rent. During the Remainder Term, subject to the
provisions of Section 2.3 below:
(A) the Rent paid by any HOPWA Eligible Household
currently residing in a County-Assisted Unit will remain subject to Section 2.2(a)(1) ; and
(B) the Rent paid by any new Tenant of a County-Assisted Unit
may not exceed one-twelfth (1/12th) of thirty percent (30%) of fifty percent (50%) of Median
Income, adjusted for Assumed Household Size (the "Very Low Income Rent").
(b) No Additional Fees. The Borrower may not charge any fee, other than
Rent, to any resident of the County-Assisted Units for any housing or other services provided by
Borrower.
2.3 Rent Increases; Increased Income of Tenants.
(a) Rent Increases. The initial Rents and subsequent Rents for all County-
Assisted Units must be approved by the County prior to occupancy and be subject to the
HOPWA regulations during the HOPWA Term. All rent increases for all County-Assisted Units
are also subject to County approval. The Rent for such Tenant's unit may be increased no more
than once annually based upon the annual income certification described in Article 3. Tenants
are to be given at least sixty (60) days written notice prior to any rent increase. The County will
provide the Borrower with a schedule of maximum permissible Rents for the County-Assisted
Units annually.
(b) Increased Income of HOPWA Eligible Household During HOPWA Term.
Subject to Section 2.3(a) above, in the event that upon the annual certification of the income of a
HOPWA Eligible Household during the HOPWA Term the Borrower determines that the Tenant
has an Adjusted Income exceeding the maximum qualifying income of a Twenty Percent Income
Household, the Tenant may continue to occupy the unit and be charged rent consistent with
Section 2.2(a)(1) above. The Borrower shall then rent the next available HOPWA Unit to a
Twenty Percent Income Household that is also a HOPWA Eligible Household, to comply with
the requirements of Section 2.1 above.
(c) Non-Qualifying Household During Remainder Term. Subject to Section
2.3(a) above, if, upon the annual certification of the income of a Tenant of a County-Assisted
Unit, the Borrower determines that a former Twenty Percent Income Household, or Very Low
Income Household, has an Adjusted Income that exceeds the maximum qualifying income for a
Very Low Income Household, the Tenant will be permitted to retain the County- Assisted Unit
and upon sixty (60) days written notice, (i) the Rent may be increased to one-twelfth (1/12th) of
thirty percent (30%) of the actual Adjusted Income of the Tenant (with the increased rent not to
6
863\80\735195.7
exceed the market rate rent for that particular unit), and (ii) the Borrower rents the next available
unit to a Very Low Income Household, to meet the requirements of Section 2.1 above.
(d) Termination of Occupancy. Upon termination of occupancy of a County-
Assisted Unit by a Tenant, such unit will be deemed to be continuously occupied by a HOPWA
Eligible Household if termination occurs during the HOPWA Term, and by a household of the
same income level as the initial income level of the vacating Tenant, until such unit is
reoccupied, at which time categorization of the unit will be established based on the occupancy
requirements of Section 2.1.
2.4 Cure for AIDS. If, in the reasonable determination of the County, there is a cure
for AIDS and therefore no need for the HOPWA Units, the County and Borrower agree that the
HOPWA Units are to be restricted to Very Low Income Households and the rents governed by
Section 2.2(a)(2), and the HOPWA Units are to be treated as County-Assisted Units occupied
during the Remainder Term.
2.5 Units Available to the Disabled. Borrower shall construct the Development in
compliance with all applicable federal and state disabled persons accessibility requirements
including but not limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794); Title II and/or Title III of the Americans with Disabilities Act of 1990;
and Title 24 of the California Code of Regulations. In compliance with Section 504 of the
Rehabilitation Act and its implementing regulations (24 C.F.R. 8), a minimum of two (2) units in
the Development fully accessible to households with a mobility impairment and an additional
one (1) unit in the Development fully accessible to hearing and/or visually impaired persons.
ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification.
(a) Borrower shall obtain, complete, and maintain on file, immediately prior
to initial occupancy and annually thereafter, income certifications from each Tenant renting any
of the County-Assisted Units. Borrower shall make a good faith effort to verify the accuracy of
the income provided by the applicant or occupying household, as the case may be, in an income
certification. To verify the information Borrower shall take two or more of the following steps:
(i) obtain a pay stub for the most recent pay period; (ii) obtain an income tax return for the most
recent tax year; (iii) conduct a credit agency or similar search; (iv) obtain an income verification
form from the applicant's current employer; (v) obtain an income verification form from the
Social Security Administration and/or the California Department of Social Services if the
applicant receives assistance from either of such agencies; or (vi) if the applicant is unemployed
and does not have a tax return, obtain another form of independent verification. Copies of
Tenant income certifications are to be available to the County upon request.
(b) For each HOPWA Unit during the HOPWA Term, Borrower shall obtain a
certification from the Tenant that the HOPWA Unit is occupied by a HOPWA Eligible
Household. Borrower shall maintain the initial and annual certifications on file.
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3.2 Reporting Requirements. Borrower shall submit to County (a) not later than the
forty-fifth (45th) day after the close of each calendar year, or such other date as may be requested
by County, a statistical report, including income and rent data for all units, setting forth the
information called for therein, and (b) within fifteen (15) days after receipt of a written request,
any other information or completed forms requested by County in order to comply with reporting
requirements of HUD, the State of California, and the County.
3.3 Additional Information. Borrower shall provide any additional information
reasonably requested by the County.
3.4 Records. Borrower shall maintain complete, accurate and current records
pertaining to the Development, and shall permit any duly authorized representative of the County
to inspect records, including records pertaining to income and household size of Tenants. All
Tenant lists, applications and waiting lists relating to the Development are to be at all times: (i)
separate and identifiable from any other business of Borrower, (ii) maintained as required by the
County, in a reasonable condition for proper audit, and (iii) subject to examination during
business hours by representatives of the County. Borrower shall retain copies of all materials
obtained or produced with respect to occupancy of the units for a period of at least five (5) years.
The County may examine and make copies of all books, records or other documents of Borrower
that pertain to the Development
3.5 HOPWA Record Requirements. For the period of the HOPWA Term all records
maintained by Borrower pursuant to Sections 3.2 and 3.4 above are to be (i) maintained in
compliance with all applicable HUD records and accounting requirements (including those set
out in 24 C.F.R. 574.450 and 24 C.F.R. 574.530), and (ii) open to and available for inspection
and copying by HUD and its authorized representatives at reasonable intervals during normal
business hours; provided however, records pertaining to Tenant income verifications, Rents, and
Development inspections are subject to HUD inspection for five (5) years after expiration of the
HOPWA Term.
3.6 On-Site Inspection. The County may perform an on-site inspection of the
Development at least one (1) time per year. Borrower shall cooperate in such inspection.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use. Borrower shall operate the Development for residential use
only. No part of the Development may be operated as transient housing.
4.2 Compliance with Loan Agreement. Borrower shall comply with all the terms and
provisions of the Loan Agreement.
4.3 Taxes and Assessments. Borrower shall pay all real and personal property taxes,
assessments and charges and all franchise, income, employment, old age benefit, withholding,
sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to
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prevent any penalty from accruing, or any lien or charge from attaching to the Property;
provided, however, that Borrower may contest in good faith, any such taxes, assessments, or
charges. In the event Borrower exercises its right to contest any tax, assessment, or charge
against it, Borrower, on final determination of the proceeding or contest, will immediately pay or
discharge any decision or judgment rendered against it, together with all costs, charges and
interest.
4.4 Property Tax Exemption. Borrower shall not apply for a property tax exemption
for the Property under any provision of law except California Revenue and Taxation Section
214(g) without the prior written consent of the County.
ARTICLE 5
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. The Borrower is responsible for all management
functions with respect to the Development, including without limitation the selection of Tenants,
certification and recertification of household size and income, evictions, collection of rents and
deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital
items, and security. The County has no responsibility for management of the Development. The
Borrower shall retain a professional property management company approved by the County in
its reasonable discretion to perform Borrower's management duties hereunder. An on-site
resident manager is also required.
5.2 Management Agent. The Borrower shall cause the Development to be managed
by an experienced management agent reasonably acceptable to the County, with a demonstrated
ability to operate residential facilities like the Development in a manner that will provide decent,
safe, and sanitary housing (the "Management Agent"). The Borrower shall submit for the
County's approval the identity of any proposed management agent. The Borrower shall also
submit such additional information about the background, experience and financial condition of
any proposed management agent as is reasonably necessary for the County to determine whether
the proposed management agent meets the standard for a qualified management agent set forth
above. If the proposed management agent meets the standard for a qualified management agent
set forth above, the County shall approve the proposed management agent by notifying the
Borrower in writing. Unless the proposed management agent is disapproved by the County
within thirty (30) days, which disapproval is to state with reasonable specificity the basis for
disapproval, it shall be deemed approved.
5.3 Periodic Performance Review. County reserves the right to conduct an annual (or
more frequently, if deemed necessary by County) review of the management practices and
financial status of the Development. The purpose of each periodic review will be to enable
County to determine if the Development is being operated and managed in accordance with the
requirements and standards of this Agreement. The Borrower shall cooperate with County in
such reviews.
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5.4 Replacement of Management Agent. If, as a result of a periodic review, the
County determines in its reasonable judgment that the Development is not being operated and
managed in accordance with any of the material requirements and standards of this Agreement,
County shall deliver notice to Borrower of its intention to cause replacement of the Management
Agent, including the reasons therefore. Within fifteen (15) days after receipt by Borrower of
such written notice, County staff and the Borrower shall meet in good faith to consider methods
for improving the financial and operating status of the Development, including, without
limitation, replacement of the Management Agent.
If, after such meeting, County staff recommends in writing the replacement of the
Management Agent, Borrower shall promptly dismiss the then-current Management Agent, and
shall appoint as the Management Agent a person or entity meeting the standards for a
management agent set forth in Section 5.2 above and approved by the County pursuant to
Section 5.2 above.
Any contract for the operation or management of the Development entered into by
Borrower shall provide that the Management Agent may be dismissed and the contract
terminated as set forth above. Failure to remove the Management Agent in accordance with the
provisions of this Section constitutes a default under this Agreement, and the County may
enforce this provision through legal proceedings as specified in Section 6.8 below.
5.5 Approval of Management Policies. The Borrower shall submit its written
management policies with respect to the Development to the County for its review, and shall
amend such policies in any way necessary to ensure that such policies comply with the
provisions of this Agreement.
5.6 Property Maintenance. The Borrower shall maintain, for the entire Term of this
Agreement, all interior and exterior Improvements, including landscaping, on the Property in
good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with
all applicable laws, rules, ordinances, orders and regulations of all federal, state, county,
municipal, and other governmental agencies and bodies having or claiming jurisdiction and all
their respective departments, bureaus, and officials, and in accordance with the following
maintenance conditions:
County places prime importance on quality maintenance to protect its investment and to
ensure that all County and County-assisted affordable housing projects within the County are not
allowed to deteriorate due to below-average maintenance. Normal wear and tear of the
Development will be acceptable to the County assuming Borrower agrees to provide all
necessary improvements to assure the Development is maintained in good condition. The
Borrower shall make all repairs and replacements necessary to keep the improvements in good
condition and repair.
In the event that the Borrower breaches any of the covenants contained in this section and
such default continues for a period of five (5) days after written notice from County with respect
to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice
from County with respect to landscaping and building improvements, then County, in addition to
whatever other remedy it may have at law or in equity, has the right to enter upon the Property
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and perform or cause to be performed all such acts and work necessary to cure the default.
Pursuant to such right of entry, County is permitted (but is not required) to enter upon the
Property and to perform all acts and work necessary to protect, maintain, and preserve the
improvements and landscaped areas on the Property, and to attach a lien on the Property, or to
assess the Property, in the amount of the expenditures arising from such acts and work of
protection, maintenance, and preservation by County and/or costs of such cure, which amount
shall be promptly paid by the Borrower to County upon demand.
ARTICLE 6
MISCELLANEOUS
6.1 Lease Provisions. In leasing the units within the Development, Borrower shall
use a form of lease approved by the County. The form of lease must comply with all
requirements of this Agreement, the Loan Agreement, and must, among other matters:
(a) provide for termination of the lease for failure: (i) to provide any
information required under this Agreement or reasonably requested by Borrower to establish or
recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy
in the Development in accordance with the standards set forth in this Agreement, (ii) to qualify
as a Twenty Percent Income Household or Very Low Income Household as a result of any
material misrepresentation made by such Tenant with respect to the income computation, or (iii)
to qualify as a HOPWA-Eligible Household when and if applicable as a result of any material
misrepresentation made by such Tenant with respect to HIV/AIDS status.
(b) be for an initial term of not less than one (1) year, unless by mutual
agreement between the Tenant and Borrower, and provide for no increase in Rent during such
year. After the initial year of tenancy, the lease may be month-to-month by mutual agreement of
Borrower and the Tenant. Notwithstanding the above, any rent increases are subject to the
requirements of Section 2.3 (a).
6.2 Lease Termination.
(a) Any termination of a lease or refusal to renew a lease for a County-
Assisted Unit within the Development must be in conformance with 24 C.F.R. 574.310(e) during
the HOPWA Term, and must be preceded by not less than sixty (60) days written notice to the
Tenant by the Borrower specifying the grounds for the action.
(b) During the HOPWA Term the Borrower shall ensure that surviving
members of a household that included a person with HIV/AIDS at the time of his or her death is
permitted to continue to occupy the unit and receive supportive services for a reasonable period
of up to one (1) year from the time of the death, and is provided with notice of their grace period
and with assistance to obtain information about other available housing assistance programs. In
addition, in the event such surviving members of a household would be eligible for occupancy in
one of the other units within the Development, upon approval from the Borrower, such surviving
members may remain in their current unit and the next available unit within the Development
will become a HOPWA Unit.
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6.3 Nondiscrimination.
(a) All of the units must be available for occupancy on a continuous basis to
members of the general public who are income eligible. Borrower may not give preference to
any particular class or group of persons in renting or selling the units, except to the extent that
the units are required to be leased to income eligible households and HOPWA-Eligible
Households pursuant to this Agreement. The Borrower herein covenants by and for Borrower,
assigns, and all persons claiming under or through the Borrower, that there exist no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, sexual orientation, marital status, national origin, source of income
(e.g., SSI), ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure,
or enjoyment of any unit nor will Borrower or any person claiming under or through Borrower,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees of any unit or in connection with the employment of persons for the construction,
operation and management of any unit.
(b) The Borrower shall accept as Tenants, on the same basis as all other
prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant
to the existing housing program under Section 8 of the United States Housing Act, or its
successor. The Borrower may not apply selection criteria to Section 8 certificate or voucher
holders that is more burdensome than criteria applied to all other prospective Tenants, nor will
the Borrower apply or permit the application of management policies or lease provisions with
respect to the Development which have the effect of precluding occupancy of units by such
prospective Tenants.
6.4 Term.
The provisions of this Agreement apply to the Property for the entire Term even if the
Loan is paid in full prior to the end of the Term. This Agreement binds any successor, heir or
assign of Borrower, whether a change in interest occurs voluntarily or involuntarily, by operation
of law or otherwise, except as expressly released by County. County is making the Loan on the
condition, and in consideration of, this provision, and would not do so otherwise.
6.5 Compliance with Loan Agreement and Program Requirements.
(a) Borrower's actions with respect to the Property shall at all times be in full
conformity with all requirements of the Loan Agreement.
(b) During the HOPWA term Borrower shall:
(1) ensure that the Property is in full conformity with all requirements
imposed on projects assisted under the HOPWA Program as contained in 42 U.S.C. Section
12901, et seq., 24 C.F.R. Part 574, and other implementing rules and regulations;
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(2) ensure the confidentiality of the name of any individual requesting
or receiving assistance through this project pursuant to 24 C.F.R. 574.440;
(3) ensure that qualified service providers in the area make available
appropriate supportive services to HOPWA Eligible Households pursuant to 24 C.F.R.
574.310(a)(1);
(4) conduct an ongoing assessment of the services required by
HOPWA Eligible Households pursuant to 24 C.F.R. 574.500(b)(2);
(5) provide the County a Social Services Plan for review detailing the
services provided to HOPWA Eligible Households; and
(6) ensure that the Development meets the Housing Quality Standards
pursuant to 24 C.F.R. 574.310(b).
6.6 Notice of Expiration of Term.
(a) At least six (6) months prior to the expiration of the Term, Borrower shall
provide by first-class mail, postage prepaid, a notice to all Tenants containing (i) the anticipated
date of the expiration of the Term, (ii) any anticipated increase in Rent upon the expiration of the
Term, (iii) a statement that a copy of such notice will be sent to the County, and (iv) a statement
that a public hearing may be held by the County on the issue and that the Tenant will receive
notice of the hearing at least fifteen (15) days in advance of any such hearing. Borrower shall
also file a copy of the above-described notice with the Deputy Director – Redevelopment of the
County.
(b) In addition to the notice required above, Borrower shall comply with the
requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such
notice requirements include: (i) a twelve (12) month notice to existing tenants, prospective
tenants and Affected Public Agencies (as defined in California Government Code Section
65863.10(a), which would include the County Housing Director) prior to the expiration of the
Term, (ii) a six (6) month notice requirement to existing tenants, prospective tenants and
Affected Public Agencies prior to the expiration of the Term; (iii) a notice of an offer to purchase
the Development to "qualified entities" (as defined in California Government Code Section
65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; (iv) a
notice of right of first refusal within the one hundred eighty (180) day period that qualified
entities may purchase the Development.
6.7 Covenants to Run With the Land. The County and Borrower hereby declare their
express intent that the covenants and restrictions set forth in this Agreement run with the land,
and bind all successors in title to the Property, provided, however, that on the expiration of the
Term of this Agreement said covenants and restrictions expire. Each and every contract, deed or
other instrument hereafter executed covering or conveying the Property or any portion thereof, is
to be held conclusively to have been executed, delivered and accepted subject to the covenants
and restrictions, regardless of whether such covenants or restrictions are set forth in such
contract, deed or other instrument, unless the County expressly releases such conveyed portion
of the Property from the requirements of this Agreement.
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6.8 Enforcement by The County. If Borrower fails to perform any obligation under
this Agreement, and fails to cure the default within thirty (30) days after the County has notified
Borrower in writing of the default or, if the default cannot be cured within thirty (30) days, fails
to commence to cure within thirty (30) days and thereafter diligently pursue such cure and
complete such cure within ninety (90) days, County may enforce this Agreement by any or all of
the following actions, or any other remedy provided by law:
(a) Calling the Loan. The County may declare a default under the Note,
accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed
of Trust.
(b) Action to Compel Performance or for Damages. County may bring an
action at law or in equity to compel Borrower's performance of its obligations under this
Agreement, and may seek damages.
(c) Remedies Provided Under Loan Agreement. County may exercise any
other remedy provided under the Loan Agreement.
6.9 Attorneys’ Fees and Costs. In any action brought to enforce this Agreement, the
prevailing party must be entitled to all costs and expenses of suit, including reasonable attorneys'
fees. This section must be interpreted in accordance with California Civil Code Section 1717
and judicial decisions interpreting that statute.
6.10 Recording and Filing. The County and Borrower shall cause this Agreement, and
all amendments and supplements to it, to be recorded in the Official Records of the County of
Contra Costa.
6.11 Governing Law. This Agreement is governed by the laws of the State of
California.
6.12 Waiver of Requirements. Any of the requirements of this Agreement may be
expressly waived by the County in writing, but no waiver by the County of any requirement of
this Agreement extends to or affects any other provision of this Agreement, and may not be
deemed to do so.
6.13 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successors in title that is duly recorded in the official
records of the County of Contra Costa.
6.14 Notices. Any notice requirement set forth herein will be deemed to be satisfied
three (3) days after mailing of the notice first-class United States certified mail, postage prepaid,
addressed to the appropriate party as follows:
County: County of Contra Costa
Department of Conservation and Development
2530 Arnold Drive, Suite 190
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15
863\80\735195.7
Martinez, CA 94553
Attn: Deputy Director- Redevelopment
Borrower: Lillie Mae Jones Plaza, L.P.
c/o Community Housing Development Corporation
of North Richmond
1535-A Third Street
Richmond, CA 94801
Attn: Executive Director
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
6.15 Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining portions of this Agreement will not in any way be affected or
impaired thereby.
6.16 Multiple Originals; Counterparts. This Agreement may be executed in multiple
originals, each of which is deemed to be an original, and may be signed in counterparts.
[Remainder of Page Left Intentionally Blank]
WHEREAS, this Agreement has been entered into by the undersigned as of the date first
written above.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: _________________________________
James Kennedy
Deputy Director - Redevelopment
Approved as to form:
SHARON L. ANDERSON
County Counsel
BORROWER:
LILLIE MAE JONES PLAZA, L.P., a California
limited partnership
By:
Kathleen Andrus
Deputy County Counsel
By: CHDC Lillie Mae Jones LLC, a California
limited liability company, its managing
general partner
By: Community Housing Development
Corporation of North Richmond, a
California nonprofit public benefit
corporation
By: ___________________________
Name: __________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a
California limited liability company, its co-
general partner
By: East Bay Asian Local Development
Corporation, a California nonprofit
public benefit corporation, its sole
member
By: ________________________
Name: _________________________
Its: Executive Director
863\80\735195.7
863\80\735195.7
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
EXHIBIT A
Legal Description
The land is situated in the State of California, County of Contra Costa, and is described as
follows:
A-1
863\80\735195.7
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Department of Conservation and Development
Redevelopment Division
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director - Redevelopment
No fee for recording pursuant to
Government Code Section 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
(Lillie Mae Jones Plaza – MHSA Loan)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of _____________ __,
2010 by and among LILLIE MAE JONES PLAZA,L.P., a California limited partnership ("Trustor"),
OLD REPUBLIC TITLE COMPANY, a California corporation ("Trustee"), and the COUNTY OF
CONTRA COSTA, a political subdivision of the State of California ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property located in the County of Contra Costa,
State of California, that is described in the attached Exhibit A, incorporated herein by this
reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said property and intended to be installed therein;
863\01\733742.3 1
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefore, whether or not the same are, or will be, attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the
"Secured Obligations"):
A. Payment to Beneficiary of all sums at any time owing under or in connection with
the Note (defined in Section 1.4 below) until paid or cancelled and any other amounts owing
under the Loan Documents (defined in Section 1.3 below). Said principal and other payments
863\01\733742.3 2
are due and payable as provided in the Note or other Loan Documents, as applicable. The Note
and all its terms are incorporated herein by reference, and this conveyance secures any and all
extensions thereof, however evidenced;
B. Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
C. Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Loan Documents; and
D. All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a different rate of
interest, or (ii) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms have
the following meanings in this Deed of Trust:
Section 1.1 The term "Loan" means the loan made by the Beneficiary to the Trustor in
the amount of Two Hundred Ninety-Three Thousand Eight Hundred Eighty-Four Dollars
($293,884).
Section 1.2 The term "Loan Agreement" means that certain MHSA Loan Agreement
between Trustor and Beneficiary, of even date herewith, providing for the Beneficiary to loan to
the Trustor Two Hundred Ninety-Three Thousand Eight Hundred Eighty-Four Dollars
($293,884) for the construction of twenty-six (26) apartment units and appurtenant
improvements on the Property.
Section 1.3 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, and the Regulatory Agreement, and any other debt, loan or security instruments
between Trustor and the Beneficiary relating to the Loan.
Section 1.4 The term "Note" means the promissory note in the principal amount of
Two Hundred Ninety-Three Thousand Eight Hundred Eighty-Four Dollars ($293,884) of even
date herewith, executed by Trustor in favor of the Beneficiary, as it may be amended or restated,
the payment of which is secured by this Deed of Trust. (A copy of the Note is on file with the
Beneficiary and terms and provisions of the Note are incorporated herein by reference.)
863\01\733742.3 3
Section 1.5 The term "Principal" means the amount required to be paid under the
Note.
Section 1.6 The term "Regulatory Agreement" means the regulatory agreement of
even date herewith by and between the Beneficiary and the Trustor.
ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE PROPERTY
AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agrees that at all times prior to full payment and performance of the Secured
Obligations, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the
Security or cause the Security to be maintained and preserved in good condition. The Trustor
will from time to time make or cause to be made all repairs, replacements and renewals deemed
proper and necessary by it. The Beneficiary has no responsibility in any of these matters or for
the making of improvements or additions to the Security.
Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary exercises its rights as agent of Trustor
only in the event that Trustor fails to take, or fails to diligently continue to take, those actions as
hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary specifies upon laborers, materialmen, subcontractors or other persons who
have furnished or claim to have furnished labor, services or materials in connection with the
Security. Nothing herein contained requires Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently contesting provided that Trustor
shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the
Recorder of Contra Costa County, a surety bond in an amount 1 and 1/2 times the amount of
such claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
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limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law, and
as approved, in writing, by Beneficiary.
Section 2.3 Assignment of Rents.
As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and
revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents
and revenues so collected to the Secured Obligations with the balance, so long as no such breach
has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this
assignment of rents constitutes an absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor
of any covenant or agreement of Trustor in the Loan Documents, and without the necessity of
Beneficiary entering upon and taking and maintaining full control of the Property in person, by
agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to possession of
all rents and revenues of the Property as specified in this Section 2.3 as the same becomes due
and payable, including but not limited to, rents then due and unpaid, and all such rents will
immediately upon delivery of such notice be held by Trustor as trustee for the benefit of
Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the
breach by Trustor contains a statement that Beneficiary exercises its rights to such rents. Trustor
agrees that commencing upon delivery of such written notice of Trustor's breach by Beneficiary
to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to
Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant therefore,
delivered to each tenant personally, by mail or by delivering such demand to each rental unit,
without any liability on the part of said tenant to inquire further as to the existence of a default by
Trustor.
Trustor hereby covenants that Trustor has not executed any prior assignment of said
rents, that Trustor has not performed, and will not perform, any acts or has not executed and will
not execute, any instrument which would prevent Beneficiary from exercising its rights under
this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no
anticipation or prepayment of any of the rents of the Property for more than two (2) months prior
to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept
payment of any rents of the Property more than two (2) months prior to the due dates of such
rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further
assignments of rents and revenues of the Property as Beneficiary may from time to time request.
Upon Trustor's breach of any covenant or agreement of Trustor in the Loan Documents,
Beneficiary may in person, by agent or by a court-appointed receiver, regardless of the adequacy
of Beneficiary's security, enter upon and take and maintain full control of the Property in order to
863\01\733742.3 5
perform all acts necessary and appropriate for the operation and maintenance thereof including,
but not limited to, the execution, cancellation or modification of leases, the collection of all rents
and revenues of the Property, the making of repairs to the Property and the execution or
termination of contracts providing for the management or maintenance of the Property, all on
such terms as are deemed best to protect the security of this Deed of Trust. In the event
Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of
any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to
the appointment of such receiver. Beneficiary or the receiver will be entitled to receive a
reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice by Beneficiary
to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents are to applied first to the costs, if any, of taking control of and managing the Property
and collecting the rents, including, but not limited to, attorney's fees, receiver's fees, premiums
on receiver's bonds, costs of repairs to the Property, premiums on insurance policies, taxes,
assessments and other charges on the Property, and the costs of discharging any obligation or
liability of Trustor as lessor or landlord of the Property and then to the sums secured by this deed
of Trust. Beneficiary or the receiver is to have access to the books and records used in the
operation and maintenance of the Property and will be liable to account only for those rents
actually received. Beneficiary is not liable to Trustor, anyone claiming under or through Trustor
or anyone having an interest in the Property by reason of anything done or left undone by
Beneficiary under this Section 2.3.
If the rents of the Property are not sufficient to meet the costs, if any, of taking control of
and managing the Property and collecting the rents, any funds expended by Beneficiary for such
purposes will become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless
Beneficiary and Trustor agree in writing to other terms of payment, such amounts are payable by
Trustor to Beneficiary upon notice from Beneficiary to Trustor requesting payment thereof and
will bear interest from the date of disbursement at the rate stated in Section 3.3.
If the Beneficiary or the receiver enters upon and takes and maintains control of the
Property, neither that act nor any application of rents as provided herein will cure or waive any
default under this Deed of Trust or invalidate any other right or remedy available to Beneficiary
under applicable law or under this Deed of Trust. This assignment of rents of the Property will
terminate at such time as this Deed of Trust ceases to secure the Secured Obligations.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes,
assessments, charges and levies imposed by any public authority or utility company that are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor is
not required to pay and discharge any such tax, assessment, charge or levy so long as (a) the
legality thereof is promptly and actively contested in good faith and by appropriate proceedings,
863\01\733742.3 6
and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this
Section 3.1. With respect to taxes, special assessments or other similar governmental charges,
Trustor shall pay such amount in full prior to the attachment of any lien therefore on any part of
the Security; provided, however, if such taxes, assessments or charges can be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this Section 3.1 must not be construed to require
that Trustor maintain a reserve account, escrow account, impound account or other similar
account for the payment of future taxes, assessments, charges and levies.
In the event that Trustor fails to pay any of the items required by this Section to be paid
by Trustor, Beneficiary may (but is under no obligation to) pay the same, after the Beneficiary
has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within
seven (7) business days after receipt of such notice. Any amount so advanced therefore by
Beneficiary, together with interest thereon from the date of such advance at the maximum rate
permitted by law, will become part of the Secured Obligations secured hereby, and Trustor
agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
Trustor agrees to provide insurance conforming in all respects to that required under the
Loan Documents during the course of construction and following completion, and at all times
until all amounts secured by this Deed of Trust have been paid, all Secured Obligations secured
hereunder have been fulfilled, and this Deed of Trust has been reconveyed.
All such insurance policies and coverages are to be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, are to be delivered to the Beneficiary upon demand therefore at any time
prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances.
In the event the Trustor fails to maintain the full insurance coverage required by this
Deed of Trust or fails to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven (7) days prior notice to Trustor, may (but is under no obligation
to) (i) take out the required policies of insurance and pay the premiums on the same, and (ii)
make any repairs or replacements that are necessary and provide for payment thereof. All
amounts so advanced by the Beneficiary will become part of the Secured Obligations (together
with interest as set forth below) and will be secured hereby, which amounts the Trustor agrees to
pay on the demand of the Beneficiary, and if not so paid, will bear interest from the date of the
advance at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.
863\01\733742.3 7
ARTICLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.
All judgments, awards of damages, settlements and compensation made in connection
with or in lieu of (1) the taking of all or any part of or any interest in the Property by or under
assertion of the power of eminent domain, (2) any damage to or destruction of the Property or
any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the
Property (collectively, the "Funds") are hereby assigned to and are to be paid to the Beneficiary
by a check made payable to the Beneficiary. The Beneficiary is authorized and empowered (but
not required) to collect and receive any Funds and is authorized to apply them in whole or in part
to any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary
determines at its sole option. The Beneficiary is entitled to settle and adjust all claims under
insurance policies provided under this Deed of Trust and may deduct and retain from the
proceeds of such insurance the amount of all expenses incurred by it in connection with any such
settlement or adjustment. All or any part of the amounts so collected and recovered by the
Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for
its disposition. Application of all or any part of the Funds collected and received by the
Beneficiary or the release thereof will not cure or waive any default under this Deed of Trust.
The rights of the Beneficiary under this Section 4.1 are subject to the rights of any senior
mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to reconstruct the
improvements on the Property provided that Beneficiary reasonably determines that Trustor
(taking into account the Funds) has sufficient funds to rebuild the improvements in substantially
the form that existed prior to the casualty or condemnation.
ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor shall duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under the Loan Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses.
In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the
Beneficiary employs attorneys or incurs other expenses for the collection of amounts due
hereunder or the enforcement of performance or observance of an obligation or agreement on the
part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefore, pay
to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so
incurred by the Beneficiary. Any such amounts paid by the Beneficiary will be added to the
Secured Obligations, and will bear interest from the date such expenses are incurred at the lesser
of ten percent (10%) per annum or the maximum rate permitted by law.
863\01\733742.3 8
Section 5.3 Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust is deemed to be fixtures and part of the real property and this Deed of Trust constitutes a
fixtures filing under the California Commercial Code. As to any personal property not deemed
or permitted to be fixtures, this Deed of Trust constitutes a security agreement under the
California Commercial Code.
Section 5.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor shall
perform all acts that the Beneficiary reasonably requests so as to enable the Beneficiary to
maintain a valid perfected security interest in the Security in order to secure the payment of the
Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it deems appropriate from time to time in order to
protect the security interest established pursuant to this instrument.
Section 5.6 Operation of the Security.
The Trustor shall operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Loan Documents.
Section 5.7 Inspection of the Security.
At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and
its duly authorized agents, attorneys, experts, engineers, accountants and representatives, may
inspect the Security, without payment of charges or fees.
Section 5.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there will be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor will the Trustor itself
or any person claiming under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants
will run with the land.
863\01\733742.3 9
ARTICLE 6
HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, and shall not cause or
permit the Property to be in violation of any federal, state or local laws, ordinances or regulations
relating to industrial hygiene or to the environmental conditions on, under or about the Property
including, but not limited to, soil and ground water conditions. Trustor shall not use, generate,
manufacture, store or dispose of on, under, or about the Property or transport to or from the
Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or
related materials, including without limitation, any substances defined as or included in the
definition of "hazardous substances", hazardous wastes", "hazardous materials", or "toxic
substances" under any applicable federal or state laws or regulations (collectively referred to
hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily used
in construction or operation of a multi-family residential development.
Trustor shall immediately advise Beneficiary in writing if at any time it receives written
notice of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Trustor or the Property pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party
against Trustor or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) Trustor's discovery
of any occurrence or condition on any real property adjoining or in the vicinity of the Property
that could cause the Property or any part thereof to be classified as "border-zone property" (as
defined in California Health and Safety Code Section 25117.4) under the provision of California
Health and Safety Code Section 25220 et seq., or any regulation adopted in accordance
therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
Beneficiary has the right to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials Claims and to have
its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall indemnify
and hold harmless Beneficiary and its boardmembers, supervisors, directors, officers, employees,
agents, successors and assigns from and against any loss, damage, cost, expense or liability
directly or indirectly arising out of or attributable to the use, generation, storage, release,
threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about
the Property including without limitation: (a) all foreseeable consequential damages; (b) the
costs of any required or necessary repair, cleanup or detoxification of the Property and the
preparation and implementation of any closure, remedial or other required plans; and (c) all
reasonable costs and expenses incurred by Beneficiary in connection with clauses (a) and (b),
including but not limited to reasonable attorneys' fees and consultant's fees. This
indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision
include, but are not limited to: (1) losses attributable to diminution in the value of the Property;
(2) loss or restriction of use of rentable space on the Property; (3) adverse effect on the
marketing of any rental space on the Property; and (4) penalties and fines levied by, and remedial
863\01\733742.3 10
or enforcement actions of any kind issued by any regulatory agency (including but not limited to
the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the
Property and surrounding properties).
Without Beneficiary's prior written consent, which may not be unreasonably withheld,
Trustor may not take any remedial action in response to the presence of any Hazardous Materials
on, under or about the Property, nor enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Material Claims, which remedial action, settlement,
consent decree or compromise might, in Beneficiary's reasonable judgment, impairs the value of
the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent is not
necessary in the event that the presence of Hazardous Materials on, under, or about the Property
either poses an immediate threat to the health, safety or welfare of any individual or is of such a
nature that an immediate remedial response is necessary and it is not reasonably possible to
obtain Beneficiary's consent before taking such action, provided that in such event Trustor
notifies Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to
withhold its consent, where such consent is required hereunder, if (i) a particular remedial action
is ordered by a court of competent jurisdiction; (ii) Trustor will or may be subjected to civil or
criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the
reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial
action which would result in less impairment of Beneficiary's security hereunder; or (iv) the
action has been agreed to by Beneficiary.
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section
726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its
rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) any other rights and remedies permitted by law. For purposes of determining
the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced
in a release or threatened release of hazardous materials, within the meaning of California Code
of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials
was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any
portion of the Property and the Trustor knew or should have known of the activity by such
lessee, occupant, or user which caused or contributed to the release or threatened release. All
863\01\733742.3 11
costs and expenses, including (but not limited to) attorneys' fees, incurred by the Beneficiary in
connection with any action commenced under this paragraph, including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to which the
Property is environmentally impaired, plus interest thereon at the default rate specified in the
Loan Agreement until paid, will be added to the indebtedness secured by this Deed of Trust and
will be due and payable to the Beneficiary upon its demand made at any time following the
conclusion of such action.
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
The following are events of default ("Events of Default") following the expiration of any
applicable notice and cure periods: (i) failure to make any payment to be paid by Trustor under
the Loan Documents; (ii) failure to observe or perform any of Trustor's other covenants,
agreements or obligations under the Loan Documents, including, without limitation, the
provisions concerning discrimination; (iii) failure to make any payment or observe or perform
any of Trustor's other covenants, agreements, or obligations under any Secured Obligations,
which default is not cured within the times and in the manner provided therein; and (iv) failure to
make any payments or observe or perform any of Trustor's other covenants, agreements or
obligations under any other debt instrument or regulatory agreement secured by the Property,
which default is not cured within the time and in the manner provided therein.
Section 7.2 Acceleration of Maturity.
If an Event of Default has occurred and is continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured
Obligations are immediately become due and payable, and no omission on the part of the
Beneficiary to exercise such option when entitled to do so will be construed as a waiver of such
right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default has occurred and is continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Property and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts that it deems necessary
or desirable to preserve the value or marketability of the Property, or part thereof or interest
therein, increase the income therefrom or protect the security thereof. The entering upon and
taking possession of the Security will not cure or waive any Event of Default or Notice of Sale
(as defined in Section 7.3(c), below) hereunder or invalidate any act done in response to such
Event of Default or pursuant to such Notice of Sale, and, notwithstanding the continuance in
possession of the Security, Beneficiary will be entitled to exercise every right provided for in this
863\01\733742.3 12
Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise
the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in
the Official Records of Contra Costa County; or
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with
Trustee this Deed of Trust which is secured hereby (and the deposit of which will be deemed to
constitute evidence that the Secured Obligations are immediately due and payable), and such
receipts and evidence of any expenditures made that are additionally secured hereby as Trustee
may require.
(a) Upon receipt of such Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as is then required
by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after the lapse of
that amount of time as is then required by law and after recordation of such Notice of Sale as
required by law, sell the Security, at the time and place of sale set forth in the Notice of Sale,
whether as a whole or in separate lots or parcels or items as Trustee deems expedient and in such
order as it determines unless specified otherwise by the Trustor according to California Civil
Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of the
United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers
thereof its good and sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed or any matters of facts will
be conclusive proof of the truthfulness thereof. Any person, including, without limitation,
Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured
Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured
hereby; and (iv) the remainder, if any, to Trustor.
(c) Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter, and without
863\01\733742.3 13
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver.
If an Event of Default occurs and is continuing, Beneficiary, as a matter of right and
without further notice to Trustor or anyone claiming under the Security, and without regard to
the then value of the Security or the interest of Trustor therein, may apply to any court having
jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor
hereby irrevocably consents to such appointment and waives further notice of any application
therefore. Any such receiver or receivers will have all the usual powers and duties of receivers
in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided
herein, and will continue as such and exercise all such powers until the date of confirmation of
sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy will be cumulative and concurrent and will be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default will exhaust or impair any such right, power or
remedy, or will be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder will not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, will not constitute a waiver by the Beneficiary of
its right hereunder or impair any rights, power or remedies consequent on any Event of Default
by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the
payment or performance of any Secured Obligation, (ii) takes other or additional security or the
payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the
Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents,
(v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or
consents to any agreement subordinating the lien hereof, any such act or omission will not
release, discharge, modify, change or affect the original liability under this Deed of Trust, or any
other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or
any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor must any
such act or omission preclude the Beneficiary from exercising any right, power or privilege
863\01\733742.3 14
herein granted or intended to be granted in any Event of Default then made or of any subsequent
Event of Default, nor, except as otherwise expressly provided in an instrument or instruments
executed by the Beneficiary will the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security.
The Beneficiary has the power to (a) institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 7.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, will be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount that becomes due and payable by the
Trustor hereunder after such date.
Section 7.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in
taking any action to collect any Secured Obligations or in proceedings against the Security, in
connection with the delivery, acceptance, performance, default, endorsement or guaranty of this
Deed of Trust.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendments.
This Deed of Trust cannot be waived, changed, discharged or terminated orally, but only
by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all Secured Obligations have been paid
or forgiven, and all obligations under the Loan Documents have been performed in full, and
upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment
by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the
person or persons legally entitled thereto.
863\01\733742.3 15
Section 8.3 Notices.
If at any time after the execution of this Deed of Trust it becomes necessary or
convenient for one of the parties hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication must be in writing and is to be served
personally or by depositing the same in the registered United States mail, return receipt
requested, postage prepaid and (1) if intended for Beneficiary is to be addressed to:
County of Contra Costa
Department of Conservation and Development
Redevelopment Division
2530 Arnold Dr., Suite 190
Martinez, CA 94553
Attention: Deputy Director – Redevelopment
and (2) if intended for Trustor is to be addressed to:
Lillie Mae Jones Plaza, L.P.
c/o Community Housing Development
Corporation of North Richmond
1535-A Third Street
Richmond, CA 94801
Attn: Executive Director
Any notice, demand or communication will be deemed given, received, made or communicated
on the date personal delivery is affected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either
party may change its address at any time by giving written notice of such change to Beneficiary
or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the
date such change is desired to be effective.
Section 8.4 Successors and Joint Trustors.
Where an obligation created herein is binding upon Trustor, the obligation also applies to
and binds any transferee or successors in interest. Where the terms of the Deed of Trust have the
effect of creating an obligation of the Trustor and a transferee, such obligation will be deemed to
be a joint and several obligation of the Trustor and such transferee. Where Trustor is more than
one entity or person, all obligations of Trustor will be deemed to be a joint and several obligation
of each and every entity and person comprising Trustor.
863\01\733742.3 16
Section 8.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity will not affect the balance of
the terms and provisions hereof, which terms and provisions will remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, will be considered to have been first
paid or applied to the full payment of that portion of the debt that is not secured or partially
secured by the lien of this Deed of Trust.
Section 8.7 Governing Law.
This Deed of Trust is governed by the laws of the State of California.
Section 8.8 Gender and Number.
In this Deed of Trust the singular includes the plural and the masculine includes the
feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage also refers to a deed of trust and any
reference to a deed of trust also refers to a mortgage.
Section 8.10 Actions.
Trustor shall appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11 Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter will be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution is to be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, will be conclusive proof of proper
appointment of the successor trustee.
863\01\733742.3 17
Section 8.12 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 8.13 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law, the Trustee is not
obligated to notify any party hereto of a pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee is a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions.
Notwithstanding anything to the contrary contained herein or in any documents secured
by this Deed of Trust, or contained in any subordination agreement, and to the extent applicable,
the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of
foreclosure (collectively, "Foreclosure") with respect to the Security encumbered by this Deed of
Trust, the following rule contained in 26 U.S.C. Section 42(h)(6)(E)(ii), as amended, applies:
For a period of three (3) years from the date of Foreclosure, with respect to any unit that
had been regulated by the Regulatory Agreement with the California Tax Credit Allocation
Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be
evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be
increased except as otherwise permitted under Section 42 of the Internal Revenue Code.
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863\01\733742.3 18
863\01\733742.3 19
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first
above written.
TRUSTOR:
LILLIE MAE JONES PLAZA, L.P., a California limited
partnership
By: CHDC Lillie Mae Jones LLC, a California limited liability
company, its managing general partner
By: Community Housing Development Corporation of
North Richmond, a California nonprofit public
benefit corporation
By:
Name: ______________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a California limited
liability company, its co-general partner
By: East Bay Asian Local Development Corporation, a
California nonprofit public benefit corporation, its
sole member
By: ________________________
Name: _________________________
Its: Executive Director
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
863\01\733742.3
EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, County of Contra Costa, and is described as
follows:
A-1
863\01\733742.3
MHSA LOAN AGREEMENT
Between
COUNTY OF CONTRA COSTA
and
LILLIE MAE JONES PLAZA, L.P.
LILLIE MAE JONES PLAZA APARTMENTS
863\01\733370.6
TABLE OF CONTENTS
Page
i
863\01\733370.6
ARTICLE 1 DEFINITIONS AND EXHIBITS............................................................................2
Section 1.1 Definitions................................................................................................... 2
Section 1.2 Exhibits....................................................................................................... 4
ARTICLE 2 LOAN PROVISIONS..............................................................................................5
Section 2.1 Loan............................................................................................................ 5
Section 2.2 Interest......................................................................................................... 5
Section 2.3 Use of Loan Funds...................................................................................... 5
Section 2.4 Security....................................................................................................... 5
Section 2.5 Subordination.............................................................................................. 5
Section 2.6 Conditions Precedent to Disbursement of Loan Funds............................... 6
Section 2.7 Conditions Precedent to Disbursement of Retention.................................. 8
Section 2.8 Repayment Schedule................................................................................... 9
Section 2.9 Non-Recourse. ............................................................................................ 9
ARTICLE 3 CONSTRUCTION OF THE DEVELOPMENT...................................................10
Section 3.1 Permits and Approvals.............................................................................. 10
Section 3.2 Bid Package. ............................................................................................. 10
Section 3.3 Construction Contract............................................................................... 11
Section 3.4 Construction Bonds................................................................................... 11
Section 3.5 Commencement of Construction.............................................................. 11
Section 3.6 Completion of Construction...................................................................... 12
Section 3.7 Construction Pursuant to Plans and Laws; Prevailing
Wages; Accessibility................................................................................. 12
Section 3.8 Marketing Plan and Social Services Plan................................................. 13
Section 3.9 Equal Opportunity..................................................................................... 14
Section 3.10 Minority and Women-Owned Contractors............................................... 14
Section 3.11 Progress Reports....................................................................................... 14
Section 3.12 Construction Responsibilities................................................................... 14
Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion.................... 15
Section 3.14 Inspections................................................................................................ 15
Section 3.15 Approved Development Budget; Revisions to Budget............................. 15
Section 3.16 Developer Fee........................................................................................... 16
Section 3.17 Capital Contributions................................................................................ 16
ARTICLE 4 LOAN REQUIREMENTS.....................................................................................16
Section 4.1 Operating Reserve Accounts..................................................................... 16
Section 4.2 Financial Accounting and Post-Completion Audits. ................................ 16
Section 4.3 Annual Operating Budget......................................................................... 16
Section 4.4 Information. .............................................................................................. 17
Section 4.5 Records. .................................................................................................... 17
Section 4.6 County Audits........................................................................................... 18
Section 4.7 Hazardous Materials................................................................................. 18
Section 4.8 Maintenance and Damage......................................................................... 20
TABLE OF CONTENTS
(continued)
Page
ii
863\01\733370.6
Section 4.9 Fees and Taxes.......................................................................................... 21
Section 4.10 Notice of Litigation................................................................................... 21
Section 4.11 Operation of Development as MHSA Eligible Housing........................... 21
Section 4.12 Nondiscrimination..................................................................................... 22
Section 4.13 Transfer..................................................................................................... 22
Section 4.14 Insurance Requirements............................................................................ 23
Section 4.15 Payment of Other Indebtedness; Notice of Default.................................. 24
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER........................24
Section 5.1 Representations and Warranties................................................................ 24
ARTICLE 6 DEFAULT AND REMEDIES...............................................................................26
Section 6.1 Events of Default...................................................................................... 26
Section 6.2 Remedies................................................................................................... 28
Section 6.3 Right of Contest........................................................................................ 28
Section 6.4 Remedies Cumulative............................................................................... 28
ARTICLE 7 GENERAL PROVISIONS....................................................................................29
Section 7.1 Relationship of Parties.............................................................................. 29
Section 7.2 No Claims................................................................................................. 29
Section 7.3 Amendments............................................................................................. 29
Section 7.4 Indemnification......................................................................................... 29
Section 7.5 Non-Liability of County Officials, Employees and Agents...................... 30
Section 7.6 No Third Party Beneficiaries.................................................................... 30
Section 7.7 Discretion Retained By County................................................................ 30
Section 7.8 Conflict of Interest.................................................................................... 30
Section 7.9 Notices, Demands and Communications.................................................. 30
Section 7.10 Applicable Law......................................................................................... 31
Section 7.11 Parties Bound............................................................................................ 31
Section 7.12 Attorneys' Fees.......................................................................................... 31
Section 7.13 Severability............................................................................................... 31
Section 7.14 Force Majeure........................................................................................... 32
Section 7.15 County Approval....................................................................................... 32
Section 7.16 Waivers..................................................................................................... 32
Section 7.17 Title of Parts and Sections. ....................................................................... 32
Section 7.18 Entire Agreement of the Parties................................................................ 32
Section 7.19 Multiple Originals; Counterpart................................................................ 32
Exhibit A: Legal Description of the Property
Exhibit B: Approved Development Budget
Exhibit C: Scope of Work
Exhibit D: Description of Operating Reserve Accounts
MHSA LOAN AGREEMENT
(Lillie Mae Jones Plaza Apartments)
This MHSA Loan Agreement (the "Agreement") is dated ____________ __, 20__, and is
between the COUNTY OF CONTRA COSTA, a political subdivision of the State of California (the
"County"), and LILLIE MAE JONES PLAZA,L.P., a California limited partnership (the
"Borrower").
A. Defined terms used but not defined in these recitals are as defined in Article 1 of
this Agreement.
B. The County has received funds from the California Department of Mental Health,
("DMH") pursuant to the Mental Health Services Act ("the Act" or "MHSA") (such funds, the
“MHSA Funds”). MHSA Funds must be used by the County in accordance with the Act and
California Code of Regulations Title 9, Section 3100, et seq.
C. The Borrower intends to acquire real property located at 116 MacDonald Avenue
in the City of Richmond, County of Contra Costa, State of California, as more particularly
described in Exhibit A (the "Property"). The Borrower intends to construct twenty-five (25)
multifamily housing units affordable to very-low income households and one manager’s unit on
the Property (the “Development”). The Development, as well as any additional improvements
on the Property, including all landscaping, roads and parking spaces on the Property, are referred
to as the "Improvements".
D. Borrower desires to borrow from the County and the County desires to lend to
Borrower a portion of the MHSA Funds in the amount of Two Hundred Ninety-Three Thousand
Eight Hundred Eighty-Four Dollars ($293,884) (the "Loan"). The Loan will be evidenced by the
Note and secured by the Deed of Trust.
E. The County has the authority to lend the Loan to the Borrower pursuant to
Government Code Section 26227 which authorizes counties to spend county funds for programs
that will further a county's public purposes. In addition, the County has the authority to loan the
MHSA Funds to expand mental health services and program capacity for persons with severe
mental illness who are unserved or underserved pursuant to 9 California Code of Regulations
(C.C.R.) Section 3410(a)(1).
F. The Loan is to be applied toward the acquisition of the Property and the
construction of the Development in order to help achieve financial feasibility for the
Development. The Development will increase the supply of affordable rental housing for
persons with mental health disabilities in Contra Costa County. Due to the assistance provided
Borrower pursuant to this Agreement, the Borrower is required to make two units in the
Development available exclusively to persons with mental health disabilities (the “MHSA
Units”).
1
863\01\733370.6
G. The project underlying this Agreement is exempt from California Environmental
Quality Act (California Public Resources Code Section 21000 et seq) requirements under the
class 32 categorical exemption set forth in 14 C.C.R. Section 15332.
H. Borrower’s use of MHSA Funds in conformance with this Agreement is
consistent with the non-supplant requirements of the Act: The funds will expand mental health
services and program capacity for persons with severe mental illness who are unserved or
underserved. Additionally, no other County mental health dollars are available to ensure that the
MHSA Units will remain available as decent, safe and sanitary housing for persons with severe
mental illness who are unserved or underserved. The use of MHSA Funds in accordance with
this Agreement is also consistent with the County's "Community Planning Process" and the
"Three-Year Program and Expenditure Plan" submitted by the County to the DMH, both of
which are required by California Code of Regulations Title 9, Section 3100, et seq.
The parties therefore agree as follows:
ARTICLE 1 DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.
The following terms have the following meanings:
(a) "Agency" means the Richmond Community Redevelopment Agency, a
public body, corporate, and politic.
(b) "Agreement" means this MHSA Loan Agreement.
(c) "Approved Development Budget" means the proforma development
budget, including sources and uses of funds, as approved by the County, and attached hereto and
incorporated herein as Exhibit B.
(d) "Approved Financing" means:
(i) A HOME/Housing Fund Loan from the Agency in the approximate
amount of Two Million Four Hundred Ten Thousand Dollars ($2,410,000) (the "Agency Loan").
(ii) A loan of American Recovery and Reinvestment Act of 2009 (Public
Law 111-5) (“ARRA”) Section 1602 program funds from the California Tax Credit Allocation
Committee, a public agency of the State of California in the amount of Three Million Nine Hundred
Sixty-Two Thousand Six Hundred Fifty-Six Dollars ($3,962,656) (the "TCAC Loan").
(iii) A loan of Mental Health Services Act funds from the California
Housing and Finance Agency ("CalHFA") in the amount of Seven Hundred Fifteen Thousand
Dollars ($715,000) (the "CalHFA MHSA Loan").
2
863\01\733370.6
(iv) A loan of Housing Opportunities with Persons with AIDS
Program ("HOPWA") funds from the County in the amount of Three Hundred Thousand Dollars
($300,000) (the "County HOPWA Loan").
(v) A grant of Cal ReUse funds from the California Department of
Toxic Substances Control in the amount of Two Hundred Eighty-Nine Thousand Five Hundred
Eighty-Nine Dollars ($289,589) (the "Cal ReUse Grant").
(vi) A Multifamily Housing Program loan from the California
Department of Housing and Community Development in the amount of Two Million Five
Hundred Eighty-Three Thousand Three Hundred Thirty-Two Dollars ($2,583,332) (the "MHP
Loan").
(vii) An Affordable Housing Program Loan in the amount of Five
Hundred Thousand Dollars ($500,000) (the "AHP Loan").
(viii) Capital contribution from CHDC Lillie Mae Jones LLC, one of
the Borrower's general partners, in the amount of Thirty-Six Thousand Two Hundred Twenty-
Five Dollars ($36,225) (the "General Partner Equity").
(e) "Bid Package" means the Borrower's proposed bid package to be made
available to potential bidders. The contents of the Bid Package are more particularly described
in Section 3.2.
(f) "Borrower" has the meaning set forth in the first paragraph of this
Agreement.
(g) "City" means the City of Richmond, a municipal corporation.
(h) "County" has the meaning set forth in the first paragraph of this
Agreement.
(i) "County MHSA Operating Reserve" has the meaning set forth in Section
4.1.
(j) "Deed of Trust" means the Deed of Trust with Assignment of Rents,
Security Agreement, and Fixture Filing of even date herewith among Borrower, as Trustor, Old
Republic Title Company, as trustee, and the County, as beneficiary, that will encumber the
Property to secure repayment of the Loan and performance of the covenants of the Loan
Documents. The form of the Deed of Trust will be provided by the County.
(k) "Default Rate" has the meaning set forth in Section 6.2(c).
(l) "Development" has the meaning set forth in Paragraph C of the Recitals.
(m) "DMH" has the meaning set forth in Paragraph B of the Recitals.
(n) "Event of Default" has the meaning set forth in Section 6.1.
3
863\01\733370.6
(o) "Hazardous Materials" has the meaning set forth in Section 4.7.
(p) "Hazardous Materials Claims" has the meaning set forth in Section 4.7.
(q) "Hazardous Materials Law" has the meaning set forth in Section 4.7.
(r) "Loan" has the meaning set forth in Paragraph D of the Recitals.
(s) "Loan Documents" means this Agreement, the Note, the Regulatory
Agreement, and the Deed of Trust.
(t) "MHSA" or the "Act" has the meaning set forth in Paragraph A of the
Recitals.
(u) "MHSA Eligible" has the meaning set forth in the Regulatory Agreement.
(v) "MHSA Funds" has the meaning set forth in Paragraph A of the Recitals.
(w) "MHSA Units" means the two (2) units required to be available to and
occupied by MHSA Eligible Tenants pursuant to the Regulatory Agreement.
(x) “Marketing Plan” has the meaning set forth in Section 3.8(a).
(y) "Note" means the promissory note that evidences Borrower's obligation to
repay the Loan.
(z) "Property" has the meaning set forth in Paragraph C of the Recitals.
(aa) "Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants of even date herewith between the County and the
Borrower related to the Loan, to be recorded against the Property.
(bb) "Retention Amount" means Ten Thousand Dollars ($10,000) of the Loan,
the disbursement of which is described in Section 2.7.
(cc) "RWP" has the meaning set forth in Section 4.7.
(dd) "Scope of Work" means the scope of work for the construction of the
Development set forth in Exhibit C.
(ee) “Social Services Plan” has the meaning set forth in Section 3.8(b).
(ff) "Tenant" means the tenant household that occupies a unit in the
Development.
(gg) "Term" has the meaning set forth in Section 2.8(a).
(hh) "Transfer" has the meaning set forth in Section 4.13.
Section 1.2 Exhibits.
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863\01\733370.6
The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Development Budget
Exhibit C: Scope of Work
Exhibit D: Description of Operating Reserve Accounts
ARTICLE 2 LOAN PROVISIONS
Section 2.1 Loan.
The County shall lend to the Borrower the Loan for the purposes set forth in Section 2.3
of this Agreement. Borrower's obligation to repay the Loan is evidenced by the Note.
Section 2.2 Interest.
(a) Subject to the provisions of Section 2.2(b) below, the Borrower shall pay
interest on the outstanding principal balance of the Loan at a per annum rate of interest equal to
one percent (1%), commencing on the date of disbursement.
(b) Upon the occurrence of an Event of a Default, interest on the Loan will
begin to accrue, beginning on the date of such occurrence and continuing until the date the Loan
is repaid in full or the Event of Default is cured, at the lesser of ten percent (10%), compounded
annually, and the highest rate permitted by law.
Section 2.3 Use of Loan Funds.
(a) The Borrower shall use the Loan to fund the acquisition of the Property
construction of the Development consistent, with the Approved Development Budget and the
Scope of Work.
(b) The Borrower may not use the Loan proceeds for any other purposes
without the prior written consent of the County.
Section 2.4 Security.
Borrower shall secure its obligation to repay the Loan, as evidenced by the Note, by
executing the Deed of Trust, and causing or permitting it to be recorded as a lien against the
Property.
Section 2.5 Subordination.
During the Term, the Deed of Trust and/or the Regulatory Agreement may be
subordinated to Approved Financing (in each case, a "Senior Loan"), provided that all of the
following conditions are satisfied:
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(a) All of the proceeds of the proposed Senior Loan, less any transaction
costs, are used to provide acquisition, construction and/or permanent financing for the
Development.
(b) The proposed lender of a Senior Loan (each, a "Senior Lender") is a state
or federally chartered financial institution, a nonprofit corporation or a public entity that is not
affiliated with Borrower or any of Borrower's affiliates, other than as a depositor or a lender.
(c) Borrower demonstrates to the County's reasonable satisfaction that
subordination of the Deed of Trust and the Regulatory Agreement is necessary to secure
adequate acquisition, construction, rehabilitation and/or permanent financing to ensure the
viability of the Development, including the operation of the Development as affordable housing,
as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the
County, in addition to any other information reasonably required by the County, evidence
demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate
acquisition, construction, rehabilitation and/or permanent financing to ensure the viability of the
Development, and adequate financing for the Development would not be available without the
proposed subordination.
(d) The subordination agreement is structured to minimize the risk that the
Deed of Trust and the Regulatory Agreement will be extinguished as a result of a foreclosure by
the Senior Lender or other holder of the Senior Loan. To satisfy this requirement, the
subordination agreement must provide the County with adequate rights to cure any defaults by
Borrower, including: (i) providing the County or its successor with copies of any notices of
default at the same time and in the same manner as provided to Borrower; and (ii) providing the
County with a cure period of at least sixty (60) days to cure any default.
(e) The subordination of the Loan is effective only during the original term of
the Senior Loan and any extension of its term that is approved in writing by the County.
(f) The subordination does not limit the effect of the Deed of Trust and the
Regulatory Agreement before a foreclosure, nor require the consent of the Senior Lender prior to
the County exercising any remedies available to the County under the Loan Documents.
Upon a determination by the County's Deputy Director – Redevelopment that the
conditions in this Section have been satisfied, the Deputy Director – Redevelopment or his/her
designee will be authorized to execute the approved subordination agreement without the
necessity of any further action or approval.
Section 2.6 Conditions Precedent to Disbursement of Loan Funds.
The maximum amount of funds to be disbursed pursuant to this Section 2.6 may not
exceed the amount of the Loan less the Retention Amount. The County is not obligated to make
any disbursements of Loan funds for construction of the Development, or to take any other
action under the Loan Documents unless the following conditions precedent are satisfied prior to
each disbursement of Loan funds:
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(a) There exists no Event of Default nor any act, failure, omission or
condition that would constitute an Event of Default under this Agreement, or the Loan
Documents;
(b) The Borrower holds title to the Property or is acquiring title
simultaneously with the disbursement of the Loan proceeds;
(c) There exists no material adverse change in the financial condition of
Borrower from that shown by the financial statements and other data and information furnished
by Borrower to the County prior to the date of this Agreement;
(d) Borrower has delivered to the County a copy of a corporate resolution
authorizing Borrower's execution of the Loan Documents;
(e) Borrower has caused to be executed and delivered to the County the Loan
Documents and any other instruments and policies required under the Loan Documents;
(f) A title insurer reasonably acceptable to the County is unconditionally and
irrevocably committed to issuing an LP-10 ALTA Lender's Policy of title insurance insuring the
priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and
exclusions as may be reasonably acceptable to the County, and containing such endorsements as
the County may reasonably require. The Borrower shall provide whatever documentation
(including an indemnification agreement), deposits or surety is reasonably required by the title
company in order for the County's Deed of Trust to be senior in lien priority to any mechanics
liens in connection with any start of construction that has occurred prior to the recordation of the
Deed of Trust against the Property in the Office of the Recorder of the County of Contra Costa;
(g) The Deed of Trust and the Regulatory Agreement have been recorded
against the Property in the Office of the Recorder of the County of Contra Costa;
(h) Borrower has furnished the County with evidence of the insurance
coverage meeting the requirements of Section 4.14 below;
(i) The County has determined the undisbursed proceeds of the Loan,
together with other funds or firm commitments for funds that the Borrower has obtained in
connection with the Development, are not less than the amount that the County determines is
necessary to pay for construction of the Development and to satisfy all of the covenants
contained in this Agreement and the Regulatory Agreement;
(j) Borrower has obtained all permits and approvals necessary for the
construction of the Development, as required by Section 3.1, and County has received a copy of
the building permit required to construct the Development (required for disbursements for
construction costs only);
(k) The County has received and approved the Bid Package for the
subcontractors for the construction of the Development, as required pursuant to Section 3.2
below;
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(l) The County has received and approved the general contractor's
construction contract that the Borrower has entered or proposed to enter for construction of the
Development as required pursuant to Section 3.3 below;
(m) The County has received copies of labor and material (payment) bonds
and performance bonds as required pursuant to Section 3.4 below;
(n) Borrower has closed all loans that are part of the Approved Financing
described in Section 1.1(d)(i), (ii), (iv), (v) and (vii) and is eligible to receive the proceeds of
those loans;
(o) Borrower has provided to the County a commitment letter for the CalHFA
MHSA Loan from CalHFA;
(p) Borrower has received the funds from the Cal Reuse Grant and the
General Partner Equity;
(q) The County has received a written draw request from the Borrower,
including certification that the condition set forth in Section 2.6(a) continues to be satisfied, and
setting forth the proposed uses of funds consistent with the Approved Development Budget, the
amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost
incurred or to be incurred. When a disbursement is requested to pay any contractor in
connection with improvements on the Property, the written request must be accompanied by (i)
certification by the Borrower's architect reasonably acceptable to the County that the work for
which disbursement is requested has been completed (although the County reserves the right to
inspect the Property and make an independent evaluation); and (ii) lien releases and/or
mechanics lien title insurance endorsements reasonably acceptable to the County.
Section 2.7 Conditions Precedent to Disbursement of Retention.
The County is not obligated to disburse the Retention Amount unless the following
conditions precedent are satisfied:
(a) The County has received a completion report from the Borrower certifying
that each Tenant occupying a MHSA Unit is MHSA Eligible, and setting forth: (i) the income,
household size, and ethnicity of Tenants, (ii) and the unit size, rent amount and utility allowance
for the MHSA Units.
(b) The County has received a cost certification for the Development from the
Borrower showing all uses and sources.
(c) The County has received from the Borrower copies of the final certificate
of occupancy for the Development, or other equivalent document evidencing completion of the
construction.
(d) The County has received for the Borrower current evidence of the
insurance coverage meeting the requirements of Section 4.14 below.
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(e) The County has received from Borrower a form of lease, Marketing Plan
and Social Service Plan as such terms are defined in Section 3.8 below.
(f) The County has received from Borrower evidence of marketing for any
vacant MHSA Units in the Development such as copies of flyers, list of media ads, list of
agencies and organizations receiving information on availability of such units, as applicable.
(g) The County has received from Borrower all relevant contract activity
information.
(h) The County has received from Borrower a copy of the management
agreement and contact information for the property manager of the Development and the name
and phone number of the on-site property manager.
(i) If the Borrower is required to pay prevailing wages under the Davis-Bacon
Act (40 U.S.C. 3141-3148), the County has received confirmation that the Borrower has
submitted all certified payrolls to the City, and any identified payment issues have been resolved,
or the Borrower is working diligently to resolve any such issues.
(j) The County has received a written draw request from the Borrower,
including certification that the condition set forth in Section 2.6(a) continues to be satisfied, and
setting forth the proposed uses of funds consistent with the Approved Development Budget, and,
where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.
Borrower shall apply the disbursement for the purpose(s) requested.
Section 2.8 Repayment Schedule.
(a) Term. The "Term" of the Loan and this Agreement is twenty (20) years,
beginning on [insert date of this Agreement] and expiring on _______________ __, 2030;
provided, however, the County may extend the Term for an additional twenty (20) years in the
event Borrower is not in default under any of the Loan Documents, and the Borrower
simultaneously extends the term of the Regulatory Agreement for an additional twenty (20)
years.
(b) Payment in Full. Borrower shall pay all principal and accrued interest on
the Loan, in full, on the earliest to occur of (i) the date of any Transfer not authorized by the
County, (ii) the date of an Event of Default, and (iii) the expiration of the Term.
(c) Prepayment. The Borrower may prepay the Loan at any time without
penalty. However, the Regulatory Agreement and the Deed of Trust will remain in effect for the
entire term of the Regulatory Agreement, regardless of any prepayment.
Section 2.9 Non-Recourse.
Except as provided below, neither the Borrower, nor any general or limited partner of the
Borrower, has any direct or indirect personal liability for payment of the principal of, and interest
on, the Loan or the performance of the covenants of the Borrower under the Deed of Trust.
Following recordation of the Deed of Trust, the sole recourse of the County with respect to the
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principal of, and interest on, the Note and defaults by Borrower in the performance of its
covenants under the Deed of Trust will be to the property described in the Deed of Trust;
provided, however, that nothing contained in the foregoing limitation of liability limits or
impairs the enforcement of all the rights and remedies of the County against all such security for
the Note or impairs the right of County to assert the unpaid principal amount of the Note as
demand for money within the meaning and intendment of Section 431.70 of the California Code
of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is
intended to apply only to the obligation to repay the principal of, and payment of interest on the
Note and the performance of the Borrower's obligations under the Deed of Trust. Except as
hereafter set forth; nothing contained herein is intended to relieve the Borrower of its obligation
to indemnify the County under Sections 3.7, 4.7, and 7.4 of this Agreement, or liability for (i)
fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges
which may create liens on the Property that are payable or applicable prior to any foreclosure
under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the
fair market value of any personal property or fixtures removed or disposed of by Borrower other
than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under
any insurance policies or awards resulting from condemnation or the exercise of the power of
eminent domain or by reason of damage, loss or destruction to any portion of the Property.
ARTICLE 3 CONSTRUCTION OF THE DEVELOPMENT
Section 3.1 Permits and Approvals.
Borrower must obtain all permits and approvals necessary for the construction of the
Development on the Property must be received no later than May 1, 2010, or such later date that
the County may approve, or the County, at its option, and with thirty (30) days written notice and
opportunity to cure, may declare Borrower in default hereunder.
Section 3.2 Bid Package.
(a) Not later than thirty (30) days prior to the Borrower's proposed date for
advertising the Bid Package, the Borrower shall submit to the County Department of
Conservation and Development - Redevelopment Division a copy of the Borrower's proposed
Bid Package that the Borrower shall utilize to select the subcontractors for the Development.
The Bid Package includes, but is not limited to: (i) a copy of the proposed construction contract,
(ii) a copy of the proposed invitation to bid, (iii) other procurement documentation reasonably
requested by the County, including, but not limited to, evidence that Borrower obtains a bid
guarantee (in a form reasonably acceptable to the County) from each bidder equivalent to five
percent (5%) of the bid price, and (iv) all Construction Plans for the Development. As used in
this Agreement, "Construction Plans" means all construction documentation upon which
Borrower and Borrower's contractor, if any, relies on in constructing all the Improvements on the
Property (including the units in the Development, landscaping, parking, and common areas) and
includes, but is not limited to, final architectural drawings, landscaping plans and specifications,
final elevations, building plans and specifications (also known as "working drawings").
(b) The County Department of Conservation and Development -
Redevelopment Division shall, if the Bid Package submitted conforms to the provisions of this
Agreement, approve in writing the Bid Package. Unless rejected by the County Department of
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Conservation and Development - Redevelopment Division for its failure to comply with the
foregoing requirements within fifteen (15) days after receipt by the County, the Bid Package will
be deemed accepted.
(c) If rejected by the County Department of Conservation and Development -
Redevelopment Division in whole or in part, Borrower shall submit a new or a corrected Bid
Package within fifteen (15) days after notification of the County's rejection and the reasons
therefor. The County will then have fifteen (15) days to review and approve Borrower's new or
corrected Bid Package. The provisions of this Section relating to time periods for approval,
rejection, or resubmission of a new or corrected Bid Package continues to apply until the Bid
Package has been approved, or is deemed approved by the County Department of Conservation
and Development - Redevelopment Division, and Borrower may not publish the Bid Package
until the County Department of Conservation and Development - Redevelopment Division has
approved the Bid Package (or the Bid Package has been deemed approved pursuant to this
Section).
Section 3.3 Construction Contract.
(a) Not later than thirty (30) days prior to the proposed commencement of
construction of the Development, the Borrower shall submit to the County for its approval the
proposed construction contract for the Development. All construction work and professional
services are to be performed by persons or entities licensed or otherwise authorized to perform
the applicable construction work or service in the State of California. Each contract that the
Borrower enters for construction of the Development is to provide that at least ten percent (10%)
of the costs incurred will be payable only upon completion of construction, subject to early
release of retention for specified subcontractors upon approval by the County. The County's
approval of the construction contract may not be deemed to constitute approval of or concurrence
with any term or condition of the construction contract except as such term or condition may be
required by this Agreement.
(b) Upon receipt by the County of the proposed construction contract, the
County shall promptly review same and approve or disapprove it within ten (10) working days.
If the construction contract is not approved by the County, the County shall set forth in writing
and notify the Borrower of the County's reasons for withholding such approval. The Borrower
shall thereafter submit a revised construction contract for County approval, which approval is to
be granted or denied in ten (10) working days in accordance with the procedures set forth above.
Any construction contract executed by the Borrower for the Development is to be in the form
approved by the County.
Section 3.4 Construction Bonds.
Prior to commencement of construction of the Development, the Borrower shall deliver
to the County copies of labor and material bonds and performance bonds for the construction of
the Development in an amount equal to one hundred percent (100%) of the scheduled cost of the
Development. Such bonds must name the County as a co-obligee.
Section 3.5 Commencement of Construction.
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Borrower shall cause the commencement of construction of the Development no later
than June 31, 2010 or such later date that the County approves.
Section 3.6 Completion of Construction.
Borrower shall diligently prosecute construction of the Development to completion, and
shall cause the completion of the construction of the Development no later than December 31,
2011, or such later date that the County approves.
Section 3.7 Construction Pursuant to Plans and Laws; Prevailing Wages;
Accessibility.
(a) Borrower shall construct the Development in conformance with the Scope
of Work and the plans and specifications approved by the City's Building Inspection Department.
Borrower shall notify the County in a timely manner of any changes in the work required to be
performed under this Agreement, including any additions, changes, or deletions to the plans and
specifications approved by the County. A written change order authorized by the County must
be obtained before any of the following changes, additions, or deletions in work for the
Development may be performed: (i) any change in the work the cost of which exceeds Twenty-
Five Thousand Dollars ($25,000); or (ii) any set of changes in the work the cost of which
cumulatively exceeds Seventy-Five Thousand Dollars ($75,000) or ten percent (10%) of the
Loan amount, whichever is less; or (iii) any material change in building materials or equipment,
specifications, or the structural or architectural design or appearance of the Development as
provided for in the plans and specifications approved by the County. Consent to any additions,
changes, or deletions to the work does not relieve or release Borrower from any other obligations
under this Agreement, or relieve or release Borrower or its surety from any surety bond.
(b) Borrower shall cause all work performed in connection with the
Development to be performed in compliance with:
(i) all applicable laws, ordinances, rules and regulations of federal,
state, county or municipal governments or agencies now in force or that may be enacted
hereafter, including without limitation and to the extent applicable, the state prevailing wages
pursuant to California Labor Code Section 1770 et seq., and the regulations pursuant thereto, as
further set forth in Subsection (c) below; and
(ii) all directions, rules and regulations of any fire marshal, health
officer, building inspector, or other officer of every governmental agency now having or
hereafter acquiring jurisdiction. The work will proceed only after procurement of each permit,
license, or other authorization that may be required by any governmental agency having
jurisdiction, and Borrower shall be responsible to the County for the procurement and
maintenance thereof, as may be required of Borrower and all entities engaged in work on the
Development.
(c) The Borrower shall pay and shall cause the contractor and subcontractors
to pay prevailing wages in the construction of the Development as those wages are determined
pursuant to California Labor Code Section 1720 et seq., to employ apprentices as required by
California Labor Code Sections 1777.5 et seq., and the implementing regulations of the
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Department of Industrial Relations (the "DIR"). The Borrower shall and shall cause the
contractor and subcontractors to comply with the other applicable provisions of California Labor
Code Sections 1720 et seq., 1777.5 et seq., and implementing regulations of the DIR. The
Borrower shall and shall cause the contractor and subcontractors to keep and retain such records
as are necessary to determine if such prevailing wages have been paid as required pursuant to
California Labor Code Section 1720 et seq., and apprentices have been employed are required by
California Labor Code Section 1777.5 et seq. Copies of the currently applicable current per
diem prevailing wages are available from DIR. During the construction of the Development,
Borrower shall or shall cause the contractor to post at the Property the applicable prevailing rates
of per diem wages. The Borrower shall indemnify, hold harmless and defend (with counsel
reasonably acceptable to the County) the County against any claim for damages, compensation,
fines, penalties or other amounts arising out of the failure or alleged failure of any person or
entity (including Borrower, its contractor and subcontractors) to pay prevailing wages as
determined pursuant to California Labor Code Section 1720 et seq., to employ apprentices
pursuant to California Labor Code Section 1777.5 et seq., and implementing regulations of the
DIR or to comply with the other applicable provisions of California Labor Code Sections 1720 et
seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the
construction of the Development or any other work undertaken or in connection with the
Property. The requirements in this Subsection survive the repayment of the Loan, and the
reconveyance of the Deed of Trust.
Section 3.8 Marketing Plan and Social Services Plan.
(a) No later than six (6) months prior to the projected date of the completion
of the Development, Borrower shall submit to the County for approval its plan for marketing the
Development to eligible households as required pursuant to the Regulatory Agreement including
information on tenant selection, affirmative marketing efforts and compliance with fair housing
laws (the "Marketing Plan"). Upon receipt of the Marketing Plan, the County will promptly
review the Marketing Plan and will approve or disapprove it within fifteen (15) days after
submission. If the Marketing Plan is not approved, Borrower shall submit a revised Marketing
Plan within fifteen (15) days. If the County does not approve the revised Marketing Plan,
Borrower will be in default hereunder.
(b) No later than four (4) months prior to the projected date of completion of
the construction of the Development, Borrower shall submit to the County for approval its social
service plan for the Development (the "Social Service Plan"). The Social Service Plan must
provide a clearly articulated service delivery program. The services to be provided pursuant to
the Social Service Plan must be appropriate for MHSA Eligible Tenants, and the Borrower must
have a commitment for ongoing funding and a budget for such services. The Social Service Plan
must identify a qualified service provider who will provide supportive services to the MHSA
Eligible Tenants. In the event that there is not a single service provider, the Social Service Plan
must identify a lead service provider for the Development. The Social Service Plan must also
detail how the services will promote wellness, recovery, resiliency and self sufficiency, assist
MHSA Eligible Tenants in obtaining or maintaining benefits to which MHSA Eligible Tenants
may be entitled, such as cash assistance or medical benefits, assess the needs of MHSA Eligible
Tenants, and assess the success of the social services and housing services. The Social Service
Plan must also include provisions setting forth the manner in which the social service provider(s)
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are to: (1) provide quarterly progress reports detailing the number of persons served by the
social service provider(s) at the Development or from the Development and the names of such
persons and (2) provide yearly information regarding the race, ethnicity, gender, cultural and
linguistic characteristics of such persons. Upon receipt of the Social Service Plan, the County
will promptly review the Social Service Plan and will approve or disapprove it within fifteen
(15) days after submission. If the Social Service Plan is not approved, Borrower shall submit a
revised Social Services Plan within fifteen (15) days. If the County does not approve the revised
Social Services Plan, Borrower will be in default hereunder. The County may require that the
Social Service Plan be updated by Borrower and/or the social service providers throughout the
Term in order to comply with applicable DMH requirements. In the event the County requires an
update of the Social Service Plan, the County will notify Borrower in writing and Borrower will
have thirty (30) days from the date of such written notice to provide the County with an updated
Social Service Plan. The time periods for review and approval of the updated Social Service Plan
will be the same as the time periods set forth above for Borrower's initial submission of the
Social Service Plan.
Section 3.9 Equal Opportunity.
During the construction of the Development, discrimination on the basis of race, color,
creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability
in the hiring, firing, promoting, or demoting of any person engaged in the construction work is
not allowed.
Section 3.10 Minority and Women-Owned Contractors.
Borrower shall use its best efforts to afford minority-owned and women-owned business
enterprises the maximum practicable opportunity to participate in the construction of the
Development. Borrower shall, at a minimum, notify applicable minority-owned and women-
owned business firms located in Contra Costa County of bid opportunities for the construction of
the Development. A listing of minority owned and woman owned businesses located in the
County and neighboring counties is available from the County. Documentation of such
notifications must be maintained by Borrower and available to the County as requested.
Section 3.11 Progress Reports.
Until such time as Borrower has received a certificate of occupancy from the City for the
Development, Borrower shall provide the County with quarterly progress reports regarding the
status of the construction of the Development, including a certification that the actual
construction costs to date conform to the Approved Development Budget, as it may be amended
from time to time pursuant to Section 3.15 below.
Section 3.12 Construction Responsibilities.
(a) Borrower is responsible for the coordination and scheduling of the work to
be performed so that commencement and completion of the construction of the Development
will take place in accordance with this Agreement.
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(b) Borrower is solely responsible for all aspects of Borrower's conduct in
connection with the Development, including (but not limited to) the quality and suitability of the
plans and specifications, the supervision of construction work, and the qualifications, financial
condition, and performance of all architects, engineers, contractors, subcontractors, suppliers,
consultants, and property managers. Any review or inspection undertaken by the County with
reference to the Development is solely for the purpose of determining whether Borrower is
properly discharging its obligations to the County, and may not be relied upon by Borrower or by
any third parties as a warranty or representation by the County as to the quality of the design or
construction of the Development.
Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop notice affecting
the Loan is served on the County or any other lender or other third party in connection with the
Development, then Borrower shall, within twenty (20) days after such filing or service, either
pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by
delivering to the County a surety bond in sufficient form and amount, or provide the County with
other assurance satisfactory to the County that the claim of lien or stop notice will be paid or
discharged.
(b) If Borrower fails to discharge any lien, encumbrance, charge, or claim in
the manner required in this Section, then in addition to any other right or remedy, the County
may (but is under no obligation to) discharge such lien, encumbrance, charge, or claim at
Borrower's expense. Alternately, the County may require Borrower to immediately deposit with
the County the amount necessary to satisfy such lien or claim and any costs, pending resolution
thereof. The County may use such deposit to satisfy any claim or lien that is adversely
determined against Borrower.
(c) Borrower shall file a valid notice of cessation or notice of completion
upon cessation of construction on the Development for a continuous period of thirty (30) days or
more, and take all other reasonable steps to forestall the assertion of claims of lien against the
Property. Borrower authorizes the County, but County has no obligation, to record any notices
of completion or cessation of labor, or any other notice that the County deems necessary or
desirable to protect its interest in the Development and Property.
Section 3.14 Inspections.
Borrower shall permit and facilitate, and shall require its contractors to permit and
facilitate, observation and inspection at the Development by the County and by public authorities
during reasonable business hours for the purposes of determining compliance with this
Agreement.
Section 3.15 Approved Development Budget; Revisions to Budget.
As of the date of this Agreement, the County has approved the Approved Development
Budget set forth in Exhibit B. Borrower shall submit any required amendments to the Approved
Development Budget to the County for approval within five (5) days of the date Borrower
receives information indicating that actual costs of the Development vary or will vary from the
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costs shown on the Approved Development Budget. Written consent of the County will be
required to amend the Approved Development Budget.
Section 3.16 Developer Fee.
The maximum cumulative developer fee that may be paid to any entity or entities
providing development services to the Development, whether paid up-front or on a deferred
basis, may not exceed Five Hundred Forty-Six Thousand Dollars ($546,000). Partnership
management fees, asset management fees and any other fees for the general partner of the
Borrower may not exceed the amounts approved by the Agency.
Section 3.17 Capital Contributions.
The Borrower shall cause one of its general partners to contribute the General Partner
Equity to the Borrower (as defined in Section 1.1(d)(viii) above), and shall utilize such funds to
pay costs of the Development, consistent with the Approved Development Budget.
ARTICLE 4 LOAN REQUIREMENTS
Section 4.1 Operating Reserve Accounts.
The Borrower shall create and maintain operating reserve accounts as described in the
attached Exhibit D, which Borrower shall use to fund operating deficits for the Development.
The County, Borrower and CalHFA will enter into an Operating Reserve Agreement in
connection with the operating reserves for the Loan (the "County MHSA Operating Reserve").
The Operating Reserve Agreement will contain the terms and requirements for the County
MHSA Operating Reserve and will be executed by the County, Borrower and CalHFA as soon as
practicable, but in no event later than six months from the date of this Agreement.
Section 4.2 Financial Accounting and Post-Completion Audits.
No later than sixty (60) days following completion of construction of the Development,
Borrower shall provide to County a financial accounting of all sources and uses of funds for the
Development. No later than one hundred fifty (150) days following completion of construction
of the Development, Borrower shall submit an audited financial report showing the sources and
uses of all funds utilized for the Development.
Section 4.3 Annual Operating Budget.
At the beginning of each year of the Term, Borrower shall provide to the County an
annual budget for the operation of the Development. Unless rejected by the County in writing
within fifteen (15) days after receipt of the budget, the budget will be deemed accepted. If
rejected by the County in whole or in part, Borrower shall submit a new or corrected budget
within thirty (30) calendar days of notification of the County's rejection and the reasons therefor.
The provisions of this Section relating to time periods for resubmission of new or corrected
budgets will continue to apply until such budget has been approved by the County.
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Section 4.4 Information.
Borrower shall provide any information reasonably requested by the County in
connection with the Development, including (but not limited to) any information required by
DMH in connection with Borrower's use of the Loan funds.
Section 4.5 Records.
(a) The Borrower shall keep and maintain at the Development, or elsewhere
with the County's written consent, full, complete and appropriate books, record and accounts
relating to the Development, including all such books, records and accounts necessary or prudent
to evidence and substantiate in full detail Borrower's compliance with the terms and provisions
of this Agreement. Books, records and accounts relating to Borrower's compliance with the
terms, provisions, covenants and conditions of this Agreement are to be kept and maintained in
accordance with generally accepted accounting principles consistently applied, and are to be
consistent with requirements of this Agreement. All such books, records, and accounts are to be
open to and available for inspection and copying by DMH, the County, its auditors or other
authorized representatives at reasonable intervals during normal business hours. Copies of all
tax returns and other reports that Borrower may be required to furnish to any governmental
agency are to be open for inspection by the County at all reasonable times at the place that the
books, records and accounts of the Borrower are kept. The Borrower shall preserve such records
for a period of not less than five (5) years after the creation of such records. If any litigation,
claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of
the Loan is pending at the end of the record retention period stated herein, then the Borrower
shall retain the records until such action and all related issues are resolved. The records are to
include all invoices, receipts, and other documents related to expenditures from the Loan funds.
Records must be kept accurate and current. Such records are to include but are not limited to:
(i) Records providing a full description of the activities undertaken
with the use of the Loan.
(ii) Records required to determine the eligibility of activities.
(iii) Records demonstrating compliance with affordability and income
requirements for Tenants;
(iv) Records documenting compliance with the fair housing and equal
opportunity requirements, as applicable;
(v) Certified payrolls from the Borrower's general contractor
evidencing that applicable prevailing wages have been paid; and
(vi) Records documenting compliance with the Social Services Plan
approved by the County.
(b) The County shall notify Borrower of any records it deems insufficient.
Borrower has fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the County in such notice, or if a period longer than fifteen
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(15) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct
the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
Section 4.6 County Audits.
Each year, Borrower shall provide the County with a copy of Borrower's annual audit,
which is to include information on all of Borrower's activities and not just those pertaining to the
Development. In addition, the County or any designated agent or employee of the County at any
time is entitled to audit all of Borrower's books, records, and accounts pertaining thereto. Such
audit is to be conducted during normal business hours at the principal place of business of
Borrower and other places where records are kept. Immediately after the completion of an audit,
the County shall deliver a copy of the results of the audit to Borrower.
Section 4.7 Hazardous Materials.
(a) Borrower shall keep and maintain the Property in compliance with, and
may not cause or permit the Property to be in violation of any federal, state or local laws,
ordinances or regulations relating to industrial hygiene or to the environmental conditions on,
under or about the Property including, but not limited to, soil and ground water conditions.
Borrower may not use, generate, manufacture, store or dispose of on, under, or about the
Property or transport to or from the Property any flammable explosives, radioactive materials,
hazardous wastes, toxic substances or related materials, including without limitation, any
substances defined as or included in the definition of "hazardous substances," hazardous wastes,"
"hazardous materials," or "toxic substances" under any applicable federal or state laws or
regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the
foregoing as may be customarily used in construction of projects like the Development or kept
and used in and about residential property of this type.
(b) Borrower shall immediately advise the County in writing if at any time it
receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against Borrower or the Property pursuant
to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"), (ii) all claims made or threatened by any third party
against Borrower or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above are hereinafter referred to as "Hazardous Materials Claims"), and (iii) Borrower's
discovery of any occurrence or condition on any real property adjoining or in the vicinity of the
Property that could cause the Property or any part thereof to be classified as "border-zone
property" (as defined in California Health and Safety Code Section 25117.4) under the provision
of California Health and Safety Code, Section 25220 et seq., or any regulation adopted in
accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
(c) The County has the right to join and participate in, as a party if it so elects,
any legal proceedings or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attorneys' fees in connection therewith paid by Borrower. Borrower
shall indemnify and hold harmless the County and its boardmembers, supervisors, directors,
officers, employees, agents, successors and assigns from and against any loss, damage, cost,
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expense or liability directly or indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on,
under, or about the Property including without limitation: (i) all foreseeable consequential
damages, (ii) the costs of any required or necessary repair, cleanup or detoxification of the
Property and the preparation and implementation of any closure, remedial or other required
plans, and (iii) all reasonable costs and expenses incurred by the County in connection with
clauses (i) and (ii), including but not limited to reasonable attorneys' fees and consultant's fees.
This indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision
include, but are not limited to: (1) losses attributable to diminution in the value of the Property,
(2) loss or restriction of use of rentable space on the Property, (3) adverse effect on the marketing
of any rental space on the Property, and (4) penalties and fines levied by, and remedial or
enforcement actions of any kind issued by any regulatory agency (including but not limited to
the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the
Property and surrounding properties). This obligation to indemnify will survive termination of
this Agreement.
(d) Without the County's prior written consent, which will not be
unreasonably withheld, Borrower may not take any remedial action in response to the presence
of any Hazardous Materials on, under or about the Property, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
which remedial action, settlement, consent decree or compromise might, in the County's
reasonable judgment, impair the value of the County's security hereunder; provided, however,
that the County's prior consent is not necessary in the event that the presence of Hazardous
Materials on, under, or about the Property either poses an immediate threat to the health, safety
or welfare of any individual or is of such a nature that an immediate remedial response is
necessary and it is not reasonably possible to obtain the County's consent before taking such
action, provided that in such event Borrower shall notify the County as soon as practicable of
any action so taken. The County agrees not to withhold its consent, where such consent is
required hereunder, if (i) a particular remedial action is ordered by a court of competent
jurisdiction, (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it
fails to take a required action, (iii) Borrower establishes to the reasonable satisfaction of the
County that there is no reasonable alternative to such remedial action which would result in less
impairment of the County's security hereunder, or (iv) the action has been agreed to by the
County.
(e) Borrower hereby acknowledges and agrees that (i) this Section is intended
as the County's written request for information (and Borrower's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Agreement (together with any
indemnity obligation applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Property is intended by the Parties to be an
"environmental provision" for purposes of California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be
"environmentally impaired" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of
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Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the
County's or the trustee's rights and remedies under the Deed of Trust, the County may elect to
exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien
on such environmentally impaired or affected portion of the Property and (2) exercise (i) the
rights and remedies of an unsecured creditor, including reduction of its claim against the
Borrower to judgment, and (ii) any other rights and remedies permitted by law. For purposes of
determining the County's right to proceed as an unsecured creditor under California Code of
Civil Procedure Section 726.5(a), the Borrower will be deemed to have willfully permitted or
acquiesced in a release or threatened release of Hazardous Materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
Hazardous Materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and the Borrower knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred
by the County in connection with any action commenced under this paragraph, including any
action required by California Code of Civil Procedure Section 726.5(b) to determine the degree
to which the Property is environmentally impaired, plus interest thereon at the lesser of ten
percent (10%) and the maximum rate permitted by law, until paid, will be added to the
indebtedness secured by the Deed of Trust and is due and payable to the County upon its demand
made at any time following the conclusion of such action.
(g) The County and Borrower acknowledge the need for Borrower to perform
Hazardous Materials remediation on the Property prior to commencement of construction of the
Development. As documented in the remediation work plan dated August 7, 2009, prepared by
PES Environmental, Inc, a portion of the soil on the Property contains lead contamination (the
"RWP"). The Borrower shall perform the remediation of the Property in compliance with the
RWP. Furthermore, the Borrower shall comply with the requirements of the California
Department of Toxic Substances Controls and all applicable laws in completing such
remediation work. Borrower shall commence and complete the remediation work in a timely
fashion.
Section 4.8 Maintenance and Damage.
(a) During the course of both construction and operation of the Development,
Borrower shall maintain the Development and the Property in good repair and in a neat, clean
and orderly condition. If there arises a condition in contravention of this requirement, and if
Borrower has not cured such condition within thirty (30) days after receiving a County notice of
such a condition, then in addition to any other rights available to the County, the County may
perform all acts necessary to cure such condition, and to establish or enforce a lien or other
encumbrance against the Property.
(b) Subject to the requirements of senior lenders, and if economically feasible
in the County’s reasonable judgment after consultation with the Borrower, if any improvement
now or in the future on the Property is damaged or destroyed, then Borrower shall, at its cost and
expense, diligently undertake to repair or restore such improvement consistent with the plans and
specifications approved by the County with such changes as have been approved by the County.
Such work or repair is to be commenced no later than the later of one hundred twenty (120) days,
or such longer period approved by the County in writing, after the damage or loss occurs or thirty
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(30) days following receipt of the insurance proceeds, and is to be complete within one (1) year
thereafter. Any insurance proceeds collected for such damage or destruction are to be applied to
the cost of such repairs or restoration and, if such insurance proceeds are insufficient for such
purpose, then Borrower shall make up the deficiency. If Borrower does not promptly make such
repairs then any insurance proceeds collected for such damage or destruction are to be promptly
delivered by the Borrower to the County as a special repayment of the Loan, subject to the rights
of the Senior Lenders, if any.
Section 4.9 Fees and Taxes.
Borrower is solely responsible for payment of all fees, assessments, taxes, charges, and
levies imposed by any public authority or utility company with respect to the Property or the
Development, and shall pay such charges prior to delinquency. However, Borrower is not
required to pay and discharge any such charge so long as (a) the legality thereof is being
contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the
County, Borrower deposits with the County any funds or other forms of assurance that the
County in good faith from time to time determines appropriate to protect the County from the
consequences of the contest being unsuccessful.
Section 4.10 Notice of Litigation.
Borrower shall promptly notify the County in writing of any litigation that has the
potential to materially affect Borrower or the Property and of any claims or disputes that involve
a material risk of such litigation.
Section 4.11 Operation of Development as MHSA Eligible Housing.
(a) Promptly after completion of construction, Borrower shall operate the
Development as permanent affordable housing, including utilizing the MHSA Units for MHSA
Eligible Tenants consistent with (i) DMH's requirements for use of "one-time" MHSA Funds,
and (ii) the Regulatory Agreement.
(b) Before leasing any MHSA Unit, Borrower shall use a form of lease
agreement approved by the County.
(c) In marketing the MHSA Units, Borrower shall comply with the
procedures set forth in the Marketing Plan approved by the County.
(d) Borrower represents and warrants that Borrower has determined the
income eligibility of each existing MHSA Eligible Tenants in the Development pursuant to
certification procedures that have been approved by the County. Borrower shall determine the
income eligibility of each prospective MHSA Eligible Tenants in the Development in accordance
with the County's approved tenant certification procedures not later than sixty (60) days prior to
the prospective MHSA Eligible Tenant's expected occupancy of one of the MHSA Units. The
Borrower shall certify each MHSA Eligible Tenant's income on an annual basis.
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(e) The maximum household income of a Tenant in the MHSA Units, and the
total charges for rent, utilities, and related services to each MHSA Eligible Tenant, are to be
maintained as provided in the Regulatory Agreement.
(f) Throughout the term of this Agreement, Borrower shall ensure that social
services are provided in accordance with the Social Service Plan approved by the County. Each
year, Borrower shall obtain a certification that each MHSA Eligible Tenant is MHSA Eligible, in
accordance with Section 3.1(b) of the Regulatory Agreement.
Section 4.12 Nondiscrimination.
(a) The Borrower covenants by and for itself and its successors and assigns
that there will be no discrimination against or segregation of a person or of a group of persons on
account of race, color, religion, creed, age, familial status, disability, sex, sexual orientation,
marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Property, nor may the Borrower or any person claiming under or
through the Borrower establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the Property. The foregoing covenant will run with
the land.
(b) Nothing in this Section prohibits the Borrower from requiring the MHSA
Units in the Development to be available to and occupied by MHSA Eligible Tenants.
Section 4.13 Transfer.
(a) For purposes of this Agreement, "Transfer" means any sale, assignment,
or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this
Agreement, and/or (ii) any interest in the Development, including (but not limited to) a fee
simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a
security interest, or an interest evidenced by a land contract by which possession of the
Development is transferred and Borrower retains title. The term "Transfer" excludes the leasing
of any single unit in the Development to an occupant in compliance with the Regulatory
Agreement. The County Deputy Director – Redevelopment is authorized to execute assignment
and assumption agreements on behalf of the County to implement any approved Transfer.
(b) No Transfer is permitted without the prior written consent of the County,
which the County may withhold in its sole discretion. The Loan will automatically accelerate and
be due in full upon any Transfer made without the prior written consent of the County.
(c) The County approves the granting of a security interest in the Property in
connection with the Approved Financing.
(d) The County hereby approves the Transfer of the general partner interest in
Borrower to a nonprofit affiliate of Community Housing Development Corporation of North
Richmond, a California nonprofit public benefit corporation ("CHDC"), controlled by CHDC.
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(e) The County hereby approves a Transfer of the Property from the Borrower
to CHDC or a non-profit affiliate of CHDC, and an assumption of the Loan by such transferee,
pursuant to an option agreement, provided that the transferee expressly assumes the obligations
of the Borrower under the Loan Documents, utilizing a form of assignment and assumption
agreement to be provided by the County.
Section 4.14 Insurance Requirements.
(a) The Borrower shall maintain the following insurance coverage throughout
the Term of the Loan:
(i) Worker's Compensation insurance to the extent required by law,
including Employer's Liability coverage, with limits not less than One Million Dollars
($1,000,000) each accident.
(ii) Comprehensive General Liability insurance with limits not less
than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations.
(iii) Comprehensive Automobile Liability insurance with limits not less
than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable.
(iv) Builders' Risk insurance during the course of construction, and
upon completion of construction, property insurance covering the Development, in form
appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for
one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the
County, naming the County as a Loss Payee, as its interests may appear. Flood insurance must
be obtained if required by applicable federal regulations.
(v) Blanket Fidelity Bond covering all officers and employees, for loss
of Loan proceeds caused by dishonesty, in an amount not less than Two Hundred Ninety-Three
Thousand Eight Hundred Eighty-Four Dollars ($293,884) naming the County a Loss Payee, as
its interests may appear.
(b) The Borrower shall cause any general contractor, agent, or subcontractor
working on the Development under direct contract with the Borrower or subcontract to maintain
insurance of the types and in at least the minimum amounts described in subsections (i), (ii), and
(iii) above, except that the limit of liability for comprehensive general liability insurance for
subcontractors must be One Million Dollars ($1,000,000), and must require that such insurance
will meet all of the general requirements of subsections (d) and (e) below.
(c) The required insurance must be provided under an occurrence form, and
Borrower shall maintain the coverage described in subsections (a) continuously throughout the
Term. Should any of the required insurance be provided under a form of coverage that includes
an annual aggregate limit or provides that claims investigation or legal defense costs be included
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in such annual aggregate limit, such annual aggregate limit must be three times the occurrence
limits specified above.
(d) Comprehensive General Liability, Comprehensive Automobile Liability
and Property insurance policies must be endorsed to name as an additional insured the County
and its officers, agents, employees and members of the County Board of Supervisors.
(e) All policies and bonds are to contain (i) the agreement of the insurer to
give the County at least thirty (30) days notice prior to cancellation (including, without
limitation, for non-payment of premium) or any material change in said policies; (ii) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the County; (iii) a provision that no act or omission of the Borrower shall affect or
limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a
waiver by the insurer of all rights of subrogation against the County and its authorized parties in
connection with any loss or damage thereby insured against.
Section 4.15 Payment of Other Indebtedness; Notice of Default
(a) Borrower shall promptly pay the principal and interest when due on any
other indebtedness related to the Development.
(b) Borrower shall promptly notify the County in writing of any defaults
declared under any other financing for the Development by the lender of such financing.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1 Representations and Warranties.
Borrower hereby represents and warrants to the County as follows:
(a) Organization. Borrower is duly organized, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted.
(b) Authority of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and
observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all
actions required under Borrower's organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the Loan
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Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Borrower enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Loan Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Borrower, or any provision of the organizational
documents of Borrower, or will conflict with or constitute a breach of or a default under any
agreement to which Borrower is a party, or will result in the creation or imposition of any lien
upon any assets or property of Borrower, other than liens established pursuant hereto.
(f) Compliance with Laws; Consents and Approvals. The construction of the
Development complies with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government
or agency.
(g) Pending Proceedings. Borrower is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened
against or affecting Borrower or the Development, at law or in equity, before or by any court,
board, commission or agency whatsoever which might, if determined adversely to Borrower,
materially affect Borrower's ability to repay the Loan or impair the security to be given to the
County pursuant hereto.
(h) Title to Land. At the time of recordation of the Deed of Trust, Borrower
will have good and marketable fee title to the Development and there will exist thereon or with
respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever
other than liens for current real property taxes and liens in favor of the County or approved in
writing by the County.
(i) Financial Statements. The financial statements of Borrower and other
financial data and information furnished by Borrower to the County fairly and accurately present
the information contained therein as of the date thereof. As of the date of this Agreement, there
has not been any material adverse change in the financial condition of Borrower from that shown
by such financial statements and other data and information.
(j) Sufficient Funds. Borrower holds sufficient funds and/or binding
commitments for sufficient funds to complete the acquisition of the Property and the
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construction of the Development in accordance with the plans and specifications approved by the
County.
(k) Taxes. Borrower and its subsidiaries have filed all federal and other
material tax returns and reports required to be filed, and have paid all federal and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them or their
income or the Property otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been provided in
accordance with generally accepted accounting principles. There is no proposed tax assessment
against Borrower or any of its subsidiaries that could, if made, be reasonably expected to have a
material adverse effect upon the Property, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower and its subsidiaries, taken as a whole,
which would be expected to result in a material impairment of the ability of Borrower to perform
under any Loan Document to which it is a party, or a material adverse effect upon the legality,
validity, binding effect or enforceability against Borrower of any Loan Document.
ARTICLE 6 DEFAULT AND REMEDIES
Section 6.1 Events of Default.
Each of the following constitutes an "Event of Default" by Borrower under this
Agreement:
(a) Failure to Construct. Failure of Borrower to commence and complete
construction of the Development within the times set forth in Article 3 above.
(b) Failure to Make Payment. Failure to repay the principal and any interest
on the Loan within ten (10) days after receipt of written notice from the County that such
payment is due pursuant to the Loan Documents.
(c) Breach of Covenants. Failure by Borrower to duly perform, comply with,
or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such
failure continues uncured for thirty (30) days after receipt of written notice thereof from the
County to the Borrower or, if the breach cannot be cured within thirty (30) days, the Borrower
may not be in breach so long as Borrower is diligently undertaking to cure such breach and such
breach is cured within ninety (90) days; provided, however, that if a different period or notice
requirement is specified under any other section of this Article 6, the specific provisions will
control.
(d) Default Under Other Loans. A default is declared under any other
financing for the Development by the lender of such financing.
(e) Insolvency. A court having jurisdiction makes or enters any decree or
order (i) adjudging Borrower or Borrower's general partner, to be bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization of Borrower or Borrower's general
partner, or seeking any arrangement for Borrower or Borrower's general partner, under the
bankruptcy law or any other applicable debtor's relief law or statute of the United States or any
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state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower
or Borrower's general partner, in bankruptcy or insolvency or for any of their properties, (iv)
directing the winding up or liquidation of Borrower or Borrower's general partner, if any such
decree or order described in clauses (i) to (iv), inclusive, is unstayed or undischarged for a period
of ninety (90) calendar days; or (v) Borrower or Borrower's general partner, admits in writing its
inability to pay its debts as they fall due or will have voluntarily submitted to or filed a petition
seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The
occurrence of any of the Events of Default in this paragraph will act to accelerate automatically,
without the need for any action by the County, the indebtedness evidenced by the Note.
(f) Assignment; Attachment. Borrower or Borrower's general partner, assign
its assets for the benefit of its creditors or suffers a sequestration or attachment of or execution
on any substantial part of its property, unless the property so assigned, sequestered, attached or
executed upon is returned or released within ninety (90) calendar days after such event or, if
sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of
any of the events of default in this paragraph shall act to accelerate automatically, without the
need for any action by the County, the indebtedness evidenced by the Note.
(g) Suspension; Termination. Borrower or Borrower's general partner,
voluntarily suspends its business or, the partnership is dissolved or terminated, other than a
technical termination of the partnership for tax purposes.
(h) Liens on Property and the Development. Any claim of lien (other than
liens approved in writing by the County) is filed against the Development or any part thereof, or
any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds
of the Loan and the continued maintenance of said claim of lien or notice to withhold for a
period of twenty (20) days, without discharge or satisfaction thereof or provision therefor
(including, without limitation, the posting of bonds) satisfactory to the County.
(i) Condemnation. The condemnation, seizure, or appropriation of all or the
substantial part of the Property and the Development.
(j) Unauthorized Transfer. Any Transfer other than as permitted by
Section 4.13.
(k) Representation or Warranty Incorrect. Any Borrower representation or
warranty contained in this Agreement, or in any application, financial statement, certificate, or
report submitted to the County in connection with any of the Loan Documents, proves to have
been incorrect in any material respect when made. After issuance of the certificates of
occupancy for the Development, an Event of Default may be declared under this subsection only
if the failure of representation or warranty also has a material adverse effect on the operation of
the Development.
Notwithstanding anything to the contrary contained herein, the County hereby agrees that
any cure of any Event of Default made or tendered by one or more of Borrower's limited partners
shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as
if made or tendered by Borrower.
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Section 6.2 Remedies.
The occurrence of any Event of Default hereunder following the expiration of all
applicable notice and cure periods will, either at the option of the County or automatically where
so specified, relieve the County of any obligation to make or continue the Loan and will give the
County the right to proceed with any and all remedies set forth in this Agreement and the Loan
Documents, including but not limited to the following:
(a) Acceleration of Note. The County may cause all indebtedness of the
Borrower to the County under this Agreement and the Note, together with any accrued interest
thereon, to become immediately due and payable. The Borrower waives all right to presentment,
demand, protest or notice of protest or dishonor. The County may proceed to enforce payment of
the indebtedness and to exercise any or all rights afforded to the County as a creditor and secured
party under the law including the Uniform Commercial Code, including foreclosure under the
Deed of Trust. The Borrower is liable to pay the County on demand all reasonable expenses,
costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or
incurred by the County in connection with the collection of the Loan and the preservation,
maintenance, protection, sale, or other disposition of the security given for the Loan.
(b) Specific Performance. The County has the right to mandamus or other
suit, action or proceeding at law or in equity to require Borrower to perform its obligations and
covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in
violation of the provisions of the Loan Documents.
(c) Right to Cure at Borrower's Expense. The County has the right (but not
the obligation) to cure any monetary default by Borrower under a loan other than the Loan. The
Borrower shall reimburse the County for any funds advanced by the County to cure a monetary
default by Borrower upon demand therefor, together with interest thereon at the lesser of the
maximum rate permitted by law and ten percent (10%) per annum (the "Default Rate") from the
date of expenditure until the date of reimbursement.
Section 6.3 Right of Contest.
Borrower may contest in good faith any claim, demand, levy, or assessment the assertion
of which would constitute an Event of Default hereunder. Any such contest is to be prosecuted
diligently and in a manner unprejudicial to the County or the rights of the County hereunder.
Section 6.4 Remedies Cumulative.
No right, power, or remedy given to the County by the terms of this Agreement or the
Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and
every such right, power, or remedy will be cumulative and in addition to every other right,
power, or remedy given to the County by the terms of any such instrument, or by any statute or
otherwise against Borrower and any other person. Neither the failure nor any delay on the part
of the County to exercise any such rights and remedies will operate as a waiver thereof, nor does
any single or partial exercise by the County of any such right or remedy preclude any other or
further exercise of such right or remedy, or any other right or remedy.
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ARTICLE 7 GENERAL PROVISIONS
Section 7.1 Relationship of Parties.
Nothing contained in this Agreement is to be interpreted or understood by any of the
Parties, or by any third persons, as creating the relationship of employer and employee, principal
and agent, limited or general partnership, or joint venture between the County and Borrower or
its agents, employees or contractors, and Borrower will at all times be deemed an independent
contractor and to be wholly responsible for the manner in which it or its agents, or both, perform
the services required of it by the terms of this Agreement. Borrower has and retains the right to
exercise full control of employment, direction, compensation, and discharge of all persons
assisting in the performance of services under the Agreement. In regards to the construction and
operation of the Development, Borrower is solely responsible for all matters relating to payment
of its employees, including compliance with Social Security, withholding, and all other laws and
regulations governing such matters, and must include requirements in each contract that
contractors are solely responsible for similar matters relating to their employees. Borrower is
solely responsible for its own acts and those of its agents and employees.
Section 7.2 No Claims.
Nothing contained in this Agreement creates or justifies any claim against the County by
any person that Borrower may have employed or with whom Borrower may have contracted
relative to the purchase of materials, supplies or equipment, or the furnishing or the performance
of any work or services with respect to the purchase of the Property, the construction or
operation of the Development, and Borrower shall include similar requirements in any contracts
entered into for the construction or operation of the Development.
Section 7.3 Amendments.
No alteration or variation of the terms of this Agreement is valid unless made in writing
by the Parties. The County Deputy Director – Redevelopment is authorized to execute on behalf
of the County amendments to the Loan Documents or amended and restated Loan Documents as
long as any material change in the amount or terms of this Agreement is approved by the County
Board of Supervisors, or in the event the amounts or terms of financing provided by other parties
for the Development is revised, requiring conforming amendments to the Loan Documents.
Section 7.4 Indemnification.
The Borrower shall indemnify, defend and hold the County harmless against any and all
claims, suits, actions, losses and liability of every kind, nature and description made against it
and expenses (including reasonable attorneys' fees) which arise out of or in connection with this
Agreement, including but not limited to the purchase of the Property, development, construction,
marketing and operation of the Development, except to the extent such claim arises from the
grossly negligent or willful misconduct of the County, its agents, and its employees. The
provisions of this Section will survive the expiration of the Term and the reconveyance of the
Deed of Trust.
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Section 7.5 Non-Liability of County Officials, Employees and Agents.
No member, official, employee or agent of the County is personally liable to Borrower in
the event of any default or breach by the County or for any amount that may become due to
Borrower or its successor or on any obligation under the terms of this Agreement.
Section 7.6 No Third Party Beneficiaries.
There are no third party beneficiaries to this Agreement.
Section 7.7 Discretion Retained By County.
The County's execution of this Agreement in no way limits the discretion of the County
in the permit and approval process in connection with construction of the Development.
Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person
described in Section 7.8(b) below who exercises or has exercised any functions or
responsibilities with respect to the activities funded pursuant to this Agreement or who is in a
position to participate in a decision-making process or gain inside information with regard to
such activities, may obtain a personal or financial interest or benefit from the activity, or have an
interest in any contract, subcontract or agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with whom they have family or business ties, during,
or at any time after, such person's tenure. Borrower shall exercise due diligence to ensure that
the prohibition in this Section 7.8(a) is followed.
(b) The conflict of interest provisions of Section 7.8(a) above apply to any
person who is an employee, agent, consultant, officer, or any immediate family member of such
person, or any elected or appointed official of the County, or any person related within the third
(3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the
Political Reform Act, California Government Code section 87100 et seq., no person who is a
director, officer, partner, trustee or employee or consultant of the Borrower, or immediate family
member of any of the preceding, may make or participate in a decision, made by the County or a
County board, commission or committee, if it is reasonably foreseeable that the decision will
have a material effect on any source of income, investment or interest in real property of that
person or Borrower. Interpretation of this section is governed by the definitions and provisions
used in the Political Reform Act, California Government Code Section 87100 et seq., its
implementing regulations manual and codes, and California Government Code Section 1090.
Section 7.9 Notices, Demands and Communications.
All notices required or permitted by any provision of this Agreement must be in writing
and sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by
express delivery service, return receipt requested, or delivered personally, to the principal office
of the Parties as follows:
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County: County of Contra Costa
Department of Conservation and Development
Redevelopment Division
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director - Redevelopment
Borrower: Lillie Mae Jones Plaza, L.P.
c/o Community Housing Development
Corporation of North Richmond
1535-A Third Street
Richmond, CA 94801
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section. Receipt will be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 7.10 Applicable Law.
This Agreement is governed by the laws of the State of California.
Section 7.11 Parties Bound.
Except as otherwise limited herein, this Agreement binds and inures to the benefit of the
parties and their heirs, executors, administrators, legal representatives, successors, and assigns.
This Agreement is intended to run with the land and to bind Borrower and its successors and
assigns in the Property and the Development for the entire Term, and the benefit hereof is to
inure to the benefit of the County and its successors and assigns.
Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing
Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other
Party.
Section 7.13 Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions will continue in full force and effect
unless the rights and obligations of the Parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
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Section 7.14 Force Majeure.
In addition to specific provisions of this Agreement, performance by either Party will not
be deemed to be an Event of Default where delays or defaults are due to war, insurrection,
strikes, lock-outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack
of transportation, or court order. An extension of time for any cause will be deemed granted if
notice by the Party claiming such extension is sent to the other within ten (10) days from the
commencement of the cause and such extension of time is not rejected in writing by the other
Party within ten (10) days of receipt of the notice. In no event is the County required to agree to
cumulative delays in excess of one hundred eighty (180) days.
Section 7.15 County Approval.
The County has authorized the County Deputy Director-Redevelopment to execute the
Loan Documents and deliver such approvals or consents as are required by this Agreement, and
to execute estoppel certificates concerning the status of the Loan and the existence of Borrower
defaults under the Loan Documents.
Section 7.16 Waivers.
Any waiver by the County of any obligation or condition in this Agreement must be in
writing. No waiver will be implied from any delay or failure by the County to take action on any
breach or default of Borrower or to pursue any remedy allowed under this Agreement or
applicable law. Any extension of time granted to Borrower to perform any obligation under this
Agreement does not operate as a waiver or release from any of its obligations under this
Agreement. Consent by the County to any act or omission by Borrower may not be construed to
be a consent to any other or subsequent act or omission or to waive the requirement for the
County's written consent to future waivers.
Section 7.17 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and are to be disregarded in interpreting any part of the Agreement's provisions.
Section 7.18 Entire Agreement of the Parties.
This Agreement, the Note, the Regulatory Agreement and the Deed of Trust constitute
the entire agreement of the Parties with respect to the Loan.
Section 7.19 Multiple Originals; Counterpart.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Remainder of Page Intentionally Left Blank
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WHEREAS, this Agreement has been entered into by the undersigned as of the date first
above written.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: _________________________________
James Kennedy
Deputy Director - Redevelopment
Approved as to form:
SHARON L. ANDERSON
County Counsel
BORROWER:
LILLIE MAE JONES PLAZA, L.P., a California
limited partnership
By:
Kathleen Andrus
Deputy County Counsel
By: CHDC Lillie Mae Jones LLC, a California
limited liability company, its managing
general partner
By: Community Housing Development
Corporation of North Richmond, a
California nonprofit public benefit
corporation
By: ___________________________
Name: __________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a
California limited liability company, its co-
general partner
By: East Bay Asian Local Development
Corporation, a California nonprofit
public benefit corporation, its sole
member
By: ________________________
Name: _________________________
Its: Executive Director
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land is situated in the State of California, County of Contra Costa, City of Richmond,
and is described as follows:
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A-1
EXHIBIT B
APPROVED DEVELOPMENT BUDGET
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B-1
EXHIBIT C
SCOPE OF WORK
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C-1
EXHIBIT D
DESCRIPTION OF OPERATING RESERVE ACCOUNTS
863\01\733370.6
D-1
PROMISSORY NOTE
(MHSA Loan)
Lillie Mae Jones Plaza
$293,884 Martinez, California
_________ __, 2010
FOR VALUE RECEIVED, the undersigned LILLIE MAE JONES PLAZA,L.P., a California
Limited Partnership ("Borrower") hereby promises to pay to the order of the COUNTY OF CONTRA
COSTA, a political subdivision of the State of California ("Holder"), the principal amount of Two
Hundred Ninety-Three Thousand Eight Hundred Eighty-Four Dollars ($293,884), plus interest
thereon pursuant to Section 2 below. All capitalized terms not defined in this Note have the
meanings set forth in the Loan Agreement.
1. Borrower's Obligation. This Note evidences Borrower's obligation to repay
Holder the principal amount of up to Two Hundred Ninety-Three Thousand Eight Hundred
Eighty-Four Dollars ($293,884) for the funds loaned to Borrower by Holder to finance the
development of the Property pursuant to the MHSA Loan Agreement between Borrower and
Holder of even date herewith (the "Loan Agreement").
2. Interest.
(a) The Note bears simple interest at the rate of one percent (1%) per annum
from the date of disbursement.
(b) If an Event of Default occurs, interest will accrue on all amounts due
under this Note at the Default Rate until such Event of Default is cured by Borrower or waived
by Holder.
3. Term and Repayment Requirements. The unpaid principal balance hereunder,
together with accrued interest thereon, is due and payable no later than the date that is twenty
years (20) from the date of this Note subject to the extension as provided in Section 2.8(a) of the
Loan Agreement (the "Term"). The Loan is payable as set forth in Section 2.8 of the Loan
Agreement.
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder.
5. Security. This Note, with interest, is secured by the Deed of Trust. Upon
execution, the Deed of Trust will be recorded in the official records of Contra Costa County,
California. Upon recordation of the Deed of Trust, this Note will become nonrecourse to
Borrower, pursuant to and except as provided in Section 2.9 of the Loan Agreement. The terms
of the Deed of Trust are hereby incorporated into this Note and made a part hereof.
863\01\733743.3
1
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at Department of Conservation and Development –
Redevelopment Division, 2530 Arnold Drive, Suite 190, Martinez, CA 94553, Attention:
Deputy Director-Redevelopment, or to such other place as Holder may from time to time
designate.
(b) All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including re-conveyance fees and reasonable attorney's fees of
Holder, incurred in connection with the payment of this Note and the release of any security
hereof.
(c) Notwithstanding any other provision of this Note, or any instrument
securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment
of any sums by Borrower pursuant to the terms of this Note would result in the payment of
interest that exceeds the amount that Holder may legally charge under the laws of the State of
California, then the amount by which payments exceed the lawful interest rate will automatically
be deducted from the principal balance owing on this Note, so that in no event is Borrower
obligated under the terms of this Note to pay any interest that would exceed the lawful rate.
(d) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7. Default.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal
balance, together with all interest thereon, and together with all other sums then payable under
this Note and the Deed of Trust will, at the option of Holder, become immediately due and
payable without further demand.
(b) Holder's failure to exercise the remedy set forth in Subsection 7(a) above
or any other remedy provided by law upon the occurrence of an Event of Default does not
constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the
same or any other Event of Default. The acceptance by Holder of any payment that is less than
the total of all amounts due and payable at the time of such payment does not constitute a waiver
of the right to exercise any of the foregoing remedies or options at that time or at any subsequent
time, or nullify any prior exercise of any such remedy or option, without the express consent of
Holder, except as and to the extent otherwise provided by law.
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
863\01\733743.3
2
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
(b) Any extension of time for payment of this Note or any installment hereof
made by agreement of Holder with any person now or hereafter liable for payment of this Note
must not operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may
therein designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e) The Loan Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the parties.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
863\01\733743.3
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4
BORROWER:
LILLIE MAE JONES PLAZA, L.P., a California limited
partnership
By: CHDC Lillie Mae Jones LLC, a California limited
liability company, its managing general partner
By: Community Housing Development
Corporation of North Richmond, a
California nonprofit public benefit
corporation
By:
Name: ______________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a California
limited liability company, its co-general partner
By: East Bay Asian Local Development
Corporation, a California nonprofit public
benefit corporation, its sole member
By: ________________________
Name: _________________________
Its: Executive Director
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Department of Conservation and Development
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attn: Deputy Director- Redevelopment
This instrument is exempt from Recording:
No fee for recording pursuant to
Government Code Section 27383
__________________________________________________________________________
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Lillie Mae Jones Plaza- MHSA Loan)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is dated ____________ __, 20__, and is between the COUNTY OF CONTRA COSTA, a political
subdivision of the State of California (the "County"), and LILLIE MAE JONES PLAZA, L.P., a
California limited partnership ("Borrower").
RECITALS
A. Defined Terms used but not defined in these recitals are as defined in Article 1 of
this Agreement.
B. The loan that is the subject of this Agreement will be funded with funds from the
California Department of Mental Health ("DMH"), pursuant to the Mental Health Services Act
("MHSA" or the "Act") (such funds, the "MHSA Funds"). The MHSA Funds must be used by
the County in accordance with the MHSA and California Code of Regulations Title 9, Section
3100, et seq.
C. The Borrower intends to acquire real property located at 116 MacDonald Avenue
in the City of Richmond, County of Contra Costa, State of California, as more particularly
described in Exhibit A (the "Property"). The Borrower intends to construct twenty-five (25)
multifamily housing units that are affordable to very-low income households and one manager’s
unit on the Property (the “Development”). The Development, as well as any additional
improvements on the Property, including all landscaping, roads and parking spaces on the
Property, are the "Improvements".
D The County and the Borrower are parties to a MHSA Loan Agreement of even
date herewith (the “Loan Agreement”), pursuant to which the County will lend Borrower Two
Hundred Ninety-Three Thousand Eight Hundred Eighty-Four Dollars ($293,884) of MHSA
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Funds (the “Loan”) to be applied toward the acquisition of the Property and construction of the
Development.
E. The County has the authority to lend the Loan to the Borrower pursuant to
Government Code Section 26227 which authorizes counties to spend county funds for programs
that will further a county's public purposes. In addition, the County has the authority to loan the
MHSA Funds to expand mental health services and program capacity for persons with severe
mental illness who are unserved or underserved pursuant to 9 California Code of Regulations
Section 3410(a)(1).
F. If Borrower complies with the terms of the Loan Agreement, Borrower’s use of
MHSA Funds will be consistent with the non-supplant requirements of the Act: The funds will
expand mental health services and program capacity for persons with severe mental illness who
are unserved or underserved. Additionally, no other County mental health dollars are available
to ensure that the MHSA Units will remain available as decent, safe and sanitary housing for
persons with severe mental illness who are unserved or underserved. The use of MHSA Funds
in accordance with this Agreement is also consistent with the County's "Community Planning
Process" and the "Three-Year Program and Expenditure Plan" submitted by the County to the
DMH, both of which are required by California Code of Regulations Title 9, Section 3100, et
seq.
G. The County has agreed to make the Loan on the condition that the Development
be maintained and operated in accordance with restrictions concerning affordability, operation,
and maintenance of the Development that are set forth in this Agreement and in the Loan
Agreement.
H. In consideration of receipt of the Loan at an interest rate substantially below the
market rate, the Borrower agrees to observe all the terms and conditions set forth below.
The parties therefore agree as follows.
ARTICLE 1
DEFINITIONS
1.1 Definitions
The following terms have the following meanings:
(a) "Actual Household Size" means the actual number of persons in the
applicable household.
(b) "Adjusted Income" means the total anticipated annual income of all
persons in a household as calculated in the manner prescribed pursuant to Title 25, Section 6914
of the California Code of Regulations.
(c) "Agreement" has the meaning set forth in the first paragraph of this
Agreement.
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(d) "Assumed Household Size" means the following: (i) one person for a
studio unit; (ii) two persons for a one-bedroom unit; (iii) three persons for a two-bedroom unit;
and (iv) four persons for a three-bedroom unit.
(e) "Certificate of Occupancy" means the certificate of occupancy issued by
the City of Richmond certifying that the Development may be legally occupied.
(f) "Completion Date" means the date the Certificate of Occupancy is issued.
(g) "County Designee" means a social service provider designated in writing
by the County as a person or entity qualified to determine whether a Tenant is MHSA Eligible.
(h) "Deed of Trust" means the Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing of even date herewith by and among the Borrower, as
trustor, Old Republic Title Company, as trustee, and the County, as beneficiary, that will
encumber the Property to secure repayment of the Loan and Borrower's performance of the
covenants set forth in the Loan Agreement. The form of Deed of Trust will be provided by the
County.
(i) "Development" has the meaning set forth in Paragraph C of the Recitals.
(j) "DMH" has the meaning set forth in Paragraph B of the Recitals.
(k) "HCD" means the California Department of Housing and Community
Development.
(l) "Loan" has the meaning set forth in Paragraph D of the Recitals.
(m) "Loan Agreement" has the meaning set forth in Paragraph D of the
Recitals.
(n) "Median Income" means the median gross yearly income, adjusted for
Actual Household Size or Assumed Household Size as specified herein, in the County of Contra
Costa, California, as published from time to time by the HCD. In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen (18)
months, the County shall provide the Borrower with other income determinations that are
reasonably similar with respect to methods of calculation to those previously published by HCD.
(o) "MHSA" or the "Act" has the meaning set forth in Paragraph B of the
Recitals.
(p) "MHSA Eligible" means a person certified by the County or the County
Designee as having a serious mental disorder as defined in Welfare and Institutions Code Section
5600.3(b) and (c), Unserved or Underserved, and eligible to occupy a unit financed with MHSA
funds. An "MHSA Eligible Tenant" means a Tenant with one or more household members that
are MHSA Eligible.
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(q) "MHSA Units" means the two (2) one-bedroom Units designated as
assisted by the County for MHSA Eligible Tenants.
(r) "Note" means the promissory note that evidences the Borrower's
obligation to repay the Loan.
(s) "Property" has the meaning set forth in Paragraph C of the Recitals.
(t) "Rent" means the total monthly payments by a Tenant for the following:
use and occupancy of the Unit and land and associated facilities, including parking; any
separately charged fees or service charges assessed by the Borrower which are required of all
Tenants, other than security deposits; an allowance for the cost of an adequate level of service
for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and any
other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a
public or private entity other than the Borrower, and paid by the Tenant.
(u) "Social Service Plan" has the meaning set forth in the Loan Agreement.
(v) "Tenant" means the tenant household that occupies a Unit in the
Development.
(w) "Term" means the term of this Agreement, which commences on the date
of this Agreement and continues for twenty (20) years; provided, however, the term may be
extended for an additional twenty (20) years pursuant to Section 2.8(a) of the Loan Agreement.
(x) "Twenty Percent Income Household" means a household with an Adjusted
Income that does not exceed twenty percent (20%) of Median Income, adjusted for Actual
Household Size.
(y) "Underserved" has the meaning set forth in California Code of
Regulations Title 9, Section 3200.300 or any successor regulation thereto. In the event that
DMH no longer publishes the definition of Underserved, the County shall provide the Borrower
with a definition of Underserved that is reasonably similar to the DMH definition in effect as of
the date of this Agreement.
(z) "Unit(s)" means one (1) or more of the units in the Development,
including the MHSA Units.
(aa) "Unserved" has the meaning set forth in Section 3200.310 of California
Code of Regulations Title 9, Chapter 14. In the event that DMH no longer publishes the
definition of Unserved, the County shall provide the Borrower with a definition of Unserved that
is reasonably similar to the DMH definition in effect as of the date of this Agreement.
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(bb) "Very Low Income Household" means a Tenant with an Adjusted Income
that does not exceed the maximum income for a very low income household, adjusted for Actual
Household Size, as published by HCD.
ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) Borrower shall rent both of the MHSA Units and shall ensure that the
MHSA Units are occupied by or, if vacant, available for occupancy by, Twenty Percent Income
Households, that are MHSA Eligible Tenants.
(b) The MHSA Units are to be intermingled throughout the Development and
of comparable quality to all other Units. All Tenants must have equal access to and enjoyment
of all common facilities in the Development.
2.2 Allowable Rent
(a) MHSA Rent. Subject to the provisions of Section 2.2(b) and Section 2.3
below, the monthly Rent paid by Tenants of the MHSA Units will be equal to the greater of (i)
one-twelfth (1/12th) of thirty percent (30%) of twenty percent (20%) of Median Income, adjusted
for Assumed Household Size, and (ii) if the household is receiving payments for welfare
assistance from a public agency and a part of the payments, adjusted in accordance with the
household's actual housing costs, is specifically designated by the agency to meet the household's
housing costs, the portion of the payments that is so designated.
(b) County Approval of Rents. Initial Rents for all MHSA Units must be
approved by the County prior to occupancy. All Rent increases must be approved by the County.
Annually, the County shall provide the Borrower with a schedule of maximum permissible Rents
for the MHSA Units.
2.3 Increased Income of Tenants.
(a) Non-Qualifying Household. If, upon recertification of the income of a
Tenant of a MHSA Unit, the Borrower determines that a former Twenty Percent Income
Household, has an Adjusted Income that exceeds the maximum qualifying income for a Twenty
Percent Income Household, (i) the Tenant will be permitted to retain the Unit, and (ii) the
Borrower shall rent the next available one-bedroom Unit to a Twenty Percent Income
Household, to meet the requirements of Section 2.1(a) above.
(b) Termination of Occupancy. Upon termination of occupancy of a MHSA
Unit by a Tenant, such MHSA Unit will be deemed to be continuously occupied by a Twenty
Percent Income Household, that is also MHSA Eligible, until such MHSA Unit is reoccupied, at
which time the MHSA Unit will be rented to a Twenty Percent Income Household that is also
MHSA Eligible.
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2.4 MHSA Eligibility.
Each Tenant occupying a MHSA Unit must include at least one MHSA Eligible Tenant.
The MHSA Eligible Tenant must occupy the MHSA Unit at least ten (10) months out of each
calendar year. If a Tenant fails to remain certified as MHSA Eligible due to the vacation of the
MHSA Unit by the MHSA Eligible Tenant (including by reason of the death of the only MHSA
Eligible Tenant), the continuing or surviving Tenant will be permitted continued occupancy for a
reasonable period of up to one (1) year from the time of the death or vacation of the MHSA
Eligible Tenant (the "Grace Period"). Borrower shall cause the Tenant to be provided with
notice of the applicable Grace Period and with assistance to obtain information about other
available housing assistance programs. The Unit will be considered an MHSA Unit during the
Grace Period. After the Grace Period, the Borrower shall rent the next available one-bedroom
Unit to a Twenty Percent Income Household that is MHSA-Eligible, to comply with the
requirements of Section 2.1(a) above.
ARTICLE 3
MHSA AND INCOME CERTIFICATION AND REPORTING
3.1 Income and MHSA Eligibility Certification.
(a) Borrower shall obtain, complete, and maintain on file, immediately prior
to initial occupancy and annually thereafter, income certifications from each Tenant renting any
of the MHSA Units. Borrower shall make a good faith effort to verify the accuracy of the
income provided by the applicant or occupying Tenant, as the case may be, in an income
certification. To verify the information, Borrower shall take two or more of the following steps:
(i) obtain a pay stub for the most recent pay period; (ii) obtain an income tax return for the most
recent tax year; (iii) conduct a credit agency or similar search; (iv) obtain an income verification
form from the applicant's current employer; (v) obtain an income verification form from the
Social Security Administration and/or the California Department of Social Services if the
applicant receives assistance from either agency; or (vi) if the applicant is unemployed and does
not have a tax return, obtain another form of independent verification. Copies of Tenant income
certifications are to be available to the County upon request.
(b) Prior to renting an MHSA Unit, Borrower shall obtain a certification from
the County Department of Health Services or a County Designee to the effect that the Tenant is
MHSA Eligible. Annually thereafter, Borrower shall confirm that each MHSA Unit is occupied
by a Tenant with at least one household member who is MHSA Eligible and that such household
member actually resides in such MHSA Unit in accordance with Section 2.4 of this Agreement.
Borrower shall maintain the initial and annual certifications on file.
3.2 Annual Report to County.
Borrower shall submit to the County (a) not later than the forty-fifth (45th) day after the
close of each calendar year, or such other date as may be requested by the County, a statistical
report, including income and rent data for all MHSA Units, setting forth the information called
for therein, and (b) within fifteen (15) days after receipt of a written request, any other
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information or completed forms requested by the County in order to comply with reporting
requirements of DMH, the State of California, and the County.
3.3 Additional Information.
Borrower shall provide any additional information reasonably requested by the County.
3.4 Records.
Borrower shall maintain complete, accurate and current records pertaining to the
Development, and shall permit any duly authorized representative of the County to inspect
records, including records pertaining to income and household size of Tenants. All Tenant lists,
applications and waiting lists relating to the Development are to be at all times: (i) separate and
identifiable from any other business of Borrower, (ii) maintained as required by the County, in a
reasonable condition for proper audit, and (iii) subject to examination during business hours by
representatives of the County. Borrower shall retain copies of all materials obtained or produced
with respect to occupancy of the MHSA Units for a period of at least five (5) years. The County
may examine and make copies of all books, records or other documents of Borrower that pertain
to the Development. The County shall have the right to examine and make copies of all books,
records or other documents of Borrower which pertain to the Development.
3.5 On-site Inspection.
The County may perform an on-site inspection of the Development at least one (1) time
per year. Borrower shall cooperate in such inspection.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Development Use.
(a) The Borrower shall operate the Development as housing affordable to very
low income households.
(b) In the event the ongoing operating and service support funds for MHSA
Eligible Tenants identified in the Social Service Plan terminate due to no fault of Borrower, the
County and Borrower may amend the Loan Documents to permit Very Low Income Households
that are not MHSA Eligible to reside in one or both of the MHSA Units.
4.2 Compliance with Loan Agreement.
Borrower shall comply with all the terms and provisions of the Loan Agreement.
4.3 Taxes and Assessments.
Borrower shall pay all real and personal property taxes, assessments and charges and all
franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed
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against it, or payable by it, at such times and in such manner as to prevent any penalty from
accruing, or any lien or charge from attaching to the Property; provided, however, that Borrower
may contest in good faith, any such taxes, assessments, or charges. In the event Borrower
exercises its right to contest any tax, assessment, or charge against it, Borrower, on final
determination of the proceeding or contest, will immediately pay or discharge any decision or
judgment rendered against it, together with all costs, charges and interest.
4.4 Property Tax Exemption.
Borrower shall not apply for a property tax exemption for the Property under any
provision of law except California Revenue and Taxation Section 214(g) without the prior
written consent of the County.
ARTICLE 5
PROPERTY MANAGEMENT, MAINTENANCE, AND SOCIAL SERVICES
5.1 Management Responsibilities.
The Borrower is responsible for all management functions with respect to the
Development, including without limitation the selection of Tenants, certification and
recertification of household size and income, evictions, collection of rents and deposits,
maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and
security. The County has no responsibility for management of the Development. The Borrower
shall retain a professional property management company approved by the County in its
reasonable discretion to perform Borrower’s management duties hereunder, unless the County
approves self management by the Borrower. An on-site resident manager is also required.
5.2 Management Agent.
The Borrower shall cause the Development to be managed at all times by an experienced
management agent reasonably acceptable to the County, with demonstrated ability to operate
residential facilities like the Development in a manner that will provide decent, safe, and sanitary
housing (the "Management Agent"). The Borrower shall submit for the County's approval the
identity of any proposed management agent. The Borrower shall also submit such additional
information about the background, experience and financial condition of any proposed
management agent as is reasonably necessary for the County to determine whether the proposed
management agent meets the standard for a qualified management agent set forth above. If the
proposed management agent meets the standard for a qualified management agent set forth
above, the County shall approve the proposed management agent by notifying the Borrower in
writing. Unless the proposed management agent is disapproved by the County within thirty (30)
days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall
be deemed approved.
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5.3 Periodic Performance Review – Property Management.
The County reserves the right to conduct an annual (or more frequently, if deemed
necessary by the County) review of the management practices and financial status of the
Development. The purpose of each periodic review will be to enable the County to determine if
the Development is being operated and managed in accordance with the requirements and
standards of this Agreement. The Borrower shall cooperate with the County in such reviews.
5.4 Replacement of Management Agent.
If, as a result of a periodic review, the County determines in its reasonable judgment that
the Development is not being operated and managed in accordance with any of the material
requirements and standards of this Agreement, the County shall deliver notice to Borrower of its
intention to cause replacement of the Management Agent, or if the Development is being self
managed, to cause the Borrower to retain a Management Agent, including the reasons therefore.
Within fifteen (15) days after receipt by Borrower of such written notice, County staff and the
Borrower shall meet in good faith to consider methods for improving the financial and operating
status of the Development, including, without limitation, replacement of the Management Agent.
If, after such meeting, County staff recommends in writing the replacement of the
Management Agent, Borrower shall promptly dismiss the current Management Agent or cease
self-management if the Development is self-managed, and shall appoint as the Management
Agent a person or entity meeting the standards for a management agent set forth in Section 5.2
above and approved by the County pursuant to Section 5.2 above.
Any contract for the operation or management of the Development entered into by
Borrower shall provide that the Management Agent may be dismissed and the contract
terminated as set forth above. Failure to remove the Management Agent or to appoint a
Management Agent instead of self-managing, in accordance with the provisions of this Section
constitutes a default under this Agreement, and the County may enforce this provision through
legal proceedings as specified in Section 6.7, below.
5.5 Approval of Management Policies.
The Borrower shall submit its written management policies with respect to the
Development to the County for its review, and shall amend such policies in any way necessary to
ensure that such policies comply with the provisions of this Agreement.
5.6 Property Maintenance.
The Borrower shall maintain, for the entire Term of this Agreement, all interior and
exterior Improvements, including landscaping, on the Property in good condition and repair (and,
as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules,
ordinances, orders and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction and all their respective
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departments, bureaus, and officials, and in accordance with the following maintenance
conditions.
County places prime importance on quality maintenance to protect its investment and to
ensure that all County and County-assisted affordable housing projects within the County are not
allowed to deteriorate due to below-average maintenance. Normal wear and tear of the
Development will be acceptable to the County assuming Borrower agrees to provide all
necessary improvements to assure the Development is maintained in good condition. The
Borrower shall make all repairs and replacements necessary to keep the improvements in good
condition and repair.
In the event that the Borrower breaches any of the covenants contained in this section and
such default continues for a period of five (5) days after written notice from the County with
respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after
written notice from the County with respect to landscaping and building improvements, then the
County, in addition to whatever other remedy it may have at law or in equity, shall have the right
to enter upon the Property and perform or cause to be performed all such acts and work
necessary to cure the default. Pursuant to such right of entry, the County shall be permitted (but
is not required) to enter upon the Property and perform all acts and work necessary to protect,
maintain, and preserve the improvements and landscaped areas on the Property, and to attach a
lien on the Property, or to assess the Property, in the amount of the expenditures arising from
such acts and work of protection, maintenance, and preservation by the County and/or costs of
such cure, which amount shall be promptly paid by the Borrower to the County upon demand.
5.7 Social Services. Throughout the Term, the Borrower shall ensure that social
services are provided to the Tenants of the MHSA Units pursuant to the Social Service Plan.
ARTICLE 6
MISCELLANEOUS
6.1 Lease Provisions.
In leasing the MHSA Units, the Borrower shall use a form of Tenant lease approved by
the County. The form of Tenant lease must comply with all requirements of this Agreement and
the Loan Agreement, and must, among other matters provide for termination of the lease for
failure: (i) to provide any information required under this Agreement or reasonably requested by
Borrower to establish or recertify the Tenant's qualification, or the qualification of the Tenant for
occupancy in the Development in accordance with the standards set forth in this Agreement, or
(ii) to qualify as a Twenty Percent Income Household (or Very Low Income Household as
provided under Section 4.1(b) above), or (iii) to qualify as a MHSA Eligible Tenant as a result of
any material misrepresentation made by such Tenant with respect to the income computation or
certification of MHSA Eligible status.
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6.2 Nondiscrimination.
All of the MHSA Units must be available for occupancy on a continuous basis to
members of the general public who are MHSA Eligible and income eligible. The Borrower may
not give preference to any particular class or group of persons in renting or selling the MHSA
Units, except to the extent that the MHSA Units are required to be leased to income-eligible
households and MHSA Eligible Tenants pursuant to this Agreement. There must be no
discrimination against or segregation of any person or group of persons, on account of race,
color, creed, religion, sex, sexual orientation, marital status, national origin, source of income
(e.g., SSI), ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure,
or enjoyment of any MHSA Unit nor will Borrower or any person claiming under or through
Borrower, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees of any MHSA Unit or in connection with the employment of persons for
the construction, operation and management of any MHSA Unit.
The Development must be operated at all times in compliance with the provisions of: (i)
the Unruh Act; (ii) the California Fair Employment and Housing Act, (iv) the United States Fair
Housing Act, as amended, and (v) any other applicable law or regulation (including the
Americans With Disabilities Act, to the extent applicable to the Development). Borrower agrees
to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to County)
County, and its boardmembers, officers and employees, from all suits, actions, claims, causes of
action, costs, demands, judgments and liens arising out of Borrower's failure to comply with
applicable legal requirements related to housing for persons with disabilities. The provisions of
this subsection survive expiration of the Term or other termination of this Agreement, and will
remain in full force and effect.
6.3 Term.
The provisions of this Agreement apply to the Property for the entire Term even if the
entire Loan is paid in full prior to the end of the Term. This Agreement binds any successor, heir
or assign of Borrower, whether a change in interest occurs voluntarily or involuntarily, by
operation of law or otherwise, except as expressly released by the County. The County is
making the Loan on the condition, and in consideration of, this provision, and would not do so
otherwise.
6.4 Compliance with Loan Agreement and Program Requirements.
(a) Borrower's actions with respect to the Property shall at all times be in full
conformity with: (i) all requirements of the Loan Agreement; and (ii) all requirements imposed
on projects under the Act and the DMH MHSA Regulations located at California Code of
Regulations Title 9, Section 3100, et seq.
(b) In the event DMH publishes or causes to be published any regulation or
requirement concerning the use of "one-time" MHSA Funds that are applicable to the Project,
and such regulation or requirement is inconsistent with the Loan Documents, upon request of the
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County, the parties shall amend the terms of the Loan Documents to comply with such
regulations.
6.5 Notice of Expiration of Term.
(a) At least six (6) months prior to the expiration of the Term, Borrower shall
provide by first-class mail, postage prepaid, a notice to all Tenants containing (i) the anticipated
date of the expiration of the Term, (ii) any anticipated increase in Rent upon the expiration of the
Term, (iii) a statement that a copy of such notice will be sent to the County, and (iv) a statement
that a public hearing may be held by the County on the issue and that the Tenant will receive
notice of the hearing at least fifteen (15) days in advance of any such hearing. Borrower shall
also file a copy of the above-described notice with the Deputy Director – Redevelopment of the
County.
(b) In addition to the notice required above, Borrower shall comply with the
requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such
notice requirements include: (i) a twelve (12) month notice to existing tenants, prospective
tenants and Affected Public Agencies (as defined in California Government Code Section
65863.10(a), which would include the County Housing Director) prior to the expiration of the
Term, (ii) a six (6) month notice requirement to existing tenants, prospective tenants and
Affected Public Agencies prior to the expiration of the Term; (iii) a notice of an offer to purchase
the Development to "qualified entities" (as defined in California Government Code Section
65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; (iv) a
notice of right of first refusal within the one hundred eighty (180) day period that qualified
entities may purchase the Development.
6.6 Covenants to Run With the Land.
The County and Borrower hereby declare their express intent that the covenants and
restrictions set forth in this Agreement run with the land, and bind all successors in title to the
Property, provided, however, that on the expiration of the Term of this Agreement said
covenants and restrictions expire. Each and every contract, deed or other instrument hereafter
executed covering or conveying the Property or any portion thereof, is to be held conclusively to
have been executed, delivered and accepted subject to the covenants and restrictions, regardless
of whether such covenants or restrictions are set forth in such contract, deed or other instrument,
unless the County expressly releases such conveyed portion of the Property from the
requirements of this Agreement.
6.7 Enforcement by the County.
If Borrower fails to perform any obligation under this Agreement, and fails to cure the
default within thirty (30) days after the County has notified Borrower in writing of the default or,
if the default cannot be cured within thirty (30) days, failed to commence to cure within thirty
(30) days and thereafter diligently pursue such cure and complete such cure within ninety (90)
days, the County may enforce this Agreement by any or all of the following actions, or any other
remedy provided by law:
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(a) Calling the Loan. The County may declare a default under the Note,
accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed
of Trust.
(b) Action to Compel Performance or for Damages. The County may bring
an action at law or in equity to compel the Borrower's performance of its obligations under this
Agreement, and may seek damages.
(c) Remedies Provided Under Loan Agreement. The County may exercise
any other remedy provided under the Loan Agreement.
6.8 Attorneys Fees and Costs.
In any action brought to enforce this Agreement, the prevailing party is entitled to all
costs and expenses of suit, including attorneys' fees. This section must be interpreted in
accordance with California Civil Code Section 1717 and judicial decisions interpreting that
statute.
6.9 Recording and Filing.
The County and the Borrower shall cause this Agreement, and all amendments and
supplements to it, to be recorded in the Official Records of the County of Contra Costa.
6.10 Governing Law.
This Agreement is governed by the laws of the State of California.
6.11 Waiver of Requirements.
Any of the requirements of this Agreement may be expressly waived by the County in
writing, but no waiver by the County of any requirement of this Agreement extends to or affects
any other provision of this Agreement, and may not be deemed to do so.
6.12 Amendments.
This Agreement may be amended only by a written instrument executed by all the parties
hereto or their successors in title, and duly recorded in the real property records of the County of
Contra Costa.
6.13 Notices.
Any notice requirement set forth herein will be deemed to be satisfied three (3) days after
mailing of the notice first-class United States certified mail, postage prepaid, addressed to the
appropriate party as follows:
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County: County of Contra Costa
Department of Conservation and Development
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attn: Deputy Director- Redevelopment
Borrower: Lillie Mae Jones Plaza, L.P.
c/o Community Housing Development Corporation
of North Richmond
1535-A Third Street
Richmond, CA 94801
Attn: Executive Director
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
6.14 Severability.
If any provision of this Agreement is determined by a court of competent jurisdiction to
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
portions of this Agreement will not in any way be affected or impaired thereby.
6.15 Multiple Originals; Counterparts.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
[Remainder of Page Left Intentionally Blank]
WHEREAS, this Agreement has been entered into by the undersigned as of the date first
written above.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: _________________________________
James Kennedy
Deputy Director - Redevelopment
Approved as to form:
SHARON L. ANDERSON
County Counsel
BORROWER:
LILLIE MAE JONES PLAZA, L.P., a California
limited partnership
By:
Kathleen Andrus
Deputy County Counsel
By: CHDC Lillie Mae Jones LLC, a California
limited liability company, its managing
general partner
By: Community Housing Development
Corporation of North Richmond, a
California nonprofit public benefit
corporation
By: ___________________________
Name: __________________________
Its: Executive Director
By: EBALDC Lillie Mae Jones, LLC, a
California limited liability company, its co-
general partner
By: East Bay Asian Local Development
Corporation, a California nonprofit
public benefit corporation, its sole
member
By: ________________________
Name: _________________________
Its: Executive Director
863\01\733745.5
863\01\733745.5
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2010, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person 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)
EXHIBIT A
Legal Description
The land is situated in the State of California, County of Contra Costa, and is described as
follows:
863\01\733745.5 A-1