HomeMy WebLinkAboutMINUTES - 02132007 - C.78 (2) CALIFORNIA ENVIRONMENTAL QUALITY ACT
Notice of Exemption
Contra Costa County Community Development Department
651 Pine Street, 4th Floor- North Wing, McBrien Administration Building
Martinez, CA 94553-0095
Telephone: (925) 335-7220 Contact Person: Robert T. Calkins
Project Description:Neighborhood House of North Richmond—W est County Human Development Center HOPE House,
County File #CP 2006-126. The County is providing financing, under the federal Community Development Block Grant
(CDBG)program,to the Neighborhood House of North Richmond to renovate the 3rd floor of the existing building to be used
for long-term transitional housing for homeless individuals recovering from substance abuse.This project only involves the
financing portion of the project under the CDBG program.The City of Richmond has determined that the actual renovation
of the 3' floor is exempt under Section 15301(a) of the CEQA guidelines.
Project Location: The subject building is located at 820 23rd Street, Richmond, CA 94804
This project is exempt from CEQA as a:
Ministerial Project (Sec. 15268) r Other Statutory Exemption, Section
Declared Emergency(Sec. 15269(a)) x General Rule of Applicability(Section 15061(b)(3)
Emergency Project(Sec. 15269(b)or(c))
Categorical Exemption,
for the following reason(s): This activity is Categorically Exempt and not subject to the California Environmental Quality
Act(CEQA) pursuant to Article 5, Section 15061(b)(3)of the CEQA Guidelines. It can be seen with certainty that there is
no possibility that the activity may have a significant adverse effect on the environment.
Date: / 25��7 By:
Community Development Department Representative
AFFIDAVIT OF FILING AND POSTING
I declare that on I received and posted this notice as required by
California Public Resources Code Section 21152(c). Said notice will remain posted for 30
days from the filing date.
Signature Title
Applicant:
Robert T. Calkins
Community Development Department
651 Pine Street, 4th Floor-North Wing
Martinez, CA 94553
County Clerk Fee $25 Due
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(Form Revised 2/97)
Agenda Date: Item No.:
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Agenda Clerk's Note:
❑ Background not available at the time the Agenda packet was compiled
❑ Information for this item was previously furnished (Date: )
❑ Oral Report to be given at the Board Meeting
❑ Error in numbering agenda items
❑ Deleted
Documents on file with the Clerk of the Board
❑ Document or attachments included separate from this packet
(voluminous/,bound/oversize/color pages, etc.)
i . J
P
CDBG LOAN AGREEMENT
Between
COUNTY OF CONTRA COSTA
and
NEIGHBORHOOD HOUSE OF NORTH RICHMOND
West County Human Development Center—Hope House
863\54\372185.6
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND EXHIBITS...........................................................................2
SectionLI Definitions....................................................................................................2
Section1.2 Exhibits. ......................................................................................................4
ARTICLE 2 LOAN PROVISIONS.............................................................................................4
Section2.1 Loan.............................................................................................................4
Section2.2 Interest.........................................................................................................4
Section 2.3 Use of Loan Funds. .....................................................................................5
Section2.4 Security. ......................................................................................................5
Section 2.5 Conditions Precedent to Disbursement of Loan Funds...............................5
Section 2.6 Conditions Precedent to Disbursement of Retention. .................................6
Section 2.7 Repayment Schedule...................................................................................7
Section2.8 Non-Recourse......................................................:.......................................8
ARTICLE 3 REHABILITATION OF THE DEVELOPMENT.................................................. 8
Section 3.1 Permits and Approvals. ...............................................................................8
Section3.2 Bid Package.................................................................................................9
Section 3.3 Construction Contract. ................................................................................9
Section 3.4 Construction Bonds................................................................................... 10
Section 3.5 Commencement of Rehabilitation............................................................. 10
Section 3.6 Completion of Rehabilitation.................................................................... 10
Section 3.7 Rehabilitation Pursuant to Plans and Laws; Prevailing
Wages; Accessibility................................................................................. 11
Section3.8 Marketing Plan.......................................................................................... 12
Section 3.9 Equal Opportunity..................................................................................... 12
Section 3.10 Minority and Women-Owned Contractors................................................ 12
Section 3.11 Progress Reports........................................................................................ 13
Section 3.12 Rehabilitation Responsibilities.................................................................. 13
Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion.................... 13
Section3.14 Inspections................................................................................................. 14
Section 3.15 Approved Development Budget; Revisions to Budget. ............................ 14
ARTICLE 4 LOAN REQUIREMENTS.................................................................................... 14
Section 4.1 Compliance with CDBG Project Agreement. ........................................... 14
Section 4.2 Match Requirement................................................................................... 14
Section 4.3 Financial Accountings and'Post-Completion Audits................................ 14
Section4.4 Information................................................................................................ 15
Section4.5 Records...................................................................................................... 15
Section 4.6 Reports and Accounting............................................................................ 16
Section4.7 Audits. ....................................................................................................... 16
Section 4.8 CDBG Requirements. ....................................:.......................................... 16
Section 4.9 Hazardous Materials...................................................................................20
Section 4.10 Maintenance and Damage.........................................................................22
Section 4.11 Fees and Taxes..........................................................................................22
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IL
TABLE OF CONTENTS
(continued)
Page
Section 4.12 Notice of Litigation...................................................................................23
Section 4.13 Operation of Development as Affordable Transitional
Housing. ....................................................................................................23
Section 4.14 Nondiscrimination.....................................................................................23
Section4.15 Transfer. ....................................................................................................23
Section 4.16 Insurance Requirements............................................................................24
Section 4.17 Anti-Lobbying Certification......................................................................25
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER.......................26
Section 5.1 Representations and Warranties................................................................26
ARTICLE 6 DEFAULT AND REMEDIES
Section 6.1 Events of Default........................................................................................27
Section6.2 Remedies...................................................................................................29
Section6.3 Right of Contest. .......................................................................................30
Section 6.4 • Remedies Cumulative. ..............................................................................30
ARTICLE 7 GENERAL PROVISIONS....................................................................................30
Section 7.1 Relationship of Parties. .............................................................................30
Section7.2 No Claims..................................................................................................31
Section 7.3 Amendments. ............................................................................................31
Section 7.4 Indemnification. ........................................................................................31
Section 7.5 Non-Liability of County Officials, Employees and Agents......................31
Section 7.6 No Third Party Beneficiaries. ...................................................................31
Section 7.7 Discretion Retained By County. ...............................................................32
Section 7.8 Conflict of Interest. ...................................................................................32
Section 7.9 Notices, Demands and Communications. .................................................32
Section 7.10 Applicable Law. .........................................................................................33
Section7.11 Parties Bound. ...........................................................................................33
Section 7.12 Attorneys' Fees..........................................................................................33
Section 7.13 , Severability. ..............................................................................................33
Section7.14 Force Majeure. ..........................................................................................33
Section 7.15 County Approval...................................
Section7.16 Waivers. ....................................................................................................34
Section 7.17 Title of Parts and Sections.........................................................................34
Section 7.18 Entire Understanding of the Parties. .........................................................34
Section 7.19 Multiple Originals; Counterpart................................................................34
Exhibit A: Legal Description of the Property
Exhibit B: Approved Development Budget
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{ 'a
CDBG LOAN AGREEMENT
West County Human Development Center—Hope House
This CDBG Loan Agreement is entered into as of , 200_, by and between
the County of Contra Costa, a political subdivision of the State of California(the "County"), and
Neighborhood House of North Richmond, a California nonprofit public benefit corporation
("Borrower"), with reference to the following facts:
A. The County has received funds from the United States Department of Housing
and Urban Development ("HUD") under Title I of the Housing and Community Development
Act of 1974, as amended ("CDBG Funds"). Such funds must be used by the County in
accordance with 24 C.F.R. Part 570.
B. Borrower owns certain real property located at 820 23rd Street in the City of
Richmond, County of Contra Costa, State of California, also known as the West County
Development Center, and as more particularly described in Exhibit A (the "Property"). Borrower
intends to rehabilitate the third floor of the West County Development Center in order to provide
twenty(20) beds of Transitional Housing for homeless individuals and families, all twenty (20)
of which will be assisted by the County.
C. County and Borrower have entered into that certain CDBG Project Agreement
HDAF 06-65A, dated , pursuant to which the County committed the CDBG Funds to
assist Borrower in the rehabilitation of the Development.
D. In furtherance of the CDBG Project Agreement, Borrower wishes to borrow from
County and County wishes to extend to Borrower a loan of Two Hundred Eighty Thousand'
Dollars ($280,000)to assist in the rehabilitation of the Development. The Loan consists of the
CDBG Loan Funds. The Loan will be evidenced by a promissory note executed by Borrower in
favor of County and secured by the Deed of Trust which will be recorded against the Property.
The Regulatory Agreement will also be recorded against the,Property governing the occupancy
and maintenance of the Development.
E. The Borrower's use of the CDBG Funds for the rehabilitation of the Development
is considered an eligible activity under 24 C.F.R. 570.201(c) and will meet a national objective
under 24 C.F.R. 570.208(a)(2)(i)(A) in that it will benefit low and moderate income persons.
F. The Loan is being made to finance rehabilitation costs associated with the
Development in order to help achieve financial feasibility for the Development and to increase
the supply of affordable rental housing in Contra Costa County.
G. The California Environmental Quality Act (Public Resources Code Section 21000
et seq.) ("CEQA") imposes no conditions on the County's consideration and approval of this
Agreement, because the project undertaken pursuant to this Agreement is the rehabilitation of
existing improvements, and such projects are exempt from CEQA requirements under class 2
categorical exemption.
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G f
H. In accordance with the National Environmental Policy Act of 1969, as amended
(42 U.S.C. 4321-4347) ("NEPA"), the County has completed and approved all applicable
environmental review by for the activities proposed to be undertaken under
this Agreement. [REVISEANSERT APPROPRIATE NEPA RECITAL]
NOW, THEREFORE,the Parties agree as follows:
ARTICLE 1
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.
The following capitalized terms have the meanings set forth in this Section 1.1 wherever
used in this Agreement, unless otherwise provided:
(a) "Agreement" shall mean this CDBG Loan Agreement.
(b) "Approved Development Budget" shall mean the proforma development
budget, including sources and uses of funds, as approved by the County, and attached hereto and
incorporated herein as Exhibit B.
(c) "Approved Financing" shall mean a loan from the City in the approximate
amount of Two Hundred Eighty-Five Thousand Dollars ($285,000) (the "City Loan"), for the
purpose of financing the Development, in addition to the Loan from the County.
(d) "Bed" shall mean one (1) of the beds in the Development that shall be
occupied by or available to a Tenant.
(e) "Bid Package" shall mean the Borrower's proposed construction 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) "Budget" has the meaning set forth in Section 4.6(a).
(h) "City" shall mean the City of Richmond.
(i) "CDBG" shall mean the Community Development Block Grant program
created pursuant to Title I of the Housing and Community Development Act of 1974 (42 USC
5301 et seq.), as amended.
(j) "CDBG Loan Funds" shall mean the Two Hundred Eighty Thousand
Dollars ($280,000)portion of the Loan that is funded with CDBG Funds.
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t 4
(k) "CDBG Project Agreement" has the meaning-set forth in paragraph C of
the Recitals.
(1) "County" has the meaning set forth in the first paragraph of this
Agreement.
(m) "Deed of Trust" shall mean the deed of trust dated ,
20_among Borrower, as trustor, Title Company, as trustee, and the
County, as beneficiary,that will encumber the Development to secure repayment of the Loan and
performance of the covenants of the Loan Documents. The form of the Deed of Trust shall be
provided by the County.
(n) "Default" shall have the meaning set forth in Section 6.1 below.
(o) "Default Rate" shall have the meaning set forth in Section 6.2(c).
(p) "Development" shall mean the Property and the multi-purpose facility to
be rehabilitated on the Property including the third floor of the West County Development
Center in order to provide twenty (20) beds for Transitional Housing for individuals recovering
from substance abuse, all twenty (20) of which will be assisted by the County, as well as any
additional improvements, and all landscaping, roads and parking spaces existing thereon, as the
same may from time to time exist.
(q) "Hazardous Materials" shall have the meaning set forth in Section 4.9
below.
(r) "Hazardous Materials Claim',' shall have the meaning set forth in Section
4.9 below.
(s) "Hazardous Materials Law" shall have the meaning set forth in Section 4.9
below.
(t) "HUD" has the meaning set forth in Paragraph A of the Recitals.
(u) "Loan" shall mean the County loan to Borrower pursuant to this
Agreement in the total principal amount of Two Hundred Eighty Thousand Dollars ($280,000)
consisting of the CDBG Loan Funds.
(v) "Loan Documents" shall mean this Agreement, the Note, the Regulatory
Agreement, and the Deed of Trust.
(w) "NEPA" shall mean the National Environmental Policy Act (42 U.S.C.
Section 4321 et s_g.), and its implementing regulations.
(k) "Note" shall,mean the promissory note dated , 2006,
between Borrower and the County evidencing Borrower's obligation to repay the Loan. The
form of the Note shall be provided by the County.
(y) "Parties shall mean the County and Borrower.
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L f
(z) "Property" has the meaning set forth in paragraph B of the Recitals.
(aa) "Regulatory Agreement" shall mean the Regulatory Agreement and
Declaration of Restrictive Covenants dated between the County and the
Borrower associated with the Loan,to be recorded against the Property.
(bb) "Retention Amount" shall mean the Ten Thousand Dollars ($10,000) of
CDBG Loan Funds set forth in Section 2.5 below.
(cc) "Tenant" shall mean a person legally occupying a Bed pursuant to the
Regulatory Agreement.
(dd) "Term" shall have the meaning set forth in Section 2.7(a), below.
(ee) "Transfer" shall have the meaning set forth in Section 4.15 below.
(ff) "Transitional Housing" shall mean housing, the purpose of which is to
facilitate the movement of homeless individuals and families to permanent housing within thirty
(30) months from the beginning of tenancy.
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
ARTICLE 2
LOAN PROVISIONS
Section 2.1 Loan.
The County shall loan to the Borrower the Loan for the purposes set forth in Section 2.3
of this Agreement. The obligation to repay the Loan shall be evidenced by the Note in the form
provided by the County.
Section 2.2 Interest.
(a) Interest. Subject to the provisions of Section 2.2(b) below, the outstanding
principal balance of the Loan shall not accrue interest.
(b) Default Interest. In the event of a Default, interest on the Loan shall begin
to accrue, as of the date of Default and continuing until such time as the Loan is repaid in full or
the Default is cured, at the default rate of the lesser of ten percent (10%), compounded annually,
and the highest rate permitted by law.
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Section 2.3 Use of Loan Funds.
(a) The Borrower shall use the Loan to fund the rehabilitation of the
Development consistent with the Approved Development Budget, and the scope of work
described in the CDBG Project Agreement.
(b) The Borrower shall not use the Loan for any other purposes without the
prior written consent of the County.
(c) The Borrower shall comply with the CDBG Project Agreement in the use
of the Loan; provided, however, in the event of any conflict between the CDBG Project
Agreement and this Agreement, the terms of this Agreement shall prevail.
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 recording it as a lien against the Property.
Section 2.5 Conditions Precedent to Disbursement of Loan Funds.
The maximum amount of funds to be disbursed pursuant to this Section 2.5 shall not
exceed the amount of the Loan less the Retention Amount. The County shall not be obligated to
make any disbursements of Loan, or take any other action under the Loan Documents unless the
following conditions precedent are satisfied prior to each such disbursement of Loan funds:
(a) There exists no Default nor any act, failure, omission or condition that
would constitute an event of Default under this Agreement, or the CDBG Project Agreement.
(b) Borrower has delivered to the County a copy of a corporate authorizing
resolution authorizing Borrower's execution of the Loan Documents.
(c) Borrower has furnished the County with evidence of the insurance
coverage meeting the requirements of Section 4.16 below
(d) Borrower has caused to be executed and delivered to the County all
County Loan Documents and any other instruments, and policies required under the Loan
Documents.
(e) 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.
(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
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a ,
company in order for the County's Deed of Trust to be senior in lien priority to any mechanics
liens in connection with any early start of rehabilitation.
(g) The County has completed and approved all environmental reviews under
NEPA, as necessary for the rehabilitation of the Development, and Borrower has provided-the
County evidence Borrower has complied with all approved NEPA requirements and mitigation
measures.
(h) The County has determined that 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 is necessary to pay for
development of the Development and to satisfy all of the covenants contained in this Agreement
and the Regulatory Agreement.
(i) The County has received and approved the final plans and specifications
for the Development, as required pursuant to Section 3.2 below.
(j) The County has received and approved the general contractor's
construction contract that the Borrower has entered or proposed to enter for rehabilitation of the
Development as required pursuant to Section 3.3 below.
(k) The County has received copies of labor and material (payment) bonds
and performance bonds as required pursuant to Section 3.4 below.
(1) Borrower has closed all Approved Financing described in Section 1.1(c)
above and is eligible to receive the proceeds thereof.
(m) The County has received a written draw request from the Borrower,
including certification that the condition set forth in Section 2.5(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 2.6 Conditions Precedent to Disbursement of Retention.
The County shall not be 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 the income, household size, and ethnicity of tenants of the Development and the rent
amount for all units in the Development.
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(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.
(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 Development.
M The County has received from Borrower evidence of marketing for any
vacant units in the Development such as copies of flyers, list of media ads, list of agencies and
organizations receiving information on availability of units, as applicable.
(g) The County has received from Borrower all relevant contract activity
information.
(h) The County has received from Borrower 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 was required to pay prevailing wages under the Davis-
Bacon Act(40 U.S.C. 3141-3148), the County has received from Borrower all certified payrolls,
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 2.5(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 2.7 Repayment Schedule.
(a) Term. The Loan and this Agreement shall have a term that expires on the
date twenty (20) years after the date of this Agreement (the "Term"); provided, however, the
County may extend the Term for an additional twenty (20) years in the event Borrower is not in
Default under this Loan Agreement, the Note, the Deed of Trust or the Regulatory Agreement,
and the Borrower agrees to extend the term of the Regulatory Agreement for an additional
twenty (20) years.
(b) Deferred Payments. Repayment of the principal amount of the Loan shall
be deferred for the Term of the Loan, except as provided in subsection (d) below.
(c) Forgiveness. One hundred percent (100%) of the Loan shall be forgiven
at the end of the fortieth(401h) year of the Term, provided,however, that in the event the Term is
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not extended pursuant to subsection (a) no such forgiveness will be granted and the Loan will be
due in full at the end of the twentieth (20th) year of the Term.
(d) Payment in Full. All principal and accrued interest on the Loan shall be
due in full on the earlier to occur of(i)the date of any Transfer not authorized by the County, (ii)
the date of any Default;and (iii) the expiration of the Term, except as otherwise provided in
subsection(c).
(e) Prepayment. The Borrower shall have the right to prepay the Loan at any
time without penalty. However, the Regulatory Agreement and the Deed of Trust shall remain in
effect for the entire term of the Regulatory Agreement, regardless of any prepayment..
Section 2.8 Non-Recourse.
Except as provided below, the Borrower shall not have 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, and interest on, the Note and
defaults by Borrower in the performance of its covenants under the Deed of Trust shall be to the
property described in the Deed of Trust; provided, however, that nothing contained in the
foregoing limitation of liability shall (a) limit or impair the enforcement against all such security
for the Note of all the rights and remedies of the County thereunder, or(b) be deemed in any way
to impair the right of the 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 for the repayment of 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 4.8 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
REHABILITATION OF THE DEVELOPMENT
Section 3.1 Permits and Approvals.
All permits and approvals necessary for the rehabilitation of the Development must be
received no later than January 8, 2007, 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.
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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 Community Development
Department- Housing Division a copy of the Borrower's proposed Bid Package the Borrower
shall utilize to select the general contractor and, as applicable, subcontractors for the
Development. Such Bid Package shall include, but shall not be 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 shall obtain 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" shall
mean all construction documentation upon which Borrower and Borrower's contractor, if any,
shall rely in rehabilitating all the improvements on the Property (including landscaping, parking,
and common areas) and shall include, but not necessarily be limited to, final architectural
drawings, landscaping plans and specifications, final elevations, building plans and
specifications (also known as "working drawings").
(b) The County Community Development Department shall, if the Bid
Package submitted conforms to the provisions of this Agreement, approve in writing such Bid
Package. Unless rejected by the County Community Development Department for its failure to
comply with the foregoing requirements within fifteen(15) days after receipt by County, said
Bid Package shall be deemed accepted.
(c) If rejected by the County Community Development Department 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 shall 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 shall continue to apply until the Bid Package has been approved,
or deemed approved, by the County Community Development Department, and Borrower shall
not publish the Bid Package until the County Community Development Department has
approved such Bid Package (or such 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
rehabilitation of the Development,the Borrower shall submit to the County for its approval the
proposed construction contract for the Development. All rehabilitation work and professional
services shall be performed by persons or entities licensed or otherwise authorized to perform the
applicable rehabilitation work or service in the State of California. Each contract that the
Borrower enters for rehabilitation of the Development shall provide that at least ten percent
(10%) of the costs incurred shall be payable only upon completion of rehabilitation, subject to
early release of retention for specified subcontractors upon approval by-the County. The
construction contract shall include all applicable CDBG requirements set Torth.in Section 4.8
below. The County's approval of the construction contract shall in no way be deemed to
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863\54\372185.6
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 isnot 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 shall
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 shall be in the form
approved by the County.
Section 3.4 Construction Bonds.
Prior to commencement of rehabilitation of the Development, the Borrower shall deliver
to the County copies of labor and material bonds and performance bonds for the rehabilitation of
the Development in an amount equal to one hundred percent (100%) of the scheduled cost of the
Development. Such bonds shall name the County as a co-obligee.
Section 3.5 Commencement of Rehabilitation.
Borrower shall cause the commencement of rehabilitation of the Development no later
than January 31, 2007, or such later date that the County may approve.
Section 3.6 Completion of Rehabilitation.
Borrower shall diligently prosecute rehabilitation of the Development to completion, and
shall cause the completion of the rehabilitation of the Development no later than June 30, 2007,
or such later date that the County may approve, after commencement of rehabilitation.
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Section 3.7 Rehabilitation Pursuant to Plans and Laws: Prevailinja Wages: Accessibility.
(a) Borrower shall rehabilitate the Development in conformance with the
plans and specifications approved by the County 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: (1) any change in the work the cost of which exceeds Fifteen
Thousand Dollars ($15,000); or(2) any set of changes in the work the cost of which
cumulatively exceeds Fifty Thousand Dollars ($50,000) or ten percent (10%) of the Loan
amount,whichever is less; or(3) 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 shall 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
Labor Code Section 1770 et seq., and the regulations thereto, as further set forth in subsection (d)
below; (ii)the property standards set out in 24 C.F.R. 5.701 et seq., and 24 C.F.R. 92.251; 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 shall 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 rehabilitation of the Development to be in
compliance with the prevailing wage requirements of the federal Davis-Bacon Act (10 U.S.C.
3141-3148). 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 the Borrower, its contractor and subcontractors) to pay prevailing wages as
determined pursuant to the prevailing wage provisions of the federal Davis-Bacon Act and
implementing rules and regulations in connection with the rehabilitation of the Development or
any other work undertaken or in connection with the Property.. The requirements in this
Subsection shall survive repayment of the Loan and the reconveyance of the Deed of Trust.
(d) This Agreement has been prepared with the intention that the County
assistance under this Agreement meets the exceptions set forth in Labor Code Section
1720(c)(6)(E)to the general requirement that state prevailing wages be paid in connection with
construction work that is paid for in whole or in part out of public funds; provided, however, that
nothing in this Agreement constitutes a representation or warranty by any party regarding the
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applicability of the provisions of Labor Code Sections 1720 et seq., and Labor Code Sections
1777.5 et seq, and Borrower shall comply with any laws related to construction wages pursuant
to Labor Code Sections.1720 et seg. and the hiring of apprentices pursuant to Labor Code
Sections 1777.5 etLe ., and the implementing regulations of the Department of Industrial
Relations (the "DIR"), as required by the Approved Financing, if and to the extent applicable to
the Development. As applicable, Borrower shall and shall cause the contractor and
subcontractor to pay prevailing wages, and keep and retain such records as are necessary to
determine if such prevailing wages have been paid as required pursuant to Labor Code Section
1720 et seq., and whether,apprentices have been employed as required by Labor Code Sections
1777.5 et sem. 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 the Borrower, its contractor and subcontractors) to pay prevailing wages as
determined pursuant to Labor Code Sections 1720 et seq.,-and to employ apprentices pursuant to
Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to comply with
the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the
implementing regulations of the DIR in connection with the Development or any other work
undertaken or in connection with the Property. The requirements in this Subsection shall survive
the repayment of the Loan and the reconveyance of the Deed of Trust.
Section 3.8 Marketing Plan.
(a) No later than , 2007,.Borrower shall submit to the County for
approval its plan for marketing the Development to income-eligible households as required
pursuant to the Regulatory Agreement, including information on affirmative marketing efforts
and compliance with fair housing laws.
(b) Upon receipt of the Marketing Plan, the County shall promptly review the
Marketing Plan and shall 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 by January 31,
2007, Borrower shall be in default hereunder.
Section 3.9 Equal Opportunity.
During the rehabilitation of the Development there shall be no 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
rehabilitation work.
Section 3.10 Minority and Women-Owned Contractors.
Borrower will use its best efforts to afford minority-owned and women-owned business
enterprises the maximum practicable opportunity to participate in the rehabilitation 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 rehabilitation
of the Development. Documentation of such notifications shall be maintained by Borrower and
available to the County as requested.
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Section 3.11 Progress Reports.
Until the date on which the Borrower has obtained the approval from the City building
inspector that the rehabilitation of the Development is complete, or if no such inspection is
required, such date when the County has deemed the rehabilitation complete in accordance with
the terms of the Loan Documents, Borrower shall provide the County with quarterly progress
reports regarding the status of the rehabilitation of the Development, including a certification that
the actual rehabilitation 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 Rehabilitation Responsibilities.
(a) It shall be the responsibility of Borrower to coordinate and schedule the
work to be performed so that commencement and completion of the rehabilitation will take place
in accordance with this Agreement.
(b) Borrower shall be 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 rehabilitation 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 should 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 rehabilitation 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 shall be 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 rehabilitation 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
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Property. Borrower authorizes the County, but without any 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. 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 costs shown on the
Approved Development Budget. Written consent of the County shall be required to amend the
Approved Development Budget.
ARTICLE 4
LOAN REQUIREMENTS
Section 4.1 Compliance with CDBG Project Agreement.
Borrower shall comply with the terms of the CDBG Project Agreement, and any breach
under the CDBG Project Agreement subject to the notice and cure periods set forth,in Section
6.1(c) below, shall be considered a Default under this Agreement. The CDBG Project
Agreement is hereby incorporated into this Agreement by this reference.
Section 4.2 Match Requirement.
The Borrower shall ensure that the Loan is matched with a minimum of Twenty Eight
Thousand Dollars ($28,000) in other, non-federal sources.
Section 4.3 Financial Accountings and Post-Completion Audits.
No later than sixty(60) days following completion of rehabilitation 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 rehabilitation
of the Development, Borrower shall submit an audited financial report showing the sources and
uses of all funds utilized for the Development.
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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
HUD 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 shall be kept and
maintained in accordance with generally accepted accounting principles consistently applied, and
shall be consistent with requirements of this Agreement. All such books, records, and accounts
shall be open to and available for inspection and copying by 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 shall at all reasonable times be open for inspection by the County at the place that the
books, records and accounts of the Borrower are kept. The Borrower shall preserve such records
for a period of not less than five (5) years after the creation of such records in compliance with
all HUD records and accounting requirements including but not limited to those set forth in 24
C.F.R. 570.506 and 570.502(b). If any litigation, claim, negotiation, audit exception,
monitoring, inspection or other action relating to the use of the Loan is pending at the end of the
record retention period stated herein, then the Borrower shall retain such records until such
action and all related issues are resolved. Such records shall include all invoices, receipts, and
other documents related to expenditures from the Loan funds. Records must be kept accurate
and current. Such records shall include but not be limited to:
(i) Records providing a full description of the activities undertaken
with the use of the CDBG Loan Funds;
(ii) Records demonstrating that each activity undertaken meets one of
the national objectives of the CDBG program set forth in 24 C.F.R. 570.208;
(iii) Records required to determine the eligibility of activities;
(iv) Records documenting compliance with the fair housing and equal
opportunity requirements, as applicable;
(v) Financial records as required by 24 C.F.R. 570.502, and OMB
Circular A-110 (24 C.F.R Part 84);
(vi) Other records necessary to document compliance with Subpart K
of 24 C.F.R. Part 570; and
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r .
(vii) Certified payrolls from the Borrower's general contractor
evidencing that applicable prevailing wages have been paid.
(b) The County shall notify Borrower of any records it deems insufficient.
Borrower shall have fifteen(15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the County in such notice, or if a period longer than fifteen
(1,5) days is reasonably necessary to correct the deficiency, then Borrower shall begin to correct
the deficiency within fifteen(15) days and correct the deficiency as soon as reasonably possible.
Section 4.6 Reports and Accounting.
(a) Approval of Budget. No later than June 1 of each year of the Term,
Borrower shall provide to the County an annual budget for the operation of the Development (the
"Budget"). Unless rejected by the County in writing within thirty (30) days after the County's
receipt, said Budget shall 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 notification
after the County's rejection and the reasons therefore. The County shall then have fifteen (15)
days to review and approve Borrower's new-or corrected Budget. The provisions of this Section
relating to time periods for approval, rejection, or resubmission of new or corrected Budget shall
continue to apply until such Budget has been approved by the County.
(b) Annual Operating Statement. No later than June 1 of each year of the
Term, Borrower shall provide the County with an annual operating statement for the immediately
preceding year the form of which shall be approved by the County.
Section 4.7 Audits.
Each year, Borrower shall provide the County with a copy of Borrower's annual audit,
which shall 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 shall be entitled to audit all of Borrower's books, records, and accounts pertaining thereto.
Such audit shall 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 such audit to Borrower.
Section 4.8 CDBG Requirements.
(a) Borrower shall comply with all applicable laws and regulations governing
the use of the CDBG Loan Funds as set forth in 24 C.F.R. Part 570, including but not limited to
.the requirements of the Regulatory Agreement and the CDBG Project Agreement. In the event
of any conflict between this Agreement and applicable laws and regulations governing the use of
the Loan funds, the applicable laws and regulations shall govern. During the first twenty (20)
years of the Term, these requirements shall be federal requirements, implemented by the County;
thereafter,these requirements shall be deemed local County requirements.
(b) The laws and regulations governing the use of the Loan funds include (but
are not limited to)the following:
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(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. 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 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
Rehabilitation Act of 1973 (29 U.S.C. 794, et seq.); the Age Discrimination Act of 1975 (42
U.S.C. 6101, et seg.); 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. The requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.), and
state relocation laws. If and to the extent that rehabilitation 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 shall be solely
responsible for payment of any relocation benefits to any displaced persons and any other
obligations associated with complying with such relocation laws. The Borrower shall indemnify,
defend (with counsel reasonably chosen by the County), and hold harmless the-County against
all claims which 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;
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(viii) Clean Air and Water Acts. The Clean Air Act, as amended, 42
U.S.C. 7401 et seg., 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) Uniform Administrative Requirements. The requirements of 24
C.F.R. 570.502 regarding cost and auditing requirements;
(x) Training_Opportunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu ("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 t. ' 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. 1701 u. 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,
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(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,
(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).
(xi) Labor Standards. 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;
(xii) 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;
(xiii) 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;
(xiv) 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;
(xv) 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; and,
(xvi) Religious Organizations. If Borrower is a religious organization,
as defined by the CDBG requirements, Borrower shall comply with all conditions prescribed by
HUD for the use of CDBG funds by religious organizations, including the First Amendment of
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the United States Constitution regarding church/state principles and the applicable constitutional
prohibitions set forth in 24 C.F.R. Section 570.2000).
Section 4.9 Hazardous Materials.
(a) Borrower shall keep and maintain the Property in compliance with, and
shall not cause or permit the Property to be in violation of any federal, state or local laws,
ordinances or regulations relating to industrial hygiene or to the environmental conditions on,
under or about the Property including, but not limited to, soil and ground water conditions.
Borrower shall not use, generate, manufacture, store or dispose of on, under, or about the
Property or transport to or from the Property any flammable explosives, radioactive materials,
hazardous wastes, toxic substances or related materials, including without limitation,.any
substances defined as or included in the definition of"hazardous-substances," "hazardous
wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws
or regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the
foregoing as may be customarily used in rehabilitation 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, Sections 25220 et se ., 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 shall have the right to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any Hazardous Materials
Claims and to have its reasonable attorneys' fees in connection therewith paid by Borrower.
Borrower shall indemnify and hold harmless the 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: (a) all foreseeable consequential
damages; (b)the costs of any required or necessary repair, cleanup or detoxification of the
Property and the preparation and implementation of any closure, remedial or other required
plans; and (c) all reasonable costs and expenses incurred by the County 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;
20
863\54\372185.6
(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 shall
survive termination of this Agreement.
(d) Without the County's prior written consent, which shall not be
unreasonably withheld, Borrower shall not take any remedial action in response to the presence
of any Hazardous Materials on, under or about the Property, nor enter into any settlement.
agreement,.consent decree, or other compromise in respect to any Hazardous Material Claims,
which remedial action, settlement, consent decree or compromise might, in the County's
reasonable judgment, impair the value of the County's security hereunder; provided, however,
that the County's prior consent shall not be necessary in the event that the presence of Hazardous
Materials on, under, or about the Property either poses an immediate threat to the health, safety
or welfare of any individual or is of such a nature that an immediate remedial response is
necessary and it is not reasonably possible to obtain the 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 shall be deemed to have willfully permitted or
acquiesced in a release or threatened release of Hazardous-Materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
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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, shall be added to the
indebtedness secured by the Deed of Trust and shall be due and payable to the County upon its
demand made at any time following the conclusion of such action.
Section 4.10 Maintenance and Damaize.
(a) During the course of both rehabilitation 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 shall have the right to perform all acts necessary to cure such condition, and to establish
or enforce a lien,or other encumbrance against the Property.
(b) Subject to the requirements of senior lenders, if any, 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 shall 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 shall
be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or
destruction shall be applied to the cost of such repairs or restoration and, if such insurance
proceeds shall be insufficient for such purpose, then Borrower shall make up the deficiency. If
Borrower does not make repairs then any insurance proceeds collected for such damage or
destruction shall be promptly delivered by the Borrower to the County as a special repayment of
the Loan, subject to rights of senior lenders, if any.
Section 4.11 Fees and Taxes.
Borrower shall be solely responsible for payment of all fees, assessments, taxes, charges,
and levies imposed by any public authority or utility company with respect to the Property or the
Development to the extent owned by Borrower, and shall pay such charges prior to delinquency.
However, Borrower shall not be required to pay and discharge any such charge so long as (a) the
legality thereof is being contested diligently and in good faith and by appropriate proceedings,
and (b) if requested by the 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 Liti ag tion.
Borrower shall promptly notify the County in writing of any litigation which 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 Transitional Housing.
(a) Promptly after completion of rehabilitation, the Borrower shall operate the
Development as an affordable Transitional Housing development consistent with (i) HUD's
requirements for use of the CDBG Funds, and (ii)the Regulatory Agreement.
(b) Before leasing any Bed in the Development, the Borrower shall submit its
proposed form of lease agreement for the County's review and approval.
(c) Before leasing any portion of the Development, the Borrower must
provide the County, for its review and approval, 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. 574, and any amendments or modification thereto.
(d) The Borrower must determine the income eligibility of each Tenant
pursuant to the County's approved tenant certification procedures within sixty (60) days before
the Tenant's expected occupancy of one of the Development's Beds. The Borrower shall certify
each Tenant's income on an annual basis.
(e) The maximum household income of a Tenant in the Development, and the
total charges for rent, utilities, and related services to each Tenant, shall be maintained as
provided in the Regulatory Agreement.
Section 4.14 Nondiscrimination.
The Borrower covenants by and for itself and its successors and assigns that there shall
be no discrimination against or segregation of a person or of a group of persons on account of
race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or
national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property, nor shall the Borrower or any person claiming under or through the Borrower establish
or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the Property. The foregoing covenant shall run with the land.
Section 4.15 Transfer.
(a) For purposes of this Agreement, "Transfer" shall mean any sale,
assignment, or transfer, whether voluntary or involuntary, of(i) any rights and/or duties under
this Agreement, 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. "Transfer" shall exclude (iii) the leasing
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of any single Bed in the Development to an occupant in compliance with the Regulatory
Agreement and (iv)the leasing of any other commercial space in the Development to a social
service provider approved in advance by the County or other commercial tenant approved in
advance by the County. 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 shall be permitted without the prior written consent of the
County, which the County may withhold in its sole discretion. The Loan shall automatically
accelerate and be due in full upon any Transfer made without the prior written consent of the
County.
(c) The County approves the grant of the security interests in the Property
described in Section'1.1(c) above.
Section 4.16 Insurance Requirements.
The Borrower shall maintain the following insurance coverage throughout the Term of
the Loan:
(a) Worker's Compensation insurance to the extent required by law, including
Employer's Liability coverage, with limits not less than One Million Dollars($1,000,000) each
accident.
(b) Comprehensive General Liability insurance with limits not less than Two
Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and
Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations.
(c) Comprehensive Automobile Liability insurance with limits not less than
One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and
Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable.
(d) Builders' risk insurance during the course of rehabilitation, and upon
completion of rehabilitation, 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 shall be
obtained if required by applicable federal regulations.
(e) Blanket Fidelity Bond covering all officers and employees, for loss of
Loan proceeds caused by dishonesty, in an amount not less than Two Hundred Eighty Thousand
Dollars ($280,000) naming the County a Loss Payee, as its interests may appear.
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 (a), (b), and (c) above,
except that the limit of liability for comprehensive general liability insurance for subcontractors
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shall be One Million Dollars ($1,000,000), and shall require that such insurance shall meet all of
the general requirements of subsections (f), (g), and (h) below, including, without limitation, the
requirement of subsection(g). Liability and Comprehensive Automobile Liability insurance to
be maintained by such contractors and agents pursuant to this subsection shall name as additional
insureds the County, its officers, agents, employees and members of the County Board of
Supervisors.
(f) The required insurance shall be provided under an occurrence form, and
Borrower shall maintain the coverage described in subsections (a)through (d) continuously
throughout the Term. Should any of the required insurance be provided under a form of
coverage that includes an annual aggregate limit or provides that claims investigation or legal
defense costs be included in such annual aggregate limit, such annual aggregate limit shall be
three times the.oecurrence limits specified above.
(g) Comprehensive General Liability, Comprehensive Automobile Liability
and Property insurance policies shall be endorsed to name as an additional insured the County
and its officers, agents, employees and members of the County Board of Supervisors.
(h) All policies and bonds shall contain(a)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; (b) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the County; (c) 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 (d) 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 4.17 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 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
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• f
for making or entering into this Agreement imposed by Section 1352, Title 31, U.S. Code. Any
person who fails to file the required certification shall be subject to a civil penalty of not less
than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars
($100,000) for such failure.
ARTICLE 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 a duly organized California nonprofit public
benefit corporation, validly existing and in good standing under the laws of the State of
California and has the power and authority to own its property and carry on its business as now
being conducted.
(b) Authority of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered,pursuant to this Agreement, and to perform and
observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all
actions required under Borrower's organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the Loan
Documents and all.other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding_Agreements. This Agreement and the Loan Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Borrower enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Loan Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
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.
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(f) Compliance With Laws; Consents and Approvals. The rehabilitation of
the Development will comply with all applicable laws, ordinances, rules and regulations of
federal, state and local governments and agencies and with all applicable directions, rules and
regulations of the fire marshal, health officer, building inspector and other officers of any such
government or agency.
(g) Pending Proceedings. 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 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 of this Agreement, there has not been any
adverse, material change in the financial condition of Borrower from that shown by such
financial statements and other data and information.
0) Sufficient Funds. Borrower holds sufficient funds and/or binding
commitments for sufficient funds to complete the rehabilitation 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 principals. 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.
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Each of the following shall constitute a "Default" by Borrower under this Agreement:
(a) Failure to Construct. Failure of Borrower to commence and complete
rehabilitation 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 of 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 having continued 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 shall not be in breach so long as Borrower is diligently undertaking to cure such breach
and such breach is cured within ninety(90) days; provided, however, that if a different period or
notice requirement is specified under any other section of this Article 6, the specific provisions
shall 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 shall have made or entered any
decree or order(i) adjudging Borrower to be bankrupt or insolvent, (ii) approving as properly
filed a petition seeking reorganization of Borrower or seeking any arrangement for Borrower
under the bankruptcy law or any other applicable debtor's relief law or statute of the United
States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee
of Borrower in bankruptcy or insolvency or for any of their properties, (iv) directing the winding
up or liquidation of Borrower if any such decree or order described in clauses (i)to (iv),
inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days; or (v)
Borrower shall have admitted in writing its inability to pay its debts as they fall due or shall have
voluntarily submitted to or filed a petition seeking any decree or order of the nature described in
clauses (i)to (iv), inclusive. The occurrence of any of the events of Default in this paragraph
shall act to accelerate automatically, without the need for any action by the County, the
indebtedness evidenced by the Note.
(f) Assignment; Attachment. Borrower shall have assigned its assets for the
benefit of its creditors or suffered a sequestration or attachment of or execution on any
substantial part of its property, unless the property so assigned, sequestered, attached or executed
upon shall have been returned or released within ninety (90) days after such event or, if sooner,
prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of
the events of default in this paragraph shall act to accelerate automatically, without the need for
any action by the County, the indebtedness evidenced by the Note.
(g) Suspension; Termination. Borrower shall have voluntarily suspended its
business or commenced termination or dissolution.
(h) Liens on Property and the Project. There shall be filed any claim of lien
(other than liens approved in writing by the County) against the Development or any part thereof,
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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, proving to have
been incorrect in any material respect when made. After issuance of the certificates of
occupancy for the Development, 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.
Section 6.2 Remedies.
The occurrence of any Default hereunder following the expiration of all applicable notice
and cure periods will,either at the option of the County or automatically where so specified,
relieve the County of any obligation to make or continue the Loan and shall 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 shall have the right to 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 shall be 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 shall have the right to mandamus or
other suit, action or proceeding at law or in equity to require Borrower to perform its obligations
and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or
in violation of the provisions of the Loan Documents.
(c) Right to Cure at Borrower's Expense. The County shall have the right (but
not the obligation)to cure any monetary default by Borrower under a loan other than the Loan.
The Borrower agrees to reimburse the 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
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1t
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.
(d) Special Remedy for Breach of Use Requirement. Pursuant to 24 C.F.R.
570.503(b)(7)(ii), if after acquisition of the Property,the Borrower changes the planned use of
the Property to a non-CDBG eligible use, or if after completion of rehabilitation of the
Development,the Borrower ceases to use the Development to primarily benefit low and
moderate income persons, the County shall have the right to require the Borrower to pay to the
County an amount equal to the current market value of the Property (as determined by appraisal)
less any portion of that value attributable to non-County Loan funds used for the development of
the Development (based on a pro-rata allocation of funds used by Borrower in its development of
the Development). Funds recovered from Borrower pursuant to this subsection shall be credited
against amounts outstanding under the Note.
Section 6.3 Right of Contest.
Borrower shall have the right to contest in good faith any claim, demand, levy, or
assessment the assertion of which would constitute a Default hereunder. Any such contest shall
be prosecuted diligently and in a manner unprejudicial to the 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 shall 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 shall operate as a waiver thereof, nor
shall 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 shall be interpreted or understood by any of the
Parties, or by any third persons, as creating the relationship of employer and employee,principal
and agent, limited or general partnership, or joint venture between the County and Borrower or
its agents, employees or contractors, and Borrower shall at all times be deemed an independent
contractor and'shall be wholly responsible for the manner in which it or its agents, or both,
perform the services required of it by the terms of this Agreement. Borrower has and retains the
right to exercise full control of employment, direction, compensation, and discharge of all
persons assisting in the performance of services under the Agreement. In regards to the
rehabilitation and operation of the Development, Borrower shall be solely responsible for all
matters relating to payment of its employees, including compliance with Social Security,
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withholding, and all other laws and regulations governing such matters, and shall include
requirements in each contract that contractors shall be solely responsible for similar matters
relating to their employees. Borrower shall be solely responsible for its own acts and those of its
agents and employees.
Section 7.2 No Claims.
Nothing contained in this Agreement shall create or justify 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, rehabilitation or the .
operation of the Development, and Borrower shall include similar requirements in any contracts
entered into for the rehabilitation or the operation of the Development.
Section 7.3 Amendments.
No alteration or variation of the terms of this Agreement shall be 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 County
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,
rehabilitation, 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 shall 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 shall be personally liable to
Borrower in the event of any default or breach by the County or for any amount which 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 shall be no third party beneficiaries to this Agreement.
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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 development 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 Government Code Section 1090 and the Political
Reform Act, 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, shall make or participate in a decision, made by the County or a County board,
commission or committee, if it is reasonably foreseeable that the decision will have a material
effect on any source of income, investment or interest in real property of that person or
Borrower. Interpretation of this Section shall be governed by the definitions and provisions used
in the Political Reform Act, Government Code Section 87100 et seg., its implementing
regulations manual and codes, and Government Code Section 1090.
(d) Borrower shall comply with the conflict of interest provisions set forth in
24 C.F.R. Section 570.611.
Section 7.9 Notices, Demands and Communications.
Formal notices, demands, and communications between the Parties shall be sufficiently
given if and shall not be deemed given unless dispatched by registered or certified mail, postage
prepaid, return receipt requested, or delivered by express delivery service, return receipt
requested, or delivered personally, to the principal office of the Parties as follows:
County: County of Contra Costa
Community Development Department
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director Redevelopment
32
863\54\37218 .6
J
Borrower: Neighborhood House of North Richmond
82023 d Street
Richmond, CA 94804
Attention: Barbara Becnel
Such written notices, demands and communications may be sent in the same manner to
such other addresses as the affected Party may from time to time designate by mail as provided
in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt
as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 7.10 Applicable Law.
This Agreement shall be governed by and construed in accordance with California law.
Section 7.11 Parties Bound.
Except as otherwise limited herein, the provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties and.their heirs, executors, administrators, legal
representatives, successors, and assigns. This Agreement is intended to run with the land and
shall bind Borrower and its successors and assigns in the Property and the Development for the
entire Term, and the benefit hereof shall 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 shall continue in full force and effect
unless the rights and obligations of the Parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 7.14 Force Mature.
In addition to specific provisions of this Agreement, performance by either Party shall not
be deemed to be in Default where delays or defaults are due to war, insurrection, strikes, lock-
outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of
transportation, or court order. An extension of time for any cause will be deemed granted if
notice by the Party claiming such extension is sent to the other within ten (10) days from the
commencement of the cause and such extension of time is not rejected in writing by the other
Party within ten (10) days of receipt of the notice. In no event shall the County be required to
agree to cumulative delays in excess of one hundred-eighty (180) days.
863\54\372185.6
w
Section 7.15 County Approval.
The County has authorized the County Deputy Director-Redevelopment to execute the
Loan Documents and deliver 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. Any consents or approvals required under this Agreement
shall not be unreasonably withheld or made, except where it is specifically provided that a sole
discretion standard applies. The County shall not unreasonably delay in reviewing and .
approving or disapproving any proposal by Borrower made in connection with this Agreement.
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 shall 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 shall 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 shall be disregarded in interpreting any part of the Agreement's provisions.
Section 7.18 Entire Understandin>; of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties with
respect to the Loan. If there is any conflict between this Agreement and the CDBG Project
Agreement, then this Agreement shall control.
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
34
863\54\37218 .6
r
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:
Silvano B. Marchesi,
County Counsel
By:
Eric S. Gelston
Deputy County Counsel
BORROWER:
NEIGHBORHOOD HOUSE OF NORTH RICHMOND,
a California nonprofit public benefit corporation
e
By.
Name:
Its:
35
863\54\372185.6
d � i
1,
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land is situated in the State of California, County of Contra Costa, and is described as
follows:
863\54\372185.6 A-1
O
EXHIBIT B
APPROVED DEVELOPMENT BUDGET
863\54\372185.6 B-1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Community Development Department
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 AND SECURITY AGREEMENT
(West County Human Development Center—Hope House)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT ("Deed of Trust") is made as of this day of , 20_, by and
among Neighborhood House of North Richmond, a California nonprofit public benefit
corporation("Trustor"), 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;
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,
863\54\372267. 1
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 of 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
therefor, whether or not the same are, or shall 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 1.2 below). Said principal and other payments
shall be due and payable as provided in the Note or other Loan Documents, as applicable. The
863\54\372267.5 2
Note and all its terms are incorporated herein by reference, and this conveyance shall secure 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 shall
have the following meanings in this Deed of Trust:
Section 1.1 The term "Loan Agreement" means that certain CDBG Loan Agreement
between Trustor and Beneficiary, dated , 20_, providing for the Beneficiary to
loan to the Trustor Two Hundred Eighty Thousand Dollars ($280,000) for the rehabilitation of
the third floor of the West County Development Center in order to provide twenty (20) beds of
transitional housing for homeless individuals.
Section 1.2 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement,the Regulatory Agreement, and any other debt, loan or security instruments between
Trustor and the Beneficiary relating to the Property.
Section 1.3 The term "Note" means the promissory note in the principal amount of
Two Hundred Eighty Thousand Dollars ($280,000), dated , 20_, 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 1.4 The term "Principal" means the amount required to be paid under the
Note.
863\54\372267.5
Section 1.5 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 shall have 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 shall exercise its rights as agent of Trustor
only in the event that Trustor shall fail to take, or shall fail 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 shall specify 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 shall require 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\54\372267.5 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 shall
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 shall contain 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
therefor, 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 collector 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\54\372267.5 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 shall 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 shall be 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 shall have access to the books and records used in the
operation and maintenance of the Property and shall be liable to account only for those rents
actually received. Beneficiary shall not be 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 shall 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 shall be
payable upon notice from Beneficiary to Trustor requesting payment thereof and shall bear
interest from.the date of disbursement at the rate stated in Section 3.3.
Any entering upon and taking and maintaining of control of the Property by Beneficiary
or the receiver and any application of rents as provided herein shall not cure or waive any default
hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
provided herein. This assignment of rents of the Property shall 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 Char.
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 which are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor
shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a)
the legality thereof shall be 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 therefor on any
863\54\372267.5 6
part of the Security; provided, however, if such taxes, assessments or charges may 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 shall 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 shall fail to pay any of the foregoing items required by this
Section to be paid by Trustor, Beneficiary may (but shall be 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 therefor by Beneficiary,together with interest thereon from the date of such advance at
the maximum rate permitted by law, shall 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 and all Secured Obligations
secured hereunder fulfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall 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, shall be delivered to the Beneficiary upon demand therefor at any time
Prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fail to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven(7) days prior notice to Trustor, may (but shall be under no
obligation to)take out the required policies of insurance and pay the premiums on the same or
may make such repairs or replacements as are necessary and provide for payment thereof, and all
amounts so advanced therefor by the Beneficiary shall become part of the Secured Obligations
(together with interest as set forth below) and shall be secured hereby, which amounts the
Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, shall 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)taking of all or any part of or any interest in the Property by or under
863\54\372267.5 7
-assertion of the power of eminent domain, (2) any damage to or destruction of the Property or in
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 shall 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
upon any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary
shall determine at its sole option. The Beneficiary shall be 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 shall 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 they 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.
lethe event of any Event of Default (as defined in Section 7.1) hereunder, and if the
Beneficiary should employ attorneys or incur other expenses for the collection of amounts due 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 therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred
by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the Secured
Obligations, and shall 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.
863\54\372267.5 8
Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall
constitute a fixtures filing under the California Commercial Code. As to any personal property
not deemed or permitted to be fixtures, this Deed of Trust shall constitute 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 agrees
to perform all acts which the Beneficiary may reasonably request so as to enable the Beneficiary
to maintain such 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 shall deem 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, shall
.have the right, without payment of charges or fees, to inspect the Security.
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 shall 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 shall 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 shall run with the land.
863\54\372267.5 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, Sections 25220 et seq., or any regulation adopted in accordance
therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
Beneficiary shall have the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to
have its reasonable attorneys' fees in connection therewith paid by 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\54\372267. 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 shall not be unreasonably withheld,
Trustor shall not take any remedial action in response to the presence of any Hazardous
Materials on, under or about the Property, nor enter into any settlement agreement, consent
decree, or other compromise in respect to any Hazardous Material Claims, which remedial
action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgement,
impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's
prior consent shall not be necessary in the event that the presence of Hazardous Materials on,
under, or about the Property either poses an immediate threat to the health, safety or welfare of
any individual or is of such a nature that an immediate remedial response is necessary and it is
not reasonably possible to obtain Beneficiary's consent before taking such action, provided that
in such event Trustor shall notify 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 shall be deemed to have willfully permitted or
acquiesced in a release or threatened release of hazardous materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and the Trustor knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
863\54\372267.5 11
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, shall be added to the indebtedness secured by this
Deed of Trust and shall 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 shall constitute events of default ("Events of Default") following the
expiration of any applicable notice and cure periods: (1) failure to make any payment to be paid
by Trustor under the Loan Documents; (2) 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; (3) failure to make any payment 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 shall not be cured within the times
and in the manner provided therein; or(4) a default is declared under the Approved Financing by
the lender of such Approved Financing.
Section 7.2 Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured
Obligations shall immediately become due and payable, upon written notice by the Beneficiary
to the Trustor(or automatically where so specified in the Loan Documents), and no omission on
the part of the Beneficiary to exercise such option when entitled to do so shall 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 shall have occurred and be 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 Security 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 which 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 shall not cure or waive any Event of Default or Notice of
Sale (as defined 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 shall be entitled to exercise every right provided for in this Deed of
863\54\372267.5 12
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 shall 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 then required by
law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation of such Notice of Sale having been
given as required by law, sell the Security, at the time and place of sale fixed by it in the Notice
of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem
expedient and in such order as it may determine 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 shall 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\54\372267.5 . 1 j
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 shall have occurred and be 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, shall have the right to
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 therefor. Any such receiver or receivers shall 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 shall 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 shall be cumulative and concurrent and shall 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 shall exhaust or impair any such right,power or
remedy, or shall 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 shall 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, shall 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(iv) makes or
consents to any agreement subordinating the lien hereof, any such act or omission shall 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 shall any
863\54\372267.5 14
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 shall the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security.
The Beneficiary shall have 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, shall 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 which may become 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 ReconveyanceX Trustee.
Upon written request of Beneficiary stating that all Secured Obligations have been paid
or forgiven, and upon surrender of this Deed of Trust to Trustee for cancellation and retention,
863\54\372267.5 15
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 shall become 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 shall be in writing and shall 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 shall be addressed to:
County of Contra Costa
Community Development Department
2530 Arnold Dr., Suite 190
Martinez, CA 94553
Attention: Deputy Director—Redevelopment
and (2) if intended for Trustor shall be addressed to:
Neighborhood House of North Richmond
82023 d Street
Richmond, CA 94804
Attention: Barbara Becnel
Any notice, demand or communication shall be deemed given, received, made or
communicated on the date personal delivery is effected 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 shall also
apply to and bind 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 shall 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 shall 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.
863\54\372267.
16
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 shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall 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, shall be considered to have been
first paid or applied to the full payment of that portion of the debt which is not secured or
partially secured by the lien of this Deed of Trust.
Section 8.7 Governing Law.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California.
Section 8.8 Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
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 shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
Section 8.10 Actions.
Trustor agrees to 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 shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall 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, shall be conclusive proof of proper
appointment of the successor trustee.
863\54\372267.5 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
madepublic record as provided by law. Except as otherwise provided by law the Trustee isnot
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written.
TRUSTOR:
NEIGHBORHOOD HOUSE OF NORTH RICHMOND,
a California nonprofit public benefit corporation
By:
Name:
Its:
APPROVED AS TO FORM:
Silvano B. Marchesi, County Counsel
By:
Eric S. Gelston
Deputy County Counsel
i
863\54\372267.5 18
STATE OF CALIFORNIA )
ss:
COUNTY OF )
On , before me, , personally
appeared , personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and-that.by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
863\54\372267.
EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, City of Richmond, County of Contra Costa,
and is described as follows:
A-I
863\54\372267.5
NO FEE DOCUMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Community Development Department
2530 Arnold Drive, Suite 190 '
Martinez, CA 94553
Attn: Deputy Director- Redevelopment
No fee for recording pursuant to
Government Code Section 27383
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(CDBG Loan for West County Human Development Center-HOPE House)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is made and entered into as of , 200_, by and between the County of Contra
Costa, a political subdivision of the State of California(the "County"), and Neighborhood House
of North Richmond, a California nonprofit public benefit corporation("Borrower").
RECITALS
A. Borrower owns certain real property located at 820 23rd Street in the City of
Richmond, the County of Contra Costa, State of California, also known as the West County
Development Center, and as more particularly described in Exhibit A (the "Property"). Pursuant
to the Loan Agreement (as defined in Section 1.1) the County will provide a loan of Two
Hundred Eighty Thousand Dollars ($280,000) in CDBG funds to Borrower to assist in the
rehabilitation of the third floor of the.West County Development Center in order to provide
twenty (20) beds of Transitional Housing for homeless individuals, all twenty (20) of which will
be assisted by the County. Capitalized terms used but not defined in this Agreement shall have
the meanings set forth in the Loan Agreement.
B. The County Loan is funded with Community Development Block Grant funds
received by the County from HUD pursuant to Title I of the Housing and Community
Development Act of 1974, (42 U.S.C. 5301 et seq.).
C. The County has agreed to make the County Loan to Borrower on the condition
that the Development be maintained and operated in accordance with restrictions concerning
affordability, operation, and maintenance of the Development, as specified in this Agreement
and the Loan Agreement.
863\54\369771.7 1
D. In consideration of receipt of the County Loan at an interest rate substantially
below the market rate, Borrower has further agreed to observe all the terms and conditions set
forth below.
E. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the County and Borrower wish to enter into
this Agreement.
THEREFORE, the County and Borrower hereby agree as follows.
ARTICLE 1
DEFINITIONS
1.1 Definitions.
When used in this Agreement, the following terms shall have the respective meanings
assigned to them in this Article 1.
(a) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a 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.
(b) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(c) 'Bed" shall mean one (1) or more of the beds in the Development
occupied by or available to Tenants.
(d) "CDBG" shall mean the Community Development Block Grant Program,
operated pursuant to Title I of the Housing and Community Development Act of 1974 (42 U.S.C.
5301, etLe ).
(e) "County-Assisted Beds" shall mean the twenty (20) Beds located at the
Development and designated as assisted by the County and only to be occupied by Tenants (as
such term is defined herein).
(f) "County Deed of Trust" shall mean the deed of trust dated
among Borrower, as trustor, Title Company, as trustee,
and the County, as beneficiary, on the Property which secures repayment of the County Loan and
the performance of the Loan Agreement and this Agreement.
(g) "County Loan" shall mean all funds loaned to Borrower by the County
pursuant to the Loan Agreement.
(h) "County Note" shall mean the promissory note from Borrower to the
County evidencing the County Loan.
863\54\369771.7 2
G) "Development" shall mean the Property and the multi-purpose facility to
be rehabilitated on the Property including the third floor of the West County Development
Center in order to provide twenty (20)beds for Transitional Housing for individuals recovering
from substance abuse, all twenty (20) of which will be assisted by the County, as well as any
additional improvements, and all landscaping, roads and parking spaces existing thereon, as the
same may from time to time exist.
(j) "Fifty Percent Tenant" shall mean a Tenant with an Adjusted Income
which does not exceed fifty percent (50%) of Median Income.
(k) "Fifty Percent Rent" shall mean the maximum allowable rent for a Fifty
Percent Bed pursuant to Section 2.2(b)below. .
(1) "Fifty Percent Beds" shall mean the Beds which, pursuant to Section 2.1
below, are required to be occupied by Fifty Percent Tenants.
(m) "HUD" shall mean the United States Department of Housing and Urban
Development.
(n) "Loan Agreement" shall mean the CDBG Loan Agreement entered into by
and between the County and Borrower, dated
(o) "Median Income" shall mean the median gross yearly income, adjusted for
household size, 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 Borrower with other
income determinations which are reasonably similar with respect to methods of calculation to
those previously published by HUD.
(p) 'Property" has the meaning set forth in paragraph A of the Recitals.
(q) "Rent" shall mean the total of monthly payments by a Tenant for the
following: use and occupancy of the Bed and land and associated facilities, including parking;
any separately charged fees or service charges assessed by 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 Borrower, and paid by the Tenant.
(r) "Tenant" shall mean a person legally occupying a Bed.
(s) "Term" shall mean the term of this Agreement, which shall commence on
the date of this Agreement and shall continue for twenty (20) years; provided, however, the term
863\54\369771.7
may be extended for an additional twenty(20) years pursuant to Section 2.7 of the Loan
Agreement.
{t) "Thirty Percent Tenant" shall mean a Tenant with an Adjusted Income
which does not exceed thirty percent(30%) of Median Income.
(u) "Thirty Percent Rent" shall mean the maximum allowable rent for a Thirty
Percent Bed pursuant to Section 2.2(a) below.
(v) "Thirty Percent Beds" shall mean the Beds which, pursuant to Section 2.1
below, are required to be occupied by Thirty Percent Tenants.
.(w) "Transitional Housing" shall mean housing, the purpose of which is to
facilitate the movement of homeless individuals and families to permanent housing within thirty
(30) months from the beginning of tenancy.
ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) Thirty Percent Beds. Ten (10) of the County-Assisted Beds shall be
rented to and occupied by or, if vacant, available for occupancy by Thirty Percent Tenants.
(b) Fifty Percent Beds. Ten (10) of the County-Assisted Beds shall be rented
to and occupied by or, if vacant, available for occupancy by Fifty Percent Tenants.
2.2 Allowable Rent.
(a) Thirty Percent Rent. Subject to the provisions of Section 2.3 below, the
Rent (including utility allowance) charged to Thirty Percent Tenants shall not exceed thirty
percent (30%) of thirty percent (30%) of the Tenant's monthly Adjusted Income.
(b) Fifty Percent Rent. Subject to the provisions of Section 2.3 below, the
Rent (including utility allowance) charged to Fifty Percent Tenants shall not exceed thirty
percent (30%) of fifty percent (50%) of the Tenant's monthly Adjusted Income.
(c) County Approval of Rents. Initial Rents for all the County-Assisted Beds
shall be approved by the County prior to occupancy. All Rent increases shall also be subject to
the County approval. The County shall provide Borrower with a schedule of maximum
permissible Rents for the County-Assisted Beds annually.
2.3 Increased Income of Tenants.
863\54\369771.7 4
(a) Increased Income From a Thirty Percent Bed to a Fifty Percent Bed. If,
upon recertification of the income of a Tenant of a the County-Assisted Bed, Borrower
determines that a Thirty Percent Tenant no longer qualifies as a Thirty Percent Tenant (but does
qualify as a Fifty Percent Tenant), such Tenant shall be considered a Fifty Percent Tenant (and
the Rent may be increased to Fifty Percent Rent upon sixty (60) days',written notice to the
Tenant) and Borrower shall rent the next available Bed to a Thirty Percent Tenant to comply
with the requirements of Section 2.1 above.
(b) Non-Qualifying Tenant. If, upon recertification of the income of a Tenant
of a County-Assisted Bed, Borrower determines that a Thirty Percent Tenant or a Fifty Percent
Tenant has an Adjusted Income exceeding the maximum qualifying income for a Fifty Percent
Tenant, Borrower shall provide such Tenant with a sixty (60) day notice of termination of
tenancy and Borrower shall require that such Tenant vacate the Development within the time set
forth in such notice.
(c) Termination of Occupancy. Upon termination of occupancy of a County-
Assisted Bed by a Tenant, such Bed shall be deemed to be continuously occupied by a Tenant of
the same income level as the initial income level of the vacating Tenant, until such Bed is
reoccupied, at which time the income character of the Bed shall be redetermined to meet the
occupancy requirements of Section 2.1.
(d) Disabled Persons Occupancy. The Development shall 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 agrees to indemnify, protect, hold harmless and defend (with counsel reasonably
satisfactory to the County) the 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 shall survive expiration of the Term or other
termination of this Agreement, and shall remain in full force and effect.
2.4 Units Available to the Disabled.
In compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794 et seg.),
a minimum of one (1) Bed shall be fully accessible to households with a mobility impaired
member and an additional one (1) Bed shall be fully accessible to hearing and/or visually
impaired persons.
ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification.
863\54\369771.7 5
Borrower will obtain, complete and maintain on file, immediately prior to initial
occupancy and annually thereafter, income certifications from each Tenant renting any of the
Beds. Borrower shall make a good faith effort to verify that the income provided by an applicant
or occupying Tenant in an income certification is accurate by taking two or more of the
following steps as a part of the verification process: (a) obtain a pay stub for the most recent pay
period; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency
or similar search; (d) obtain an income verification form from the applicant's current employer;
(e) 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 (f) if the applicant is unemployed and has no such tax return, obtain another form of
independent verification. Copies of Tenant income certifications shall be available to the County
upon request.
3.2 Annual Report to the County.
Borrower shall submit to the County (a) not later than the sixtieth (60th) 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 Beds, 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 the County in order to comply with reporting requirements of
HUD, the State.of California, or the County.
3.3 Additional
Information.
Borrower shall provide any additional information reasonably requested by the County.
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.
3.4 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 of Tenants. All Tenant lists, applications and
waiting lists relating to the Development shall at all times be kept separate and identifiable from
any other business of Borrower and shall be maintained as required by the County, in a
reasonable condition for proper audit and 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 Beds for a period of at least five (5) years.
3.5 On-site Inspection.
The County shall have the right to perform an on-site inspection of the Development at
least one (1)time per year. Borrower agrees to cooperate in such inspection.
863\54\369771.7 6
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Development Use.
The Development shall be operated only as transitional housing facility for homeless
families and individuals with space in the Development for individuals recovering from
substance abuse.
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 prevent any penalty from
accruing, or any line or charge from attaching to the Property; provided, however,that Borrower
shall have the right to 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, shall immediately pay or discharge any decision
or judgment rendered against it, together with all costs, charges and interest.
4.4 Property Tax Exemption.
Developer shall not apply for a property tax exemption for the property under any
provision of law except California Revenue and Taxation Section 214(g) or 214(h), without the
prior written consent of the County.
ARTICLE 5 .
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities.
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 shall have no
responsibility over management of the Development. Borrower shall retain a professional
property management company approved by the County in its reasonable discretion to perform
its management duties hereunder, unless the County approves self management by Borrower. A
resident manager shall also be required.
5.2 Management Agent: Periodic Reports.
863\54\369771.7 7
Unless the County has approved self-management by Borrower, the Development shall at
all times be managed 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 (as approved, the "Management Agent").
Borrower shall submit for the County's approval the identity of any proposed Management Agent
(and the County hereby pre-approves Borrower as the initial Management Agent). 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 Borrower in writing. Unless the proposed management agent is disapproved
by the County within thirty (30) days, which disapproval shall state with reasonable specificity
the basis for disapproval, it shall be deemed approved.
5.3 Periodic Performance Review.
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. 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 judgement 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'Borrower to retain a Management Agent, including the reasons therefor.
Within fifteen (15) days of receipt by Borrower of such written notice, the County staff and
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, the 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 contract can be 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 shall constitute default under this Agreement, and
the County may enforce this provision through legal proceedings as specified in Section 6.7,
below.
863\54\369771.7 8
5.5 Approval of Management Policies.
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.
Borrower agrees, for the entire Term of this Agreement, to maintain 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.
The County places prime importance on quality maintenance to protect its investment and
to ensure that all the 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. Borrower
shall make all repairs and replacements necessary to keep the improvements in good condition
and repair.
In the event that Borrower breaches any of the covenants contained in this section and
such default continues for a period of ten(10) 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 preservati6n by the County and/or costs of
such cure, which amount shall be promptly paid by Borrower to the County upon demand.
ARTICLE 6
MISCELLANEOUS
6.1 Lease Provisions.
863\54\369771.7 9
Borrower shall use a form of Tenant lease approved by the County. The form of Tenant
lease shall comply with all requirements of this Agreement and the Loan Agreement, and shall,
among other matters:
(a) provide for termination of the lease and consent by the Tenant to
immediate eviction for failure: (1)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(2)to qualify as a Thirty Percent Tenant or a Fifty Percent Tenant.
(b) be for an initial term of not less than thirty (30) days, 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, however Rent may not be raised more often than once a year.
Borrower will provide each Tenant with at least sixty (60) days' written notice of any increase in
Rent applicable to such Tenant.
6.2 Nondiscrimination.
All of the Beds shall be available for occupancy on a continuous basis to members of the
general public who are homeless and income eligible. Borrower shall not give preference to any
particular class or group of persons in renting or selling the Beds, except to the extent that the
Beds are required to be leased to Thirty Percent Tenants or Fifty Percent Tenants pursuant to this
Agreement. There shall 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), age (except for lawful senior housing), ancestry, or disability,
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Bed nor shall
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 Bed or
in connection with the employment of persons for the rehabilitation, operation and management
of any Bed.
6.3 Term.
The provisions of this Agreement shall apply to the Property for the entire Term even'if
the County Loan is paid in full prior to the end of the Term. This Agreement shall bind 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 makes the County 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
863\54\369771.7 10
on projects assisted under the CDBG Program as contained in 42 U.S.C. 5301 et-seq., 24 C.F.R.
Part 570, and other implementing rules and regulations.
(b) Borrower shall ensure that the Development meets the Housing Quality
Standards pursuant to 24 C.F.R. 92.251 throughout the Term.
6.5 Notice of Expiration of Term.
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 (a)the anticipated date of the
expiration of the Term, (b) any anticipated increase in Rent upon the expiration of the Term, (c)
a statement that a copy of such notice will be sent to the County, and (d) 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. In
addition, Borrow shall comply with the requirements set forth in California Government Code
Sections 65 863.10 and 65863.11.
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 shall run with the land, and shall bind all successors in
title to the Property, provided, however, that on the expiration of the Term of this Agreement
said covenants and restrictions shall expire. Each and every contract, deed or other instrument
hereafter executed covering or conveying the Property or any portion thereof, shall be held
conclusively to have been executed, delivered and accepted subject to such 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 shall have the right to enforce this Agreement by any or all of the following
actions, or any other remedy provided by law:
(a) Calling the County Loan. The County may declare a default under the
County Note, accelerate the indebtedness evidenced by the County Note, and proceed with
foreclosure under the County Deed of Trust.
(b) Action to Compel Performance or for Damages. The County may,bring
an action at law or in equity to compel Borrower's performance of its obligations under this
Agreement, and/or for damages.
863\54\369771.7 11
(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 shall be entitled to
all costs and expenses of suit, including attorneys' fees. This section shall be interpreted in
accordance with California Civil Code Section 1717 and judicial decisions interpreting that
statute.
6.9 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.
6.10 Governing Law.
This Agreement shall be 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 shall, or shall be
deemed to, extend to or affect any other provision of this Agreement.
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 shall 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:
Borrower: Neighborhood House of North Richmond
820 23 d Street
Richmond, CA 94804
Attention: Barbara Becnel
County: County of Contra Costa
Community Development Department
2530 Arnold Drive, Suite 190
863\54\369771.7 12
Martinez, CA 94553
Attention: Deputy Director- Redevelopment
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 shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining portions of this Agreement shall 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.
863\54\369771.7 13
IN WITNESS WHEREOF,the County and Borrower have executed this Agreement by
duly authorized representatives, all on the date first written above.
BORROWER:
NEIGHBOHOOD HOUSE OF NORTH RICHMOND,
a California nonprofit public benefit corporation
By:
Name:
Its:
i
COUNTY:
COUNTY OF CONTRA COSTA,
a political subdivision of the State of California
By:
James Kennedy
Deputy Director—Redevelopment
APPROVED AS TO FORM:
Silvano B. Marchesi, County Counsel
By:
Eric S. Gelston
Deputy County Counsel
863\54\369771.7 14
STATE OF CALIFORNIA )
COUNTY OF )
On , 20 before me, ,
Notary Public, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged.to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
STATE OF CALIFORNIA )
COUNTY OF )
On , 20 before me, ,
Notary Public, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
863\54\369771.7 15
EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, the County of Contra Costa, and is described
as follows:
863\54\369771.7 A-1
PROMISSORY NOTE
(West County Human Development Center—Hope House)
$280,000 Martinez, California
200_
FOR VALUE RECEIVED,the undersigned,Neighborhood House of North Richmond, a
California nonprofit public benefit corporation ("Borrower") hereby promises to pay to the order
of the County of Contra Costa, a political subdivision of the State of California, 2530 Arnold
Drive, Suite 190, Martinez, California 94553 ("Holder"), a principal amount of up to Two
Hundred Eighty Thousand Dollars ($280,000) or so much thereof as is disbursed to Borrower
pursuant to the Loan Agreement(as defined below), plus interest thereon pursuant to Section 2
below.
1. Borrower's Obligation. This promissory note (the "Note") evidences Borrower's
obligation to pay Holder the principal amount of Two Hundred Eighty Thousand Dollars
($280,00) of CDBG Loan Funds to assist in the rehabilitation of the Development (the "Loan"),
pursuant to the CDBG Loan Agreement between Borrower and Holder of even date herewith
(the "Loan Agreement"). All capitalized terms not otherwise defined in this Note shall have the
meanings set forth in the Loan Agreement.
2. Interest. The principal balance of this Note shall not bear interest; provided,
however, if a Default occurs, interest on all of the Loan shall begin to accrue, as of the date of
Default and continuing until such time as the Loan funds are repaid in full or the Default is
cured, at the Default Rate.
3. Term and Repayment Requirements. The term of this Note shall commence on
the date of this Note and shall expire on the date which is twenty (20) years from the date of this
Note (the "Term"); provided however, that Holder may extend the Term for an additional twenty
(20) years in the event the term of the Loan Agreement is extended pursuant to Section 2.7(a) of
the Loan Agreement. This Note shall be due and payable as set forth in Section 2.7 of the Loan
Agreement.
4. No Assumption. This Note shall not be assumable by the successors and assigns
of Borrower without the prior written consent of Holder.
5. Security. This Note is to be secured by the Deed of Trust on the Property wherein
Borrower is the trustor and Holder is the beneficiary.
6. Terms of Payment.
(a) All payments due under this Note shall be paid in currency of the United
States of America, which at the time of payment is lawful for the payment of public and private
debts.
(b) All payments on this Note shall be paid to Holder at Community
Development Department, 2530 Arnold Drive, Suite 190, Martinez, CA 94553, Attention:
1
863\54\372210.3
Deputy Director- Redevelopment or to such other place as Holder of this Note may from time to
time designate.
(c) All payments on this Note shall be without expense to Holder, and
Borrower agrees to 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.
(d) 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 which would exceed 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 shall
automatically be deducted from the principal balance owing on this Note, so that in no event
shall Borrower be obligated under the terms of this Note to pay any interest which would exceed
the lawful rate.
(e) This Note shall be nonrecourse to Borrower, pursuant to, and except as
provided in, Section 2.8 of the Loan Agreement.
7. Default.
(a) Any of the following shall constitute an event of default under this Note:
(i) Any failure to pay, in full, any payment required under this Note
when due following written notice by Holder of such failure and ten(10) days opportunity to
cure;
(ii) Any failure in the performance by Borrower of any term,
condition, provision or covenant set forth in this Note subject to the notice and cure period set
forth in Section 6.1(c) of the Loan Agreement;
(iii) The occurrence of any event of default under the Loan Agreement,
the Deed of Trust, or the Regulatory Agreement, or other instrument securing the obligations of
Borrower under this Note or under any other promissory notes hereafter issued by Borrower to
Holder pursuant to the Loan Agreement or the Deed of Trust, subject to notice and cure periods,
if any, set forth therein.
(b) Upon the occurrence of one or more of the foregoing events 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 shall at the option of Holder become
immediately due and payable upon written notice by Holder to Borrower without further
demand.
(c) Holder's failure to exercise the remedy set forth in Subsection 7(b) above
or any other remedy provided by law upon the occurrence of one or more of the foregoing events
of default shall not constitute a waiver of the right to exercise any remedy at any subsequent time
2
863\54\372210.3
in respect to the same or any other default. The acceptance by Holder hereof of any payment
which is less than the total of all amounts due and payable at the time of such payment shall 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, withoufthe
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
shall not operate to release, discharge, modify, change or affect the original-liability of Borrower
under this Note, either in whole or in part.
(c) The obligations of Borrower under this Note shall be 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.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower shall be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as the 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 may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change, modification or discharge
is sought,
(d) This Note shall be governed by and construed in accordance with the laws
of the State of California.
(e) The times for the performance of any obligations hereunder shall be
strictly construed, time being of the essence.
(f) This document, together with the Loan Documents, contains the entire
agreement between the parties as to the Loan. It may not be modified except upon written
consent of the parties.
J
863\54\372210.3
}
BORROWER:
NEIGHBORHOOD HOUSE OF NORTH RICHMOND,
a California nonprofit public benefit corporation
By:
Name:
Its:
APPROVED AS TO FORM:
Silvano B. Marchesi, County Counsel
By:
Eric S. Gelston
Deputy County Counsel
4
863\54\372210.3