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HomeMy WebLinkAboutOrd. 1541-2017City of South San Francisco P.O. Box 711 (City Hall, Igo 400 Grand Avenue) South San Francisco, CA City Council Ordinance: ORD 1541 -2017 File Number: 17 -936 Enactment Number: ORD 1541 -2017 ORDINANCE APPROVING A DEVELOPMENT AGREEMENT BETWEEN ROEM DEVELOPMENT CORPORATION AND THE CITY OF SOUTH SAN FRANCISCO FOR THE DEVELOPMENT OF THE PROPERTIES LOCATED AT 418 LINDEN AVENUE AND 201 -219 GRAND AVENUE. WHEREAS, the City of South San Francisco ( "City ") is the owner of certain real property located in the City of South San Francisco, California, known as County Assessor's Parcel Number 012 - 314 -010 ( "418 Linden Avenue "); and WHEREAS, the City is also the owner of former Redevelopment Agency property located in the City of South San Francisco, California, known as County Assessor's Parcel Number 012 - 316 -110 (201 Grand Avenue), 012 - 316 -100 (207 Grand Avenue), 012 -316 -090 and 012- 316 -080 (217 -219 Grand Avenue) (collectively, the "201 Grand Avenue "); and WHEREAS, in December 2015, the City approved entitlements for a residential project at 418 Linden Avenue and a mixed -use project at 201 Grand Avenue ( "Project "); and WHEREAS, in December 2016, the City and Agency selected a developer, ROEM Development Corporation ( "Developer "), to develop the 418 Linden Avenue and 201 Grand Avenue Projects; and WHEREAS, Developer seeks to purchase the property from the City, and seeks approval of a Development Agreement; and WHEREAS, the City Council certified an Environmental Impact Report (` EIR ") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of CEQA and CEQA Guidelines, which analyzed the potential environmental impacts of the development of the Downtown Station Area Specific Plan; and WHEREAS, the 418 Linden Avenue and 201 Grand Avenue Projects are both within the Downtown Station Area Specific Plan ( "DSASP ") area and were found to be within the parameters analyzed within the DSASP EIR; and WHEREAS, the Project will not result in any new significant environmental effects or a substantial increase City of South San Francisco Page 1 File Number., 17 -936 Enactment Number. ORD 1541 -2017 in the severity of any previously identified effects beyond those disclosed and analyzed in the DSASP EIR, and would not constitute a change in circumstances that would require additional environmental review; and WHEREAS, the Planning Commission held a properly noticed public hearing on July 6, 2017, to solicit public comment and consider the Development Agreement, take public testimony, and make a recommendation to the City Council on the Development Agreement; and WHEREAS, on September 6, 2017, the City Council for the City of South San Francisco held a lawfully noticed public hearing to consider the Development Agreement. NOW, THEREFORE, BE IT ORDAINED that based on the entirety of the Record before it, as described below, the City Council of the City of South San Francisco does hereby ORDAIN as follows: SECTION I. FINDINGS. A. General Findings 1. The foregoing recitals are true and correct and made a part of this Ordinance. 2. The Development Agreement (Exhibit A) and its attachments, is incorporated by reference and made a part of this Ordinance, as if they were each set forth fully herein. 3. The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA 94080, and in the custody of the Chief Planner, Sailesh Mehra. 4. The 418 Linden Avenue and 201 Grand Avenue Projects are consistent with the General Plan by creating a mixed -use environment that emphasizes pedestrian - activity with buildings built up to the property line on Linden Avenue and Grand Avenue, respectively, provide well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan, are consistent with the City's Design Guidelines as they relate to building design, form and articulation and in the case of the 201 Grand Avenue project, provide commercial uses along both Grand and Cypress Avenues. B. Development Agreement 1. The Developer and City have negotiated a Development Agreement pursuant to Government Code section 65864 et seq. The Development Agreement, attached hereto as Exhibit A, sets for the duration, property, project criteria, and other required information identified in Government Code section 65865.2. Based on the findings in support of the Project, the City Council finds that the Development Agreement is City of South San Francisco Page 2 File Number: 17 -936 Enactment Number. ORD 1541 -2017 consistent with the objectives, policies, general land uses and programs specified in the South San Francisco General Plan and any applicable zoning regulations. 2. The Development Agreement is compatible with the uses authorized in, and the regulations prescribed for the land use district in which the real property is located. The subject site is suitable for the type and intensity of the land use being proposed. The General Plan specifically contemplates the proposed type of project and the suitability of the site for development was analyzed thoroughly in the environmental document prepared for the Project. 3. The Development Agreement is in conformity with public convenience, general welfare and good land use practice. 4. The Development Agreement will not be detrimental to the health, safety and general welfare. 5. The Development Agreement will not adversely affect the orderly development of property or the preservation of property values. SECTION II. DEVELOPMENT AGREEMENT. The City Council of the City of South San Francisco hereby: Approves the Development Agreement between ROEM Development Corporation and the City of South San Francisco for the development of the properties located at 418 Linden Avenue and 201 -219 Grand Avenue, attached hereto as Exhibit A and incorporated herein. Authorizes the City Manager to enter into and execute the Development Agreement on behalf of the City Council in substantially the same form as attached hereto as Exhibit A; to make any revisions, amendments, or modifications, subject to the approval of the City Attorney, deemed necessary to carry out the intent of this Ordinance and which do not materially alter or increase the City's obligations thereunder. SECTION III. SEVERABILITY. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of this Ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this Ordinance are severable. The City Council of the City of South San Francisco hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof irrespective of the fact that any one or more sections, subsections, subdivisions, City of South San Francisco Page 3 File Number: 17 -936 Enactment Number: ORD 1541 -2017 paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable. SECTION IV. PUBLICATION AND EFFECTIVE DATE. Pursuant to the provisions of Government Code Section 36933, a summary of this Ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this Ordinance is scheduled to be adopted, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of this Ordinance. Within fifteen (15) days after the adoption of this Ordinance, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of the full text of this Ordinance along with the names of those City Councilmembers voting for and against this Ordinance or otherwise voting. This Ordinance shall become effective thirty (30) days from and after its adoption. Introduced at a regular meeting of the City Council of the City of South San Francisco, held the 6th day of September, 2017. At a meeting of the City Council on 10/11/2017, a motion was made by Richard Garbarino, seconded by Liza Normandy, that this Ordinance be approved. The motion passed. Yes: 5 Vice Mayor Normandy, Councilmember Garbarino, Councilmember Matsumoto, Mayor Gupta, and Councilmember Addiego Mayor Pradeep Gupta, Mayor City of South San Francisco Page 4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City Clerk City of South San Francisco P.O. Box 711 South San Francisco, CA 94083 ______________________________________________________________________________ (Space Above This Line Reserved For Recorder’s Use) This instrument is exempt from recording fees pursuant to Government Code section 27383. Documentary Transfer Tax is $0.00 (exempt per Revenue & Taxation Code section 11922, Transfer to Municipality). DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF SOUTH SAN FRANCISCO AND ROEM DEVELOPMENT CORPORATION GRAND AND LINDEN PROJECT SOUTH SAN FRANCISCO, CALIFORNIA Exhibit A DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (“Agreement”) is entered into as of _______________, 2017 by and between ROEM Development Corp, a California corporation (“Developer”), and the City of South San Francisco (“City”), pursuant to California Government Code (“Government Code”) sections 65864 et seq. ROEM Development Corp and the City are sometimes collectively referred to herein as “Parties.” RECITALS A. To strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California enacted California Government Code sections 65864 et seq. (the “Development Agreements Statute”), which authorizes the City to enter into an agreement with any person having a legal or equitable interest in real property for the development of such property. B. Pursuant to Government Code section 65864, City has adopted procedures and requirements for the consideration of development agreements (South San Francisco Municipal Code (“SSFMC”) Chapter 19.60). This Agreement has been processed, considered, and executed in accordance with such procedures and requirements. C. The purpose of this Agreement is to provide for the development of a high-density, mixed use project including residential units and ground floor commercial units located on the real property commonly known as 201-219 Grand Avenue, with Assessor’s Parcel Numbers: 012-316- 110, 012-316-100, 012-316-090 and 012-316-080 (the “Grand Project Site”), as more particularly described on Exhibit A attached hereto; and, a high-density residential project located on the real property commonly known as 418 Linden Avenue, with Assessor’s Parcel Number 012-314-010 (the “Linden Project Site”), as more particularly described on Exhibit B attached hereto. D. Concurrently with the approval of this Agreement, Developer shall enter into a Purchase and Sale Agreement and Joint Escrow Instructions between South San Francisco Successor Agency, as Seller, and Developer, as Buyer, whereby Developer shall have the right, upon satisfaction of certain terms and conditions contained therein, to acquire a fee title interest in the Grand Project Site (the “Grand PSA”); and, a Purchase and Sale Agreement and Joint Escrow Instructions between the City, as Seller, and Developer, as Buyer whereby Developer shall have the right, upon satisfaction of certain terms and conditions contained therein, to acquire a fee title interest in the Linden Project Site (the “Linden PSA”). The Grand Project Site and the Linden Project Site are collectively referred to herein as the “Project Site” or the “Properties”. E. As set forth herein, upon Developer’s acquisition of the Properties, Developer shall re-develop the Grand Project Site into a high-density, mixed-use project including 46 residential units, nine (9) of which are required to be below market rate (“BMR”) units with the following affordability levels: three (3) units affordable to households earning 80-120% of the Area Median Income (AMI), five (5) units affordable to housing holds earning 60%-80% AMI, and one (1) unit affordable to households earning up to 60% AMI, and ground floor retail (the “Grand Project”); and, Developer shall re-develop the Linden Project Site into a high-density, residential use only 2 project, with some flexibility for live/work spaces, including 38 residential units, eight (8) of which are required to be BMR units with the following levels of affordability: two (2) units affordable to households earning 80-120% AMI, five (5) units affordable to households earning 60-80% AMI, and one (1) unit affordable to households earning up to 60% AMI (the “Linden Project”). The Grand Project and the Linden Project are collectively referred to herein as the “Project” or the “Projects”. F. Both Projects are fully entitled, and have obtained planning approval from the Design Review Board, Planning Commission, Successor Agency and City Council as well as the Oversight Board. The approved and in effect Grand Project entitlements include Planning Project: P15-0017; Use Permit UP15-0003; Design Review DR15-0016; and Parking Exception PE15- 0001. The approved and in effect Linden Project entitlements include Planning Project P15-0016; Use Permit UP15-0002; Design Review DR15-0015; and Parking Exception PE15-0002. Because the City provided substantial financial support of the pre-development entitlement costs of these Projects, the source of City funds triggers the affordable housing mandates of the Projects set forth in this Agreement. The entitlements listed in this Recital F and all Conditions of Approval and Mitigation Measures imposed on the entitlements are collectively referred to herein as the “Project Approvals.” The Project Approvals are described in Exhibit B attached hereto. G. City has determined that the Project presents certain public benefits and opportunities which are advanced by City and Developer entering into this Agreement. This Agreement will, among other things, (1) reduce uncertainties in planning and provide for the orderly development of the Project; (2) provide needed residential development consistent with the Downtown Station Area Specific Plan; (3) mitigate any significant environmental impacts; (4) provide for and generate substantial revenues for the City in the form of one time and annual fees and exactions and other fiscal benefits; and (5) otherwise achieve the goals and purposes for which the Development Agreement Statute was enacted. H. In exchange for the benefits to City described in the preceding Recital, together with the other public benefits that will result from the development of the Project, Developer will receive, by this Agreement, assurance that it may proceed with the Project in accordance with the “Applicable Law” (defined in section 6.3 below), and therefore desires to enter into this Agreement. I. On _________, following a duly noticed public hearing, the Planning Commission adopted Resolution No. ____________ recommending that the City Council approve this Agreement. J. With the Planning Commission’s recommendation set forth in its Resolution No. _______________ , the City Council, after conducting a duly noticed public hearing, has found that this Agreement is consistent with the General Plan and Zoning Ordinance and has conducted all necessary proceedings in accordance with the City’s rules and regulations for the approval of this Agreement. In accordance with SSFMC section 19.60.120, the City Council, at a duly noticed public hearing, adopted Ordinance No. __________, approving and authorizing the execution of this Agreement. 3 AGREEMENT NOW, THEREFORE, the Parties, pursuant to the authority contained in Government Code sections 65864 through 65869.5 and Chapter 19.60 of the South San Francisco Municipal Code and in consideration of the mutual covenants and agreements contained herein, agree as follows: ARTICLE 1 DEFINITIONS 1.1 “Administrative Project Amendment” shall have that meaning set forth in Section 7.1 of this Agreement. 1.2 “Administrative Agreement Amendment” shall have that meaning set forth in Section 7.2 (a) of this Agreement. 1.3 “Affiliate of Developer” shall have that meaning set forth in Section 8.1 of this Agreement. 1.4 “Agreement” shall mean this Development Agreement. 1.5 “Applicable Law” shall have that meaning set forth in Section 6.3 of this Agreement. 1.6 “CEQA” shall have that meaning set forth in Section 3.3 of this Agreement. 1.7 “City” shall mean the City of South San Francisco. 1.8 “City Law” shall have that meaning set forth in Section 6.5 of this Agreement. 1.9 “Claims” shall have that meaning set forth in Section 6.10 of this Agreement. 1.10 “Control” shall have that meaning set forth in Section 8.1 of this Agreement. 1.11 “Controlled” shall have that meaning set forth in Section 8.1 of this Agreement. 1.12 “Controlling” shall have that meaning set forth in Section 8.1 of this Agreement. 1.13 “Deficiencies” shall have that meaning set forth in Section 9.2 of this Agreement. 1.14 “Developer” shall mean ROEM Development Corporation, a California corporation or its assignee. 1.15 “Development Agreements Statute” shall have that meaning set forth in Recital A of this Agreement. 1.16 “Development Fees” shall have that meaning set forth in Section 3.2 of this Agreement. 1.17 “DSASP” shall have that meaning set forth in Section 3.1 of this Agreement. 4 1.18 “Effective Date” shall have that meaning set forth in Section 2.1 of this Agreement. 1.19 “EIR” shall have that meaning set forth in Section 3.1. 1.20 “Force Majeure Delay” shall have that meaning set forth in Section 10.3 1.21 “Grand PSA” is defined as the “Purchase and Sale Agreement and Joint Escrow Instructions between the City of South San Francisco and ROEM Development Corp. dated __________, relating to the Grand Project Site and approved pursuant to South San Francisco Oversight Board Resolution No. ______. 1.22 “GDP” shall have that meaning set forth in Section 10.3 1.23 “Indemnitees” shall have that meaning set forth in Section 6.10 of this Agreement. 1.24 “Judgment” shall have that meaning set forth in Section 9.2 of this Agreement. 1.25 “Linden PSA” is defined as the “Purchase and Sale Agreement and Joint Escrow Instructions between the City of South San Francisco and ROEM Development Corp. dated _________, regarding the Linden Project Site, and approved pursuant to South San Francisco City Council Resolution No. ______. 1.26 “Parties” shall mean the Developer and City, collectively. 1.27 “Periodic Review” shall have that meaning set forth in Section 10.5 of this Agreement. 1.28 “Project” or “Projects” shall have that meaning set forth in Recital E of this Agreement. 1.29 “Project Approvals” shall have that meaning set forth in Recital F of this Agreement. 1.30 “Project Site” shall have that meaning set forth in Recital D of this Agreement. 1.31 “PSA” shall mean the Grand PSA and the Linden PSA, together. 1.32 “Severe Economic Recession” shall have that meaning set forth in Section 10.3 1.33 “SSFMC” shall have the meaning set forth in Recital B of this Agreement. 1.34 “Subsequent Approvals” shall mean those certain other land use approvals, entitlements, and permits in addition to the Project Approvals that are necessary or desirable for the Project. In particular, for example, the parties contemplate that Developer may, at its election, seek approvals for the following: amendments of the Project Approvals, unless determined not required pursuant to the further provisions of this Agreement: improvement agreements, grading permits, building permits, lot line adjustments, sewer and water connection permits, certificates of 5 occupancy, subdivision maps, rezonings, development agreements, use permits, sign permits and any amendments to, or repealing of, any of the foregoing. 1.35 “Tax” and “Taxes” shall not include any generally applicable City Business License Tax or locally imposed Sales Tax. 1.36 “Term” shall have that meaning set forth in Section 2.2 of this Agreement. ARTICLE 2 EFFECTIVE DATE AND TERM 2.1 Effective Date. This Agreement shall become effective upon the date when the following have occurred: (i) this Agreement is executed pursuant to the resolution and ordinance described in Recitals I and J, and (ii) the Grand PSA and the Linden PSA are both fully executed and effective (the “Effective Date”). If both PSAs are not executed and effective by December 31, 2017, this Agreement shall terminate and have no further force or effect unless the Developer and City have mutually agreed in writing to extend the date. 2.2 Term. The term of this Agreement (“Term”) shall commence upon the Effective Date and, unless terminated pursuant to this Agreement, shall continue until completion of construction of the Project, as evidenced by a final certificate of occupancy. ARTICLE 3 OBLIGATIONS OF DEVELOPER 3.1 Obligations of Developer Generally. The Parties acknowledge and agree that the City’s agreement to perform and abide by the covenants and obligations of City set forth in this Agreement is a material consideration for Developer’s agreement to perform and abide by its long term covenants and obligations, as set forth herein. The Parties acknowledge that many of Developer’s long term obligations set forth in this Agreement are in addition to Developer’s agreement to perform all the applicable mitigation measures identified in the Downtown Station Area Specific Plan (“DSASP”) and Environmental Impact Report (“EIR”). 3.2 City Fees. (a) Developer shall pay those processing, inspection and plan checking fees and charges required by the City for processing applications and requests for Subsequent Approvals under the applicable non-discriminatory regulations in effect at the time such applications and requests are submitted to the City. (b) Developer agrees that Developer shall be responsible for the payment of development fees, charges, exactions, and taxes (“Development Fees”) generally applicable, and specifically applicable to the Project. Further, nothing herein shall be construed to relieve the Property from common benefit assessments levied against it and similarly situated properties by the City pursuant to and in accordance with any statutory procedure for the assessment of property to pay for infrastructure and/or services that benefit the Property. This shall not prohibit City from imposing on Developer any fee or obligation that is imposed by a regional agency in accordance 6 with state or federal obligations and required to be implemented by City. Development Fees shall be due upon issuance of building permits, except as otherwise provided under the Agreement or the Project Approvals. 3.3 Mitigation Measures. Developer shall comply with the Mitigation Measures included in the Project Approval and those identified and approved in the Downtown Station Area Plan EIR, in accordance with the California Environmental Quality Act (“CEQA”) or other law. 3.4 Compliance with Terms of the Purchase and Sale Agreement. Developer shall comply with all terms of the Grand PSA and the Linden PSA. In the event that either the Linden PSA or the Grand PSA is terminated under its terms prior to the transfer of real property to the Developer, this Agreement shall terminate and shall have no further force or effect, unless otherwise agreed to by both parties in writing. 3.5 Cost of Acquisition and Construction. Except as expressly set forth herein, Developer shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the acquisition of the Properties and construction of the Project, specifically excluding any relocation obligations, and none of such costs and expenses shall be the obligation of the City. 3.6 Affordable Housing. Developer acknowledges that upon Developer’s acquisition of the Properties, the Properties will be subject to recorded covenants that will restrict use of the Properties for a term of not less than fifty-five (55) years, commencing upon the issuance of a final certificate of occupancy for the Project, as further set forth in the Linden Affordable Housing Agreement (“Linden AHA”) and the Grand Affordable Housing Agreement (“Grand AHA”), each substantially in the forms attached hereto as Exhibits C and D (the “AHAs”), each of which shall be recorded in the Official Records on the date that Developer acquires the Project Site. The AHAs shall provide that not less than twenty percent (20%) of the residential units in the Project as a whole shall be rented at an affordable cost (as defined in the respective AHA) and also shall ensure that use of any city financial assistance shall be utilized by Developer in a manner consistent with those terms imposed on the use of said City financial assistance. ARTICLE 4 OBLIGATIONS OF CITY 4.1 Obligations of City Generally. The parties acknowledge and agree that Developer’s agreement to perform and abide by its covenants and obligations set forth in this Agreement, including Developer’s decision to process the development of the Project in the City, is material consideration for City’s agreement to perform and abide by the long term covenants and obligations of City, as set forth herein. 4.2 Protection of Vested Rights. To the maximum extent permitted by law, City shall take any and all actions as may be necessary or appropriate to ensure that the vested rights provided by this Agreement can be enjoyed by Developer and to prevent any City Law, as defined above, from invalidating or prevailing over all or any part of this Agreement. City shall cooperate with Developer and shall undertake such actions as may be necessary to ensure this Agreement remains in full force and effect. Except as authorized in Section 6.9, City shall not support, adopt, or enact 7 any City Law, or take any other action which would violate the express provisions or intent of the Project Approvals or the Subsequent Approvals. 4.3 Availability of Public Services. To the maximum extent permitted by law and consistent with its authority, City shall assist developer in reserving such capacity for sewer and water services as may be necessary to serve the Project. 4.4 Developer’s Right to Rebuild. City agrees that Developer may, but shall not be obligated to, renovate or rebuild all or any part of the Project within the Term of this Agreement should it become necessary due to damage or destruction. Any such renovation or rebuilding shall be subject to the square footage and height limitations vested by this Agreement, and shall comply with the Project Approvals, the building codes existing at the time of such rebuilding or reconstruction, and the requirements of CEQA. 4.5 Expedited Plan Check Process. The City agrees to provide an expedited plan check process for the approval of Project drawings consistent with its existing practices for expedited plan checks. The City shall use reasonable efforts to provide such plan checks within 3 weeks of a submittal that meets the requirements of Section 5.2. The City acknowledges that the City’s timely processing of Subsequent Approvals and plan checks is essential to the Developer’s ability to achieve the Schedule of Performance. ARTICLE 5 COOPERATION – IMPLEMENTATION 5.1 Processing Application for Subsequent Approvals. By approving the Project Approvals, City has made a final policy decision that the Project is in the best interests of the public health, safety and general welfare. Accordingly, City shall not use its discretionary authority in considering any application for a Subsequent Approval to change the policy decisions reflected by the Project Approvals or otherwise to prevent or delay development of the Project as set forth in the Project Approvals. Instead, the Subsequent Approvals shall be deemed to be tools to implement those final policy decisions. 5.2 Timely Submittals By Developer. Developer acknowledges that City cannot expedite processing Subsequent Approvals until Developer submits complete applications on a timely basis. Developer shall use its best efforts to (i) provide to City in a timely manner any and all documents, applications, plans, and other information necessary for City to carry out its obligations hereunder; and (ii) cause Developer’s planners, engineers, and all other consultants to provide to City in a timely manner all such documents, applications, plans and other necessary required materials as set forth in the Applicable Law. It is the express intent of Developer and City to cooperate and diligently work to obtain any and all Subsequent Approvals. 5.3 Timely Processing By City. Upon submission by Developer of all appropriate applications and processing fees for any Subsequent Approval, City shall promptly and diligently commence and complete all steps necessary to act on the Subsequent Approval application including, without limitation: (i) providing at Developer’s expense and subject to Developer’s request and prior approval, reasonable overtime staff assistance and/or staff consultants for planning and processing of each Subsequent Approval application; (ii) if legally required, 8 providing notice and holding public hearings; and (iii) acting on any such Subsequent Approval application. City shall ensure that adequate staff is available, and shall authorize overtime staff assistance as may be necessary, to timely process such Subsequent Approval application. If overtime staff is necessary, City shall first obtain Developer’s prior written consent prior to the incurring overtime fees and passing such overtime fees on to Developer for reimbursement. 5.4 Denial of Subsequent Approval Application. The City may deny an application for a Subsequent Approval only if such application does not comply with the Agreement or Applicable Law (as defined below) or with those state or federal law, regulations, plans, or policies set forth in Section 6.9. 5.5 Other Government Permits. At Developer’s sole discretion and in accordance with Developer’s construction schedule, Developer shall apply for such other permits and approvals as may be required by other governmental or quasi-governmental entities in connection with the development of, or the provision of services to, the Project. City shall cooperate with Developer in its efforts to obtain such permits and approvals and shall, from time to time, at the request of Developer, use its reasonable efforts to assist Developer to ensure the timely availability of such permits and approvals. 5.6 Future Fees, Taxes and Assessments. City understands that long term assurances by City concerning fees, taxes and assessments were a material consideration for Developer agreeing to enter this Agreement and to pay long term fees, taxes and assessments described in this Agreement. City shall retain the ability to initiate or process applications for the formation of new assessment districts covering all or any portion of the Project Site, provided that if an assessment district is lawfully formed to provide funding for services, improvements, maintenance or facilities which are substantially the same as those services, improvements, maintenance or facilities being funded by the fees or assessments to be paid by Developer under the Project Approvals or this Agreement, such fees or assessments to be paid by Developer shall be subject to reduction/credit in an amount equal to Developer’s new or increased assessment under the assessment district. Alternatively, the new assessment district shall reduce/credit Developer’s new assessment in an amount equal to such fees or assessments to be paid by Developer under the Project Approvals or this Agreement. Nothing herein shall modify or limit Developer’s right to oppose the formation or proposed assessment of any new assessment district or increased assessment. STANDARDS, LAWS AND PROCEDURES GOVERNING THE PROJECT 6.1 Vested Right to Develop. Developer shall have a vested right to develop the Project on the Project Site in accordance with the terms and conditions of this Agreement and the Project Approvals. Nothing in this section shall be deemed to eliminate or diminish the requirement of Developer to obtain any required Subsequent Approvals. 6.2 Permitted Uses Vested by This Agreement. The permitted uses of the Project Site; the density and intensity of use of the Project Site; the maximum height, bulk, and size of proposed buildings; provisions for reservation or dedication of land for public purposes and the location of public improvements; the general location of public utilities; and other terms and conditions of development applicable to the Project, shall be as set forth in the Project Approvals and, as and when they are issued (but not in limitation of any right to develop as set forth in the 9 Project Approvals), the Subsequent Approvals, provided, however, that no further design review or other discretionary approvals or public hearings shall be required except for review of minor changes to the Project Approvals by the Chief Planner as provided in this Agreement. 6.3 Applicable Law. The rules, regulations, official policies, standards and specifications applicable to the Project (the “Applicable Law”) shall be those set forth in this Agreement and the Project Approvals, and, with respect to matters not addressed by this Agreement or the Project Approvals, those rules, regulations, official policies, standards and specifications (including City ordinances and resolutions) governing permitted uses, building locations, timing of construction, densities, design, heights, fees, exactions, and taxes in force and effect on the Effective Date of this Agreement. 6.4 Uniform Codes. City may apply to the Project Site, at any time during the Term, then current Uniform Building Code and other uniform construction codes, and City’s then current design and construction standards for road and storm drain facilities (if applicable), provided any such uniform code or standard has been adopted and uniformly applied by City on a citywide basis and provided that no such code or standard is adopted for the purpose of preventing or otherwise limiting construction of all or any part of the Project. 6.5 No Conflicting Enactments. Except as authorized in Section 6.9, City shall not impose on the Project (whether by action of the City Council or by initiative, referendum or other means) any ordinance, resolution, rule, regulation, standard, directive, condition or other measure (each individually, a “City Law”) that is in conflict with Applicable Law, the Project Approvals or this Agreement or that reduces the development rights or assurances provided by this Agreement. Without limiting the generality of the foregoing, any City Law shall be deemed to conflict with Applicable Law, Project Approvals or this Agreement or reduce the development rights provided hereby if it would accomplish any of the following results, either by specific reference to the Project or as part of a general enactment which applies to or affects the Project: (a) Change any land use designation or permitted use of the Project Site; (b) Limit or control the availability of public utilities, services, or facilities, or any privileges or rights to public utilities, services, or facilities (for example, water rights, water connections or sewage capacity rights, sewer connections, etc.) for the Project; (c) Limit or control the location of buildings, structures, grading, or other improvements of the Project in a manner that is inconsistent with or more restrictive than the limitations included in the Project Approvals or the Subsequent Approvals (as and when they are issued); (d) Limit or control the rate, timing, phasing, or sequencing of the approval, development or construction of all or any part of the Project in any manner; (e) Result in Developer having to substantially delay construction of the Project or require the issuance of additional permits or approvals by the City other than those required by Applicable Law; 10 (f) Establish, enact, increase, or impose against the Project or Project Site any fees, taxes (including without limitation general, special and excise taxes but excluding any increased local sales tax or increases city business license tax), assessments, liens or other monetary obligations (including generating demolition permit fees, encroachment permit and grading permit fees) other than those specifically permitted by this Agreement, those fees in effect at the time of issuance of the building permit, or other connection fees imposed by third party utilities; (g) Impose against the Project any condition, dedication or other exaction not specifically authorized by Applicable Law; (h) Limit the processing or procuring of applications and approvals of Subsequent Approvals; or, (i) Establish, enact, increase, or impose against the Project or Project Site any requirement that would materially increase Developer’s total cost associated with processing and constructing the Project as contemplated in the Project Approvals. 6.6 Initiatives and Referenda. (a) If any City Law is enacted or imposed by initiative or referendum, or by the City Council directly or indirectly in connection with any proposed initiative or referendum, which City Law would conflict with Applicable Law, the Project Approvals or this Agreement or reduce the development rights provided by this Agreement, such Law shall not apply to the Project. (b) Except as authorized in Section 6.9, without limiting the generality of any of the foregoing, no moratorium or other limitation (whether relating to the rate, timing, phasing or sequencing of development) affecting subdivision maps, building permits or other entitlements to use that are approved or to be approved, issued or granted within the City, or portions of the City, shall apply to the Project. (c) To the maximum extent permitted by law, City shall prevent any City Law from invalidating or prevailing over all or any part of this Agreement, and City shall cooperate with Developer and shall undertake such actions as may be necessary to ensure this Agreement remains in full force and effect. (d) Notwithstanding any other remedy provided to Developer in this Agreement, City and Developer each reserves the right to challenge in court any City Law that would conflict with Applicable Law, the Project Approvals or this Agreement or reduce the development rights provided by this Agreement. 6.7 Environmental Mitigation. The parties understand that the DSASP EIR was intended to be used in connection with each of the Project Approvals and Subsequent Approvals needed for the Project. Consistent with the CEQA policies and requirements applicable to the DSASP EIR, City agrees to use the DSASP EIR in connection with the processing of any Subsequent Approval to the maximum extent allowed by law and not to impose on the Project any mitigation measures or conditions of approval other than those specifically imposed by the Project Approvals and DSASP EIR, or specifically required by CEQA or other Applicable Law. 11 6.8 Life of Subdivision Maps, Development Approvals, and Permits. The term of any subdivision map or any other map, permit, rezoning, or other land use entitlement approved as a Project Approval or Subsequent Approval shall automatically be extended for the longer of the duration of Developer’s processing and development of the Project, the Term of this Agreement (including any extensions) or the term otherwise applicable to such Project Approval or Subsequent Approval if this Agreement is no longer in effect. The foregoing shall not include any period of time during which a development moratorium (including, but not limited to, a water or sewer moratorium or water and sewer moratorium) or the actions of other public agencies that regulate land use, development or the provision of services to the land, prevents, prohibits or delays the construction of the Project or a lawsuit involving any such development approvals or permits is pending. 6.9 State and Federal Law. As provided in Government Code section 65869.5, this Agreement shall not preclude the application to the Project of changes in laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in state or federal laws or regulations. Not in limitation of the foregoing, nothing in this Agreement shall preclude City from imposing on Developer any fee specifically mandated and required by state or federal laws and regulations. 6.10 Prevailing Wage. Developer shall pay, or cause to be paid, prevailing wages, for all construction work required or undertaken pursuant or under this Agreement. For the purposes of this Agreement, “prevailing wages” means not less than the general prevailing rate of per diem wages, as defined in Section 1773 of the California Labor Code and Subchapter 3 of Chapter 8, Division 1, Title 8 of the California Code of Regulations (Section 16000 et seq.), and as established by the Director of the California Department of Industrial Relations (“DIR”) for the respective craft classification. In any case where the prevailing wage is established by the DIR, the general prevailing rate of per diem wages shall be adjusted annually in accordance with the established rate in effect as of such date. In furtherance of Developer’s obligation to pay prevailing wages, addition, and regardless of whether required by all applicable state and federal laws, rules and regulations, Developer and its contractors and agents shall comply with California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto (“Prevailing Wage Laws”), and shall be responsible for carrying out the requirements of such provisions. Developer shall submit to City a plan for monitoring payment of prevailing wages that includes providing original payrolls to the Labor Compliance Officer at the City’s Office of Economic Development and Housing, and shall implement such plan at Developer’s expense. To the fullest extent permitted by law, Developer shall indemnify, defend (with counsel approved by City) and hold the City, and their respective elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without limitation, all claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781), the failure to comply with any Prevailing Wage Laws, or any act or omission of 12 Developer related to this Agreement with respect to the payment or requirement of payment of prevailing wages, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that the City does not and shall not waive any rights against Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by the City, or Developer’s deposit with the City of any of the insurance policies described in this Agreement. The provisions of this Section 6.10 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project. Developer’s indemnification obligations set forth in this section shall not apply to Claims arising solely from the gross negligence or willful misconduct of the Indemnitees. 6.11 Timing of Project Construction and Completion. This project shall, at all times, be constructed in a manner consistent with the Schedule of Performance, attached hereto as Exhibit E. 6.12 No Condominium Conversion. City acknowledges and agrees that the residential component of the Project, other than the Below Market Rate (BMR) units, is proposed for, approved as, and will be constructed as market-rate rental housing. Developer shall not convert the residential units in the Project to condominium or cooperative ownership or sell condominium or cooperative rights to the residential portion of the Project or any part thereof unless Developer obtains the City's consent and meets the City’s affordability requirements in effect at the time. City prior written consent shall be required with respect to the sale or condominium conversion of the retail/commercial portion of the Project or any part thereof, and shall not be unreasonably withheld, conditioned or delayed provided that Developer meets all applicable requirements. 6.13 Commercial Project. Developer hereby agrees to abide by the following terms with respect to the commercial portion of the Grand Project: (a) Within seventeen (17) months after the start of construction, Developer shall enter into an agreement with a qualified commercial broker to lease the commercial and retail space to be constructed in the Grand Project. (b) Within the following 30 days following execution of the broker agreement, and every 30 days thereafter, Developer shall provide a retail leasing progress report that shows the tenants contacted, tenant contact information, and the results of such contact. (c) Developer shall grant a right of first refusal to prior tenants Ben Tre and Moms Tofu House. (d) The commercial retail space shall be constructed in a manner that is consistent with all applicable zoning regulations. Further, Developer shall employ Good Faith Efforts to occupy ground floor retail space with restaurants or other active retail tenant. Personal and financial services, offices, medical clinics and other similar uses are not permitted. For the purposes of this section, Good Faith Efforts shall constitute detailed progress reports from Developer’s broker that outline the companies contacted, contact name, dates and times of meetings, and any follow-up outreach. If, after Good Faith Efforts by Developer, securing one of the foregoing preferred uses with a signed lease or Letter of Intent for the ground floor retail space 13 is shown to be infeasible, Developer and City agree to meet and confer regarding the additional permissible uses for the ground floor retail space. The City shall not issue Certificates of Occupancy for the Project’s residential units until Developer provides executed retail leases for the foregoing preferred uses of ground floor retail space, or until Developer provides Basic Improvements to ground floor retail space. For the purposes of this section, Basic Improvements shall be defined as access to mechanical, electrical and plumbing connections, which must include access to drain and waste; to heating, ventilation and air conditioning (HVAC); to electrical subpanels; and to floor slabs, at four locations throughout the retail space for future use. 6.14 Project Screening. Developer will provide screening during construction that depicts a project rendering with contact details that refer people to a website/company that will provide them more information on the development. 6.15 Construction Pursuant to Plans. Buyer and its contractor(s) shall construct the Project in accordance with the approved Construction Plans and the Project Approvals. Developer shall comply with all directions, rules and regulations of any fire marshal, health officer, building inspector or other officer of every governmental agency having jurisdiction over the Project. Each element of the work shall proceed only after procurement of each permit, license or other authorization that may be required for such element by any governmental agency having jurisdiction. All design and construction work on the Project shall be performed by licensed contractors, engineers or architects, as applicable. 6.16 City Disclaimer. Developer acknowledges that the City is under no obligation, and does not undertake or assume any responsibility or duty to Developer or to any third party, to in any manner review, supervise, or inspect the progress of construction or the operation of the Project. Developer and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the materials and work, the performance of architects, subcontractors, and material suppliers, and all other matters relating to the construction and operation of the Project. Any review or inspection undertaken by the City is solely for the purpose of determining whether Developer is properly discharging its obligations under this Agreement, and shall not be relied upon by Developer or any third party as a warranty or representation by the City as to the quality of the design or rehabilitation of the improvements or otherwise. ARTICLE 7 AMENDMENT 7.1 Amendment. To the extent permitted by state and federal law, any Project Approval or Subsequent Approval may, from time to time, be amended or modified in the following manner: (a) Administrative Project Amendments. Upon the written request of Developer for an amendment or modification to a Project Approval or Subsequent Approval, the Chief Planner or his/her designee shall reasonably determine at his or her sole discretion: (i) whether the requested amendment or modification is minor when considered in light of the Project as a whole; and (ii) whether the requested amendment or modification is consistent with 14 this Agreement and Applicable Law. If the Chief Planner or his/her designee finds that the proposed amendment or modification is minor, consistent with this Agreement and Applicable Law, and will result in no new significant impacts not addressed and mitigated in the DSASP EIR, the amendment shall be determined to be an “Administrative Project Amendment” and the Chief Planner or his designee may, except to the extent otherwise required or prohibited by Applicable Law or this Agreement, and only after making the findings required by this subsection (a), approve the Administrative Project Amendment without notice and public hearing. Without limiting the generality of the foregoing, lot line adjustments, minor alterations in vehicle circulation patterns or vehicle access points, location of parking stalls on the site, number of required parking stalls if city development standards allow, substitutions of comparable landscaping for any landscaping shown on any final development plan or landscape plan, variations in the location of structures that do not substantially alter the design concepts of the Project, location or installation of utilities and other infrastructure connections or facilities that do not substantially alter the design concepts of the Project, and minor adjustments to the Project Site diagram or Project Site legal description shall be treated as Administrative Project Amendments. (b) Non-Administrative Project Amendments. Any request by Developer for an amendment or modification to a Project Approval or Subsequent Approval which is determined not to be an Administrative Project Amendment as set forth above shall be subject to review, consideration and action pursuant to the Applicable Law and this Agreement. 7.2 Amendment of this Agreement. This Agreement may be amended from time to time, in whole or in part, by mutual written consent of the parties hereto or their successors in interest, as follows: (a) Administrative Agreement Amendments. Any amendment to this Agreement which the City determines is minor and does not substantially affect (i) the Term of this Agreement and Schedule of Performance, (ii) permitted uses of the Project Site, (iii) provisions for the reservation or dedication of land, (iv) conditions, terms, restrictions, or requirements for subsequent discretionary actions, (v) the density or intensity of use of the Project Site or the maximum height or size of proposed buildings or (vi) monetary contributions by Developer, shall be considered an “Administrative Agreement Amendment” and shall not, except to the extent otherwise required by law, require notice or public hearing before the parties may execute an amendment hereto. Such amendment may be approved by City resolution. (b) Other Agreement Amendments. Any amendment to this Agreement that the City does not find to be an Administrative Agreement Amendment as defined in 7.2 (a) shall be subject to approval by the City Council (by ordinance) following a duly noticed public hearing before City Council, consistent with Government Code sections 65867 and 65867.5. (c) Amendment Exemptions. No amendment of a Project Approval or Subsequent Approval, or a Subsequent Approval shall require an amendment to this Agreement. Instead, any such matter automatically shall be deemed to be incorporated into the Project and vested under this Agreement. ARTICLE 8 ASSIGNMENT, TRANSFER AND NOTICE 15 8.1 Assignment and Transfer. (i) Developer may not transfer or assign all or any portion of its interests, rights, or obligations under the Agreement and the Project approvals to third parties prior to the issuance of a certificate of occupancy for the portion of the Project to be transferred. Notwithstanding any other provision of this Agreement to the contrary, prior to the issuance of the certificate of occupancy, each of following Transfers are permitted and shall not require City consent under Section 8.1(ii): (a) Any transfer for financing purposes to secure the funds necessary for construction and/or permanent financing of the Project; (b) An assignment of this Agreement, or a portion thereof, to an Affiliate of Developer; (c) The sale of one or more of the completed residential units to an occupant thereof; (d) Transfers of common area to a homeowners or property owners association; and (e) Dedications and grants of easements and rights of way required in accordance with the Project Approvals. For the purposes of this Section 8.1(i), “Affiliate of Developer” means: an entity or person that Developer is a member of, contains one or more of the principal members or shareholders of Developer, or that is directly or indirectly controlling, controlled by, or under common control with Developer. For the purposes of this definition, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity or a person, whether through the ownership of voting securities, by contract, or otherwise, and the terms “controlling” and “controlled” have the meanings correlative to the foregoing. (ii) Upon issuance of the certificate of occupancy, Developer and/or an Affiliate of Developer may freely transfer or assign all or any portion of its interests, rights, or obligations under the Agreement, or its ownership interest in the Project, to third parties for that portion of the Project for which a certificate of occupancy has been issued. ARTICLE 9 COOPERATION IN THE EVENT OF LEGAL CHALLENGE 9.1 Cooperation. In the event of any administrative, legal, or equitable action or other proceeding instituted by any person not a party to the Agreement challenging the validity of any provision of the Agreement or any Project approval, the parties will cooperate in defending such action or proceeding. City shall promptly notify Developer of any such action against City. If City fails promptly to notify Developer of any legal action against City or if City fails to cooperate in the defense, Developer will not thereafter be responsible for City’s defense. The parties will use best efforts to select mutually agreeable legal counsel to defend such action, and Developer will pay compensation for such legal counsel (including City Attorney time and overhead for the 16 defense of such action), but will exclude other City staff overhead costs and normal day-to-day business expenses incurred by City. Developer’s obligation to pay for legal counsel will extend to fees incurred on appeal. In the event City and Developer are unable to select mutually agreeable legal counsel to defend such action or proceeding, each party may select its own legal counsel and Developer will pay its and the City’s legal fees and costs. Developer shall reimburse City for all reasonable court costs and attorneys’ fees expended by the City in defense of any such action or other proceeding or payable to any prevailing plaintiff/petitioner. 9.2 Reapproval. If, as a result of any administrative, legal, or equitable action or other proceeding, all or any portion of the Agreement or the Project approvals are set aside or otherwise made ineffective by any judgment in such action or proceeding (“Judgment”), based on procedural, substantive or other deficiencies (“Deficiencies”), the parties will use their respective best efforts to sustain and reenact or readopt the Agreement, and/or the Project approvals, that the Deficiencies related to, unless the Parties mutually agree in writing to act otherwise: (a) If any Judgment requires reconsideration or consideration by City of the Agreement or any Project approval, then the City will consider or reconsider that matter in a manner consistent with the intent of the Agreement and with Applicable Law. If any such Judgment invalidates or otherwise makes ineffective all or any portion of the Agreement or Project approval, then the parties will cooperate and will cure any Deficiencies identified in the Judgment or upon which the Judgment is based in a manner consistent with the intent of the Agreement, the Project Approvals and with Applicable Law. City will then consider readopting or reenacting the Agreement, or the Project approval, or any portion thereof, to which the Deficiencies related. (b) Acting in a manner consistent with the intent of the Agreement and the Project Approvals includes, but is not limited to, recognizing that the parties intend that Developer may develop the Project as described in the Agreement and Project Approvals, and adopting such ordinances, resolutions, and other enactments as are necessary to readopt or reenact all or any portion of the Agreement or Project Approvals without contravening the Judgment. ARTICLE 10 DEFAULT; REMEDIES; TERMINATION 10.1 Defaults. Any failure by either party to perform any term or provision of the Agreement, which failure continues uncured for a period of thirty (30) days following written notice of such failure from the other party (unless such period is extended by mutual written consent), will constitute a default under the Agreement. Any notice given will specify the nature of the alleged failure and, where appropriate, the manner in which said failure satisfactorily may be cured. If the nature of the alleged failure is such that it cannot reasonably be cured within such 30-day period, then the commencement of the cure within such time period, and the diligent prosecution to completion of the cure thereafter, will be deemed to be a cure within such 30-day period. Upon the occurrence of a default under the Agreement, the non-defaulting party may institute legal proceedings to enforce the terms of the Agreement, or in the event of a material default terminate the Agreement, each in the non-defaulting party’s sole discretion. If the default is timely cured, then no default will exist and the noticing party shall take no further action. 17 10.2 Termination. If City elects to consider terminating the Agreement due to a material uncured default of Developer, then City will give a notice of intent to terminate the Agreement and the matter will be scheduled for consideration and review by the City Council at a duly noticed and conducted public hearing. Developer will have the right to offer written and oral evidence prior to or at the time of said public hearings. If the City Council determines that a material default has occurred and is continuing, and elects to terminate the Agreement, City will give written notice of termination of the Agreement to Developer by certified mail and the Agreement will thereby be terminated ten (10) days thereafter. City shall cease all work, and incurring fees on Developer’s behalf upon the date it delivers its notice of intent to terminate the Agreement to Developer. 10.3 Enforced Delay; Extension of Time of Performance. Subject to the limitations set forth below, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement, the Schedule of Performance, and the PSAs shall be extended, where delays are due to: war; insurrection; strikes and labor disputes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority; litigation and arbitration, including court delays; legal challenges to this Agreement, the PSA, the Project Approvals, or any other approval required for the Project or any initiatives or referenda regarding the same; environmental conditions, pre-existing or discovered, delaying the construction or development of the Property or any portion thereof; unusually severe weather but only to the extent that such weather or its effects (including, without limitation, dry out time) result in delays that cumulatively exceed thirty (30) days for every winter season occurring after commencement of construction of the Project; acts or omissions of the other party; or acts or failures to act of any public or governmental agency or entity (except that acts or failures to act of City shall not excuse performance by City); moratorium; or a Severe Economic Recession (each a “Force Majeure Delay”). An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if Notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. If Notice is sent after such sixty (60) day period, then the extension shall commence to run no sooner than sixty (60) days prior to the giving of such Notice. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. Developer’s inability or failure to obtain financing or otherwise timely satisfy shall not be deemed to be a cause outside the reasonable control of the Developer and shall not be the basis for an excused delay unless such inability, failure or delay is a direct result of a Severe Economic Recession. “Severe Economic Recession” means a decline in the monetary value of all finished goods and services produced in the United States, as measured by initial quarterly estimates of United States Gross Domestic Product (“GDP”) published by the United States Department of Commerce Bureau of Economic Analysis (and not subsequent monthly revisions), lasting more than four (4) consecutive calendar quarters. Any quarter of flat or positive GDP growth shall end the period of such Severe Economic Recession. 10.5 Legal Action. Either party may institute legal action to cure, correct, or remedy any default, enforce any covenant or agreement in the Agreement, enjoin any threatened or attempted violation thereof, and enforce by specific performance the obligations and rights of the parties thereto. Except for a Developer Default that the City elects to remedy through the exercise of section 10.5.1, the sole and exclusive remedy for any default or violation of the Agreement will be specific performance. In any proceeding brought to enforce the Agreement, the prevailing party 18 will be entitled to recover from the unsuccessful party all costs, expenses and reasonable attorney’s fees incurred by the prevailing party in the enforcement proceeding. 10.5.1 Completion Guaranty. As a condition to close of escrow, Developer has provided City with an executed a guaranty of completion of the Project in accordance with the terms of this Agreement, substantially in the form of Exhibit F ("Completion Guaranty") attached hereto. Upon the occurrence of a Default by Developer based on failure to comply with the Project Schedule of Performance, attached hereto as Exhibit E, City’s remedies shall include but are not limited to: exercise of the completion guarantee, as applicable, the transfer of all plans and reports specified in Section 10.11, as well as all other remedies set forth in this Agreement. 10.6 Periodic Review. (a) Conducting the Periodic Review. Throughout the Term of this Agreement, at least once every twelve (12) months following the Effective Date or more often as may be required pursuant to section 19.60.185 of the SSFMC, City shall review the extent of good-faith compliance by Developer with the terms of this Agreement. This review (“Periodic Review”) shall be conducted by the Chief Planner or his/her designee and shall be limited in scope to compliance with the terms of this Agreement pursuant to Government Code section 65865.1. (b) Notice. At least thirty (30) days prior to the Periodic Review, and in the manner prescribed in Section 11.9 of this Agreement, City shall deposit in the mail to Developer a copy of any staff reports and documents to be used or relied upon in conducting the review and, to the extent practical, related exhibits concerning Developer’s performance hereunder. Developer shall be permitted an opportunity to respond to City’s evaluation of Developer’s performance, either orally at a public hearing or in a written statement, at Developer’s election. Such response shall be made to the Chief Planner. (c) Good Faith Compliance. During the Periodic Review, the Chief Planner shall review Developer’s good-faith compliance with the terms of this Agreement. At the conclusion of the Periodic Review, the Chief Planner shall make written findings and determinations, on the basis of substantial evidence, as to whether or not Developer has complied in good faith with the material terms and conditions of this Agreement. The decision of the Chief Planner shall be appealable to the City Council. If in the Chief Planner’s good faith determination based on substantial evidence the Chief Planner finds and determines that Developer has not complied with such terms and conditions, the Chief Planner may recommend to the City Council that it terminate or modify this Agreement by giving notice of its intention to do so, in the manner set forth in Government Code sections 65867 and 65868, provided City has first complied with the provisions of Section 101. And 10.2 affording Developer both notice and opportunity to cure. The costs incurred by City in connection with the Periodic Review process described herein shall be borne by Developer. (d) Failure to Properly Conduct Periodic Review. If City fails, during any calendar year, to either: (i) conduct the Periodic Review or (ii) timely notify Developer in writing of City’s determination, pursuant to a Periodic Review, as to Developer’s compliance with the terms of this Agreement and such failure remains uncured as of December 31 of any year during 19 the term of this Agreement, such failure shall be conclusively deemed an approval by City of Developer’s compliance with the terms of this Agreement. (e) Written Notice of Compliance. With respect to any year for which Developer has been determined or deemed to have complied with this Agreement, City shall, within thirty (30) days following City’s review, provide Developer with a written notice of compliance, in recordable form, duly executed and acknowledged by City. Developer shall have the right, in Developer’s sole discretion, to record such notice of compliance. 10.7 California Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of San Mateo County, California. 10.8 Resolution of Disputes. With regard to any dispute involving development of the Project, the resolution of which is not provided for by this Agreement or Applicable Law, Developer shall, at City’s request, meet with City. The parties to any such meetings shall attempt in good faith to resolve any such disputes for a period not exceeding thirty (30) days. Nothing in this section shall in any way be interpreted as requiring that Developer and City and/or City’s designee reach agreement within said thirty (30) days with regard to those matters being addressed, nor shall the outcome of these meetings be binding in any way on City or Developer unless expressly agreed to by the parties to such meetings. 10.9 Attorneys’ Fees. In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Agreement, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. 10.10 Hold Harmless. Developer shall hold City and its elected and appointed officers, agents, employees, and representatives harmless from claims, costs, and liabilities for any personal injury, death, or property damage which is a result of, or alleged to be the result of, the construction of the Project or of operations performed under this Agreement by Developer, or by Developer’s contractors, subcontractors, agents or employees, whether such operations were performed by Developer or any of Developer’s contractors, Developer’s contractors, subcontractors, agents or employees. Nothing in this section shall be construed to mean that Developer shall hold City harmless from any claims of personal injury, death or property damage arising from, or alleged to arise from, any gross negligence or willful misconduct on the part of City, its elected and appointed representatives, offices, agents and employees. 10.11 Construction Plans. If this Agreement is terminated for any reason other than City’s non-performance, Developer, at no cost to the City, shall deliver to the City copies of any studies, surveys, plans, specifications and reports and construction plans, BCD's (including OMR's) in the Developer’s possession or in the possession of the Developer’s consultants related to development of the Project on the Property. In the event the City terminates the Agreement pursuant to Section 10.2, the City shall have sole rights to the studies, surveys, plans, specifications and reports and construction plans, BCD's (including OMR's) in the Developer’s possession or in the possession of the Developer’s consultants related to development of the 20 Project on the Property, and the City shall have right to utilize such plans or studies, and/or assign the plans to a successor in interest with the intent to develop the Project. ARTICLE 11 MISCELLANEOUS 11.1 Incorporation of Recitals and Introductory Paragraph. The Recitals contained in this Agreement, and the introductory paragraph preceding the Recitals, are hereby incorporated into this Agreement as if fully set forth herein. 11.2 No Agency. It is specifically understood and agreed to by and between the parties hereto that: (i) the subject development is a private development; (ii) City has no interest or responsibilities for, or duty to, third parties concerning any improvements until such time, and only until such time, that City accepts the same pursuant to the provisions of this Agreement or in connection with the various Project Approvals or Subsequent Approvals; (iii) Developer shall have full power over and exclusive control of the Project herein described, subject only to the limitations and obligations of Developer under this Agreement, the Project Approvals, Subsequent Approvals, and Applicable Law; and (iv) City and Developer hereby renounce the existence of any form of agency relationship, joint venture or partnership between City and Developer and agree that nothing contained herein or in any document executed in connection herewith shall be construed as creating any such relationship between City and Developer. 11.3 Enforceability. City and Developer agree that unless this Agreement is amended or terminated pursuant to the provisions of this Agreement, this Agreement shall be enforceable by any party hereto notwithstanding any change hereafter enacted or adopted (whether by ordinance, resolution, initiative, or any other means) in any applicable general plan, specific plan, zoning ordinance, subdivision ordinance, or any other land use ordinance or building ordinance, resolution or other rule, regulation or policy adopted by City that changes, alters or amends the rules, regulations, and policies applicable to the development of the Project Site at the time of the approval of this Agreement as provided by Government Code section 65866. 11.4 Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a particular situation, is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect unless amended or modified by mutual consent of the parties. Notwithstanding the foregoing, if any material provision of this Agreement, or the application of such provision to a particular situation, is held to be invalid, void or unenforceable, either City or Developer may (in their sole and absolute discretion) terminate this Agreement by providing written notice of such termination to the other party. 11.5 Other Necessary Acts. Each party shall execute and deliver to the other all such other further instruments and documents as may be reasonably necessary to carry out the Project Approvals, Subsequent Approvals and this Agreement and to provide and secure to the other party the full and complete enjoyment of its rights and privileges hereunder. 21 11.6 Construction. Each reference in this Agreement or any of the Project Approvals or Subsequent Approvals shall be deemed to refer to the Agreement, Project Approval, or Subsequent Approval as it may be amended from time to time, whether or not the particular reference refers to such possible amendment. This Agreement has been reviewed and revised by legal counsel for both City and Developer, and no presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. 11.7 Other Miscellaneous Terms. The singular shall include the plural; the masculine gender shall include the feminine; “shall” is mandatory; “may” is permissive. If there is more than one signer of this Agreement, the signer obligations are joint and several. 11.8 Covenants Running with the Land. All of the provisions contained in this Agreement shall be binding upon the parties and their respective heirs, successors and assigns, representatives, lessees, and all other persons acquiring all or a portion of the Project, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions contained in this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to California law including, without limitation, Civil Code section 1468. Each covenant herein to act or refrain from acting is for the benefit of or a burden upon the Project, as appropriate, runs with the Project Site, and is binding upon the owner of all or a portion of the Project Site and each successive owner during its ownership of such property. 11.9 Notices. Any notice or communication required hereunder between City or Developer must be in writing, and may be given either personally, by e-mail (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving party. Notices transmitted after 5:00 p.m. on a normal business day or on a Saturday, Sunday, or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of: (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below: 22 If to City, to: City of South San Francisco 400 Grand Avenue Attn: City Manager South San Francisco, CA 94080 Phone: (650) 877-8500 Fax: (650) 829-6609 With a Copy to: City of South San Francisco 400 Grand Avenue Attn: ECD Director South San Francisco, CA 94080 Phone: (650) 829-6622 Fax: (650) 829-6609 [email protected] With a Copy to: Meyers Nave Attn: Jason Rosenberg 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-2000 Fax (510) 444-1108 Email [email protected] If to Developer: ROEM Development Corporation 1650 Lafayette Street Santa Clara, CA 95050 Attention: Alex Sanchez Telephone: (408) 984-5600 Email: [email protected] With Copies to: Situs Law, PC Attn: Summer Ludwick, Esq. 10 Almaden Blvd., Suite 1250 San Jose, CA 95113 Telephone: (408) 299-0100 Email: [email protected] 11.10 Entire Agreement, Counterparts And Exhibits. This Agreement is executed in two (2) duplicate counterparts, each of which is deemed to be an original. This Agreement consists of 21 pages and five (5) exhibits which constitute in full, the final and exclusive understanding and agreement of the parties and supersedes all negotiations or previous agreements of the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement shall be in writing and signed by the appropriate authorities of City and the Developer. The following exhibits are attached to this Agreement and incorporated herein for all purposes: Exhibit A: Description and Diagram of Project Site 23 Exhibit B: List of Project Approvals Exhibit C: Form of Linden Affordable Housing Agreement Exhibit D: Form of Grand Affordable Housing Agreement Exhibit E: Project Schedule of Performance Exhibit F: Form of Completion Guaranty 11.11 Recordation Of Development Agreement. Pursuant to Government Code section 65868.5, no later than ten (10) days after City enters into this Agreement, the City Clerk shall record an executed copy of this Agreement in the Official Records of the County of San Mateo. IN WITNESS WHEREOF, this Agreement has been entered into by and between Developer and City as of the day and year first above written. CITY CITY OF SOUTH SAN FRANCISCO, a municipal corporation By: ___________________________ Name: ______________________ City Manager ATTEST: By: ___________________________ City Clerk APPROVED AS TO FORM: By: ___________________________ City Attorney 24 DEVELOPER ROEM DEVELOPMENT CORPORATION a California Corporation By: By:_______________________ A-1 Exhibit A Description and Diagram of Linden Project Site The site is bounded by Lux Avenue to the north, Linden Avenue to the west, and Tamarack Avenue to the south. Project Name Linden Project Address 418 Linden APN 012-314-010 Owner City of South San Francisco Area 14,000 sq. ft. / 0.32 acres Zoning Downtown Transit Core (DTC) Current Use Parking Lot A-2 Description and Diagram of Grand Project Site Project Name Grand Project Addresses 201-219 Grand Avenue APNs 012-316-110 012-316-100 012-316-090 012-316-080 Owner City of South San Francisco Area 20,198 square feet (sq. ft.) / 0.46 acres Zoning Grand Avenue Core (GAC) Current Use Parking Lot & Commercial (Restaurant) The site is bounded by Cypress Avenue to the east, Grand avenue to the north and Third Lane to the south. B-1 #39643361_v4 Exhibit B: List of Project Approvals Grand Project • Planning Project: P15-0017 • Use Permit UP15-0003 • Design Review DR15-0016 • Parking Exception PE15-0001 Linden Project • Planning Project P15-0016 • Use Permit UP15-0002 • Design Review DR15-0015 • Parking Exception PE15-0002 C-1 Exhibit C Linden Affordable Housing Agreement [to be provided upon execution] D-1 Exhibit D Grand Affordable Housing Agreement [to be provided upon execution] E-1 Exhibit E Project Schedule of Performance SCHEDULE OF PERFORMANCE 1 50% Construction Drawings (CDs) and Proforma Two (2) months after Development Agreement Execution 2 100% CDs submitted for building permits and Updated Proforma Four (4) months after DA execution 3 Construction Financing Secured and Construction Contract Executed Five (5) months after DA execution 4 If building permit application and 100% CDs were complete in #2, building permit ready for issuance Six (6) months after DA execution 5 Close of Escrow and Property Conveyance Six (6) months after DA execution 6 Construction Start Start within 30 days after Building permit issuance, but no later than Seven (7) months after DA execution 7 Construction Completion Thirty (30) months after DA execution F-1 Exhibit F Form of Completion Guaranty COMPLETION GUARANTY (LINDEN) THIS COMPLETION GUARANTY (the “Guaranty”) is made this ___day of _____________________, 2018 by and between THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”) and ____________________________________(“Guarantor”). RECITALS A. On _______, _______________________________, a _________ (“Developer”) acquired the real property commonly known as 418 Linden Avenue, South San Francisco, California (the “Property”) from the City pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated ___, 2017 (the “PSA”). B. As set forth in the PSA, Developer is to construct a high-density, 38-unit multi- family apartment building, eight (8) units of which are required to be made available at below market rates (the “Linden Project”), pursuant to that certain Development Agreement dated ______, 2018 between City and Developer (the “DA”). C. As a condition precedent to transferring the Property to Developer, the City requires Guarantor to execute and deliver this Guaranty Guarantying the lien-free completion of the Linden Project pursuant to, and in accordance with, the DA, and providing for the performance of other covenants contained herein. GUARANTY AND AGREEMENT NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, Guarantor hereby agrees as follows: 1. Guaranty. Subject to the terms and conditions set forth herein, Guarantor unconditionally and irrevocably guarantees the full and timely performance of Developer’s obligations under the DA, to construct and complete the Project in accordance with the DA, free and clear of all mechanics liens. 2. Remedies. If Developer fails to timely perform an of its obligations under the DA with respect to the construction and completion of the Project, after expiration of any applicable notice and cure periods, the City, prior to exercising any of its remedies hereunder, shall demand (by written notice) that Guarantor perform the same on Developer’s behalf. If, within thirty (30) days after receiving such demand, Guarantor advises the City in writing that Guarantor will commence and diligently proceed to cure all defaults of Developer under the DA, which by their nature are capable of being cured by Guarantor, then the DA shall remain in full force and effect, and the F-2 City shall perform for the benefit of the Guarantor any unperformed obligations of the City under the DA. If Guarantor fails to respond to City’s written notice, or fails to perform as herein above provided, the City shall have the following remedies in addition to other remedies expressly provided herein: (a) From time to time and without first being required to exhaust any or all security held by the City, if any, to require performance by the Guarantor of any obligation to be performed on the part of the Guarantor pursuant to the terms hereof, by action at law or in equity or both. Nothing herein shall be construed to prohibit the City from pursuing any remedies under any other agreement, against any person other than the Guarantor. (b) If Guarantor does not timely perform its obligations under this Guaranty, the City, at City’s option, shall have the right to perform any obligation required to be performed by Guarantor under this Guaranty, which City reasonably deems necessary, and expend such sums as City reasonably deems proper in order so to complete such obligation. The amount of any and all reasonable expenditures made by City shall be immediately due and payable by Guarantor to City, notwithstanding City’s pursuit of any other rights or remedies. 3. Termination. This Guaranty shall terminate and be of no further force or effect upon the occurrence of either (i) upon issuance of a final certificate of occupancy for the Project, or (ii) termination of the DA by either City or Developer in accordance with its own terms. 4. Interest. Any sums required to be paid by the Guarantor to the City pursuant to the terms hereof that are not paid within thirty (30) days of the date due, shall bear interest at the prime rate announced by the Bank of America plus three percent (3%), from the date said sums shall have become due until the date said sums are paid. 5. Consideration. Guarantor acknowledges that the undertakings given hereunder are given in consideration of the City's conveyance of the Property to Developer pursuant to the PSA and City’s performance under the DA, and that the City would not convey the Property were it not for Guarantor’s execution and delivery of this Guaranty. 6. No Waiver, Extension or Modification. No failure on the part of the City to pursue any remedy hereunder shall constitute a waiver on its part of the right to pursue said remedy on the basis of the same or a subsequent breach. No extension, modification, amendment or renewal of the DA shall serve to waive the provisions hereof or discharge the Guarantor from any obligation herein contained, in whole or in part, except to the extent expressly approved by the City by written instrument signed by the City, specifying the nature and the extent of the intended waiver and discharge of the Guarantor. 7. Covenant of Guarantor. Guarantor shall promptly advise the City in writing of any material adverse change in the business or financial condition of Guarantor. 8. Guaranty Independent; Waiver of Exoneration. F-3 (a) Guarantor agrees that the obligations hereunder are independent of and in addition to the undertakings of the Developer pursuant to the DA, any other Guarantees given in connection with the DA, and other obligations of the Guarantor to the City. (b) Guarantor agrees that the validity of this Guaranty shall continue and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished or impaired by reason of any bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship affecting the Developer or its partners, parents, principals, or members whether or not notice is given to the Guarantor, or by any other circumstances or condition that may grant or result in a discharge, limitation or reduction of liability of the Developer or its partners, parents, principals, members or of a surety or a guarantor. (c) Guarantor waives all rights and remedies accorded by applicable law to guarantors and agrees not to assert or take advantage of any such rights or remedies including but not limited to any right to require the City to, after expiration of applicable notice and cure periods to Developer, (1) proceed against the Developer, any partner or member of the Developer or any other person, (2) proceed against or exhaust any security held by the City, or (3) pursue any remedy in the power of the City whatsoever. If Guarantor is liable pursuant to this Guaranty, Guarantor waives any defense arising by reason of any disability or other defense of the Developer or any partner or member of the Developer, or any of their parents, principals, or affiliated entities or by reason of the cessation from any cause whatsoever of the liability of the Developer or any member or partner of the Developer, or any of their parents, principals, or affiliated entities other than the full discharge and performance of all of Developer’s obligations under the DA. Guarantor, except as expressly set forth herein, waives any defense it may acquire by reason of the City's election of any remedy against it or the Developer, or both, even though the Guarantors’ right of subrogation may be impaired thereby or extinguished under the antideficiency statutes of the State of California. Without limiting the generality of the foregoing, Guarantor waives (a) any defense that may arise by reason of the lack of authority or of any other person or persons or the failure of City to file or enforce a claim against the estate (in administration, bankruptcy, or any other proceeding) of any other person or persons; (b) demand, protest and notice of any kind including but not limited to notice of any kind (except for the notice required in Sections 2 and 10 hereof or under the DA) including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or nonaction on the part of Developer, City, any endorser or creditor of Developer or Guarantor or on the part of any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by City as collateral or in connection with any obligations the performance of which are hereby Guaranty; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any duty on the part of City to disclose to Guarantor any facts City may now or hereafter know about Developer, regardless of whether City has reason to believe that any such F-4 facts materially increase the risk beyond that which Guarantor intended to assume or has reason to believe that such facts are unknown to Guarantor; (e) any defense arising because of City's election, in any proceeding instituted under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code; and (f) any defense based on any borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code. Without limiting the generality of the foregoing or any other provision hereof, Guarantor hereby expressly waives any and all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580(a), 580(b), 580(d), and 726. (e) Until termination of this Guaranty (as set forth in Section 3), Guarantor shall have no right of subrogation, and waives any right to enforce any remedy that the City now has or may hereafter have against the Developer or any member of Developer, or any other person, and waives the benefit of, and any right to participate in, any security now or hereafter held by City from the Developer. 9. Continued Existence; No Transfer or Assignment. (a) Guarantor does hereby further agree that as long as this Guaranty is in effect, it will not dispose of all or substantially all of its assets without the express written approval of the City, which shall not be unreasonably withheld. (b) The obligations of Guarantor under this Guaranty may not be assigned or transferred without, in each case, the express written approval of the City, which approval shall be within the sole and absolute discretion of the City. 10. Notices. City shall provide Guarantor with all written notices delivered to Developer pursuant to the DA at the same time such notice is delivered to Developer. Guarantor shall not be liable under this Guaranty unless and until it has received such notice. The Guarantor shall have the right to perform any and all of Developer’s obligations under the DA. 11. Miscellaneous. (a) This Guaranty shall inure to the benefit of City and its successors and assigns and shall bind the heirs, executors, administrators, personal representatives, successors and assigns of Guarantor. (b) This Guaranty shall be governed by and shall be construed in accordance with the laws of the State of California. (c) Time is of the essence hereof. (d) If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof and all applications thereof not F-5 held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. (e) Guarantor assumes the responsibility for keeping informed of (1) the financial condition of Developer, (2) any change in the management or control of Developer, and (3) all other circumstances bearing upon the risk of nonperformance by Developer of its obligations under the DA. (f) This Guaranty shall be construed and enforced in accordance with the laws of the State of California. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of San Mateo County, California. (g) Any notice or communication required hereunder between City or Guarantor must be in writing, and may be given either personally, by e-mail (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving party. Notices transmitted after 5:00 p.m. on a normal business day or on a Saturday, Sunday, or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of: (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below: If to City, to: City of South San Francisco 400 Grand Avenue Attn: City Manager South San Francisco, CA 94080 Phone: (650) 877-8500 Fax: (650) 829-6609 F-6 With a Copy to: City of South San Francisco 400 Grand Avenue Attn: ECD Director South San Francisco, CA 94080 Phone: (650) 829-6622 Fax: (650) 829-6609 [email protected] With a Copy to: Meyers Nave Attn: Jason Rosenberg 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-2000 Fax (510) 444-1108 Email [email protected] If to Guarantor: With Copies to: (h) In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Guaranty, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the day and year first above written. GUARANTOR By:_____________________________ Name: __________________________ Its______________________________ F-7 COMPLETION GUARANTY (GRAND) THIS COMPLETION GUARANTY (the “Guaranty”) is made this ___day of _____________________, 2018 by and between THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”) and ____________________________________(“Guarantor”). RECITALS D. On _______, _______________________________, a _________ (“Developer”) acquired the real property commonly known as 201-219 Grand Avenue, South San Francisco, California (the “Property”) from the City pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated ___, 2017 (the “PSA”). E. As set forth in the PSA, Developer is to construct a high-density, mixed-use project, including 46 residential units, nine (9) of which are required to be below market rate units, and approximately 6,000 square feet of ground floor commercial units (the “Grand Project”) pursuant to that certain Development Agreement dated ______, 2018 between City and Developer (the “DA”). F. As a condition precedent to transferring the Property to Developer, the City requires Guarantor to execute and deliver this Guaranty Guarantying the lien-free completion of the Grand Project pursuant to, and in accordance with, the DA, and providing for the performance of other covenants contained herein. GUARANTY AND AGREEMENT NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, Guarantor hereby agrees as follows: 1. Guaranty. Subject to the terms and conditions set forth herein, Guarantor unconditionally and irrevocably guarantees the full and timely performance of Developer’s obligations under the DA, to construct and complete the Project in accordance with the DA, free and clear of all mechanics liens. 2. Remedies. If Developer fails to timely perform an of its obligations under the DA with respect to the construction and completion of the Project, after expiration of any applicable notice and cure periods, the City, prior to exercising any of its remedies hereunder, shall demand (by written notice) that Guarantor perform the same on Developer’s behalf. If, within thirty (30) days after receiving such demand, Guarantor advises the City in writing that Guarantor will commence and diligently proceed to cure all defaults of Developer under the DA, which by their nature are capable of being cured by Guarantor, then the DA shall remain in full force and effect, and the City shall perform for the benefit of the Guarantor any unperformed obligations of the City under the DA. If Guarantor fails to respond to City’s written notice, or fails to perform as herein above F-8 provided, the City shall have the following remedies in addition to other remedies expressly provided herein: (a) From time to time and without first being required to exhaust any or all security held by the City, if any, to require performance by the Guarantor of any obligation to be performed on the part of the Guarantor pursuant to the terms hereof, by action at law or in equity or both. Nothing herein shall be construed to prohibit the City from pursuing any remedies under any other agreement, against any person other than the Guarantor. (b) If Guarantor does not timely perform its obligations under this Guaranty, the City, at City’s option, shall have the right to perform any obligation required to be performed by Guarantor under this Guaranty, which City reasonably deems necessary, and expend such sums as City reasonably deems proper in order so to complete such obligation. The amount of any and all reasonable expenditures made by City shall be immediately due and payable by Guarantor to City, notwithstanding City’s pursuit of any other rights or remedies. 3. Termination. This Guaranty shall terminate and be of no further force or effect upon the occurrence of either (i) upon issuance of a final certificate of occupancy for the Project, or (ii) termination of the DA by either City or Developer in accordance with its own terms. 4. Interest. Any sums required to be paid by the Guarantor to the City pursuant to the terms hereof that are not paid within thirty (30) days of the date due, shall bear interest at the prime rate announced by the Bank of America plus three percent (3%), from the date said sums shall have become due until the date said sums are paid. 5. Consideration. Guarantor acknowledges that the undertakings given hereunder are given in consideration of the City's conveyance of the Property to Developer pursuant to the PSA and City’s performance under the DA, and that the City would not convey the Property were it not for Guarantor’s execution and delivery of this Guaranty. 6. No Waiver, Extension or Modification. No failure on the part of the City to pursue any remedy hereunder shall constitute a waiver on its part of the right to pursue said remedy on the basis of the same or a subsequent breach. No extension, modification, amendment or renewal of the DA shall serve to waive the provisions hereof or discharge the Guarantor from any obligation herein contained, in whole or in part, except to the extent expressly approved by the City by written instrument signed by the City, specifying the nature and the extent of the intended waiver and discharge of the Guarantor. 7. Covenant of Guarantor. Guarantor shall promptly advise the City in writing of any material adverse change in the business or financial condition of Guarantor. 8. Guaranty Independent; Waiver of Exoneration. (f) Guarantor agrees that the obligations hereunder are independent of and in addition to the undertakings of the Developer pursuant to the DA, any other Guarantees given in connection with the DA, and other obligations of the Guarantor to the City. F-9 (g) Guarantor agrees that the validity of this Guaranty shall continue and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished or impaired by reason of any bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship affecting the Developer or its partners, parents, principals, or members whether or not notice is given to the Guarantor, or by any other circumstances or condition that may grant or result in a discharge, limitation or reduction of liability of the Developer or its partners, parents, principals, members or of a surety or a guarantor. (h) Guarantor waives all rights and remedies accorded by applicable law to guarantors and agrees not to assert or take advantage of any such rights or remedies including but not limited to any right to require the City to, after expiration of applicable notice and cure periods to Developer, (1) proceed against the Developer, any partner or member of the Developer or any other person, (2) proceed against or exhaust any security held by the City, or (3) pursue any remedy in the power of the City whatsoever. If Guarantor is liable pursuant to this Guaranty, Guarantor waives any defense arising by reason of any disability or other defense of the Developer or any partner or member of the Developer, or any of their parents, principals, or affiliated entities or by reason of the cessation from any cause whatsoever of the liability of the Developer or any member or partner of the Developer, or any of their parents, principals, or affiliated entities other than the full discharge and performance of all of Developer’s obligations under the DA. Guarantor, except as expressly set forth herein, waives any defense it may acquire by reason of the City's election of any remedy against it or the Developer, or both, even though the Guarantors’ right of subrogation may be impaired thereby or extinguished under the antideficiency statutes of the State of California. Without limiting the generality of the foregoing, Guarantor waives (a) any defense that may arise by reason of the lack of authority or of any other person or persons or the failure of City to file or enforce a claim against the estate (in administration, bankruptcy, or any other proceeding) of any other person or persons; (b) demand, protest and notice of any kind including but not limited to notice of any kind (except for the notice required in Sections 2 and 10 hereof or under the DA) including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or nonaction on the part of Developer, City, any endorser or creditor of Developer or Guarantor or on the part of any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by City as collateral or in connection with any obligations the performance of which are hereby Guaranty; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (i) any duty on the part of City to disclose to Guarantor any facts City may now or hereafter know about Developer, regardless of whether City has reason to believe that any such facts materially increase the risk beyond that which Guarantor intended to assume or has reason to believe that such facts are unknown to Guarantor; (e) any defense arising because of City's election, in any proceeding instituted under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code; and (f) F-10 any defense based on any borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code. Without limiting the generality of the foregoing or any other provision hereof, Guarantor hereby expressly waives any and all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580(a), 580(b), 580(d), and 726. (j) Until termination of this Guaranty (as set forth in Section 3), Guarantor shall have no right of subrogation, and waives any right to enforce any remedy that the City now has or may hereafter have against the Developer or any member of Developer, or any other person, and waives the benefit of, and any right to participate in, any security now or hereafter held by City from the Developer. 9. Continued Existence; No Transfer or Assignment. (c) Guarantor does hereby further agree that as long as this Guaranty is in effect, it will not dispose of all or substantially all of its assets without the express written approval of the City, which shall not be unreasonably withheld. (d) The obligations of Guarantor under this Guaranty may not be assigned or transferred without, in each case, the express written approval of the City, which approval shall be within the sole and absolute discretion of the City. 10. Notices. City shall provide Guarantor with all written notices delivered to Developer pursuant to the DA at the same time such notice is delivered to Developer. Guarantor shall not be liable under this Guaranty unless and until it has received such notice. The Guarantor shall have the right to perform any and all of Developer’s obligations under the DA. 11. Miscellaneous. (i) This Guaranty shall inure to the benefit of City and its successors and assigns and shall bind the heirs, executors, administrators, personal representatives, successors and assigns of Guarantor. (j) This Guaranty shall be governed by and shall be construed in accordance with the laws of the State of California. (k) Time is of the essence hereof. (l) If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. F-11 (m) Guarantor assumes the responsibility for keeping informed of (1) the financial condition of Developer, (2) any change in the management or control of Developer, and (3) all other circumstances bearing upon the risk of nonperformance by Developer of its obligations under the DA. (n) This Guaranty shall be construed and enforced in accordance with the laws of the State of California. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of San Mateo County, California. (o) Any notice or communication required hereunder between City or Guarantor must be in writing, and may be given either personally, by e-mail (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving party. Notices transmitted after 5:00 p.m. on a normal business day or on a Saturday, Sunday, or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of: (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below: If to City, to: City of South San Francisco 400 Grand Avenue Attn: City Manager South San Francisco, CA 94080 Phone: (650) 877-8500 Fax: (650) 829-6609 With a Copy to: City of South San Francisco 400 Grand Avenue Attn: ECD Director South San Francisco, CA 94080 Phone: (650) 829-6622 Fax: (650) 829-6609 [email protected] F-12 With a Copy to: Meyers Nave Attn: Jason Rosenberg 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-2000 Fax (510) 444-1108 Email [email protected] If to Guarantor: With Copies to: (p) In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Guaranty, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the day and year first above written. GUARANTOR By:_____________________________ Name: __________________________ Its______________________________