HomeMy WebLinkAboutReso RDA 06-2005RESOLUTION NO. 06-2005
REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO
STATE OF CALIFORNIA
A RESOLUTION AUTHORIZING A CONSTRUCTION LOAN
AGREEMENT AND PROMISSORY NOTE WITH BRIDGE HOUSING
CORPORATION
WHEREAS, the City of South San Francisco and County of San Mateo have agreed to
develop county owned property located within the City for purposes of providing affordable
housing; and
WHEREAS, the Redevelopment Agency provided a Pre-Construction Loan to Bridge
Housing to facilitate development of the affordable housing project; and
WHEREAS, the Pre-Construction Loan will be merged into the Construction Loan
Agreement; and
WHEREAS, funds for the project have been identified in the Capital Improvement Program
budget for fiscal year 2004-05; and
WHEREAS, staffrecommends approval of a Construction Loan Agreement and Promissory
Note between the Redevelopment Agency Board and BRIDGE Housing Corporation in an amount
not to exceed $3,500,000 to development affordable housing at the County owned site located at Oak
and Grand Avenues.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of
South San Francisco that the Redevelopment Agency hereby authorizes a Construction Loan
Agreement and Promissory Note between the Redevelopment Agency Board and BRIDGE Housing
Corporation in an amount not to exceed $3,500,000 to develop affordable housing at the County
owned site located at Oak and Grand Avenues. The agreement is attached hereto as Exhibit A.
BE IT FURTHER RESOLVED that the Executive Director is hereby authorized to execute
the agreement on behalf of the City of South San Francisco.
I hereby certify that the foregoing Resolution was regularly introduced
and adopted by the Redevelopment Agency of the City of South San Francisco
at a regular meeting held on the 9th day of March 2005 by the following vote:
AYES:
Boardmembers Richard A. Garbarino, PedroGonzalez, and Karyl Matsumoto,
Vice Chair Joseph A. Femekes and Chair Raymond L. Green
NOES: None.
ABSTAIN: None.
ABSENT: None
ATTEST: J/~L ~ ,
Clerk
S:\Current Reso'sX3-9-05bridge.housing.doc
EXHIBIT A to Reso 06-2005
PERMANENT LOAN AGREEMENT
BY AND BETWEEN
THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
AND
BRIDGE HOUSING
Loan Agreement 735688_1 i
CONSTRUCTION AND PERMANENT LOAN AGREEMENT
This Construction and Permanent Loan Agreement (this "Loan Agreement") is made as
of this __ day of ,2005, by and between the Redevelopment
Agency of the City of South San Francisco, a public body, corporate and politic (the "Agency"),
and BRIDGE Housing Corporation, a California nonprofit public benefit corporation (the
"Borrower").
RECITALS
A. The Agency wishes to promote the development of more affordable rental
housing in the South San Francisco community and to provide a greater choice of housing
opportunities for persons and families of low income.
B. Pursuant to that certain ground lease by and between Borrower and the County of
San Mateo dated ., 2005, the Borrower leases certain real property located at
in South San Francisco, California, as more particularly described in
Exhibit A attached hereto and incorporated by reference herein (the "Property"), on which the
Borrower will develop approximately forty-two (42) units of rental housing affordable to low
income households and one (1) manager's unit (the "Project").
C. The Borrower wishes to borrow from the Agency and the Agency wishes to
extend to the Borrower a loan in the amount not to exceed Three Million Five Hundred
Thousand Dollars ($3,500,000.00) to finance the construction costs of the Project (the "Loan").
D. The Agency previously disbursed Four Hundred Thousand Dollars ($400,000.00)
in the form of a Pre-Construction Loan to Borrower.
E. The previously disbursed amount is included in the total loan amount subject to
this Agreement. This Loan is intended to supersede and cancel the Pre-Construction Loan made
to BRIDGE. All Advances under the Pre-Construction Loan are intended as Advances under the
Loan.
F. The Loan is derived from tax increment revenue received by the Agency for the
purpose of increasing and improving the supply of low and moderate income housing pursuant to
Section 33334.2 of the California Health and Safety Code (the "Housing Fund").
G. Expenditure of Housing Fund deposits will serve the purposes of Health and
Safety Code Section 33334.2, as well as the goals and objectives of the Redevelopment Plan for
the [South San Francisco Redevelopment Project Area], by improving and increasing the
cormrtunity's supply of affordable housing.
NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, and
representations, and in further consideration for the making of the Loan, the Borrower and the
Agency hereby agree as follows:
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ARTICLE 1. DEFINITIONS
The following terms have the meanings and content set forth in this section wherever
used in this Loan Agreement, attached Exhibits, or documents incorporated into this Loan
Agreement by reference.
1.1 "AGENCY" is the Redevelopment Agency of the City of South San Francisco, a
public body corporate and politic, and its authorized representatives, officers, officials, directors,
employees, and agents.
1.2 "BORROWER" is BRIDGE Housing Corporation, a California nonprofit public
benefit corporation, and its authorized representatives, assigns, transferees, or successors-in-
interest thereto.
1.3 "BUDGET" means that budget for the development of the Project attached as
Exhibit B, which is hereby incorporated into this Loan Agreement by this reference.
1.4 "CITY" means the City of South San Francisco, a municipal corporation and its
authorized representatives, officers, officials, directors, employees, and agents.
1.5 "DEED OF TRUST" is that deed of trust and assignment of rents placed on the
Leasehold Estate as security for the Loan by Borrower as trustor with the Agency as beneficiary,
as well as any amendments to, modifications of, and restatements of said deed of trust, attached
hereto as Exhibit D. The terms of the Deed of Trust have been incorporated into this Loan
Agreement.
1.6 "PROJECT" is the acquisition of the Leasehold Estate and the development of
forty three (43) units of rental housing.
1.7 "ELIGIBLE COSTS" means all costs incurred by or paid by the Borrower in
conducting development activities for the Project.
1.8 "INSURANCE REQUIREMENTS" means the types and amounts of insurance
required to be carried by the Borrower as set out in Exhibit F, which is hereby incorporated into
this Loan Agreement by this reference.
1.9 "HAZARDOUS MATERIALS" or "HAZARDOUS SUBSTANCES" shall mean:
(a) any substance defined, regulated or listed (directly or by reference) as "hazardous
substances," "hazardous materials," "hazardous wastes," "toxic waste," "pollutant" or "toxic
substances" or similarly identified as hazardous to human health or the environment, in or
pursuant to (i) the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. '9601 et seq. ("CERCLA"), (ii) the Hazardous Materials Transportation Act, 49
U.S.C. '1802 et seq.; (iii) the Resource Conversation and Recovery Act, 42 U.S.C. '6901 et seq.;
(iv) the Clean Water Act, 33 U.S.C. '1251 et seq.; (v) California Health and Safety Code "25225-
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25117, 25249.5, 25249.8, 25281, and 25316; and (vi) the Clean Air Act, 42 U.S.C. 7901 et seq.;
and (vii) California Water Code '13050; Co) any amendments to such enumerated statutes or acts;
and (c) any other hazardous or toxic substance, material chemical, waste or pollutant identified
as hazardous or toxic or regulated under any other applicable federal, state or local
environmental laws, including without limitation, friable asbestos, polychtorinated biphenyls
("PCBs"), petroleum, natural gas and synthetic fuel products and by-products."
1.10 "LEASE" shall mean that certain ground lease by and between Borrower and
County dated ,2005.
1.11 "LEASEHOLD ESTATE" shall mean Borrower's leasehold interest in the
Property created by the Lease.
1.12 "LOAN'~ means the loan of funds provided by the Agency to the Borrower
pursuant to this Loan Agreement and the Pre-Construction Loan Agreement entered into between
Agency and Borrower on __., 200_.
1.13 "LOAN AGREEMENT" means this construction and permanent loan agreement
entered into between the Agency and the Borrower.
1.14 "LOAN DOCUMENTS" means collectively the Loan Agreement, the Note, the
Deed of Trust, and the Regulatory Agreement, as they may be amended, modified, or restated
from time to time, along with all exhibits and attachments to these documents.
1.15 "MEDIAN INCOME" shall mean the median gross yearly income, adjusted for
household size, in the County of San Mateo, California, as published from time to time by the
State of California. In the event that such income determinations are no longer published, or are
not updated for a period of at least eighteen (18) months, the Agency shall provide the Borrower
with other income determinations which are reasonably similar with respect to methods of
calculation to those previously published by the State.
1.16 "NOTE" is that promissory note executed by the Borrower in favor of the Agency
evidencing the Loan in an amount not to exceed Three Million Five Hundred Thousand Dollars
($3,500,000.00), a form of which is attached hereto and incorporated herein as Exhibit C.
1.17 "PRE-CONSTRUCTION LOAN" means the loan in the amount of Four Hundred
Thousand Dollars ($400,000) made by the Agency to BRIDGE to support the predevelopment
activities related to the Development.
1.18 "PRE-CONSTRUCTION LOAN AGREEMENT" means the Pre-Construction
Loan Agreement dated as of January 2004 between the Agency and BRIDGE.
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1.19 "PLANS AND SPECIFICATIONS" means the plans and specifications for the
construction of the Project approved by the Agency as well as any change orders approved by the
Agency.
1.20 "PROPERTY" consists of the real property located at
as more particularly described in Exhibit A attached hereto and incorporated herein.
1.21 "REGULATORY AGREEMENT" means the regulatory agreement in the form
attached as Exhibit E executed by the Borrower and the Agency.
ARTICLE 2. TERMS OF LOAN
2.1 LOAN. The Agency agrees to provide the Loan to the Borrower under the terms
and conditions of this Loan Agreement.
2.2 AMOUNT OF LOAN. On and subject to the terms and conditions of this Loan
Agreement, the Agency agrees to make and the Borrower agrees to accept the Loan in an amount
not to exceed Three Million Five Hundred Thousand Dollars ($3,500,000.00). The Loan shall be
evidenced by the Note, to be executed and delivered by the Borrower concurrently with the
execution of this Loan Agreement.
2.3 INTEREST. The Note shall bear simple interest at the rate of three percent (3%)
per annum on the principal amount outstanding from the date of the Note until paid, which
interest shall be deferred and shall accrue for the term of the Loan.
2.4 TERM OF LOAN. Subject to Section 2.5, the principal of the Loan and all
accrued interest shall be due and payable on the date fifty-five (55) years from the date of the
Note.
2.5 EXTENSION OF LOAN TERM. Upon the expiration date of the Term of this
Note as specified in Section 2.4 above, the Term of this Loan may be extended for an additional
twenty-five (25) years upon the written request of the Borrower to the Agency subject to the
following: (i) the Borrower is not in default under the Note or any other Loan Document, and (ii)
the Borrower agrees to execute an amendment to the Regulatory Agreement agreeing to extend
the affordability controls contained therein for the duration of the extension.
2.6 REPAYMENT OF LOAN. The Loan shall be repaid as follows:
A. The following definitions shall apply for the purposes of this Section 2:
(1) "Annual Operating Costs" with respect to a particular fiscal year
shall mean the following costs reasonably and actually incurred for operation and maintenance of
the Project: property taxes and assessments imposed on the Project; debt service currently due
on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the
Project) on loans associated with the development of the Project, annual bond issuer fees,
property management fees and reimbursements, not to exceed fees and reimbursements which
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are standard in the industry; premiums for property damage and liability insurance; utility
services not paid for directly by tenants, including water, sewer, and trash collection;
maintenance and repair; any annual license or certificate of occupancy fees required for
operation of the Project; security services; advertising and marketing; cash deposited into
reserves for capital replacements of the Project; cash deposited into an operating reserve;
payment of any previously unpaid portion of the developer fee; a partnership management fee in
the amount of Twenty Five Thousand Dollars ($25,000) (increased by three percent (3%)
annually), special limited partner asset management fee, extraordinary operating costs
specifically approved in writing by the Agency; payments of deductibles in connection with
casualty insurance claims not normally paid from reserves; the amount of uninsured losses
actually replaced, repaired or restored, and not normally paid from reserves; and other ordinary
and reasonable operating expenses approved in writing by the Agency and not listed above.
Annual Operating Expenses shall not include the following: depreciation, amortization,
depletion or other non-cash expenses; any amount expended from a reserve account; and any
capital cost with respect to the Project, as determined by the accountant for the Project.
(2) "Gross Revenue" with respect to a particular fiscal year shall mean
all revenue, income, receipts, and other consideration actually received from operation and
leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and
charges paid by tenants, Section 8 payments or other rental subsidy payments received for the
dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and
any other rental adjustments to leases or rental agreements; net proceeds from vending and
laundry room machines; the proceeds of business interruption or similar insurance and not paid
to senior lenders; the proceeds of casualty insurance not used to rebuild the Project and not paid
to senior lenders; and condemnation awards for a taking of part or all of the Project for a
temporary period not paid to senior lenders. Gross Revenue shall not include tenants' security
deposits, loan proceeds, capital contributions or similar advances.
(3) "Agency's Share of Residual Receipts" shall mean
percent ( %) of the Residual Receipts.
(4) "Residual Receipts" in a particular calendar year shall mean the
amount by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as
defined above).
B. Annual Payments. Commencing on following completion of the
Project, and on __ of each year thereafter for the Term of the Loan, Borrower shall make
repayments of the outstanding principal and accrued interest on the Loan equal to the Agency's
Share of Residual Receipts. The Agency shall provide the Borrower with any documentation
reasonably requested by the Holder to substantiate the Maker's determination of Residual
Receipts. In the event the Agency ceases to exist, all rights and obligations of the Agency under
this Agreement succeed to the City of South San Francisco.
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C. Payment in Full. All principal and accrued interest on the Loan shall be
due in full on the earlier to occur of(ii) the date of any Event of Default (as defined in Section
6.1), or (iii) the expiration of the Term
2.7 PREPAYMENT OF LOAN. No prepayment penalty will be charged to the
Borrower for payment of all or any portion of the Loan amount prior to the end of the terms
described herein. However, prepayment of the Loan shall not affect the Borrower's obligations
under the Regulatory Agreement, all of which shall remain in full force and effect for the entire
term as stated therein.
2.8 USE OF FUNDS. Loan proceeds may be used only for Eligible Costs in the
amounts specified in the Budget attached as Exhibit B, as amended by the Borrower and
approved by the Agency.
2.9 SECURITY. The Borrower shall secure its obligation to repay the Loan, as
executed by the Note, by executing the Deed of Trust, substantially in the form attached hereto
as Exhibit D, and recording it as a lien against the Leasehold Estate, junior in lien priority to any
deed of trust related to either (i) the bond financing, (ii) Multifamily
Housing Program funds from the California Department of Housing and Community
Development, or (iii)
2.10 RECORDING. On the date of closing for the Borrower's acquisition of the
Leasehold Estate, the Borrower shall cause the recordation of the Deed of Trust and the
Regulatory Agreement with the Recorder for the County of San Mateo, and shall deliver
conformed copies of the recorded documents to the Agency.
2.11 PRE-CONSTRUCTION LOAN CANCELLATION. Upon execution of this
Loan Agreement and pursuant to the Pre-Construction Loan Agreement dated as of January 2004
between the Agency and BRIDGE (the "Pre-Construction Loan Agreement"), the Pre-
Construction Loan Agreement shall terminate. The Agency shall cancel the promissory note
executed by BRIDGE for the Pre-Construction Loan and return the Note to BRIDGE. Any
advances under the Pre-Construction Loan shall be considered as advances of funds under the
Loan. Any interest accrued under the Pre-Construction Loan shall be considered as accrued
interest under the Loan
ARTICLE 3. LOAN DISBURSEMENT
3.1 LOAN PROCEEDS. Concurrent with the recordation of the Deed of Trust and
Regulatory Agreement and upon satisfaction of the conditions precedent to disbursement set
forth in Section 3.2, the Agency shall disburse the Loan to the Developer.
3.2 CONDITIONS PRECEDENT TO DISBURSEMENT OF LOAN. The Agency
shall disburse the Loan upon the satisfaction of the following conditions precedent:
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MN Revised Doc #Loan Agreement 735688_1;738001 6
Estate;
The Borrower has acquired (or is concurrently acquiring) the Leasehold
B. There exists no Event of Default (as defined in Section 6.1) nor any act,
failure, omission or condition that with the giving of notice or passage of time would constitute
an Event of Default; and
C. The Deed of Trust and Regulatory Agreement have been recorded against
the Leasehold Estate; and
D. The Borrower has executed and/or delivered to the Agency all documents,
instruments, and policies required under the Loan Documents, including but not limited to the
Deed of Trust, the Regulatory Agreement, and an ALTA Lender's policy of title insurance from a
title insurance company approved by the Agency in a form reasonably acceptable to the Agency;
and
E. The Borrower has provided to the Agency a certificate of insurance or
copy of an insurance policy, which policy shall be satisfactory to the Agency, as required by
Section 5.1 below; and
F. The Agency has approved the Plans and Specifications.
ARTICLE 4. AFFORDABLE UNITS; USE RESTRICTION
4.1 RECORDING REGULATORY AGREEMENT. Upon the closing of the
Borrower's acquisition of the Leasehold Estate, the Borrower and the Agency shall execute the
Regulatory Agreement substantially in the form attached as Exhibit E and the Borrower shall
record the Regulatory Agreement as an encumbrance against the Leasehold Estate.
4.2 LOW INCOME UNITS. During the term of the Regulatory Agreement,
Developer shall operate the Leasehold Estate and Project in accordance with the Regulatory
Agreement which requires: (a) seven (7) rental housing units be occupied by and available to
households whose total household incomes are twenty percent (20%) or less of Median Income;
(b) four (4) rental housing units be occupied by and available to households whose total
household incomes are forty percent (40%) or less of Median Income; and (c) ten (10) rental
housing units be occupied by and available to households whose total household incomes are
fifty percent (50%) or less of Median Income.
ARTICLE 5. INDEMNITY AND INSURANCE
5.1 INSURANCE COVERAGE.
The Borrower shall cause to have in full force and effect during the term of the Loan the
insurance listed in the Insurance Requirements, attached as Exhibit F. Such insurance shall name
the Agency and the City as additional insureds and also provide for and protect the Agency and
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MN Revised Doc #Loan Agreement 735688_1;738001
7
the City against incurring any legal cost in defending claims for alleged loss in connection with
the Project. The limitation on the amount of insurance shall not limit the responsibility of the
Borrower to indemnify, defend or hold the Agency or the City harmless or pay damages on
account of injury to persons or damage to property resulting from the Borrower's activities, or
the activities of any other person or persons for which the Borrower or any of Borrower's agents
are otherwise responsible, in connection with the Project.
5.2 NON-LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS. No
member, official, employee, agent or volunteer of the Agency or the City shall be personally
liable to the Borrower, or any successor in interest, in the event of any default or breach by the
Agency or for any amount which may become due to the Borrower or successor or on any
obligation under the terms of this Loan Agreement.
5.3 INDEMNITY. Except for the gross negligence, fraud or willful misconduct of
the Agency, its officials, employees, agents or volunteers, the Borrower undertakes and agrees to
defend, indemnify, and hold harmless the Agency, the City, or their respective officials,
employees, agents, or volunteers from and against all suits and causes of action, claims, losses,
demands, costs and expenses, including, but not limited to, reasonable attorneys' fees (including
reasonable costs allocable to in-house counsel) and costs of litigation, damage or liability of any
nature whatsoever, arising in any manner by reason of or incident to the performance of this
Loan Agreement on the part of the Borrower or any contractor or subcontractor of the Borrower.
5.4 HAZARDOUS MATERIALS INDEMNITY. Following the conveyance of the
Leasehold Estate to the Borrower by the Agency, the Borrower shall defend, with counsel
acceptable to the Agency, indemnify and hold harmless the Agency and the City and their
respective members, directors, officers, employees, agents, successors and assigns from and
against any loss, damage, cost, expense or liability (including any administrative or regulatory
actions) directly or indirectly arising out of or attributable to the use, generation, storage, release,
threatened release, discharge, disposal, or presence of hazardous materials on, under, or about the
Leasehold Estate including without limitation: (a) all foreseeable consequential damages; (b) the
costs of any required or necessary repair, cleanup or detoxification of the Leasehold Estate and
the preparation and implementation of any closure, remedial or other required plans; and (c) all
reasonable costs and expenses incurred by the Agency in connection with clauses (a) and (b),
including but not limited to reasonable attorneys' fees.
Borrower agrees that upon receipt of any notices of the presence of, or a release or
potential release of Hazardous Materials on or under the Leasehold Estate for which it is liable
under the provisions of this Agreement, Borrower shall timely initiate and diligently pursue and
complete all appropriate response, remediation and removal actions for the release, within the
deadlines specified by applicable laws and regulations.
ARTICLE 6. DEFAULT
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6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Loan Agreement:
and
Ao
The Borrower's failure to pay when due any sums payable under the Note;
B. The Borrower's failure to perform any of its obligations pursuant to this
Loan Agreement; and
C. The Borrower's default under the Lease.
6.2 NOTICE OF DEFAULT AND OPPORTUNITY TO CURE. For a monetary
Event of Default, the Agency shall give written notice to the Borrower of the Event of Default by
specifying: (a) the nature of the event or deficiency giving rise to the default, (b) the action
required to cure the deficiency, if an action to cure is possible, and (c) a date, which shall not be
less than thirty (30) calendar days from the date of receipt of the notice or the date the notice was
refused, by which such action to cure must have been commenced. For a non-monetary Event of
Default, the Agency shall give written notice to the Borrower of the Event of Default by
specifying: (a) the nature of the event or deficiency giving rise to the default, (b) the action
required to cure the deficiency, if an action to cure is possible, and (c) a date, which shall not be
less than one hundred twenty (120) calendar days fi'om the date of receipt of the notice or the
date the notice was refused, by which such action to cure must be taken.
6.3 AGENCY'S REMEDIES. Upon the happening of an Event of Default by the
Borrower and a failure to cure said Event of Default within the time specified in the notice of
Event of Default, the Agency may also proceed with any or all of the following remedies in any
order or combination the Agency may choose in its sole discretion:
A. Terminate this Loan Agreement, in which event the entire principal
amount outstanding under the Note shall immediately become due and payable at the option of
the Agency;
B. Pursue any other remedy allowed at law or in equity.
ARTICLE 7. TRANSFERS
7.1 NO TRANSFER. Except for an assignment to an affiliate nonprofit public
benefit corporation controlled by the Borrower, the Borrower may not assign, transfer, or
otherwise convey its interests and obligations under this Loan Agreement, the Regulatory
Agreement, the Note, or the Deed of Trust without the prior written consent of the Agency,
which consent shall not be unreasonably withheld. Absent such consent, the Borrower shall
remain accountable for the perfonr~ance of all such obligations under this Loan Agreement, the
Regulatory Agreement, the Note, and the Deed of Trust.
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ARTICLE 8. GENERAL PROVISIONS
8.1 CONFLICTS OF INTEREST. No member, official, employee or agent of the
Agency shall have any personal interest, direct or indirect, in this Loan Agreement nor shall any
such member, official, employee or agent participate in any decision relating to the Loan
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is, directly or indirectly, interested.
8.2 RECORDS. The Borrower shall be accountable to the Agency for all funds
disbursed to the Borrower pursuant to this Loan Agreement. The Borrower agrees to maintain
records that accurately and fully show the date, amount, purpose, and payee of all expenditures
drawn from Loan funds, and to keep all invoices, receipts, and other documents related to
expenditures from said Loan funds for not less than three (3) years after completion of the
Project.
8.3 NONDISCRIMINATION. The Borrower shall not discriminate or segregate in
the development, construction, use, enjoyment, occupancy, conveyance, lease, sublease, or rental
of any part of the Leasehold Estate on the basis of race, color, ancestry, national origin, religion,
sex, sexual preference, marital status, family status, source of income, physical or mental
disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC),
or any other arbitrary basis. The Borrower shall otherwise comply with all applicable local,
state, and federal laws concerning discrimination in housing.
8.4 CONSENTS AND APPROVALS. Any consent or approval of the Agency or the
Borrower required under this Loan Agreement shall not be unreasonably withheld. Any
approval required under this Loan Agreement shall be in writing and executed by an authorized
representative of the party granting the approval.
8.5 NOTICES, DEMANDS AND COMMUNICATIONS. Formal notices, demands
and communications between the Borrower and the Agency shall be sufficiently given and shall
not be deemed given unless dispatched by registered or certified mail, postage prepaid, return
receipt requested, or delivered personally, to the principal offices of the Borrower and the
Agency as follows:
Agency:
Redevelopment Agency of the City of South San Francisco
400 Grand Ave.
P.O. Box 711
South San Francisco, California 94083
Attention: Sylvia Payne, City Clerk
With a copy to:
Norma Fragoso
400 Grand Avenue
P.O. Box 711
South San Francisco, CA 94084
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Borrower:
BRIDGE Housing Corporation
345 Spear Street, Suite 700
San Francisco, CA 94105
Attention: Lydia Tan
8.6 BINDING UPON SUCCESSORS. All provisions of this Loan Agreement shall
be binding upon and inure to the benefit of the heirs, administrators, executors, successors-in-
interest, transferees, and assigns of each of the parties; provided, however, that this section does
not waive the prohibition on assignment of this Loan Agreement by the Borrower without the
Agency's consent.
8.7 RELATIONSHIP OF PARTIES. The relationship of the Borrower and the
Agency for this Project under this Loan Agreement is and at all times shall remain solely that of
a debtor and a creditor, and shall not be construed as a joint venture, equity venture or
partnership. The Agency neither undertakes nor assumes any responsibility or duty to the
Borrower (except as provided for herein) or any third party with respect to the Project, the
Leasehold Estate, or the Loan. Except as the Agency may specify in writing, the Borrower shall
have no authority to act as an agent of the Agency or to bind the Agency to any obligation.
8.8 WAIVER. Any waiver by the Agency or the Borrower of any obligation in this
Loan Agreement must be in writing. No waiver will be implied from any delay or failure by the
Agency to take action on any breach or default of the Borrower or to pursue any remedy allowed
under this Loan Agreement or under applicable law. Any extension of time granted to the
Borrower to perform any obligation under the Loan Documents shall not operate as a waiver or
release from any of its obligations under this Loan Agreement. Consent by the Agency to any
act or omission by the Borrower shall not be construed as consent to any other or subsequent act
or omission or to waive the requirement for the Agency's written consent to future waivers.
8.9 INTEGRATION. This Loan Agreement, including exhibits, executed by the
Borrower for the Leasehold Estate, if any, contains the entire agreement of the parties and
supersedes any and all prior negotiations, including but not limited to any documents related to
the Pre-Construction Loan.
8.10 AMENDMENTS AND MODIFICATIONS. Any amendments or modifications
to this Loan Agreement must be in writing, and shall be made only if executed by both the
Borrower and the Agency.
8.11 POLITICAL ACTIVITY. None of the funds, materials, property or services
contributed by the Agency or the Borrower under this Loan Agreement shall be used for any
partisan political activity or the election or defeat of any candidate for public office.
8.12 TERM OF AGREEMENT. This Loan Agreement shall commence on the date set
forth above and remain in full force and effect until the Loan is fully repaid.
144\16L217251.1
MN Revised Doc #Loan Agreement 735688_1;738001 1 1
8.13 GOVERNING LAW. This Loan Agreement shall be interpreted under and be
governed by the laws of the State of California, except for those provisions relating to choice of
law or those provisions preempted by federal law.
8.14 ATTORNEYS' FEES AND COSTS. In the event of an Event of Default or a
legal or administrative action commenced to interpret or to enforce the terms of this Loan
Agreement, the prevailing party in any such action shall be entitled to recover all reasonable
attorneys' fees (which as to any party shall include the allocated reasonable costs for services of
any party's in-house counsel) and costs in such action.
8.15 TIME. Time is of the essence in this Loan Agreement.
8.16 SEVERABILITY. Every provision of this Loan Agreement is intended to be
severable. If any provision of this Loan Agreement shall be held invalid, illegal, or
unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired.
144\16k217251.1
MN Revised Doc #Loan Agreement 735688_1;738001 12
IN WITNESS WHEREOF, the parties hereby have executed this Loan Agreement as of
the date first above written.
BORROWER:
BRIDGE Housing Corporation, a California
nonprofit public benefit corporation
By:
Its:
AGENCY:
Redevelopment Agency of the City of South San
Francisco, a public body, corporate and politic
By:
Barry M. Nagel, Executive Director
APPROVED AS TO FORM:
Steven T. Mattas, Agency Counsel
144\16k217251.1
MN Revised Doc #Loan Agreement 735688_1;738001 13
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT F
DESCRIPTION OF THE PROPERTY
BUDGET
FORM OF PROMISSORY NOTE
FORM OF DEED OF TRUST
FORM OF REGULATORY AGREEMENT
FORM OF iNSURANCE REQUIREMENTS
144\16~17251.1 ii
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
144\16217251.1 A- 1
Page 1 DESCRIPTION
Order No. 737852
CITY OF SOUTH SAN FRANCISCO
PARCEL ONE:
BEGINNING AT A POINT ON THE SOUTHERLY LINE OF GRAND AVENUE EXTENSION, W~ICH
POINT IS DISTANT SOUTH 53° 15' WEST, 118.07 FEET FROM A GRANITE MOUNT SET IN
THE WESTERLY BOUNDARY LINE OF THE LANDS OF THE SOUTH SAN FRANCISCO LAND AND
IMPROVEMENT COMPAI~Y, AND MARKED "L7"; RUNNING THENCE F2kSTERLY ON A CURVE TO THE
LEFT WITH A RADIUS OF 410, FEET, 215.26 FEET TO A POINT ON THE WESTERLY LINE OF
OAK AVENUE, FORMERLY OLD GRAND AVENUE EXTENSION; THENCE SOUTH 53° 15' WEST,
450.59 FEET ALONG SAID WESTERLY LINE; THENCE NORTH 360 45' WEST, 125 FEET TO THE
WESTERLY BOUNDARY LINE OF THE LANDS OF THE SOUTH SAN FRANCISCO LAlqD AND
IMPROVEMENT COM]PA/q~; THENCE ALONG SAID WESTERLY BOI/NDARY LINE, NORTH 53o 15'
EAST, 278.39 FEET TO THE POINT OF BEGINlgING.
ASSESSOR'S PARCEL NO. 011-311-110 (PORTION) JOINT PLANT NO. 011-031-311-03A
PARCEL TWO:
BEGINNIN~ AT THE INTERSECTION OF THE NORTh'WESTERLY LINE OF OAK AVEN-0E AND THE
SOUTHWESTERLY LINE OF THE IAkNDS DESCRIBED IN THE DEED FROM SOUTH SAN FRANCISCO
LAND AND IMPROVESfEIqT COMPANY, A CORPORATION, TO PIETRO UCEbLI, DATED OCTOBER 17,
].917 AIN-D RECORDED OCTOBER 29, i917, IN BOOK 26g OF DEEDS, AT PAGE 372, RECORDS
OF SAN MATEO COUNTY, CALIFORNIA; THENCE NORTH 36° 45' 00" WEST ALONG THE
SOUTHWESTERLY BOUI~DARY L/NE OF SA_ID LAST MENTIONED LANDS, 125 FEET TO THE
SOUTHEASTERLY BOUNDARY LINE OF THE IJkNDS DESCRIBED IN THE DEED FROM ELIZ/kBETH C.
ASHTON TO GIUSEPPI UCELLI, DATED SEPTEFIBER 27, 1905 AND RECORDED SEPTEMBER 27,
]905, IN HOOK 115 OF DEEDS, AT PAGE 582, RECORDS OF SAN MATEO COUNTY,
CALIFORNIA; THENCE SOUTH 53° 15' 00" WEST ALONG THE LAST MENTIONED SOUTHEASTERLY
BOUNDARY LINE, 50 FEET; THENCE SOUTH 36° 45' 00" EAST, 125 FEET TO THE
NORTHWESTERLY LINE OF OA_K AVENUE; THENCE NORTH 53° 15' 00" EAST, ALONG THE LAST
NAMED LINE, 50 FEET TO THE POINT OF BEGINNING.
ASSESSOR'S PARCEL NO. 011-311-070 JO1-NT PLANT NO. 011-031-311-07A
EXHIBIT B
BUDGET
144\162.17251.1 B- l
Project Budget
SOURCES AND USES
Sources of Funds
Construction Loan
Permanent Mortgage
AHP
City Loan
MHP Loan
Investor Pay In
Developer Equity
Deferred Developer Fee
Total Sources
Uses of Funds
Acquisition
Construction
Indirect Expenses
Financing and Carry Costs
Contingency & Reserve
Organizational Expenses and Fees
Total Uses
NET SURPLUS(SHORTFALL)
Construction
Period
$ 9,905,000
$
$
$ 3,500,000
$
$ lOO,OOO
$
$
$ 13,505,000
10,335,000
1,600,000
631,000
$ 830,00
109,000
13,505,000
Permanent
Period
-
2,066,000
-
3,500,000
4,350,000
4,435,000
693,000
lOO,OOO
15,144,000
10,335,000
1,650,000
631,000
930,000
1,598,000
15,144,000
EXHIBIT C
FORM OF PROMISSORY NOTE
144\16k217251.1 C~- 1
EXHIBIT C
FORM OF PROMISSORY NOTE
$3,500,000
South San Francisco, C~ifornia
,2005
FOR VALUE RECEWED, the undersigned BRIDGE Housing Corporation, a Califomia
nonprofit public benefit corporation ("Maker"), hereby promises to pay to the order of the
Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic
("Holder"), the principal sum of Three Million Five Hundred Thousand Dollars ($3,500,000)
(the "Loan") or such lesser amount as is actually disbursed to Maker by Holder.
1. Interest.
This promissory note (this "Note") shall bear simple interest at the rate of three percent
(3%) per annum on the principal amount outstanding from the date of this Note until paid, which
interest shall be deferred and shall accrue for the Term (as defined below).
2. Pa_¥xnents.
This Note shall be due and payable as set forth in Section 2.6 of the Loan Agreement by
and between Maker and Holder of even date herewith (the "Loan Agreement").
3. Deed of Trust.
This Note will be secured by a deed of trust to be executed by Maker, as trustor, for the
benefit of Holder (the "Deed of Trust") and recorded against Maker's leasehold interest in that
certain real property in South San Francisco, California (the "Property"). All covenants,
conditions, and agreements contained in the Deed of Trust are hereby made a part of this Note.
4. Term.
Subject to Section 5 below, the principal amount of this Note shall be due and payable on
the fifty-fifth (55th) anniversary of the date of this Note (the "Term").
5. Extension of Term.
Upon the expiration date of the Term of this Note as specified in Section 4, the Term of
this Note may be extended for an additional twenty-five (25) years upon the written request of
Maker to Holder provided that: (a) Maker is not in default under this Note or any other Loan
Document, and (b) Maker agrees to execute an amendment to the Regulatory Agreement
recorded against the Project agreeing to extend the affordability controls contained therein for an
additional twenty-five (25) years.
144\ 16k217296.1 1
6. Term of Payments.
(a) All payments under this Note shall be paid in currency of the United
States of America, which at the time of payment is lawful for the payment of public and private
debts.
(b) All payments shall be made payable to Holder and mailed or delivered in
person to Holder's office at 400 Grand Avenue, P.O. Box 711, South San Francisco, California
94083, or to such other place as Holder of this Note may from time to time designate.
7. Default.
(a) Any of the following shall constitute an event of default under this Note.
(1) Any failure to pay in full any payment required under this Note
when due which continues for more than thirty (30) days after Holder's delivery of a written
notice that such payment is due;
(2) Any failure in the performance by Maker of any term, condition,
provision, or covenant set forth in the Loan Agreement or the Regulatory Agreement recorded
against the Project which continues for more than one hundred twenty (120) days after delivery
of a written notice of the default by Holder;
(3) Except for an assignment to an affiliate controlled by the Maker or
a partnership in which an affiliate controlled by the Maker is the general partner, any transfer,
sale or other conveyance of the Property to any other entity without the consent of Holder;
(4) Any refinancing of the Project without Holder's consent.
(b) In the event of a default as determined by Holder, and at Holder's option,
all obligations pursuant to this Note shall immediately become due and payable.
(c) If an event of default should occur and be continuing, subject to
Section 7(a)(1) above, Holder may pursue all fights and remedies available under this Note or as
may otherwise be available to Holder.
8. Waivers.
(a) Maker expressly agrees that the term of this Note or the date of any
payment due hereunder may be extended from time to time with Holder's consent, and that
Holder may accept further security or release any security for this Note, all without in any way
affecting the liability of Maker.
144\ 16\217296.1 2
(b) No extension of time for payment of this Note or any installment hereof
made by agreement by Holder with any person now or hereafter liable for the payment of this
Note shall operate to release, discharge, modify, change or affect the original liability of Maker
under this Note, either in whole or in part.
(c) The obligations of Maker under this Note shall be absolute and Maker
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
9. Non-Recourse.
Holder's sole recourse in the event of a default by Maker shall be to the Property, except
in the event of (a) fraud by Maker, (b) any material misrepresentation made by Maker to Holder
in connection with the Loan, (c) misappropriation by Maker of any rents, security deposits, or
insurance or condemnation proceeds, or (d) commission of bad faith waste by Maker. The
foregoing provisions shall not prevent recourse to the collateral security for the Loan or
constitute a waiver, release or discharge of or otherwise affect the obligation to pay, any
indebtedness evidenced by this Note.
10. Miscellaneous Provisions.
(a) All notices to Holder or Maker shall be given in the manner and at the
addresses set forth in the Deed of Trust, or to such addresses as Holder and Maker may hereafter
designate in accordance with said Deed of Trust.
(b) In the event of litigation arising from the enforcement of or a default under
this Note, the non-prevailing party promises to pay all reasonable costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party in such litigation.
(c) This Note may be amended only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification or discharge is sought.
(d) This Note shall be governed by and construed in accordance with the laws
of the State of California.
(e) The times for the performance of any obligations hereunder shall be
strictly construed, time being of the essence.
(f) This Note has priority over any and all other residual receipts notes except
(g)
pledged by Holder.
This Note is non-negotiable and may not be sold, transferred, assigned or
144\16X217296.1 3
(h) Any capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Loan Agreement.
BRIDGE Housing Corporation, a California
nonprofit public benefit corporation
By:
Its:
144\ 16k217296.1 4
EXHIBIT D
FORM OF DEED OF TRUST
144\16~.17251.1 D-1
RECORDING REQUESTED BY
AND WHEN RECORDED IV[AIL TO:
Redevelopment Agency of the City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attn: City Clerk
DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
( APN 011-311-070 and 011--311-110 (portion))
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
("Deed of Trust") is made as of ,2005, by Bridge Housing Corporation, a California non-profit public benefit
corporation ("Trustor") to First American Title Insurance Company, as trustee ("Trustee"), for the benefit of the
Redevelopment Agency of the City of South San Francisco, a public body corporate and politic
("Agency")("Beneficlary').
WHEREAS, Beneficiary and Trustor have entered into that certain Loan Agreement dated as of the date
hereof (the "Loan Agreement") pursuant to which Beneficiary has loaned to Trustor the sum of $3,500,000 (the
"Loan"), and Trustor has issued to Beneficiary its Secured Promissory Note dated as of the date hereof
("Promissory Note") to secure repayment of the Loan;
WHEREAS, Trustor will own a leasehold interest in the real property described in ExhibitA attached
hereto; and
WHEREAS, Trustor has a leasehold interest in the property that will be developed with the Loan and/or will
otherwise derive a material financial benefit from the funding of the Loan;
WHEREAS, as a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter
into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a first priodty lien and security interest in the
Property as hereinafter defined subject only to those rights and interests of the property owner, the County of San
Mateo.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows.
1. Grant in Trust
Trustor, in consideration of the foregoing and the indebtedness herein recited, hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of
sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire
in and to that certain real property ("Land") located in San Mateo County, State of California and more particularly
described in ExhibitA attached hereto and incorporated herein by this reference, together with all of the following,
whether presently owned or hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land
("Improvements");
735768_1
b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights
used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter
owned or constructed or placed upon or in the Land or improvements and ail existing and future privileges, rights,
franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances
which may be in, under or produced from any part of the Land, and all water dghts, rights of way, gores or strips of
land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and
Improvements (collectively, ".Appurtenances");
c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether
moVeable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in
connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements,
repairs, additions or substitutions thereto (collectively, "Equipment");
d. All existing and future leases, subleases, licenses, and other agreements relating to the use or
occupancy of all or any portion of the Land (collectively, "Leases"), all amendments, extensions, renewals or
modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise
become payable thereunder to or for the benefit of Trustor, including but not limited to secudty deposits (collectively,
"Rents");
e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances,
Equipment, Leases, and Rents, including without limitation, all deposits made with or other secudty deposits given to
utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter
acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or
payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds"); and
f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements,
Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues");
All of the above-referenced Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds and Gross
Revenues as hereby conveyed to Trustee or made subject to the secudty interest herein described are collectively
referred to herein as the "Property."
2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of
the following (the "Secured Obligations"): (i) all present and future indebtedness evidenced by the Promissory Note
and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note;
(ii) all present and future obligations of Trustor to Beneficiary under the Loan Agreement; (iii) all additional present
and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor
(whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust;
(vi) all modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether
evidenced by new or additional documents; and (vii) reimbursement of all amounts advanced by or on behalf of
Beneficiary to protect Beneflciary's interests under this Deed of Trust.
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and
unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the
Property. This is an absolute assignment and not an assignment for secudty only. Beneficiary hereby confers upon
Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds as they
become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of
Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the
adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver
to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or
otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs
735768_1
and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby,
and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue,
income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the
Property. The entedng upon and taking possession of the Property, the collection of such rents, issues, and profits,
and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all
or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary,
Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any
of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted
hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land and
Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for
performing any obligation of the lessor under any Lease, shall not be liable in any manner for the Property, or the
use, occupancy, enjoyment or operation of any part of it, and unless due solely to the willful misconduct or gross
negligence of Beneficiary, shall not be responsible for any dangerous or defective condition of the Property or any
negligence in the management, repair or control of the Property.
4. Secudty Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute
assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property
may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be
or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security
interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust
constitutes a secudty agreement under the California Uniform Commercial Code, as amended or recodified from time
to time (the "UCC"), covedng all such Property. To the extent such Property is not real property encumbered by the
lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties
that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes
of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the
Land and Improvements.
5. Financinq Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party,
to file such financing statements and amendments thereof and such continuation statements with respect thereto as
Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in such Property and Rents,
without requiring any signature or further authorization by Trustor. Trustor shall pay all fees and costs that Beneficiary
may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may
reasonably require. If any financing statement or other document is filed in the records normally pertaining to
personal property, that filing shall never be construed as in any way derogating from or impairing this Deed of Trust
or the dghts or obligations of the parties under it.
Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected
in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be
regarded as part of the real estate encumbered by this Deed of Trust irrespective of whether (i) any such item is
physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment
items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such
item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such
financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in
eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or
future lease or dghts to income growing out of the use and/or occupancy of the property conveyed hereby, whether
pursuant to lease or otherwise, shall never be construed as in any way altering any of the rights of Beneficiary as
determined by this instrument or impugning the pdority of Beneficiary's lien granted hereby or by any other recorded
document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the
event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2),
and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of
735768_1 ,.~
persons, including but not limited to the federal government and any subdivisions or entity of the federal government.
6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of
the UCC with respect to ail of the Property constituting fixtures, is being recorded as a fixture financing statement and
filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the
Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate
records of San Mateo County and shall also operate from the date of such filing as a fixture filing in accordance with
Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing
statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor
shall be deemed to be the "debto¢' and Beneficiary shall be deemed to be the "secured party" for all purposes under
the UCC. The full name of Trustor and the mailing address of Trustor are set forth in Section 10.2 of this Deed of
Trust.
7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties.
7.1 Ownership of Property,. Trustor represents and warrants that Trustor (i) lawfully possess and holds
a leasehold interest in the Property pursuant to that certain Ground Lease with San Mateo County; (ii) has the right
to grant and convey its interest in the Property; (iii) that this Deed of Trust creates a priority monetary lien on
Trustor's entire interest in the Property, subject only to encumbrances of record; (iv) subject only to encumbrances of
record, the Land is free and clear of any deeds of trust, mortgages, security agreements, reservations of title or
conditional sales contracts; and (v) there is no financing statement affecting the Property on file in any public office.
Trustor warrants and will defend generally the title to the Property against all claims and demands, subject to
encumbrances of record.
7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in
writing, as of the date hereof to the best knowledge of Trustor: (i) Trustor has not received any notice from any
governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of
other governmental regulations concerning the Land that has not previously been corrected, and no condition on the
Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance
or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or
allowing any third party dghts to use the Property are in force; (iii) there are no threatened or pending actions, suits,
or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the
Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the
Land or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which
have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could
result in a material and adverse change in the condition of the Land; (vii) alt information that Trustor has delivered to
Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents
have disclosed to Beneficiary all matedal facts concerning the Property.
7.3 Authority. Trustor further represents and warrants that this Deed of Trust and all other documents
delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and
delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to
which Trustor is a pady or which affects the Property.
7.4 Payment and Performance of Secured Obliqations. Trustor shall promptly pay and perform all
obligations of Trustor arising in connection with the Secured Obligations in accordance with the respective terms of
each such Secured Obligation.
7.5 Preservation and Maintenance of Property; Compliance with Laws. Trustor shall keep the Land
and improvements located thereon in good repair and condition, and from time to time make necessary repairs,
735768_1
renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to
comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property.
7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default
hereunder if the Property, any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated,
leased, licensed or encumbered without the pdor written consent of Beneficiary or otherwise in violation of the
requirements of the Loan Agreement provided, however, that Trustor may sell, transfer, lease pledge, or assign the
Property to an affiliate controlled by the Borrower or a partnership in which an affiliate controlled by the Borrower is
the general partner. The consent by Beneficiary to any sale, transfer, lease, pledge, encumbrance, creation of a
security interest in, or other hypothecation of the Property shall not be deemed to constitute a novation or consent to
any further sale, transfer, lease, pledge, encumbrance, creation of a security interest in or other hypothecation. If any
of the foregoing shall occur, or if Trustor agrees to sell, assign, convey, transfer, hypothecate, lease, license, or
encumber the Property, or any part thereof, whether voluntarily or involuntarily, by operation of law or otherwise
without the prior wdtten consent of Beneficiary or otherwise in violation of the Loan Agreement and/or Promissory
Note, without limiting the provisions of Section 8 hereof, all obligations secured by this instrument, irrespective of the
matudty dates expressed therein, at the option of Beneficiary, and without demand shall immediately become due
and payable. As used in this Section 7.6, the term "transfer" includes, without limitation, the following transactions:
(a) Any total or partial sale, assignment or conveyance, or creation of any trust or power, or
any transfer in any other mode or form with respect to the Property or any part thereof or any interest therein, or any
contract or agreement to do the same;
(b) The cumulative transfer of more than ten percent (10%) of the capital stock, partnership
profit and loss interest, or other form of interest in Trustor; and
(c) Any merger, consolidation, sale or lease of all or substantially all of the assets of Trustor
provided that this provision shall not be interpreted to prohibit leasing of the Property to tenants leasing the individual
units comprising the Project located upon the Property.
7.7 Inspections. Beneficiary and its agents and representatives shall have the right at any reasonable
time upon reasonable notice to Trustor to enter upon and inspect the Property.
7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies,
assessments and other charges affecting the Property. Trustor shall immediately discharge or cause to be
discharged any lien on the Property (other than encumbrances approved by Beneficiary as of the date hereof in
writing) to which Beneficiary provide written objection. Trustor shall pay when due each obligation secured by or
reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part
of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or
subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, levy, charge or assessment so long as
its validity is being actively contested in good faith and by appropriate actions and/or proceedings.
7.9 Subroqation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of
record or not, which are discharged in whole or in part by Beneficiary in accordance with this Beed of Trust.
7.10 Hazard, Liability and Workers' Compensation Insurance.
7.10.1 At all times during the term hereof, Trustor shall keep the improvements and personal
property now existing or hereafter erected on the Property insured against loss by fire, vandalism and malicious
mischief by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full replacement
value basis and shall name Beneficiary as loss payee. The full replacement value of the improvements to be insured
shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently
735768_1
than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it
elects to have the replacement value redetermined by the insurance company. The proceeds collected under any
insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary
may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to
Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate
any act done pursuant to such notice.
7.10.2 Trustor shall at all times during the term hereof, maintain a comprehensive general liability
insurance policy in an amount not less than $5,000,000 per occurrence, combined single limit. Such policy shall
name the Beneficiary as additional insured. Trustor shall maintain workers' compensation insurance as required by
law.
7.10.3 Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates
evidencing each of the insurance policies required by this Section, and such certificates shall provide that at least
thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in
coverage under each such policy.
7.10.4 If any insurance policy required hereunder is canceled or the coverage provided
thereunder is reduced, Trustor shall, within fifteen (15) days after receipt of wdtten notice of such cancellation or
reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a
certificate showing that the required insurance has been reinstated or provided through another insurance company
or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option,
procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such
expense upon receipt of billing from Beneficiary.
7.10.5 The insurance policies required hereunder shall be issued by insurance companies
authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most
recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the
insurer to provide at least 30 days written notice to Beneficiary prior to change in coverage, cancellation or expiration
thereof.
7.11 Hazardous Materials.
Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to
the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined
below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no
buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of
violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the
Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to
investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental
Law; (iv) there is no monitodng program required by the Environmental Protection Agency or any other governmental
agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been
spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in
containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and
(vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably
available to Trustor relating to the Land concerning Hazardous Materials.
Trustor shall not cause or permit any Hazardous Materials to be brought upon, kept, stored or used in, on,
or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily
used in the course and scope of Trustor's operations on the Land in compliance with all applicable laws, and shall not
cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is
735768_1
discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the
Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or
from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all
Environmental Laws.
Trustor hereby releases and waives any and all claims against Beneficiary for indemnity or contribution in the
event that Trustor becomes liable for any cost or obligated to undertake any action pursuant to any Hazardous
Material Claim or any Environmental Law. Trustor shall indemnify, defend (with counsel reasonably acceptable to
Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively,
"lndemnitee~") harmless from and against any and all loss, claim, including administrative actions or claims, liability,
damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees
and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or
cause of action, arising in connection with the breach of Trustor's covenants and obligations set forth in this Section
7.11, the breach of Trustor's representations and warranties set forth in Loan Agreement or otherwise adsing in
connection with the actual or alleged Release or presence of any Hazardous Materials on, under, in or about the Land,
whether foreseeable or unforeseeable, regardless of the source of such Release or when such Release occurred or
such presence is discovered. The foregoing indemnity includes, without limitation, all costs of investigation,
assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of
determining whether the Land is in compliance with Environmental Laws, all costs associated with bdnging the Land
into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to
persons, property, or natural resources.
Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the
following:
(i) pay or satisfy any judgment or decree that may be entered against any lndemnitee or Indemnitees
in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be
indemnified under this Deed of Trust;
(ii) reimburse Indemnitees for any expenses paid or incurred in connection with any matters against
which Indemnitees are entitled to be indemnified under this Deed of Trust; and
(iii) reimburse Indemnitees for any and all expenses, including without limitation out-of-pocket
expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement
by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or
administrative proceeding.
Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or
by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or
modification of any Loan Agreement; (ii) any extensions of time for performance required by any Loan Agreement;
(iii) any provision in any of the Loan Agreement limiting Beneficiary's recourse to property secudng the obligations, or
limiting the personal liability of Trustor or any other party for payment of all or any part of the obligations; (iv) the
accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or
any other party under any Loan Agreement, (v) the release of Trustor or any other person, by Beneficiary or by
operation of law, from performance of any obligation under any Loan Agreement; (vi) the release or substitution in
whole or in part of any security for the secured obligation; and (vii) Beneficiary's failure to properly perfect any lien or
security interest given as security for the secured obligation.
The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that
Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section
without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other
735768_1 7
security, pursued any rights against any guarantor or other party, or pursued any other dghts available under the
Loan Document or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall
survive any repayment or discharge of the secured obligation, any foreclosure proceeding, any foreclosure sale, any
delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust.
Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that
each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(0(2) of the
California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental
Provisions"), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of
contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil
Procedure ("Section ?36") for the recovery of damages and for the enforcement of the Environmental Provisions.
Pursuant to Section 736, Beneflciary's action for recovery of damages or enforcement of the Environmental
Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil
Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections
580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure.
"Hazardous Material" means any substance, material or waste which is or becomes regulated by any
federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct
or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance,
material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material",
"hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or
pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic
Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and
Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C.
Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water
Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the Califomia
Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the
California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the
California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe
Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the
Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are
hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste
which is defined as such or regulated by any "Superfund" or"Superlien" law, or any Environmental Law; or (v) any
other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other
federal, state or local environmental law, including without limitation, asbestos, polychlodnated biphenyls, petroleum,
natural gas and synthetic fuel products and by-products.
"Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders,
decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating
authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or
protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents,
to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii)
protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases
of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into
commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution,
transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances
or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later
time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the
Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the
Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation
and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the
735768_1
Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act
[California Health and Safety Code Section 25280, et seq.], the Califomia Hazardous Substances Account Act
[California Health and Safety Code Section 25300, et seq.], the Califomia Hazardous Waste Act [California Health
and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California
Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [Califomia
Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations
promulgated thereunder.
7.12 Notice of Claims; Defense of Security; Reimbursement of Costs.
(a) Notice of Claims. Within three business days after any of the following shall occur, Trustor shall
provide written notice thereof to Beneficiary: (1) the occurrence of any Event of Default hereunder of which Trustor
acquires knowledge; (2) any change in name, identity, legal structure, business location, or address of Trustor; or (3)
any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in
excess of an aggregate of Twenty Five Thousand Dollars ($25,000). Trustor shall ensure that Beneficiary shall
receive timely notice of, and shall have a dght to cure, any default under any other financing document or other lien
affecting the Property and that provisions mandating such notice and allowing such right to cure shall be included in
all such documents.
(b) Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the
Property and title to and dght of possession of the Property, the security of this Deed of Trust and the dghts and
powers of Beneficiary and Trustee created under it, against all adverse claims.
(c) Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and
expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection
with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of
obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs,
expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any
terms of this Deed of Trust, including any rights or remedies afforded to Beneficiary or Trustee or both of them under
Section 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding adsing under or relating to
this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property
under the power of sale granted hereunder or any judicial foreclosure and any cost of evidence of title.
7.13 Indemnification.
(a) Trustor shall indemnify, defend (with counsel selected by Beneficiary and reasonably acceptable to
Trustor), and hold harmless the Indemnitees (as defined in Section 7.11) from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, claims, demands, penalties, fines, orders, judgments, injunctive or
other relief, expenses and charges (including reasonable attorney's fees and expenses) (all of the foregoing are
collectively referred to as "Liabilities") adsing directly or indirectly in any manner in connection with or as a result of
(a) any breach of Trustor's covenants under the Loan Agreement, (b) any representation by Trustor which proves to
be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or
other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any
other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building,
construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any
action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to
or arises out of the Property, or the Loan Agreement or any transaction contemplated thereby, or any failure of
Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided
that no Indemnitee shall be entitled to indemnification under this Section for matters solely caused by such
Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the
repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained
735768_1
herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale,
any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust.
(b) Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other
Person as a consequence of any of the following:
(i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to
Beneficiary in this Deed of Trust;
(ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under
any agreement related to the Property or under this Deed of Trust; or
(iii) Any loss sustained by Trustor or any third party resulting from any act or omission of
Beneficiary in managing the Property, after an Event of Default, unless the loss is caused by the willful misconduct or
bad faith of Beneficiary.
Trustor hereby expressly waives and releases all liability of the types described above, and agrees that
Trustor shall assert no claim related to any of the foregoing against Beneficiary.
7.14 Condemnation Awards. Any award of damages in connection with any condemnation for public
use of or injury to the Property or any part thereof is hereby assigned to, and shall be paid to Beneficiary, who may
apply such moneys to any indebtedness secured hereby and in such order as Beneficiary may determine, or at
option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application
or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to
such notice.
7.15 Release, Extension, Modification. At any time and from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for
endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or
plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join
in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to
time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any
Secured Obligation, (ii) extend the time for payment or othe~ise alter the terms of payment of any Secured
Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv)
substitute or release any property securing the Secured Obligations.
7.16 Reconveyance. Upon written request of Beneficiary stating that the secured obligation has been
paid in full, and upon surrender of this Deed of Trust, the Loan Agreement and Promissory Note, Trustee shall
reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any
reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness
thereof. Trustor shall pay all fees, including attorneys' fees, of Trustee and all recordation fees related to such
reoonveyanoe.
7.17 Ri.qht to Cure. Should Trustor fail to make any payment or do any act as herein provided, then
Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without
releasing Trustor from any obligation hereof, may do any of the following: (i) make or do the same in such manner
and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being
authorized to enter upon the Property for such purposes; (ii) appear in, commence, and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; (iii) pay,
purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be
prior or supedor hereto; and (iv) in exercising any such powers, or in enforcing this Deed of Trust by judicial
735768_1 ~0
foreclosure, pay necessary expenses, employ counsel, and pay reasonable attorneys' fees. Any amounts disbursed
by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.
8. Default and Remedies
8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under
this Deed of Trust upon the occurrence of any one or more of the following events:
(i) An Event of Default under the Loan Agreement;
(ii) An Event of Default under the Promissory Note;
(iii) Trustor fails to perform any obligation to pay money which arises under this Deed of Trust,
and does not cure that failure within five (5) days following written notice from Beneficiary or Trustee;
(iv) Trustor violates any provision of Section 7.6 pertaining to restrictions on sale, transfer,
lease, or encumbrance of the Property;
(v) Trustor fails to maintain the insurance coverage required under Section 7.10;
(vi)
Assessments);
Trustor fails to comply with the requirements of Section 7.8 (Charges, Liens, Taxes and
(vii) Any representation or warranty of Trustor contained in or made in connection with the
execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any
other Loan Document proves to have been false or misleading in any matedal respect when made;
(viii) A default has been declared by any lender under any loan or other obligation secured by
a deed of trust on the Property or part thereof, and such default remains uncured beyond the expiration of any
applicable cure period;
(ix) The holder of any other debt instrument secured by a mortgage or deed of trust on the
Property or part thereof exercises a dght to declare all amounts due and payable under that debt instrument
immediately due and payable;
(x) Trustor fails to perform any obligation arising under this Deed of Trust other than one
enumerated in this Section 8.1, and does not cure that failure either within thirty (30) days ("Initial Cure Period")
after written notice from Beneficiary or Trustee, or within ninety (90) days after such written notice, provided that
Trustor commences within the Initial Cure Period and diligently continues to cure the failure, and Beneficiary,
exercising reasonable judgment, determines that the cure cannot reasonably be completed at or before expiration of
the Initial Cure Period; or
(xi) A default other than one enumerated in this Section 8.1 occurs under the secured
obligation and continues beyond the expiration of any applicable cure period.
8.2 Remedies.
Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default,
Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may
exercise any one or more or all, of the remedies set forth in the Loan Agreement or Promissory Note, and any other
remedy existing at law or in equity or by statute. All of the foregoing rights and remedies shall be cumulative, and
735768_1
the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to
collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable
attorneys' fees and costs of title evidence.
(a) Acceleration. Beneficiary may declare the secured obligation to be due and payable
immediately.
(b) Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain
appointment of, a receiver for the Property.
(c) Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take
possession of, manage and operate all or any part of the Property, and may also do any and all other things in
connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to
protect the security of this Deed of Trust. Such other things may include: taking and possessing all of Trustor's or the
then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on
such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying
Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction;
and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the
Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land.
Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney- in-fact to perform such acts
and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with
taking these measures, including endorsement of Trustor's name on any instruments. Regardless of any provision of
this Deed of Trust, Beneficiary shall not be considered to have accepted any property other than cash or immediately
available funds in satisfaction of any obligation of Trustor to Beneficiary, unless Beneficiary has given express written
notice of Beneficiary's election of that remedy in accordance with UCC Section 9621, as it may be amended or
recodified from time to time.
(d) Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of
Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the
Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to
protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or
proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed
of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in
Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of
Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or
paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting
any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to
assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Subsection
8.2(d) either with or without giving notice to any Person, except for notices required under applicable law.
(e) UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party
under the UCC.
(f) Judicial Action. Beneficiary may bdng an action in any court of competent jurisdiction to
foreclose this instrument or to obtain specific enforcement of any of the covenants or agreements of this Deed of
Trust.
(g) Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the
discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to
be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.
735768_1
8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall
execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to
be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of
each County wherein the Property or some part thereof is situated.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note
or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed
with a sale of the Property, pursuant to the provisions of law and this Deed of Trust.
Notice of sate having been given as then required by law, and not less than the time then required by law
having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property
at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it
may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time
of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public
announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its
deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such
deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor,
Trustee, or Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including cost of
evidence of title and reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to
payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof, and all outstanding
sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.
Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether
or not a default has occurred hereunder, if an Event of Default has occurred under the Loan Agreement or
Promissory Note, and if in connection with such Event of Default, Beneficiary exercises its right to foreclose on the
Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Loan Agreement and
Promissory Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with
such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal
balance and all other amounts due under the Loan Agreement and Promissory Note.
At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the
Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property,
Beneficiary may settle for the purchase price by crediting the sales price of the property against the following
obligations:
(a) First, the portion of the secured obligation attributable to the expenses of sale, costs of any
action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section
7.12(c); and
(b) Second, the remaining balance of all other secured obligations in any order and proportions as
Beneficiary in its sole discretion may choose.
8.5 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by
this Deed of Trust, Trustor shall have the dght to have any proceedings begun by Beneficiary to enforce this Deed of
Trust discontinued at any time pdor to five days before sale of the Property pursuant to the power of sale contained in
this Deed of Trust or at any time pdor to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays
Beneficiary all sums which would be then due under this Deed of Trust if the secured obligation had no acceleration
provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of
735768_1
Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and
agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as
provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as
Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property
and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such
payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and
effect as if no acceleration had occurred.
8.6 Limitations of Power of Sate Notwithstanding anything to the contrary contained herein or in any
documents secured by this deed of trust or contained in any subordination agreement, the Beneficiary acknowledges
and agrees that in the event of a foreclosure or deed-in-lieu of foreclosure (collectively, "Foreclosure") with respect to
the property encumbered by this deed of trust, the following rule contained in Section 42(h)(6)(E)(ii) of the Internal
Revenue Code of 1986, as amended, shall apply:
For a pedod of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated
by the regulatory agreement with the California Tax Credit Allocation Committee, (i) none of the tenants
occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for
good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the
Code.
9. Miscellaneous Provisions
9.1 Additional Provisions. The Loan Agreement grants further rights to Beneficiary and contains
further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the
Property.
9.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at
the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC.
Beneficiary's address set forth below is the address for Beneficiary as secured party under the UCC. Except for any
notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of
Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other
address as a party may designate by written notice delivered to the other parties in accordance with this Section. All
such notices shall be sent by:
(a) personal delivery, in which case notice shall be deemed delivered upon receipt;
(b) certified or registered mail, return receipt requested, in which case notice shall be deemed
delivered two (2) business days after deposit, postage prepaid in the United States mail;
(c) nationally recognized ovemight courier, in which case notice shall be deemed delivered one (1)
day after deposit with such courier; or
(d) facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided
that a transmission report is generated reflecting the accurate transmission thereof.
Beneficiary:
City of South San Francisco Redevelopment Agency
400 Grand Avenue
South San Francisco, California 94568
Attention: Executive Director
735768_1
Trustor:
BRIDGE Housing Corporation
345 Spear Street, Suite 700
San Francisco, CA 94105
Attention: Lydia Tan
Trustee:
First American Title Insurance Company
[Insert Address of Title Company]
Attention: Chief Title Officer
9.3 Successors and Assigns. The terms, covenants and conditions of this Deed of Trust shall be
binding on and inure to the benefit of the heirs, successors, and assigns of the parties; provided however this
Section 9.3 does not waive the provisions of Sections 7.6.
9.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or
trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of
the Recorder of San Mateo County, it shall be conclusive evidence of the appointment of such trustee or trustees,
and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.
9.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce
any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or
proceeding, including reasonable attorneys' fees.
9.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the
State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under
or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the
"Property Jurisdiction"). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall
have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents.
Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any
other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this
Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions,
and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for
convenience only and are not intended to affect the interpretation or construction of the provision~ herein contained.
In this Deed of Trust, whenever the context so requires, the singular number includes the plural.
9.7 Waiver, Modification and Amendment. Each waiver by Beneficiary or Trustee must be in writing, and
no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by
Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any
act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive
the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment
to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in
writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneflciary's
acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of
its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to
pay.
9.8 Joint and Several Liability. If Trustor consists of more than one person, each shall be jointly and
severally liable for the faithful performance of all of Trustor's obligations under this Deed of Trust.
735768_1
9.9
9.10
Counterparts. This Deed of Trust may be executed in counterparts, each of which shall be an
odginal and all of which taken together shall constitute one and the same agreement.
The pleading of any statute of limitations as a defense to any and all obligations secured by this
Deed of Trust is hereby waived to the full extent permissible by law.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.
Bridge Housing Corporation
By:
Its:
SIGNATURES MUST BE NOTARIZED.
735768_1
Exhibit A
Land
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF SOUTH SAN FRANCISCO, COUNTY OF
SAN MATEO, STATE OF CALIFORNIA DESCRIBED AS FOLLOWS:
735768_1
ACKNOWLEDGMENT
State of California)
County of San Mateo )
) SS,
On before me, a Notary Public, personally
appeared , personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(is), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed-ed the instrument.
WITNESS my hand and official seal.
NOTARY PUBLIC
735768_1
EXHIBIT E
FORM OF REGULATORY AGREEMENT
144\16217251.1 E-1
EXHIBIT E
FORM OF REGULATORY AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Redevelopment Agency of the City of South San Francisco
400 Grand Ave.
P.O. Box 711
South San Francisco, California 94083
Attention: Sylvia Payne, City Clerk
No fee for recording pursuant to
Government Code Section 27383
REGULATORY AGREEMENT
This Regulatory Agreement (the "Agreement") is made and entered into as of this __
day of ,2005, by and between the Redevelopment Agency of the City
of South San Francisco, a public body, corporate and politic (the "Agency"), and BRIDGE
Housing Corporation, a California nonprofit public benefit corporation (the "Borrower").
RECITALS
A. The Borrower is constructing a forty three (43) unit housing development
affordable to low income households (the "Project") on a parcel of real property located at
in South San Francisco, California (the "Property").
B. The Agency has made a loan to the Borrower in the amount not to exceed Three
Million Five Hundred Thousand Dollars ($3,500,000.00) to assist in developing the Project (the
"Loan").
D. The Loan funds are derived by the Agency from the Agency's Low and Moderate
Income Housing Fund (the "Housing Fund"). Pursuant to California Health and Safety Code
Section 33334.2 et seq., the Agency must restrict housing assisted with funds derived from the
Housing Fund, so that the housing remains affordable to low and moderate income households
for the longest feasible time. This Agreement is intended to implement the requirements of
California Health and Safety Code Section 33334.2 et seq.
E. The Agency agreed to make the Loan to the Borrower on the condition that the
Project be maintained and operated in accordance Sections 33334.2 et seq. and in accordance
with additional restrictions concerning affordability, operation, and maintenance of the Project,
as specified in this Agreement.
MNRegulatory Agreement 735708_12; 738001
F. In consideration of receipt of the funds under the Loan, the Borrower has further
agreed to observe all the terms and conditions set forth below.
G. In order to ensure that the Project will be used and operated in accordance with
these conditions and restrictions, the Agency and the Borrower wish to enter into this
Agreement.
THEREFORE, the Agency and the Borrower hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions.
When used in this Agreement, the following terms shall have the respective meanings
assigned to them in this Article 1.
(a) "Actual Household Size" shall mean the actual number of persons in the
applicable household.
(b) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a household, as calculated in accordance with 25 California Code of Regulations
Section 6914 or pursuant to a successor state housing program that utilizes a reasonably similar
method of calculation of adjusted income. In the event that no such program exists, the Agency
shall provide the Borrower with a reasonably similar method of calculation of adjusted income as
provided in said Section 6914.
(c) "Agency" shall mean the Redevelopment Agency of the City of South San
Francisco, a public body, corporate and politic.
(d) "Agreement" shall mean this Regulatory Agreement.
(e) "Assumed Household Size" shall mean a household of one person in the
case of a studio unit, two persons in the case of a one-bedroom unit, and three (3) persons in the
case of a two-bedroom unit, four (4) persons in the case of a three-bedroom unit and five (5)
persons in the case of a four-bedroom unit, unless the Project receives financing from a federal
program that utilizes different household size assumptions, in which event the federal program
household size assumptions shall be utilized.
(f) "Borrower" shall mean BRIDGE Housing Corporation, a California
nonprofit public benefit corporation.
(g) "Deed of Trust" shall mean the Deed of Trust of even date herewith
securing the Note and recorded against the borrower's leasehold interest in the Property.
MNRegulatory Agreement 735708_12; 738001 2
(h) "Fifty Percent Household" shall mean a household with an Adjusted
Income which does not exceed fifty percent (50%) of Median Income, adjusted for Actual
Household Size.
(i) "Fifty Percent Units" shall mean the Units which, pursuant to Section 2.1
below, are required to be occupied by Fifty Percent Households.
(j) "Forty Percent Households" shall mean a household with an Adjusted
Income which does not exceed forty percent (40%) of the Median Income, adjusted for Actual
Household Size.
(k) "Forty Percent Units" shall mean the Units which, pursuant to Section 2.1
below, are required to be occupied by Forty Percent Households.
(1) "Loan" shall mean all funds loaned to the Borrower by the Agency under
the Loan Agreement by and between Borrower dated of even date herewith.
(m) "Median Income" shall mean the median gross yearly income, adjusted for
Actual Household Size as specified herein, in the County of San Mateo, California, as published
from time to time by the State of California. In the event that such income determinations are no
longer published, or are not updated for a period of at least eighteen (18) months, the Agency
shall provide the Borrower with other income determinations which are reasonably similar with
respect to methods of calculation to those previously published by the State.
(n) "Note" shall mean the promissory note from the Borrower to the Agency
evidencing all or any part of the Loan.
(o) "Project" shall mean the Borrower's fee interest or leasehold in the
Property and the forty three (43) units to be developed by the Borrower.
(p) "Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
(q) "Rent" shall mean the total of monthly payments by the Tenant of a Unit
for the following: (1) use and occupancy of the Unit and land and associated facilities, including
parking; (2) any separately charged fees or service charges assessed by the Borrower which are
required of all Tenants, other than security deposits; (3) the cost of an adequate level of service
for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuel, but not telephone service, cable television service
or any other utility or service permitted to be excluded bom the calculation of Rent pursuant to
the terms of 25 California Code of Regulations Section 6918; and (4) any other interest, taxes,
fees or charges for use of the land or associated facilities and assessed by a public or private
entity other than the Borrower, and paid by the Tenant.
MNRegulatory Agreement 735708_12; 738001 3
(r) "Tenant" shall mean a qualified household occupying a Unit.
(s) "Term" shall mean the term of this Agreement, which shall commence on
the date that this Agreement is recorded in the Official Records of the County of San Mateo and
shall continue in effect for fifty-five (55) years following the date of recording.
(t) "Twenty Percent Household" shall mean a household with an Adjusted
Income which does not exceed twenty percent (20%) of Median Income, adjusted for Actual
Household Size.
(u) "Twenty Percent Units" shall mean the Units which, pursuant to Section
2.1 below, are required to be occupied by Twenty Percent Households.
(v)
"Unit" shall mean one of the forty three (43) residential units comprising
the Project.
ARTICLE 2.
AFFORDABILITY AND OCCUPANCY
COVENANTS
2.1 Occupancy Requirement.
(a) Twen _ty Percent Units. Seven (7) Units shall be rented to and occupied by
or, if vacant, available for occupancy by Twenty Percent Households.
(b) Forty Percent Units. Four (4) Units shall be rented to and occupied by or,
if vacant, available for occupancy by Forty Percent Households.
(c) Fifty Percent Units. Ten (10) Units shall be rented to and occupied by or,
if vacant, available for occupancy by Fifty Percent Households.
(d) City of South San Francisco. In order to ensure an adequate supply of low
income housing within the City of South San Francisco for residents and employees of
businesses within the City, no less than fifty percent (50%) of the units shall be marketed and
made available to City of South San Francisco residents, employees of businesses operating in
the City of South San Francisco and employees of government agencies located in the City of
South San Francisco.
2.2 Allowable Rent.
(a) Twenty Percent Rent. Subject to the provisions of Section 2.3 below, the
Rent charged to Tenants of the Twenty Percent Units shall not exceed one-twelfth (1/12) of
thirty percent (30%) of twenty percent (20%) of Median Income, adjusted for Assumed
Household Size.
MNRegulatory Agreement 735708_12; 738001 4
(b) Forty Percent Rent. Subject to the provisions of Section 2.3 below, the
Rent charged to Tenants of the Forty Percent Units shall not exceed one-twelfth (1/12) of thirty
percent (30%) of forty percent (40%) of Median Income, adjusted for Assumed Household Size.
(c) Fifty Percent Rent. Subject to the provisions of Section 2.3 below, the
Rent charged to Tenants of the Fifty Percent Units shall not exceed one-twelfth (1/12) of thirty
percent (30%) of fifty percent (50%) of Median Income, adjusted for Assumed Household Size.
2.3
Increased Income of Tenants.
(a) Increase from Twenty Percent to Forty Percent. If, upon recertification of
the income of a Tenant of a Twenty Percent Unit, the Borrower determines that a former Twenty
Percent Household's Adjusted Income has increased and exceeds the qualifying income for a
Twenty Percent Household set forth in Section 1.1 (t), but does not exceed the maximum
qualifying income for a Forty Percent Household, then, upon expiration of the Tenant's lease:
(i) Such Tenant's Unit shall be considered a Forty Percent Unit;
(ii) Such Tenant's Rent may be increased to a Forty Percent Rent, upon
sixty (60) days' written notice to the Tenant; and
(iii) The Borrower shall rent the next available Unit to a Twenty
Percent Household at Rent not exceeding the maximum Rent specified in Section 2.2(a) to
comply with the requirements of Section 2.1 (a) and Section 2.2(a) above.
(b) Increase from Twenty Percent or Forty Percent to Fif~ Percent.
If, upon recertification of the income of a Tenant of a Twenty Percent Unit or a Forty Percent
Unit, the Borrower determines that a former Twenty Percent Household's or Forty Percent
Household's Adjusted Income has increased and exceeds the qualifying income for a Forty
Percent Household set forth in Section 1.1 (j), but does not exceed the maximum qualifying
income for a Fifty Percent Unit, then, upon expiration of the Tenant's lease:
(i) Such Tenant's Unit shall be considered a Fifty Percent Unit;
(ii) Such Tenant's Rent may be increased to a Fifty Percent Rent, upon
sixty (60) days' written notice to the Tenant; and
(iii) The Borrower shall rent the next available Unit to a Twenty
Percent Household, or a Forty Percent Household, as applicable, at Rent not exceeding the
maximum Rent specified in Sections 2.2(a) or 2.2(b), as applicable, to comply with the
requirements of Sections 2.1(a) and 2.1(b) and Sections 2.2(a) and 2.2(b) above.
(c) Non-Qualifying Household. If, upon recertification of the income of a
Tenant of a Unit, the Borrower determines that a former Twenty Percent Household, Forty
Percent Household, or Fifty Percent Household has an Adjusted Income exceeding the maximum
qualifying income for a Fifty Percent Household, such Tenant shall be permitted to continue
MNRegulatory Agreement 735708_12; 738001 5
occupying the Unit and upon expiration of the Tenant's lease and upon sixty (60) days written
notice, the Rent may be increased to the lesser of one-twelfth of thirty percent (30%) of actual
Adjusted Income of the Tenant, or fair market rent, and the Borrower shall rent the next available
Unit to Twenty Percent Household, Forty Percent Household, or Fifty Percent Household, as
applicable, to meet the requirements of Section 2.1 (a), 2.1 (b), 2.1 (c) and 2.1 (d) above.
Notwithstanding the above, the Borrower may choose not to renew a Tenant's lease if the
Tenant's household income exceeds eighty percent (80%) of Median Income.
(d) Termination of Occupancy. Upon termination of occupancy of a Unit by a
Tenant, such Unit shall be deemed to be continuously occupied by a household of the same
income level (e.g., Twenty Percent Household, Forty Percent Household, or Fifty Percent
Household) as the income level of the vacating Tenant, until such Unit is reoccupied, at which
time the income character of the Unit (e.g., Twenty Percent Unit, Forty Percent Unit, or Fifty
Percent Unit) shall be redetermined. In any event, Borrower shall maintain the occupancy
requirements set forth in section 2.1 above.
2.4
Non-discrimination.
All of the Units shall be available for occupancy on a continuous basis to members of the
general public who are income eligible. The Borrower shall not give preference to any particular
class or group of persons in renting or selling the Units, except to the extent that the Units are
required to be leased in accordance with this Agreement. There shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed,
religion, sex, sexual orientation, marital status, national origin, source of income (e.g. AFDC or
SSI), ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of any Unit nor shall the Borrower or any person claiming under or through the
.Borrower, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees of any Unit or in connection with the employment of persons for the
construction, operation and management of any Unit. All deeds, leases or contracts made or
entered into by the Borrower as to the Units or the Project or portion thereof, shall contain
covenants concerning discrimination as prescribed in the Deed of Trust.
ARTICLE 3.
INCOME CERTIFICATION AND REPORTING
3.1
Income Certification.
The Borrower will obtain, complete and maintain on file, immediately prior to initial
occupancy and annually thereafter, income certifications from each Tenant renting any of the
Units in substantially the form approved by the Agency. Copies of Tenant income certifications
shall be available to the Agency upon request.
MNRegulatory Agreement 735708_12; 738001 6
3.2 Records.
The Borrower shall maintain complete, accurate and current records pertaining to the
Project, and shall permit any duly authorized representative of the Agency to inspect records,
including records pertaining to income and household size of Tenants. All Tenant lists,
applications and waiting lists relating to the Project shall at all times be kept separate and
identifiable from any other business of the Borrower and shall be maintained as required by the
Agency, in a reasonable condition for proper audit and subject to examination during business
hours by representatives of the Agency. The Borrower shall retain copies of all materials
obtained or produced with respect to occupancy of the Units for a period of at least three (3)
years.
ARTICLE 4.
MISCELLANEOUS
4.1 Tenn.
The provisions of this Agreement shall apply to Borrower's long-term leasehold in the
Property for the entire Term even if the entire Loan is paid in full prior to the end of the Term.
This Agreement shall bind any successor, heir or assign of the Borrower, whether a change in
interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly
released by the Agency. The Agency made the Loan on the condition, and in consideration of,
this provision, and would not do so otherwise.
4.2 Covenants to Run With the Land.
The Agency and the Borrower hereby declare their express intent that the covenants and
restrictions set forth in this Agreement shall run with the land, and shall bind all successors in
title to the Borrower's leasehold interest in the Property, provided, however, that on the
expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Property
or any portion thereof shall be held conclusively to have been executed, delivered and accepted
subject to such covenants and restrictions, regardless of whether such covenants or restrictions
are set forth in such contract, deed or other instrument, unless the Agency expressly release such
conveyed portion of the Property from the requirements of this Agreement.
4.3 Enforcement by the Agency.
If the Borrower fails to perform any obligation under this Agreement, and fails to cure the
default within thirty (30) days after the Agency has notified the Borrower in writing of the
default or, if the default cannot be cured within thirty (30) days, or the Borrower has failed to
commence to cure within thirty (30) days and thereafter diligently pursue such cure, the Agency
shall have the right to bring an action at law or in equity to compel the Borrower's performance
of its obligations under this Agreement, and/or for damages or the Agency may exercise any
other remedy provided by law.
MNRegulatory Agreement 735708_12; 738001 7
4.4 Attorneys Fees and Costs.
In any action brought to enforce this Agreement, the prevailing party shall be entitled to
all costs and expenses of suit, including reasonable attorneys' fees which include reasonable
costs of in-house counsel. This section shall be interpreted in accordance with California Civil
Code Section 1717 and judicial decisions interpreting that statute.
4.5 Recording and Filing.
The Agency and the Borrower shall cause this Agreement, and all amendments and
supplements to it, to be recorded in the Official Records of the County of San Mateo.
4.6 Governing Law.
This Agreement shall be governed by the laws of the State of California.
4.7 Waiver of Requirements.
Any of the requirements of this Agreement may be expressly waived by the Agency in
writing, but no waiver by the Agreement of any requirement of this Agreement shall, or shall be
deemed to, extend to or affect any other provision of this Agreement.
4.8 Amendments.
This Agreement may be amended only by a written instrument executed by all the parties
hereto or their successors in title, and duly recorded in the real property records of the County of
San Mateo.
4.9 Notices.
Any notice requirement set forth herein shall be deemed to be satisfied three (3) days
after mailing of the notice first-class United States certified mail, postage prepaid, addressed to
the appropriate party as follows:
Agency:
Redevelopment Agency of the City of South San Francisco
400 Grand Ave.
P.O. Box 711
South San Francisco, California 94083
Attention: Norma Fragoso
With a Copy to:
Sylvia Payne, City Clerk
400 Grand Avenue
South San Francisco, CA 94080
MNRegulatory Agreement 735708_12; 738001 8
Bo~ower:
BRIDGE Housing Corporation
345 Spear Street, Suite 700
San Francisco, CA 94105
Attention: Lydia Tan
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
4.10 Severabili _ty.
If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining portions of this Agreement shall not in any way be
affected or impaired thereby.
MNRegulatory Agreement 735708_12; 738001 9
IN WITNESS WHEREOF, the Agency and the Borrower have executed this Agreement
by duly authorized representatives, all on the date first written above.
BORROWER:
BRIDGE Housing Corporation, a California
nonprofit public benefit corporation
By:
Its:
AGENCY:
Redevelopment Agency of the City of South San
Francisco, a public body, corporate and politic
By:
Barry M. Nagel, Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Steven T. Mattas, Agency Counsel
MN Regulatory Agreement 735708_12; 738001 I 0
EXHIBIT A
Property Description
144\16X217295.1 A- 1
EXHIBIT F
FORM OF INSURANCE REQUIREMENTS
144\16~17251.1 F-1
EXHIBIT "F"
INSURANCE REQUIREMENTS
INSURANCE REQUIREMENTS. Borrower shall procure and maintain for the duration
of the contract "occurrence coverage" insurance against claims for injuries to
persons or damages to property which may arise from or ~n connection with the
performance of the work hereunder by the Borrower, its agents,
representatives, employees or subcontractors. The cost of such insurance
shall be included in the Borrower's bid.
(a)
Minimum Scope of Insurance. Coverage shall be at least as broad
1. Insurance Services Office form number GL 0002 (Ed. 1/73)
covering comprehensive General Liability and Insurance
Services Office form number GL 0404 covering Broad Form
. Comprehensive General Liability; or Insurance Services
Office Commercial General Liability coverage ("occurrence"
form CG 0001.)
2. Insurance Services Office form number CA 0001 (Ed. 1/78)
covering Automobile Liability, code 1 "any auto" and
endorsement CA 0025.
Workers' Compensation insurance as required by the Labor
Code of the State of California and Employers Liability
Insurance.
(b)
Minimum Limits of Insurance. Borrower shall maintain limits no
less than:
General Liability: $1,000,000 combined single limit per
occurrence for bodily injurY, personal injury and property
damage. If commercial General Liability Insurance or other
form with a General aggregate limit is used, either the
General aggregate limit shall apply separately to this
project/location or the general aggregate limit shall be
twice the required occurrence limit.
Automobile Liability: $1,000,000 combined single limit per
accident for bodily injury and property damage,
Workers' Compensation and Employers Liability: Workers'
compensation limits as required by the Labor Code of the
State of California and Employers Liability limits of
$1,000,000 per accident.
(c)
Deductibles and Self-Insured Retentions. Any deductibles or self-
insured retentions must be declared to and approved by the Agency.
At the option of the Agency, either the insurer shall reduce or
eliminate such deductibles or self-insured retentions as respects
the Agency, its officers, officials and employees; or the Borrower
shall procure a bond guaranteeing payment of losses and related
investigations, claim administration and defense expenses.
(d)
Other Insurance Provisions. The policies are to contain, or be
endorsed to contain, the following provisions:
1. General Liability and Automobile Liability Coverages.
Insurance Requirements
Exhibit F
Page 2
(e)
a.. The Agency, its officers, officials, employees and
volunteers are to be covered as insureds as respects:
liability arising out of activities performed by or on
behalf'of the Borrower; products and completed
operations of the Borrower, premises owned, occupied
or used by the Borrower, or automobiles owned, leased,
hired or borrowed by the Borrower. The coverage shall
contain no special limitations on the scope of the
protection afforded to the Agency, its officers,
'officials, employees or volunteers.
b. The Borrower's insurance coverage shall be primary
insurance as respects the Agency, its officers,
officials, 'employees and volunteers. Any insurance or
self-insurance maintained by the Agency, its officers,
officials, employees or volunteers shall be excess of
the Borrower's insurance and shall not contribute with
it.
Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to the
Agency, its officers, officials, employees or ....
volunteers.
d. The Borrower's insurance shall apply separately to
each insured against whom claim is made or suit is
brought, except with.respect to the limits of the
insurer's liability.
Workers' Compensation and Employers Liability Coverage.
The insurer shall agree to waive all rights of subrogation
against the Agency, its officers, officials, employees and
volunteers for losses 'arising from work performed by the
Borrower forlthe Agency.
3. Professional Liability.
Borrower shall carry professional liability insurance in an
amount deemed by the Agency to adequately protect the
Borrower against liability caused by negligent, acts; errors
or omissions on the part of the Borrower in the course of
performance of the services specified in this Agreement.
Ail Coverages.
Each insurance policy required by this clause shall be
endorsed to state that coverage shall not be suspended,
voided, cancelled by either party, reduced in coverage or in
limits except after thirty (30) days' prior written notice
by certified mail, return receipt requested, has been given
to the Agency.
~cceptabilit¥ of Insurers. Insurance is to be placed with
insurers with a Bests' rating of no less than A:VII.
Insurance Requirements
Exhibit F
Page 3
(f)
(g)
(h)
Verification of coverage. Borrower shall furnish Agency with
~ertificates of insurance and with original endorsements effecting
coverage required by this clause. The certificates and
endorsements for each insurance policy are to be signed by a
person authorized by that insurer to bind coverage on its behalf.
The certificates and endorsements are to be received and approved
by the Agency before work commences. The Agency reserves the
right to require complete, certified copies of all'required
insurance policies, at any time.
Subcontractors. Borrower shall include all subcontractors as
~nsureds under its policies or shall furnish separate certificates
and endorsements for each subcontractor. All coverages for
subcontractors shall be subject to all of the requirements stated
herein.
The Risk Manager of City may approve a variation in those
insurance requirements upon a determination that the coverages,
scope, limits and forms' of Such insurance are either not
commercially available or that the Agency's interests are
otherwise fully protected