HomeMy WebLinkAboutReso RDA 7-1987 RESOLUTION NO. 7-87
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION AUTHORIZING THE LEASE OF PROPERTY
FOR THE DEVELOPMENT OF SENIOR CITIZEN HOUSING
AT THE MAGNOLIA SCHOOL SITE
WHEREAS, on April 8, 1987, by Resolution No, 4-87 the Redevelopment Agency
of the City of South San Francisco approved the assignment of an option and
amendment of a purchase agreement to acquire approximately 2.5 acres, commonly
known as the Magnolia School Site, from the South San Francisco Unified School
District; and
WHEREAS, on April 21, 1987 escrow closed and the Agency became owner
of the property; and
WHEREAS, South San Francisco Magnolia Plaza Associates intends to improve
the site with approximately 125 senior citizen housing units and to renovate
the Baden Bungalow, in accordance with Use Permit No. 86-762; and
WHEREAS, the Agency has previously indicated its intention to lease the
site to the Magnolia Plaza Associates, for a period of 75 years, after which
title to all holdings and improvements will vest in the Agency;
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City
of South San Francisco that the Agency approves of the leasing of the property
by the Agency to Magnolia Plaza Associates for the purpose of developing
approximately 125 senior citizen housing units and renovating the Baden
Bungalow, and authorizes the Executive Director to execute a Land Lease in
substantially the same form as attached. A copy of the Land Lease is attached
as "Exhibit Z".
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 Reqular meeting held on the 13th day of M~y , 1987 , by
the following vote:
AYES: Chairman Mark N. Addiego; Vice Chairman Jack Dra9o; Member Richard A.
Haffey; Member Gus Nicolopulos; Member Roberta Cerri Teglia
NOES: NONE
ABSENT: NONE
City o~= South san Francisco
ATTEST:
Executive Direct
Redevelopment Agency of the City
of South San Francisco
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RECORDING REQUESTED BY:
Redevelopment Agency of the City
of South San Francisco
WHEN RECORDED RETURN TO:
Redevelopment Agency of the City
of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
LAND LEASE
between the Redevelopment Agency
of the City of South San Francisco, as Landlord,
and South San Francisco Magnolia Plaza Associates,
a California limited partnership,
as Tenant
Dated: May 1, 1987
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Table of Contents
1.0 DEFINITIONS ..................... 2
1.1 Definitions ................... 3
2.0 LEASE OF THE LAND; RENTAL PROVISIONS; TAXES AND
ASSESSMENTS ....................... 6
2.1 Lease of the Land ................ 6
2.2 Duration of Term ................. 6
2.3 Rental Provisions ................ 6
2.4 Use of Development and Assurances of Magnolia . . 6
2.5 Rights of Magnolia ................ 8
2.6 Taxes and Assessments .............. 8
3.0 REHABILITATION AND MAINTENANCE; USE OF PREMISES . . 10
3.1 Construction of Improvements; Rehabilitation of
Baden Bungalow; Title to Improvements ....... 10
3.2 Permits, Licenses and Easements ........ 11
3.3 Use of Premises ................ 11
3.4 Maintenance of the Improvements and the Land . . 12
3.5 Utilities ................... 12
4.0 MORTGAGE LOANS .................. 12
4.1 Mortgage Loans ................. 12
4.2 Notice to and Rights of Mortgagees ....... 12
4.3 Subordination by Agency ............. 15
4.4 Notice and Right to Cure Defaults Under Mortgage
Loans ........................ 15
4.5 Priorities ................... 15
4.6 No Merger .................... 16
5.0 INSURANCE ..................... 16
5.1 Required Insurance Coverage .......... 16
5.2 Insurance Policies and Premiums ........ 17
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5.3 Proceeds of Insurance ............. 17
5.4 Limitation of Liability ............ 18
5.5 Hold Harmless and Indemnity .......... 18
6.0 PROVISIONS RESPECTING CONDEMNATION AND DAMAGE OR
DESTRUCTION OF DEVELOPMENT .............. 19
6.1 Condemnation .................. 19
6.2 Magnolia, Agency and Mortgagees to be Made Parties
in Legal Proceedings ................ 20
6.3 Waiver of Eminent Domain ............ 20
7.0 PARTICULAR COVENANTS ............... 20
7.1 Non-Discrimination Clause ........... 20
7.2 Magnolia to Extend Vendor's Warranties to Agency 21
7.3 Tax-Exempt Financing .............. 21
7.4 Leases and Contracts .............. 21
8.0 COVENANTS AND ASSURANCES OF AGENCY ........ 21
8.1 Agency to Give Peaceful Possession ....... 21
8.2 Agency to Lease Development with Marketable Title 22
8.3 Agency to Obtain Necessary Governmental Approvals 22
8.4 Agency to Extend Vendor's Warranties to Magnolia 22
9.0 DEFAULTS AND REMEDIES ............... 22
9.1 Default of Magnolia .............. 22
9.2 Default of Agency ............... 23
10.0 GENERAL PROVISIONS ................ 24
10.1 No Third Party Beneficiary .......... 24
10.2 Instrument is Entire Agreement ........ 24
10.3 Amendment of Lease .............. 24
10.4 Notices .................... 24
_ 10.5 Recording ................... 25
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10.6 Non-Waiver of Breach ............. 25
10.7 Effective Date; Counterparts ......... 25
10.8 Lease Binding on Successors .......... 26
10.9 Relationship of Parties ............ 26
10.10 Construction of Words ............ 26
10.11 Titles .................... 26
10.12 Invalidity of Particular Provisions ..... 26
10.13 Attorneys Fees ................ 26
10.14 Applicable Law ................ 27
10.15 Requests For Approval ............ 27
10.16 Non-recourse ................. 27
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LAND LEASE
THIS LAND LEASE ("Lease") is entered into as of M~y 1,
1987, by and between the Redevelopment Agency of the City of
South San Francisco, a public body, corporate and politic,
("Agency") and South San Francisco Magnolia Plaza Associates,
a California Limited Partnership, ("Magnolia") of which BRIDGE
Properties, Inc. and Adams & Graves are general partners.
RECITALS
A. Agency is a redevelopment agency organized pursuant
to the California Community Redevelopment Law ("CRL"),
California Health and Safety Code Section 33000 et. seq.
Pursuant to CRL Section 33334.5, the provision of housing is a
fundamental purpose of the CRL, and the provision of
affordable housing by redevelopment agencies is of statewide
benefit. Pursuant to CRL Article 11, Agency has the power to
lease its property (Section 33430), and to provide subsidies
to, or for the benefit of, such persons and families or
households to assist them in obtaining housing within the
community (Section 33449).
B. Agency holds fee title to certain land in the City of
South San Francisco, California, which land is more
particularly described in Exhibit A attached hereto and
incorporated herein (the "Land"). Agency desires to lease the
Land to Magnolia for low and moderate income housing use for a
period of seventy-five (75) years.
C. Simultaneous with the execution of this Lease,
Magnolia is purchasing from Agency all improvements located on
the Land, including the Baden Bungalow, as defined in Section
1.1(e) of this Lease. Magnolia desires to lease the Land from
Agency.
D. The Parties acknowledge that the terms of this Land
Lease are valid, enforceable, and legally binding on all of
the Parties hereto, and that they possess the requisite
authority to enter into this Land Lease and Agreement.
NOW, THEREFORE, in consideration of the promises and the
respective covenants and agreements hereinafter contained, the
Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1 Definitions
The following terms shall have the following meanings in
this Lease:
(a) "Adjusted Household Income" shall mean the to%al of
the Adjusted Incomes of all persons in a household.
(b) "Adjusted Income" shall mean the adjusted income of a
person as shown on federal income tax Form 1040, 1040A, or
1040EZ, or any successors to these forms, for such person.
(c) "Agency" shall mean the Redevelopment Agency of the
City of South San Francisco, a public body, corporate and
politic, as landlord under this Lease.
(d) "Authorized Officers(s)" shall mean (i) in the case
of the Agency, its Executive Director (ii) in the case of
Magnolia, its President or Vice President.
(e) "Baden Bungalow" shall mean the historically
significant Baden Avenue School bungalow located between Grand
and Baden Avenues, approximately 125 feet westerly of Magnolia
Avenue.
(f) "Commencement Date" shall mean the date of this
Lease.
(g) "Development" shall mean and include both the
Improvements owned by Magnolia and located on the Land and the
leasehold estate in the Land held by Magnolia and created by
this Lease.
(h) "Dwelling Units" shall mean the units of housing
within the Development, and any additions or alterations
thereto; such Dwelling Units shall be occupied by the
Residents (as defined in subsection (w) below).
(i) "Elderly Household" shall mean:
(i) A single person who is 62 years of age or older;
or
(ii) Households of two or more persons, one or more
members of which is 62 years of age or older; and
the other members of which qualify as one of the
following: (A) the spouse or cohabitant of the 62
year old member, (B) the provider of the primary
physical or economic support to the 62 year old
member, or (C) a temporary resident who does not
reside in the Dwelling Unit for a period of more
than 120 days per calendar year; or
(iii) The surviving members of any household described
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in subsections (ii)(A) or (ii)(B), above, who
resided in a Dwelling Unit with the deceased 62
year old member at the time of his or her death,
or the remaining members of any household
described in subsections (ii) (A) or (ii) (B),
above, who resided in a Dwelling Unit at ~he time
of the dissolution of marriage, hospitalization,
or other prolonged absence of the 62 year old
member; or
(iv) Two or more persons, each 62 year of age or
older, residing together, or one or more persons
under 62 years of age who, based upon a licensed
physician's certification are essential to the
care or well being of the 62 year old member of
the household residing in the Dwelling Unit.
(j) "Impositions" shall mean any taxes or assessments,
general or specific, and any other governmental charge
whatsoever, which if not paid when due would impair the lien
of the Mortgage Loans, or encumber title to the Development
any payment in lieu of taxes, which Magnolia has agreed to or
is bound to pay with respect to the Development.
(k) "Improvements" shall mean the senior citizen housing
development of approximately 125 units, including the
rehabilitated Baden Bungalow, all other structures, fixtures,
landscaping, driveways, off-street parking and other
improvements constructed or installed on the Land.
(1) "Land" shall mean the real property upon which the
Improvements are located and which is being leased to Magnolia
pursuant to this Lease, which real property is more fully
described in the attached Exhibit A incorporated by reference
into this Lease.
(m) "Lease" shall mean this Land Lease between Magnolia
and the Agency, and shall include all further amendments to
this Lease.
(n) "Lower Income Tenants" shall mean Elderly Households
whose Adjusted Household Incomes do not exceed eighty percent
(80%) of the Median Income.
(o) "Lower Income Units" shall mean the Dwelling Units
occupied or held available for occupancy by Lower Income
Tenants pursuant to Section 2.4(a) of the Lease.
(p) "Magnolia" shall mean South San Francisco Magnolia
Plaza Associates, a California limited partnership, with
BRIDGE Properties, Inc. and Adams & Graves as general partners
or its successors and assigns under this Lease.
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(q) "Median Income" shall mean the median gross yearly
income for households in the San Francisco, California PMSA,
as published periodically by the United States Department of
Housing and Urban Development ("HUD"). In the event that such
income determinations are no longer published by HUD, "Median
Income" shall mean the median gross yearly income for -
households in San Mateo County, California, as published
periodically by the California Department of Housing and
Community Development ("HCD"). In the event that such income
determinations are no longer published by HCD, or are not
updated for a period of at least eighteen months, the Agency
shall provide Magnolia with other income determinations which
are reasonably similar with respect to method of calculation
to those previously published by HCD or HUD.
(r) "Mortgage Loans" shall mean any loans to Magnolia
which are secured by a deed of trust on the Development, any
bond indebtedness of Magnolia secured by a deed of trust on
the Development, and any reimbursement obligations of Magnolia
in connection with letters of credit issued as credit support
for such bond indebtedness (which obligations are secured by a
deed of trust on the Development including without limitation
that certain letter of credit to be issued by Wells Fargo
Bank, N.A.)
(s) "Mortgage Loan Documents" shall mean all documents
executed by Magnolia evidencing or securing the Mortgage
Loans.
(t) "Mortgagees" shall mean the holders or beneficiaries
of any of the Mortgage Loans.
(u) "Notice" shall mean a writing containing the
information required by this Lease to be communicated to a
person or entity and sent by registered or certified mail,
postage prepaid, return receipt requested, to such person or
entity at the last known address of such person or entity, the
date of registry thereof or the date of the certification
receipt therefor being deemed the date of such Notice;
provided, however, that any written communication containing
such information sent to such person or entity and actually
received by such person or entity shall constitute Notice for
all purposes of this Lease.
(v) "Parties" shall mean the Agency and Magnolia.
(w) "Residents" shall mean the residents of the Dwelling
Units to whom Magnolia leases such Dwelling Units.
(x) "Term" shall mean the seventy-five (75) year period
during which this Lease shall be operative, unless earlier
terminated in accordance with the provisions of this Lease.
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ARTICLE II
LEASE OF THE LAND; RENTAL PROVISIONS; TAXES
AND ASSESSMENTS
Section 2.1 Lease of the Land -
Agency for and in consideration of the rent, covenants,
and agreements of Magnolia, to be paid, kept and performed by
Magnolia, hereby leases the Land to Magnolia, and in
consideration thereof, Magnolia does take, hire and lease the
Land from Agency pursuant to the terms of this Lease.
Section 2.2 Duration of Term
The Term of this Lease shall commence on May 1, 1987
("Commencement Date"), and shall expire seventy-five (75)
years from the date of commencement of the Term of this Lease.
Section 2.3 Rental Provisions
Magnolia hereby agrees to pay the Agency as rent for the
Land as follows: (a) from the Commencement Date until
December 31, 1992, the sum of $1.00 per year, due and payable
in advance on the date of commencement of this Lease and on
each anniversary of the date of commencement of this Lease;
(b) from January 1, 1993 until December 31, 1996, the total
sum of $36,500 per year due and payable on December 31st of
each year commencing with December 31, 1993; and (c) from
January 1, 1997 until termination of the Lease, the sum of
$51,800 per year, payable on December 31st of each year
commencing on December 31, 1997. Magnolia also agrees to
reimburse the Agency as additional rent due by the
Commencement Date all closing and escrow costs paid by the
Agency in acquiring the Land from the South San Francisco
Unified School District.
Section 2.4 Use of Development and Assurances of
Magnolia
(a) The Development and the Land is to be used by
Magnolia for housing solely for Elderly Households
and related ancillary uses, except that two units of
the Development may be set aside, one for a resident
manager and one for an assistant resident manager,
whose households need not qualify as Elderly
Households or Lower Income Tenants. No less than
fifty percent (50%) of the Dwelling Units are to be
occupied or held available for occupancy by Lower
Income Tenants for the entire Term of this Lease,
which Dwelling Units shall be referred to in this
Lease as the "Lower Income Units."
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(b) Magnolia shall meet any requirements of any
regulatory agreement executed by Magnolia which
regulatory agreement shall enforce the requirements
of any program or instruments of tax-exempt financing
issued by the County of San Mateo, the City of South
San Francisco or the Agency as a means of providing
financing for the Development.
(c) Magnolia shall verify the incomes of new Residents
upon initial occupancy to determine that the Adjusted
Household Incomes of Residents of Lower Income Units
do not exceed eighty percent (80%) of the Median
Income. No Resident shall be denied continued
occupancy or ownership because, after admission, the
Resident's family income increases to exceed the
limit for Lower Income Tenants. However, Magnolia
shall provide the next available unit or units to
Lower Income Tenants as necessary to meet the
requirements of this Section 2.4.
(d) Magnolia hereby agrees subject to applicable law:
(i) not to use or permit the use of the Development
or the Land for any disorderly or unlawful
purpose, and not to use the Land and the
Development other than to provide proper housing
facilities to Residents and to maintain the
character of the Development as required by any
Mortgage Loan Documents and this Lease for so
long as such Mortgage Loan Documents remain in
effect and for the entire Term of this Lease;
(ii) to notify the Agency promptly in writing of any
defect appearing in the Land or any part thereof;
(iii) to use reasonable efforts to prevent any
Resident from committing or maintaining any
nuisance or unlawful conduct on or about the
Development or the Land;
(iv) to use reasonable efforts to prevent any
Resident from violating any of the covenants and
conditions of this Lease with respect to the
Development or the Land;
(v) to take necessary action, to abate any
violation of this Lease by any Resident; and
(vi) subject to any applicable laws of the State of
California, to permit the Agency and its agents
to inspect the Development and the Land or any
part thereof at any reasonable time during the
Term of this Lease.
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(e) Lower Income Units shall be intermingled with all
other Dwelling Units, and Residents of Lower Income
Units shall have equal access to and enjoyment of all
common facilities of the Development on a
nondiscriminatory basis.
Section 2.5 Rights of Magnolia
Subject to the terms and conditions set forth in Section
2.4 above, Magnolia shall have the sole and exclusive right:
(a) to select and terminate the occupancy of a Resident;
(b) to determine the eligibility of a Resident for
admission to the Development;
(c) to give notice to a Resident to vacate the
Development or any part thereof; and
(d) to institute and prosecute legal proceedings against
a Resident, and levy execution upon any judgment obtained in
such proceedings.
Section 2.6 Taxes and Assessments
(a) Subject to Section 2.6(c), as a part of the
consideration for the execution and delivery of this Lease and
as additional rent and subject to all the provisions hereof,
Magnolia covenants and agrees during the entire Term of this
Lease, at its own cost and expense, to pay to the public
officers charged with the collections thereof, as the same
become due and payable and before any fine, penalty, interest,
or other charge may be added thereto for the nonpayment
thereof, all real estate taxes, licenses and permit fees,
charges for public utilities of any kind (except as payable by
the Residents pursuant to this Lease), and obligations for any
and all other governmental charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of
any kind and nature whatsoever, as well as assessments for
sidewalks, streets, sewers, water, or any other public
improvements and any other improvements or benefits which
shall, during the Term hereof, be made, assessed, levied, or
imposed upon or become due and payable in connection with, or
a lien upon, the Development, or any part thereof, or upon
this Lease. Magnolia shall have the right to apply for a
partial exemption for real estate taxes on the Lower Income
Units within the Development. Any such taxes, assessments or
charges which are applicable only to a portion of the Term
hereof shall be appropriately prorated; provided that, if by
law any imposition may at the option of the taxpayer be paid
in installments, Magnolia may exercise such option, and in
such event Magnolia shall pay all such installments, (and
interest, if any) becoming due during, or allocable to, the
Term of this Lease as the same become due and before any
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additional interest or any penalty, fine or cost may be added
thereto, except that any amounts properly allocable to periods
subsequent to the expiration of the Term of this Lease, shall
not be chargeable to nor payable by Magnolia, it being agreed
that such impositions for said partial taxing period shall be
prorated between Agency and Magnolia on the basis that-the
number of days in each such fractional tax year bears to 365.
Upon request by Agency, Magnolia covenants to furnish to
Agency, within thirty (30) days after the date upon which any
such tax, assessment, or other charge is payable, official
receipts of the proper taxing or other authority, or other
proof satisfactory to Agency, evidencing the full payment
thereof. In the event of Magnolia's failure to pay any such
tax, assessment, or other charge, Agency shall have the right
to pay the same and charge said amount to Magnolia as
additional rent, which rent shall not be deferred but shall be
due and payable immediately upon receipt of notice by Magnolia
that Agency has paid a tax, charge, or assessment pursuant to
this Section. Agency agrees promptly to send to Magnolia (i)
copies of any notices for any taxes, assessments or charges,
if such notices have been received by Agency, and (ii)
evidence of any such payment of taxes, assessments or charges
made by the Agency, which are the responsibility of Magnolia,
pursuant to the terms of the Lease.
Subject to the rights of the Mortgagees to cure such
default, failure by Magnolia to pay any such tax, assessment,
or other charge shall be a default by Magnolia under this
Lease for which Agency may terminate the Lease.
(b) Limits of Tax Liability. The provisions of this
Lease shall not be deemed to require Magnolia to pay
municipal, county, state or federal income or gross receipts
or excess profits taxes assessed against Agency, or municipal,
county, state, or federal capital levy, estate, succession,
inheritance, gift or transfer taxes of Agency, or corporation
franchise taxes imposed upon any fee interest of the Agency in
the Land, or any increase in real estate taxes or assessments
on account of Agency's transfer of its fee title to the Land
or a change in ownership of the Land other than to Magnolia.
Magnolia agrees promptly to send to Agency copies of any and
all notices received by it in respect to any taxes or
assessments affecting the Land which are the responsibility of
the Agency, pursuant to the terms hereof.
(c) Magnolia's Right to Contest. Magnolia may, if it
disputes the amount or validity of any liens, taxes,
assessments, charges, penalties or claims, including liens or
claims of materialmen, mechanics or laborers, upon the Land
and improvements thereon, contest and defend against the same
at its cost, and in good faith diligently conduct any
necessary proceedings to prevent and avoid the same; provided
however, that such contest shall be prosecuted to a final
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conclusion as speedily as possible. Any rebate made on
account of any taxes or charges paid by Magnolia shall belong
and be paid to Magnolia. Agency agrees to render to Magnolia
all reasonable assistance, at no expense to Agency, in
contesting the validity or amount of any such taxes,
assessments or charges, including joining in the signing of
any protests or pleadings which Magnolia may deem it advisable
to file. During any such contest, Magnolia shall (by the
payment of such disputed taxes, assessments or charges, if
necessary) prevent any advertisement of tax sale, any
foreclosure of, or any divesting thereby of Agency's title,
reversion or other interest in or to the Land.
ARTICLE III
REHABILITATION AND MAINTENANCE; USE OF PREMISES
Section 3.1 Construction of Improvements;
Rehabilitation of Baden Bungalow; Title to Improvements
(a) Construction of Improvements. Magnolia shall
construct approximately 125 units of housing for Elderly
Households and related improvements and shall rehabilitate the
Baden Bungalow substantially as indicated in the plans dated
April 22, 1986, prepared by Treffinger, Welz and MacLeod, as
modified by any issued permit for the development of the
Development. All rehabilitation, additions, construction and
reconstruction of the Improvements shall be the Property of
Magnolia.
(b) Additional Rehabilitation. Magnolia shall have the
right in its sole discretion at any time as it wishes during
the Term of this Lease, without the necessity of securing
Agency's consent, to alter or rehabilitate the Improvements on
the Land as Magnolia shall deem desirable; provided, however,
that Magnolia shall not demolish or tear down all or any
substantial part of the Improvements located on the Land or
change the number or square footages of the Dwelling Units
without the prior written consent of Agency. Magnolia and its
Residents shall obtain building permits for all additional
rehabilitation work to the extent such permits are required by
the City of South San Francisco codes.
(c) Title to Improvements and Liens Thereon. Title to
all Improvements on the Land shall be in and remain in
Magnolia for and during the entire Term of the Lease, but at
the expiration of the Lease Term, and any extensions thereto,
or upon sooner termination of the Lease, title to the
Improvements shall vest in Agency. Magnolia agrees to execute
at the time of such expiration or termination a confirmatory
quitclaim deed for the Improvements to Agency to be recorded
at Agency's option and at Agency's sole cost and expense.
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Magnolia agrees that any improvements on the Land and any
maintenance and repair work, alterations, replacements and
additions in connection therewith shall be of good quality.
Except as provided in the Mortgage Loans, Magnolia shall have
no authority to place any lien or any encumbrances upon the
fee title to the Land, or in any manner to bind the interest
of Agency in the Land or to assign the rentals payable to
Agency under this Lease for any claim in favor of any person
dealing with Magnolia. Magnolia covenants and agrees promptly
to pay all sums legally due and payable by Magnolia on account
of any labor performed or materials supplied on the Land on
which any lien is or can legally be asserted against
Magnolia's leasehold interest in the Land or the Improvements
thereon. In the event any mechanic or materialmen's lien is
filed against the Land, Magnolia at its expense shall promptly
cause such lien to be removed by bonding or otherwise.
Section 3.2 Permits, Licenses and Easements
Agency agrees that, within ten (10) days after receipt of
written request from Magnolia, it will (at no expense to
Agency) join in all applications for permits, licenses or
other authorizations required by any governmental or other
body claiming jurisdiction in connection with any work which
Magnolia may do on the Development, and will also join in any
grants of easements for public utilities useful or necessary
to the proper economic development of the Land or to the
improvements to be constructed thereon, if required to do so
by such governmental or other bodies.
Section 3.3 Use of Premises
Magnolia shall at all times during the Term of this Lease
not cause the Development to be used for purposes other than
specified in Section 2.4(a), consistent with all applicable
zoning and environmental laws of any governmental authority
having jurisdiction over the Development. Magnolia agrees to
comply reasonably, promptly, and effectively with all
applicable and lawful statutes, rules, orders, ordinances,
requirements and regulations of the State of California, the
Federal Government, the City of South San Francisco, the
Redevelopment Agency of the City of South San Francisco and
any other governmental authority having jurisdiction over the
Development. Magnolia may, if in good faith and on reasonable
grounds, dispute the validity of any charge, complaint or
action taken pursuant to or under color of any statute, rule,
order, ordinance, requirement or regulation, defend against
the same, and in good faith diligently conduct any necessary
proceedings to prevent and avoid any adverse consequence of
the same. Magnolia agrees that any such contest shall be
prosecuted to a final conclusion as speedily as possible.
Agency agrees upon request by Magnolia to sign, promptly and
without charge therefor to Magnolia, all applications for
licenses and permits required by Magnolia for the lawful
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conduct and operation of any business on the Land or in the
Improvements, including, without limitation, applications for
occupancy permits, provided that the cost of obtaining such
licenses and permits shall be borne by Magnolia, and to the
extent such participation by the Agency is required by the
body receiving such application. '
Section 3.4 Maintenance of the Improvements and the
Land
During the Term of this Lease, Magnolia or its designee
shall perform, or cause to be performed, all maintenance and
repairs necessary to maintain the Improvements and Land in
good repair and tenantable condition, except for ordinary wear
and tear.
Section 3.5 Utilities
Magnolia shall be responsible for the cost of all
utilities, including water, heat, gas, electricity, waste
removal or other utilities or services supplied to the
Development and Magnolia will pay or cause same to be paid
currently and as due. Each Resident, including Residents of
the Lower Income Units, shall be responsible for payment of
utility charges incurred by that Resident.
ARTICLE IV
MORTGAGE LOANS
Section 4.1 Mortgage Loans.
To secure the payment of the funds to be provided by the
Mortgagees for the purchase and rehabilitation of the
Improvements, or in connection with further or subordinate
financing, Magnolia and the Mortgagees may enter into Mortgage
Loans. Nothing contained herein shall relieve Magnolia of
its obligations and responsibilities under said.Mortgage Loans
to the extent specified therein.
Section 4.2 Notice to and Rights of Mortgagees.
(a) When giving notice to Magnolia with respect to any
default hereunder, Agency shall also serve a copy of each such
notice upon any Mortgagee who shall have given Agency a
written notice requesting such notice and specifying its name
and address. In the event Magnolia shall default in the
performance of any of the terms, covenants, agreements, or
conditions of this Lease on Magnolia's part to be performed,
any Mortgagee shall have the right, within the grace period
available to Magnolia for curing such default and such
additional period permitted under Section 4.2(b) below, to
cure such default, whether the same consists of the failure to
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pay rent or the failure to perform any other obligation, and
Agency shall accept any such performance by any Mortgagee as
though the same had been done or performed by Magnolia.
(b) In case of a default by Magnolia in the payment of
money or the performance of any other obligation due u~der
this Lease, Agency will take no action to effect a termination
of this Lease by reason thereof unless such default has
continued beyond thirty (30) days in the case of monetary
default, and forty-five (45) days in the case of a
non-monetary default, after Agency has served a copy. of the
notice of such default upon Magnolia and any Mortgagee, it
being the intent hereof and the understanding of the parties
that any Mortgagee shall be allowed up to, but not in excess
of, thirty (30) days in the case of a monetary default, and
forty-five (45) days in the case of a non-monetary default by
Magnolia, to cure such default, in addition to the grace
periods of ten (10) days for monetary defaults and sixty (60)
days for non-monetary defaults granted to Magnolia under
Section 9.1 of this Lease; provided, however, that in the case
of any non-monetary default by Magnolia, Agency will take no
action to effect a termination of this Lease by reason thereof
if within forty-five (45) days after the expiration of
Magnolia's 60-day grace period, a Mortgagee has either:
(i) commenced to cure such default and to proceed
diligently with such cure thereafter, if such default can
be cured by the Mortgagee without the Mortgagee obtaining
possession of the Development;
(ii) commenced proceedings to obtain possession of
the Development (including possession by a receiver) and
to proceed diligently to obtain such possession and to
cure such default in the case of default which can be
cured when the Mortgagee has obtained possession thereof;
or
(iii) instituted foreclosure proceedings and
thereafter to diligently proceed to complete such
foreclosure proceedings or otherwise acquire Magnolia's
interest under this Lease with reasonable and continuous
diligence in the case of a default which cannot be cured
in the manner set forth in sub-paragraphs (i) or (ii)
above. As long as any Mortgagee is diligently proceeding
to complete foreclosure, the Agency shall not terminate
the Lease. No Mortgagee shall be required to continue
such possession or continue such foreclosure proceedings
if the default which prompted the service of such a
notice has been cured. No Mortgagee shall be obligated
to cure any default in the payment of money which has
occurred more than ninety (90) days before the receipt of
notice of such default, in order to preserve its interest
under its Mortgage or to exercise any of the rights
granted to it under this Lease.
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(c) If this Lease is terminated by Agency on account of
any default which neither Magnolia nor any Mortgagee has cured
within the time periods provided for in this Lease and if (i)
no rent or other charges shall then be due and payable by
Magnolia under this Lease, and (ii) a Mortgagee shall have
arranged to the reasonable satisfaction of Agency to c~re any
default of Magnolia under this Lease, that Mortgagee may
request in writing that the Agency lease the Land to such
Mortgagee, its nominee, purchaser, assignee or transferee for
the remainder of the term of this Lease ("Mortgagee Lease").
The Mortgagee shall make such request in writing within sixty
(60) days after termination of the Lease by Agency. Agency
shall execute and deliver the Mortgagee Lease to the new
tenant within thirty (30) days of Mortgagee's request
therefor. Mortgagee shall pay all of Agency's expenses
(including reasonable attorneys' fees) incident to executing
and delivering the Mortgagee Lease. The Mortgagee Lease shall
contain the same covenants, agreements, terms, provisions and
limitations as are contained herein, except such amendments as
may be necessary to prevent a repetition of the default which
caused such termination.
(d) Except as provided in Section 4.2(e) below, during
the period that a Mortgagee shall be in possession of the Land
and/or Development and/or during the pendency of any
foreclosure proceeding instituted by a Mortgagee, the
Mortgagee shall pay or cause to be paid the rent specified in
Section 2.3 above and all other charges of whatsoever nature
payable by Magnolia hereunder which have been accrued and are
unpaid and which will thereafter accrue during said period.
Following the acquisition of Magnolia's leasehold estate by
the Mortgagee or its designee, the Mortgagee or party
acquiring title to Magnolia's leasehold estate shall
immediately cure all monetary defaults and shall commence the
cure of all non-monetary defaults and thereafter diligently
process the cure of all non-monetary defaults to completion.
Any default other than a monetary default shall be, and shall
be deemed to have been, waived by Agency upon completion of
the foreclosure proceedings or acquisition of Magnolia's
interest in this Lease by any purchaser at the foreclosure
sale or who otherwise acquires Magnolia's interest.
(e) Nothing herein shall preclude Agency from exercising
any of Agency's rights or remedies with respect to any other
default by Magnolia during any period of any such forbearance,
subject to the rights of any Mortgagee as herein provided.
(f) Ail notices by Agency to Mortgagees shall be given
by registered or certified mail, return receipt requested,
addressed to the Mortgagees at the address last specified to
Agency by the Mortgagees and shall be deemed served when
delivered as shown on the return receipt.
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(g) In the event two or more Mortgagees exercise their
rights hereunder, and there is a conflict which renders it
impossible to comply with all such requests, the Mortgagee
whose Mortgage would be senior in priority if there were a
foreclosure shall prevail. In the event any Mortgagee pays
any rental or other sums due hereunder which relate to, periods
other than during its actual ownership of the leasehold
estate, such Mortgagee shall be subrogated to any and all
rights which may be asserted against Agency with respect to
such period of time.
(h) Upon the request of any Mortgagee, Agency agrees to
execute any amendment to this Lease which does not adversely
affect Agency's rights hereunder, subject to the provisions of
Section 10.3 below.
Section 4.3 Subordination by Agency.
In the event any Mortgagee holding a mortgage pursuant to
a Mortgage Loan, forecloses on the Development or accepts a
deed-in-lieu of foreclosure to the Development, the provisions
of this Lease which provide that the Agency has fee title,
which require the Mortgagee and its successors to pay rent as
successors of Magnolia and which require non-discrimination
(Section 7.1) shall remain in full force and effect. The
Agency agrees to subordinate all other provisions of this
Lease to the rights of Mortgagees holding a mortgage pursuant
to a Mortgage Loan. The Agency agrees to execute a
subordination agreement in the form attached to this Lease as
Exhibit B in order to implement the provisions of this
Section. Any such subordination does not relieve the party
holding the leasehold interest in the Development from the
obligation to comply with the provisions of the City of South
San Francisco Use Permit Number UP-$6-762, which applies to
the Development.
Section 4.4 Notice and Right to Cure Defaults Under
Mortgage Loans.
Upon the recording of the Short Form Lease pursuant to
Section 10.5, Magnolia on behalf of Agency shall cause to be
recorded in the office of the County Recorder of San Mateo
County requests for copies of any notice of default or notice
of sale under the Mortgage Loans. In the event of default by
Magnolia under the Mortgage Loans, Agency shall have the
right, but not the obligation, to cure such default. Any
payments made by Agency to cure such default shall be treated
as added rent due from Magnolia. Such added rent is to be
paid within thirty (30) days of the date on which the payment
was made by the Agency.
Section 4.5 Priorities.
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With the exception of the Mortgage Loans (subject to the
provisions of Section 4.3) and exceptions numbered 1, 2, 3, 4,
5, 7, 9, 11, 13, 15, 16, 18, 20, 21, and 22 set forth in the
Preliminary Title Report issued by Chicago Title Insurance
Company on January 17, 1986 Order No. 900704 which are
approved by Magnolia, no other deed of trust, mortgage~ lien,
encumbrance, restriction or exception shall be superior to any
of the interests created by this Lease.
Section 4.6 No Merger.
In the event Magnolia acquires the fee estate of Agency
in the Land, there shall be no merger of Magnolia's leasehold
and fee estates so as to impair or extinguish the lien of any
mortgage, deed of trust, or other encumbrance against
Magnolia's leasehold estate, but rather the lien of such
mortgage, deed of trust or other encumbrance shall continue
and apply to the entire right, title, and interest of Magnolia.
ARTICLE V
INSURANCE
Section 5.1 Required Insurance Coverage
(a) Fire and Special Coverage Endorsement. Magnolia
shall during the Term of the Lease keep the Improvements
insured against loss or damage by fire, and all other risks as
may be included in the standard form of special coverage
endorsement at all times in amounts such that the proceeds of
such insurance shall not be less than the replacement value of
the Improvements or any other amount required by the
Mortgagees and approved by Magnolia which is reasonably and
commercially available. Magnolia will use its best efforts to
obtain and maintain an extended coverage endorsement that
insures 100% of the replacement value of the Improvements as
soon as it becomes commercially and reasonably available.
Agency shall be named as an additional insured as provided for
in Section 5.2.
(b) Liability and Property Damage Insurance. During
the Term of the Lease, Magnolia shall keep in full force and
effect a policy or policies of public liability and property
damage insurance against liability for bodily injury to or
death of any person or property damage arising out of the
Development. If reasonably available, the limits of such
insurance shall be not less than one million dollars
($1,000,000) combined single limit for injury to persons or
death for any one occurrence, and not less than five hundred
thousand dollars ($500,000) for property damage to others'
property. The Agency shall be named as an additional insured
as provided for in Section 5.2.
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(c) Workers' Compensation Insurance. Magnolia shall
carry workers' compensation insurance covering all persons
employed by Magnolia in connection with the Development and
with respect to whom death, bodily injury, and sickness
insurance claims could be asserted against the Agency or
Magnolia. -
Section 5.2 Insurance Policies and Premiums
(a) All policies of insurance required under this Lease
shall name the Agency and the City of South San Francisco,
including their members, officers, employees and agents, and
the Mortgagees as additional insureds as their respective
interests may appear; provided, however, that the Mortgagees
for so long as the Mortgage Loans are outstanding, shall be
named as Mortgagees under the terms of a standard mortgagee
clause, and all insurance proceeds shall be payable to the
Mortgagees as their interest may appear, subject to the terms
of their mortgage loan instruments and applicable law.
Duplicate copies of such policies or certificates of such
insurance shall be promptly furnished to the Mortgagees and
the Agency.
(b) Any policy of insurance shall provide that any change
or cancellation of said policy must be in writing to the
Mortgagees, Magnolia, and the Agency at their respective
principal offices at least thirty (30) days before the
effective date of said change or cancellation.
Section 5.3 Proceeds of Insurance
(a) For so long as one of the Mortgage Loans on the
Development is outstanding, all fire and special or extended
coverage (casualty) insurance proceeds shall be applied,
subject to the rights of the Mortgagees, to the payment of the
costs of repairing or rebuilding that part of the Development
damaged or destroyed if Magnolia agrees in writing within
ninety (90) days after payment of the proceeds of insurance
that such repair or rebuilding is economically feasible. If
the Development is not repaired or replaced, all such proceeds
shall be applied in a manner consistent with the terms of the
Mortgage Loans. The balance, if any, after payment to the
Mortgagees, shall be paid to Magnolia and this Lease shall
terminate, and shall become void from the time the decision is
made by Magnolia not to rebuild, and from that date the
Parties hereto shall be released from further obligation
hereunder.
(b) In the event that the Mortgagees are no longer
providing the Mortgage Loans, or if all Mortgage Loans have
been paid in full, all insurance proceeds received under the
policies set forth in this Article V shall be applied to the
payment of the costs of repairing or rebuilding that part of
the Development damaged or destroyed, if Magnolia agrees in
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writing within ninety (90) days after the payment of the
proceeds of insurance that such repair or rebuilding is
economically feasible. If Magnolia decides that such repair
or replacement is not economically feasible, the proceeds
shall be paid to Magnolia and this Lease shall terminate, and
shall become void from the time the decision is made b~
Magnolia not to rebuild, and from that date the parties hereto
shall be released from further obligation hereunder.
Section 5.4 Limitation of Liability
The Agency shall not be liable for any damage or injury
to the persons or property of Magnolia or its officers,
agents, servants, or employees, invitees or any other person
who may be about the Development, due to any act or negligence
of any person other than the Agency, or its officers, agents,
servants and employees.
Section 5.5 Hold Harmless and Indemnity
(a) Indemnification of Agency. Magnolia agrees to
indemnify and hold Agency harmless from and shall defend
(including payment of attorneys fees) Agency against all
liability, penalties, losses, damages, costs and expenses
including attorneys fees, demands, litigation, claims or
judgment arising from any injury to any person or persons or
any damage to any property occurring in, on, or about the
Development, or as a result of any accident or other
occurrence during the Term occasioned in any way as a result
of Magnolia or Magnolia's officers, employees, agents,
servants, concessionnaires, licensees, contractors or invitees
use, maintenance, occupation or operation of the Development
during the Term; provided, however, that Magnolia shall not be
required to indemnify Agency for any damage or injury of any
kind arising as the result of Agency's negligence or willful
misconduct or that of its agents and employees.
(b) Indemnification of Magnolia. Agency agrees to
indemnify and hold Magnolia harmless from and shall defend
(including payment of attorneys fees) Magnolia against all
liability, penalties, losses, damages, costs and expenses
including attorneys fees, demands, litigation, claims or
judgment arising from any injury to any person or persons or
any damage to any property occurring in, on, or about the
Development, or as a result of any accident or other
occurrence during the Term occasioned in any way as a result
of Agency or Agency's officers, employees, agents, servants,
concessionnaires, licensees, contractors or invitees use,
maintenance, occupation or operation of the Development during
the Term; provided, however, that Agency shall not be required
to indemnify Magnolia for any damage or injury of any kind
arising as the result of Magnolia's negligence or willful
-- misconduct or that of its agents and employees.
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ARTICLE VI
PROVISIONS RESPECTING CONDEMNATION AND DAMAGE
OR DESTRUCTION OF DEVELOPMENT
Section 6.1 Condemnation
(a) If the Development or any part thereof shall be taken
or condemned, for any public or quasi-public purpose or use by
any competent entity in appropriate proceedings, or by any
right of eminent domain, the whole compensation therefore
shall be paid directly to the Mortgagees, as their interests
may appear, subject to the terms of the Mortgage Loans and
applicable law. In the event that the Mortgage Loans have
been paid in full, all proceeds resulting from any taking or
condemnation of the Development, or any portion thereof, shall
be paid to Magnolia.
(b) Subject to the rights of the Mortgagees, all
condemnation proceeds received by the Mortgagees, or paid to
Magnolia, in compensation for a taking of less than
substantially all of the Development shall be applied as
follows:
(1) If the Development or any part thereof is taken
without any material loss of or damage resulting to the
Development, but creating a right to compensation therefor,
the net condemnation award shall be applied pursuant to the
terms of the Mortgage Loans, as the rights and interest of the
Mortgagees may appear, or otherwise be paid to Magnolia and
there shall be no abatement or termination of the obligation
of Magnolia to make payments hereunder;
(2) If the Development or any part thereof is taken
with material loss of or any damage to the Development
resulting from such taking, and Magnolia agrees in writing
within ninety (90) days after payment of the condemnation
award that continuation of the operation of the Development
and reconstruction or restoration of all or any part of the
Development taken or damaged is economically feasible, then
the net condemnation award shall be applied, subject to the
rights of the Mortgagees, first to the reconstruction or
restoration and the balance, if any, shall be paid to
Magnolia. In the event of such taking and subsequent
determination to proceed with reconstruction or restoration,
the rights and obligations of the parties to this Lease shall
continue in full force and effect, subject to the rights of
the Mortgagees.
(c) If the entire Development shall be taken as
aforesaid, or, in the case of a partial taking, there is a
decision not to continue with the Development and carry out
its reconstruction or restoration pursuant to (b) above, then
the net condemnation award shall be paid to the Mortgagees as
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their interests may appear in accordance with the terms of the
Mortgage Loans, the balance shall be paid to the Agency, and
this Lease shall terminate, and shall become void from the
time possession thereof is required for public use, and from
that date the parties hereto shall be released from further
obligation hereunder. .
Section 6.2 Magnolia, Agency and Mortgagees to be
Made Parties in Legal Proceedings
(a) In the event proceedings shall be instituted (1) for
the exercise of the power of eminent domain, or (2) as a
result of any damage to or destruction of the Development,
Magnolia, Agency, and the Mortgagees shall be made parties
thereto, and if not made parties thereto by the petitioning
party, shall be brought into the proceedings by appropriate
proceedings of parties thereto so that adjudication may be
made of such damages, if any, as are to be paid to Magnolia,
Agency, or the Mortgagees as compensation for loss of their
rights in the Development or the Land, or for damage to or
destruction of the Development.
(b) The Agency, Magnolia and the Mortgagees shall
cooperate and consult with each other in all matters
pertaining to the settlement, compromise, arbitration, or
adjustment of any and all (1) legal proceedings affecting
Magnolia, the Agency and the Development, or (2) claims and
demands for damages on account of damage to or destruction of
the Development, or for damages on account of the taking or
condemnation of the Development or the Land.
Section 6.3 Waiver of Eminent Domain
So long as Magnolia is not in breach of any of the
material terms, conditions, or covenants of this Lease, the
Agency agrees not to exercise its right of eminent domain
against the Land and/or the Improvements for the term of this
Lease.
ARTICLE VII
PARTICULAR COVENANTS
Section 7.1 Non-Discrimination Clause
Magnolia or its designee shall not, in the selection or
approval of Tenants or provision of service or in any other
manner, discriminate against any person on the grounds of
race, color, creed, religion, sex, sexual orientation, marital
status, national origin, ancestry, or handicap. In addition,
Magnolia herein covenants by and for Magnolia and Magnolia's
heirs, executors,administrators, and assigns and all persons
claiming under Magnolia or through Magnolia that this Lease is
-20-
made subject to the condition that 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, ancestry,
or handicap, in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the Land herein leased nor
shall Magnolia or any person claiming under or through
Magnolia establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, subtenants or
vendees in the Land herein leased.
The obligations of Magnolia and the Agency to comply with
this section inures to the benefit of each to the other and to
the Mortgagees where applicable. The Mortgagees, as
appropriate, shall be entitled to invoke any remedies
available by law to redress any breach of these subsections or
to compel compliance therewith by Magnolia and the Agency.
Section 7.2 Magnolia to Extend Vendor's Warranties
to Agency
Magnolia covenants that it will, to the extent available
at no cost to Magnolia, extend to the Agency all vendor's
warranties received by Magnolia in connection with the
provision, construction and equipment of the Land and any
improvements thereon, including any warranties given by
contractors, manufacturers or service organizations who have
performed construction work on the Land. If requested,
Magnolia shall execute and deliver appropriate instruments to
the Agency to accomplish the foregoing, all without cost to
Magnolia.
Section 7.3 Tax-Exempt Financing
Agency covenants that it will use its best efforts to
provide or cause to be provided tax-exempt financing ~hrough
bonds or other instruments to Magnolia.
Section 7.4 Leases and Contracts.
Magnolia covenants that it will require a provision in
all contracts involving the Development and in all leases to
its tenants in the Development that these contracts and leases
require compliance with the terms and conditions of this
Lease.
ARTICLE VIII
COVENANTS AND ASSURANCES OF AGENCY
-- Section 8.1 Agency to Give Peaceful Possession
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The Agency covenants that it is seized in fee simple of,
and has good and marketable title to, the Land and that the
same is free of all easements, covenants, conditions and
restrictions except as set forth in the Preliminary Title
Report issued by Chicago Title Insurance Company, dated
January 17, 1986, Order No. 900704. The Agency covenants and
warrants that it has the full right and authority to make this
Lease. The Agency covenants and warrants that Magnolia and
the Residents shall have, hold and enjoy, during the Lease
Term, peaceful, quiet and undisputed possession of the Land
herein leased without hindrance or molestation by or from
anyone so long as Magnolia is not in default hereunder.
Agency shall require that any structures on property adjoining
the Land shall be constructed in accordance with the South San
Francisco City Codes. The Agency hereby affirms that Magnolia
will be the owner in fee simple of all Improvements on the
Land during the Term of this Lease.
Section 8.2 Agency to Lease Development with
Marketable Title
The Agency covenants and warrants that there are no
outstanding liens and encumbrances that will interfere with
Magnolia's possession of the Land.
Section 8.3 Agency to Obtain Necessary Governmental
Approvals
The Agency as landlord (not as a public body) covenants
that as of the date of this Lease, all necessary approvals
from any and all governmental agencies in compliance with all
federal, state, and local laws, ordinances, and regulations
requisite to leasing of the Land have been obtained.
Section 8.4 Agency to Extend Vendor's Warranties to
Magnolia
The Agency covenants that it will, to the extent
available at no cost to Agency, extend to Magnolia all
vendor's warranties received by the Agency in connection with
the provision, construction and equipment of the Land and any
improvements thereon, including any warranties given by
contractors, manufacturers or service organizations who have
performed construction work on the Land. If requested, the
Agency shall execute and deliver appropriate instruments, if
available, to Magnolia to accomplish the foregoing.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1 Default of Magnolia
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(a) Any one or more of the following events shall
constitute an "Event of Default":
(1) Failure of Magnolia to make timely payment of
rent pursuant to the terms of Section 2.3 of this Lease, or
failure to make any monetary payment due to Agency und%r the
Lease, and continuance of such failure for ten (10) days after
receipt by Magnolia of written notice from Agency specifying
such failure;
(2) Failure of Magnolia to observe and perform any
other material covenant, condition, or agreement hereunder on
its part to be performed, and (A) continuance of such failure
for a period of sixty (60) days after receipt by Magnolia of
written notice from Agency or its agent specifying the nature
of such default, or (B) if by reason of the nature of such
default the same cannot be remedied within the said sixty (60)
days, Magnolia fails to proceed with reasonable diligence
after receipt of said notice to cure the same;
(3) Magnolia's abandonment of the Land as determined
under Civil Code Section 1951.3 or succeeding statutes.
(b) Subject to the provisions of Article IV of this
Lease, whenever any Event of Default referred to in (a) (1),
(a) (2) or (a) (3) above shall have occurred and be continuing,
the Agency and/or the Mortgagees may take whatever action at
law or in equity as may appear necessary or reasonable to
enforce performance or observance of any obligations,
agreements, or covenants of Magnolia under this Lease. In the
Event of Default, Agency's remedies shall be cumulative, and
no remedy expressly provided for herein shall be deemed to
exclude any other remedy allowed by law, including termination
of the Lease. If Agency terminates the Lease after an Event
of Default, Agency shall have the right to hire a property
manager for the Development, to release or sell the
Development, or to take any other action it desires with the
Development.
Section 9.2 Default of Agency
(a) Agency shall be in default or breach of this Lease if
Agency fails to observe or perform any covenant, condition or
agreement hereunder on its part to be performed which results
in material detriment to the leasehold interest of Magnolia in
the Land, or the fee interest of Magnolia in the Improvements,
and (A) continuance of such failure for a period of sixty (60)
days after receipt by the Agency of written notice specifying
the nature of such default, or (B) if by reason of the nature
of such default the same cannot be remedied within said sixty
(60) days, the Agency fails to proceed with reasonable
diligence after receipt of the notice to cure the default.
-23-
(b) If the Agency breaches or defaults under the Lease,
Magnolia shall give the Agency and the Mortgagees written
notice requiring that the breach or default be remedied by the
Agency. If the default or breach is not cured within the time
set forth in (a) above, Magnolia or the Mortgagees may take
any action as may be necessary to protect their respective
interests. Such action shall include but is not limited to
the right of (i) Magnolia or the Mortgagees to cure such
default and recover any expenditure with interest thereon (at
the reference lending rate then in effect at the largest
financial institution in the State of California, or at the
maximum amount allowed under applicable law, if less), from
the Agency within thirty (30) days after sending to Agency a
statement therefor, (ii) any rights or remedies granted to
Magnolia and/or the Mortgagees under the Mortgage Loans or the
laws of the State of California.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 No Third Party Beneficiary
The provisions of this Lease are for the exclusive
benefit of Magnolia and Agency and their successors and
assigns, and not for the benefit of any third person, nor
shall this Lease be deemed to have conferred any rights,
express or implied, upon any third person, except those rights
conferred on the Mortgagees by the provisions of this Lease
and persons benefitted by Section 7.1 of this Lease.
Section 10.2 Instrument is Entire Agreement
This Lease and attached Exhibit A constitute the entire
agreement between the parties. This Lease shall completely
and fully supersede all other prior understandings or
agreements, both written and oral, between the Agency and
Magnolia relating to the Lease of the Land by the Agency to
Magnolia.
Section 10.3 Amendment of Lease
(a) No amendment to this Lease shall be effective unless
all of the following requirements are met:
(1) the amendment is in writing and executed by both
Agency and Magnolia;
(2) written consent to the amendment has been
obtained from each Mortgagee.
Section 10.4 Notices
-24-
Ail notices hereunder shall be in writing signed by an
Authorized Officer(s) and shall be sufficient if sent by
United States first class, registered or certified mail,
postage prepaid, addressed:
(1) if to the Agency: -
Redevelopment Agency of the City of
South San Francisco
P.O. Box 711
South San Francisco, CA 94080
Attention: Executive Director
and
(2) if to Magnolia:
BRIDGE Housing Corporation
150 California Street, Suite 201
San Francisco, CA 94111
Attention: Richard Holliday
Vice President
The Agency, the Mortgagees and Magnolia may, by like notice,
designate any further or different addresses to which
subsequent notices shall be sent.
Section 10.5 Recording
The Agency shall record a Short Form of this Lease in the
Office of the San Mateo County Recorder within five (5) days
of execution of this Lease.
Section 10.6 Non-Waiver of Breach
Neither the failure of the Agency or Magnolia to insist
upon strict performance of any of the covenants and agreements
of this Lease nor the failure by the Agency or Magnolia to
exercise any rights or remedies upon default while the Agency
or Magnolia is in default hereunder shall be deemed a waiver
or relinquishment (1) of any covenant herein contained or of
any of the rights or remedies of the Agency or Magnolia
hereunder, (2) of the right in the future of the Agency or
Magnolia to insist upon and to enforce by mandamus or other
appropriate legal remedy a strict compliance with all of the
covenants and conditions hereof, or (3) the right of the
Agency to recover possession of the Land.
Section 10.7 Effective Date; Counterparts
This Lease shall become effective upon the commencement
of the Term set forth in Section 2.2. This Lease may be
executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the
same instrument.
-25-
Section 10.8 Lease Binding on Successors
Subject to Section 4.3 and any subordination agreement
executed therewith, this Lease and all its provisions and
attached Exhibit A shall inure to the benefit of, and shall be
binding upon, the Agency, Magnolia and their respective
successors and assigns.-
Section 10.9 Relationship of Parties
Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to
create the relationship of principal and agent or of
partnership or of joint venture or of association whatsoever
between Agency and Magnolia, it being expressly understood and
agreed that neither the computation of any payments and other
charges hereunder nor any other provisions contained in this
Lease, nor any act or acts of the parties hereto, shall be
deemed to create any relationship between Agency and Magnolia
other than the relationship of landlord and tenant.
Section 10.10 Construction of Words .
Except where the context otherwise requires, words
imparting the singular number shall include the plural number
and vice versa, words imparting persons shall include firms,
associations, partnerships and corporations, and words of
either gender shall include the other gender.
Section 10.11 Titles
The titles and headings are inserted only for
convenience, and are in no way to be construed as a part of
this Lease or as a limitation on the scope of the particular
provisions to which they refer.
Section 10.12 Invalidity of Particular Provisions
If any provision of this Lease or the application thereof
to any person or circumstances shall to any extent be invalid
or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this
Lease shall be valid and be enforced to the fullest extent
permitted by law.
Section 10.13 Attorneys Fees
If either Agency or Magnolia brings an action or
proceeding to enforce, protect or establish any right or
remedy under this Lease, the prevailing party shall be
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entitled to recover from the other party its costs of suit and
reasonable attorneys' fees which shall be fixed by the court.
Section 10.14 Applicable Law
This Lease shall be governed by and construed in -
accordance with the laws of the State of California.
Section 10.15 Requests For Approval
Whenever, Agency or Magnolia is required to obtain prior
written consent on any matter from the other party, and no
specific time for response is set by terms of this Lease, then
after notice has been duly given as required by this Lease and
no response has been given to the other party for ten (10)
working days after receipt of such notice, then written
consent shall be deemed to have been given by the party
failing to respond.
Section 10.16 Non-recourse
Notwithstanding any other provision in this Lease to the
contrary, Magnolia and its successors and assigns shall not
have any personal liability under this Lease, and in the event
of any default Agency shall have the right to terminate this
Lease and recover the Development as provided herein and in
accordance with applicable law, or Agency may seek other
appropriate remedies, but Agency shall not assert any claim or
have any right to obtain any judgment against Magnolia (or any
of its partners) for rent, damages or any other sum.
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IN WITNESS WHEREOF, the parties have executed this Land'
Lease as of the day and year first above written.
Approved as to Form: Agency:
Redevelopment Agency of the
Agency Attorney City of South San Francisco
Attest: By: ~~0~_~~.j~~
Its: Executiv~Di~ector
Secretary
South San Francisco
Magnolia Plaza Associates,
a California Limited Partnership
By: BRIDGE Properties, Inc.
General Partner
By:
Richard Holliday
Vice President
By: Adams & Graves
General Partner
By:
05/08/87
#012/A14420
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EXNIBIT A
· ~zl~OPE~T~ DESCR~?TION ~
CIT"~'OF SOUTH SAN FRANCZS¢O
LOTS ! THROUGH ~1 AND LOTS 3& THROUGH &O,'BLOCK 96, AS SMONN ON THE
NAP OF SOUTH SAN ~NCISCO, ~T NO. 1, F~~CH ~ 1892, ~BO~K
20F~PS, PAGE ~2, ~CO~S OF S~~O CO~.
T~R ~ ~T PORTION OF~ ~L~ ~ SA~ BLO~ 96, DES~IB~
AS FOLLOWS:
BEGGING AT ~ MOST ~STE~T CO~ OF LOT 1, BLOCK 96, ~ ~E
~OVE ~ION~ ~; R~G~CE NORTH 7&' 27' ~$T 320 FEET;
~NCE AT KIGHT~GLE$ NOR~ 1~' 33' ~ST 20 ~; ~CE AT RI~T
~GLES SO~H 7&' 27' ~ST 320 ~; ~CE AT RI~ ~S ~ 15'
33' ~ST 20 ~ TO ~ POI~ OF BECk'G, BErG ~ ~~Y 350
~ OF ~ ~0~ DES~ ~, BErG ~ HOST ~ST~Y 320 ~
OF ~T CERTA~ ~ ~I~ C~CES ON ~ ~ST~Y S~E OF
~STE~Y TO ~E ~ST~Y L~ OF O~GE A~ BE~ ~ A~
~CE~G ~OM~ ~ DE$~ LOTS ~~ ~T PORTION
~OF DESCRIB~ IN~E DE~ ~ ~ C~OF~ S~ ~CISCO,
~CO~ J~Y 9, 1957, B~K 3156, PAGE 2~2, O~IC~CO~S.
~SESSOE'S P~C~S. 012-23~110