07 Staff Report - 185 Anne Way~pW N OF
!ps G NrtpS
DATE:
MEETING DATE: 5119/08
ITEM NO:
COUNCIL/AGENCY AGENDA REPORT
May 15, 2008
TO: MAYOR AND COUNCIL MEMBERS
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
BOARD
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR i
SUBJECT: ADOPT CONCURRENT RESOLUTION OF TOWN COUNCIL/
REDEVELOPMENT AGENCY APPROVING GRANT OF
REDEVELOPMENT HOUSING FUNDS TO SENIOR HOUSING
SOLUTIONS (185 ANNE WAY)
RECOMMENDATION:
Adopt concurrent resolution approving grant of Redevelopment housing funds to Senior
Housing Solutions.
BACKGROUND:
On December 3, 2007, the Town of Los Gatos Redevelopment Agency (RDA) Board
approved an increased funding commitment of $832,700 to Senior Housing Solutions
(SHS) to purchase and rehabilitate a home in Los Gatos for five units of senior housing.
The five rooms would be rented to very low-income seniors whose incomes are $1,000
per month or less. Details are contained in the Council/Agency Staff Report for that
meeting (Attachment 1). The RDA Board had previously committed $777,700 to SHS
(Attachment 2).
DISCUSSION:
1. Grant Documents:
SUS is in contract to purchase a home at 185 Arnie Way in Los Gatos. This is
currently a four bedroom home of which SHS will undertake an interior remodel to
create a fifth bedroom. The funding sources for the purchase and rehabilitation of the
home are shown in the following chart.
PREPARED BY: BUD N. LORTZ,
DEPUTY EXECUTIVE DIRECTOR
Review -d by: P~Assistant Town Manager/Deputy Director Town
Atto ey/General Counsel Clerk Administrator/Secretary Finance
Community Development
PAGE 2
MAYOR AND TOWN COUNCIL MEMBERS/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY BOARD
SUBJECT: ADOPT A RESOLUTION APPROVING GRANT DOCUMENTS FOR
May 15, 2008
THE SENIOR HOUSING SOLUTIONS PROJECT
Town of Los
County
Housing
Senior
TOTAL
Gatos
CDBG/Home
Trust
Housing
Program
Services
$832,700
$150,000
$450,000
$9,895
$1,442,595
In order to finalize the grant to SHS, staff is requesting RDA Board approval of three
documents that have been prepared by Goldfarb & Lipman, outside RDA counsel, in
conjunction with staff:
Revocable Grant Agreement
Regulatory Agreement and Declaration of Restrictive Covenants
Deed of Trust
As stated in the previous staff report, the general terms of the grant documents are as
follows:
• Loan/revocable grant does not have a specific repayment date.
• Grant is repayable upon sale of the property or default on any of the RDA
conditions.
• Units must be rented to seniors that qualify as a Very Low Income Household
until loan is repaid.
• Preference is given to seniors that live or work in Los Gatos.
The grant will be repayable upon sale of the property or default on the Agency's
requirements. Should default occur, the repayment of the grant will be required in
addition to interest equivalent of five percent per year from the date of the loan.
Should the grantee act in a manner inconsistent with any of the grant documents, the
Agency can call the loan and initiate foreclosure.
2. Occupancy Requirements:
The units will be made available to senior 62 years of age or older. The residents of
the units must qualify as very low-income, meaning they will make less than 50% of
the median county income. These requirements are contained in the Regulatory
Agreement and will be in effect in perpetuity, even if the Agency's grant is repaid.
PAGE3
MAYOR AND TOWN COUNCIL MEMBERS/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY BOARD
SUBJECT: ADOPT A RESOLUTION APPROVING GRANT DOCUMENTS FOR
THE SENIOR HOUSING SOLUTIONS PROJECT
May 15, 2008
3. Location of Home:
The Anne Way property is located outside of the Central Los Gatos Redevelopment
Project Area. Given the cost of housing within the Redevelopment Area, it is
infeasible for SHS to purchase a home within the RDA boundaries. State law allows
the use of RDA Housing Funds to be used outside of the Redevelopment area with
the adoption of the finding contained in the attached resolution (Attachment 3). No
discretionary permit, such as a conditional use permit, is required as State law
preempts local government from regulating senior group homes with six or fewer
individuals.
4. Consistency with Plans:
This request is consistent with the following Town plans as summarized below:
General Plan Housing Element: The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing. The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of monies from
the Los Gatos RDA's Housing Fund.
Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing. Staff
sees no issues with this amount given the current Housing Fund balance of
roughly $6.2 million and roughly $1.2 million in revenues deposited into the fund
annually in this and future fiscal years.
CONCLUSION:
Approval of the grant documents will implement the RDA Board's funding commitment
to SHS of $832,700. The request is consistent with State Redevelopment Law and the
PAGE 4
MAYOR AND TOWN COUNCIL MEMBERS/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY BOARD
SUBJECT: ADOPT A RESOLUTION APPROVING GRANT DOCUMENTS FOR
May 15, 2008
THE SENIOR HOUSING SOLUTIONS PROJECT
Redevelopment Plan. The RDA's funding will enable the creation of a five-unit, very
low-income home for seniors. The project is funded with monies from the RDA's
Housing Fund that must be spent on affordable housing projects.
ENVIRONMENTAL ASSESSMENT:
Is a project as defined under the California Environmental Quality Act but is
Categorically Exempt per Section 15301.
FISCAL IMPACT:
Funding for this $832,700 request comes from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $6.5 million.
Attachments:
I . Council/Agenda Staff Report for the meeting of April 7, 2008
2. Council/Agenda Staff Report for the meeting of December 3, 2007
3. Resolution
4. Revocable Grant Agreement
5. Regulatory Agreement and Declaration of Restrictive Covenants
6. Deed of Trust
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
BNL:RT:mdc
NADEVICNCLRPTS120081sr housing solutions 051908.doc
toWN ap MEETING DATE: 4/7/08
ITEM NO. S
~~s ctoy COUNCIL/AGENCY AGENDA REPORT
DATE: March 31, 2008
TO: MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
FROM: GREG CARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT! INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS TO ACQUIRE AND REHABILITATE A HOME TO
PROVIDE FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING, MODIFY THE TERMS OF THE LOAN, AND DIRECT
STAFF TO NEGOTIATE THE LOAN DOCUMENTS
RECOMMENDATION:
Increase a previous commitment to loan $777,700 of Redevelopment Agency Low and
Moderate Income Housing Fund monies to $832,700 for Senior Housing Solutions to
acquire and rehabilitate a home to provide five units of very low-income senior housing,
modify the term of the loan, and direct staff to negotiate the loan documents.
BACKGROUND:
On December 3, 2007, the Town of Los Gatos Redevelopment Agency (RDA) Board
approved a funding commitment of $777,700 to Senior Housing Solutions (SHS) to
purchase and rehabilitate a home in Los Gatos for five units of senior housing. The five
rooms would be rented to very low-income seniors-whose incomes are $1000 per month
or less. Details are contained in the Council/Agency Staff Report for that meeting
(Attachment 1). At that time SHS presented a pro forma budget of $1,332,400 which
assumed the purchase price of a single family home to be $965,000.
Two changes impacting the project budget have occurred. First, the acquisition and
rehabilitation costs are higher than previously projected which raised the project budget
by roughly $110,000 to $1,442,595. Second, SHE was able to obtain only $150,000 of
funding through the Santa Clara County CDBG program rather than $450,000 as shown
in the pro forma, leaving a total funding gap of $410,000.
PREPARED BY: Bud N. Lortz, Deputy Executive Director
Reviewed by: HS_S Assistant Town Manager/Deputy Director Town
Attorney/General Counsel Clerk Administrator/Secretary q(, Fina
VCommunity Development
ATTAC ENT 1
PAGE 2
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS
March 31, 2008
To assist SHS in addressing the funding gap, staff worked with the Housing Trust of
Santa Clara County to increase their investment in the project by $350,000 to a total of
$450,000. This represents the balance of funds that the Town has contributed to the
Housing Trust.
With the increased investment from the Housing Trust, the shortfall is roughly $60,000.
SHS will invest an additional $5,000 of its own funds in the house, leaving a remaining
shortfall of $55,000.
DISCUSSION:
1. Request from Senior Housing Solutions:
SHS requests that the RDA Board increase its funding commitment for their project
from $777,700 to $832,700 to fill the remaining shortfall. SHS's revised pro forma
includes now includes funding from following sources (Attachment 2):
Town of Los
County
Housing
Senior
TOTAL
Gatos
CDBG/Home
Trust
Housing
Pro ram
Services
$832,700
$150,000
5450,000
$9,895
$1,442,595
SHS has made an offer to purchase a single family home in Los Gatos. The offer
contains a financing contingency which expires on April 17, 2008.
2. General Terms of Loan and Agreements:
At this stage in the funding process, this request is only for a commitment of funding
from the RDA. RDA staff would then proceed to draft the formal agreements with
SHS, which would be brought back to the RDA Board for approval.
At the previous RDA Board meeting, staff proposed that this loan mirror the terms
contained in the previous loan to Project Match approved by the RDA Board in 2003.
Those terms are summarized as follows:
■ Loan term of 99 years at which time the loan will be due and payable in frill or the
property would revert back to the Town.
■ 3% interest rate with deferred payments for the term of the loan.
■ Units must be rented to seniors that qualify as a Very Low Income Household.
PAGE 3
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS
March 31, 2008
■ Preference is given to seniors that live or work in Los Gatos.
SHS has requested that the loan terra be modified. They propose a loan/revocable
grant that does not have a specific repayment date, but would be repayable upon sale
of the property or default on any of the Town's conditions. SHS states this type of
funding would eliminate the impact of a deferred loan on their balance sheet by
eliminating the annual accrued interest liability. This approach continues to ensure
that SHS re-pay the Town including interest upon sale or default. SHS also states
they are willing to designate this property as affordable housing in perpetuity if the
Town is willing to finance the project with the revocable grant. The City of Campbell
recently used a similar financing vehicle for a project in their jurisdiction.
3. Consistency with Plans:
This request is consistent the following Town plans as summarized below:
■ General Plan Housing Element; The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing. The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
■ Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of monies from
the Los Gatos RDA's Housing Fund.
Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing. Staff
sees no issues with this amount given the current Housing Fund balance of
roughly $6.2 million and roughly $1.2 million in revenues deposited into the fund
annually in this and future fiscal years.
PAGE 4
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS
March 31, 2008
CONCLUSION:
The revised request is consistent with State Redevelopment Law and the Redevelopment
Plan. An increased funding commitment of $832,700 to Senior Housing Solutions will
facilitate a five unit, very low-income senior housing project. The project would be
funded with monies from the RDA's Housing Fund that must be spent on affordable
housing projects. The facility would utilize an existing house in Los Gatos and is
anticipated to be operational in roughly one year. If this commitment is authorized, staff
will return with the necessary agreements for Board approval.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required. A categorical
exemption will need to be granted when the Agency Board considers the final loan
agreements.
FISCAL IMPACT:
Funding for this $832,700 request would come from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $6.5 million.
Attachments:
1. Council/Agenda Staff Report for the meeting of December 3, 2007
2. Senior Housing Solutions Budget
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
NADEV\CNCLRP'l'S120081sr housing solutions 040708.doc
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ATTTACHM NT 2
t a MEETING DATE: 1213107
ITEM NO:
.Nu
5
!ps GA p's COUNCIL/AGENCY AGENDA REPORT
DATE: November 27, 2007
TO: CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY FROM: PAMELA S. JACOBS, INTERIM EXECUTIVE DIRECTOR PA&"
SUBJECT: DIRECT STAFF TO NEGOTIATE AN AGREEMENT TO LOAN
$777,700 OF REDEVELOPMENT AGENCY LOW AND MODERATE
INCOME HOUSING FUND MONIES TO SENIOR HOUSING
SOLUTIONS TO ACQUIRE AND REHABILITATE A HOME TO
PROVIDE FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING.
RECOMMENDATION:
Direct staff to negotiate an agreement to loan $777,700 of Redevelopment Agency Low
and Moderate Income Housing Fund monies to Senior Housing Solutions to acquire and
rehabilitate a home to provide five units of very low-income: senior housing.
BACKGROUND:
1. Low and Moderate Income Housing Fund:
Under California Redevelopment Law, 20 percent of all redevelopment tax increment
revenues must be set-aside in a separate account to be used for the purposes of
affordable housing. These funds can only be used to retain or increase the supply of
affordable housing in the community.
The Town of Los Gatos Redevelopment Agency (RDA) currently has a balance of
roughly $6.5 million in its Housing Fund. Redevelopment Law requires that an
agency expend or encumber the money in its housing fund within specified
timeframes. Specifically, housing fund amounts that exceed the aggregate amount
deposited into the housing fund during the preceding four fiscal years is deemed to be
"excess surplus." "AAgencies have three years in which to expend their excess surplus
PREPARED BY: ~'L Lortz, Deputy Executive Director
NADEVICNCLRPTS00071sr housing solutions 120307.doc
Reviewed by: Assistant Town Manager/Deputy Director '`fTown
Attoriey/General Counsel Clerk Administrator/Secretary Finance
✓ Community Development
ATTACEMNT 2
PAGE 2
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
housing funds. Under the excess surplus requirements, the RDA must encumber
$519,000 from its Housing Fund by July 1, 2008.
2. Senior Housing Solutions-.
Senior Housing Solutions (SHS) was formerly called Project Match. Their mission is
to provide affordable housing to very low income seniors with annual incomes of less
than $12,000. SHS typically purchases an existing single family home which it
rehabilitates to provide four or five senior housing units/bedrooms. Under their
program, each senior is provided with an independent bedroom while the other living
spaces are shared. SHS currently provides 42 units of senior housing in nine single
family homes in Santa Clara County.
In 2003, the Town loaned SHS (then Project Match) roughly $262,000 to purchase
and rehabilitate a home in Los Gatos. The loan led to the purchase of the home at
14390 Blossom Hill Road.
DISCUSSION:
1. Request from SHS:
SHS requests $777,700 of support from the Town to purchase and rehabilitate a
second home in Los Gatos for five units of senior housing (Attachment 1). The five
rooms would be rented to very low-income seniors whose incomes are $1000 per
month or less.
SHS proposes to fund this project from the following sources:
Town of Los
County
Housing
Senior
TOTAL
Gatos
CDBGIHome
Trust
Housing
Pro ram
Services
$777,700
$450,000
$100,000
$4,700
$1,332,400
When SHS has secured a financing commitment from the Town, they will submit
applications to the County and the Housing Trust to obtain funding from those
agencies. SHS targets May 2008 to secure all funding for the project. Subsequently,
SHS will purchase a home and proceed with rehabilitation and conversion of the
home to a senior residence. They hope to have the home complete in December 2008
with full rental by March 2009. A more detailed schedule is attached to their letter
(Attachment 1).
PAGE 3
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
2. General Terms of Loan and Agreements:
At this stage in the funding process, this request is only for a commitment of funding
from the RDA. RDA staff would then proceed to draft the formal agreements with
SHS, which would be brought back to the RDA Board for approval.
Staff proposes that this loan mirror the terms contained in the previous loan to Project
Match approved by the RDA Board in 2003. Those terms are summarized as
follows:
■ Loan term of 99 years at which time the loan will be due and payable in full or the
property would revert back to the Town.
■ 3% interest rate with deferred payments for the term of the loan.
■ Units must be rented to seniors that qualify as a Very Low Income Household.
■ Affordability restrictions will run for the 99-year period.
■ Preference is given to seniors that live or work in Los Gatos.
These terms are similar to those used by other cities that have funded SHS projects.
3. Selection of Property
Once SHS has secured all its financing, it can search for and enter into a contract to
purchase a suitable home in Los Gatos. Typically, SHS tries to locate a home that
can be modified to provide five bedrooms. Given the cost of housing near Downtown
in the Redevelopment Project Area, it is likely that the home will be outside of the
Project Area. When the RDA Board reviews the loan documents and agreements,
staff will also include a resolution with findings to allow for Redevelopment Housing
Funds to be expended outside of the Project Area, as allowed by Redevelopment
Law.
When SHS has purchased a home, it will obtain building permits for any
rehabilitation work. No conditional use permit is required, as State law preempts
local government from regulating group homes of six or fewer individuals. However,
SHS does conduct substantial outreach to the neighborhood in which the project will
be located and the projects are generally well received once neighbors understand
seniors will occupy the home.
PAGE 4
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
4. Consistency with Plans:
This request is consistent the following Town plans as summarized below:
■ General Plan Housing Element: The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing, The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
■ Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of monies from
the Los Gatos RDA's Housing Fund.
Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing. Staff
sees no issues with this amount given the current Housing Fund balance of
roughly $6.2 million and roughly $1.2 million in revenues deposited into the fund
annually in this and future fiscal years.
CONCLUSION:
A funding commitment of $777,700 to Senior Housing Solutions will facilitate a five
unit, very low-income senior housing project. The project would be funded with monies
from the RDA's Housing Fund that must be spent on affordable housing projects. The
facility would utilize an existing house in Los Gatos and is anticipated to be operational
in roughly one year. If this commitment is authorized, staff will return with the necessary
agreements for Board approval in early 2008.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required. A categorical
exemption will need to be granted when the Agency Board considers the final loan
agreements.
PAGE 5
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
FISCAL IMPACT:
Funding for this $777,700 request would come from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $6.5 million.
Attachments:
1. Letter from Senior Housing Solutions
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
NADEVICNCLRPTS120071sr housing solutions 120307.doc
SENIOR
iiit&
SOLLPYION S
HOUSING BUFAISM
Efflom Welcome hornet
Randy Tsuda
Assistant Director of Community Development
110 E. Main Street
Los Gatos, CA 95031
Dear Randy,
Thank you for taking time to meet with Chris and I on the 29t1i. This correspondence is intended
to provide an overview of the Los Gatos Senior Group Residence Project and an initial request
for financing support for the project.
Senior Housing Solutions (formerly Project Match) is planning to develop 5 units of affordable
housing for extremely low-income seniors in the Town of Los Gatos. We are seeking
approximately $777,700 of support for the project from the Town of Los Gatos. We're targeting
Redevelopment Agency funds for this purpose. The total cost of the project is estimated at just
over $1.3 million. A schedule of sources and uses is attached.
Brief Description of Senior Housing Solutions
The mission of Senior Housing Solutions (SHS) is simple; To develop affordable housing to help
extremely low-income seniors improve their quality of life. Our innovative model combines
housing, property management and case management to achieve positive health and quality of life
outcomes for our residents (2005-2006 Findings and Outcomes is attached). Toady the Senior
Group Residence Program provides 42 units of affordable housing for extremely love-income
seniors in nine single-family homes throughout Santa Clara County (2 in Campbell, 2 in
Sunnyvale, 2 in Santa Clara, I in San Jose, 1 in Los Gatos and 1 in Milpitas). The average age of
current residents is 72 years; the average monthly income is $935. Rent, including utilities,
phone, cable and laundry facilities is just $280 a month. Our web site is
www.srhousingsolutions.org if you'd like more information.
Tire Los Gatos Senior Group Residence Project Description
For the Los Gatos Senior Group Residence Project we plan to purchase a 3-5 bedroom home and
rehab it so that it is appropriate to house 5 extremely low-income independently functioning
seniors. Rents would be held at 30% of the senior's income. Our target is Town of Los Gatos
residents who are seniors and whose income is $1,000 per month or less. We would propose to
finance the project with a combination of funding sources including Los Gatos Redevelopment
Agency, County of Santa, Clara Office of Affordable Housing and the Housing Trust of Santa
Clara County.
We've used this fonnula successfully in most of our Senior Group Residences mentioned above.
For the Los Gatos Senior Group Residence Project we anticipate submittal an application for
$450,000 to the County Office of Affordable Housing (OAH) Urban County HOME/CDBG fund
M(Y-e) 5eniar Houslrty Solutlons
512 Valley Way 1 Milpitas. California / 95035
ph 408.416-0271 1 fx 408-416-0278 / www AT ACHZSM 1
program in January 2008. We will make our loan application to the Housing Trust for the project
once we have a commitment from the Town of Los Gatos. Currently, for projects of the size
proposed (5 units) the Trust will lend up to $20,000 per unit. We have loans from the Trust on
our last three projects; one in Campbell, one in Los Gatos and our most recent project in
Milpitas. Should the rehab needs be more extensive than planned we would consider requesting a
loan from the County of Santa Clara Rental Rehab Program. I have attached a history of our
sources for acquisition and rehabilitation for our past seven projects for your information. All of
the funds identified are grants or loans with repayment being either residual receipt or deferred
simple interest and principle. Affordability periods range from 15 to 99 years.
The process is to obtain funding commitments for the project from the Town of Los Gatos
Redevelopment Agency and Housing Trust (not later than October) and from the County during
their usual CDBG/HOME grant cycle which usually begins in January with commitments in
May. Once the commitment from the County is made we would apply for a Temporary Loan
from Lenders for Community Development (we've obtained temporary loans from LCD for
several of our other projects). Then we would go out on the market and purchase an appropriate
single-family home, A detailed project schedule is attached.
Because we serve a senior population exclusively we require central heating with AC. We've
discovered that it is possible to set up the HVAC system in zones within the house. This allows
each resident to control the flow of heat or cool air into their room. Our floor plan design
incorporates some of the concepts promoted by Christopher Alexander in "A Pattern Language"
related to the grand room and casual contact between occupants. Therefore we look for a house
in which the kitchen, dining room and family room are contiguous. It is also important that the
floor itself is one elevation (no sunken living rooms etc). The kitchen always needs to be
remodeled to be adequate for 5 individual adults to share. We also look at the overall condition
of the house and property; the roof, internal and external paint, landscaping, available storage,
condition of heating/cooling system, hot water heater, kitchen layout and other amenities that
would both secure the major property maintenance for several years as well as make the house
comfortable for 5 seniors to share. Overall we perform the necessary rehabilitation to bring the
house and property up to the optimum condition. In this way we give ourselves the maximum
number of years before any major repairs will be required. This in turn assists in predicting our
operating costs well into the future. Of course the condition and floor plan of the specific
property at the time of our purchase will dictate what needs to be done. We also look for
property with adequate parking, On average 3 of 5 residents drive their own cars. Aside from the
physical condition of the property we look for a house near a bus stop where food shopping is
convenient and the neighborhood shows some pride of ownership.
Site Control, Acquisition and Rehabilitation
We will not have site control prior to a commitment of funds. What we will have is a ready
market of single family homes. We will have researched the local market and the attached
proforma is based on the current market in Los Gatos. Checking the multiple listing yesterday
there were three properties under $1.3 million that fit our criteria. The attached copy of the
multiple listing for the property at 1590 Elwood Drive is an example of the type of property we
would go and see. At $965,000 it was the least expensive property on the current market that met
our criteria. At 1,854 sq. ft. and single story with 4 existing bedrooms and 2 bathrooms we'd
want to see it with the following questions in mind: where could we put the 5'h bedroom and P
bathroom? does the floor plan work? where is the bus stop and shopping? how's the
neighborhood look? what is the overall condition of the property? Affirmative answers to these
questions (along with funding commitments already in place) and a positive nod from our
architect and contractor would result in an offer to purchase. We'd go through a purchase process
just as a private buyer of a single-family home would do. We'd need to be able to work within
the structure of a 30-45 day escrow period. An escrow account would be established and all the
grant deeds and loan documents would be signed at the close of escrow and recorded.
Construction would start within a month of the close of escrow and be completed within six
months or less.
We've estimated rehabilitation at $250,000 from the County CDBG/HOME program. There is
some flexibility here because if we find a house that requires less work but is more expensive we
can use some of the $250,000 towards the purchase price. In the attached proforma we've
assumed our usual rehabilitation activities which include re-model in add a bedroom and
bathroom, new roof, gutters, double pane windows, window coverings, floor covering, interior
and exterior paint, HVAC upgrade or modifications and kitchen remodel. Tenancy would begin
within eight months of purchase and rent up would take up to three months depending on the
market. We would do affirmative marketing within the Town of Los Gatos to ensure Los Gatos
residents got the first shot at renting the new units. We would give Los Gatos residents priority
during the initial rent up but would fill the house as soon as possible to meet operation costs. One
question comes to mind; would the Town allow an increase to the footprint of the house to
accomplish our 5 bedroom 3 bath goal? If not, could we use some of the garage space to
accomplish our occupancy goal?
At some point during the process, to be determined by the Town, I will go out and walk the
neighborhood introducing Senior Housing Solutions and letting neighbors know we will be
adding our Senior Residence to their neighborhood. I have done this for our last 4 projects (in
Sunnyvale, Campbell, Los Gatos and Milpitas) and have been very well received by the
neighbors. In general they are glad to know independent seniors will be living next door and that
Senior Housing Solutions is taking responsibility for the house and is available if any of the
neighbors have any problems with our presence. We will hold an open house prior to occupancy
and all the neighbors will be invited including guests from the Town and other supporters of the
project and Senior Housing Solutions. In coordination with the Town we will seek out media
coverage and other positive public relations activities.
The Projeet lbfeets Los Gatos Affordable Mousing Objectives
Our proposed Los Gatos Senior Group Residence Project fits very well with the Town's
affordable housing objectives for the following reasons:
1. Our project would positively impact your Adequate Land Inventory objectives in that we
could complete a project by the end of 2008 and we would not use up any vacant land to
accomplish this. The 5 units we would produce would be for Very Low Income (50% of
the median) seniors.
2. Our model fits your BMR Program objectives in that it would produce 5 of the planned
units.
3. The proposed project is consistent with the Housing Element/Community Benefit policy
4. Considering that we intend to rehabilitate the property our project would help the Town
meet some of its Housing Conservation. Program objectives.
5. The project tits well within the Redevelopment Housing Set-Aside Funds/In-Lieu Fees
objectives.
Thank you for taking time to consider our proposed project. I really hope you find our project
worthy of your support and the support of the Town of Los Gatos. Our brochure is attached for
more information. I'll make contact with you the week of July 23 as I will be out of the office on
vacation between July 9 and July 20.
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Senior Housing Solutions Acquisition/Rehabilitation Sources Spreadsheet
for
Los Gatos Senior Group Residence Project
Acquisition
Initial Rehab
Project
Date
Sources
Cost
Cost
Fairlands Ct
1993
City of Campbell
$324,970
$33,000
City of Campbell
Redevelopment
4 bdrm 2bath
CDBG
added 1 bdrm 1 bath
& rehab to turn key
County of Santa Clara
HOME
Homestead Rd
1993
City of Santa Clara
$257,406
Rehab work done
City of Santa Clara
Redevelopment
by City Public
4 bdrm 2 bath
HOME
Works Dept.
rehab to turn key
Klee Ct.
City of Sunnyvale
1994
City of Sunnyvale
$356,184
$25,066
Duplex 5 bdrm 3 bath
CDBG
Rehab to turn key
HOME
Wolfe Rd
1997
City of Sunnyvale
$315,257
$45,000
City of Sunnyvale
HOME
3 bdrm 1 bath
added I bdrm 1 bath
City of Mt. View
& rehab to turn key
HOME
City of Los Altos Hills
CDBG (Grant)
City of Los Altos
CDBG
Pollard Rd
2001
City of Campbell
$450,000
$197,059
City of Campbell
Redevelopment
3 bdrm 2 bath
CDBG
added 2 bdrm 1 bath
& rehab to turn key
County
CDBG
Rental Rehab Program
Housing Trust
Blossom Hill
2003
Town of Los Gatos
$564,000
$159,150
Town of Los Gatos
Redevelopment
5 bdrm 3 bath
CDBG
Rehab to turn key
Housing Trust
County of Santa Clara
HOME
CDBG
Rental Rehab Program
Senior Housing Solutions Acquisition/Rehabilitation Sources Spreadsheet
for
Los Gatos Senior Group Residence Project
Project
Date
Sources
Acquisition
Cost
Initial Rehab
Cost
Vasona
2006
City of Milpitas
$715,000
$372,000
City of Milpitas
Redevelopment (Grant)
5 bdrm 3 bath
CDBG (Grant)
Rehab to turn key
Rental Rehab (Grant)
Housing Trust
County of Santa Clara
HOME
Rental Rehab Program
LOS GATOS SENIOR GROUP RESIDENCE PROJECT
Detailed Project Schedule at Signing of Contract with Ouellette & Sons
July 3, 2007
ACTIVITY
TARGET DATE
Make initial contact with Town of Los Gatos about Senior Housing Solutions
interest in developing a Senor Group Residence Project
July 2007
Done
Follow-up with information requested
July 2007
Done
Request Funds from Redevelopment Funds for the Project
Done
Jul 2007
Apply for additional funding for the Project (Other Los Gatos Funds, Housing
Trust)
August - September 2007
Obtain funding commitments from Los Gatos Redevelopment Agency (and/or
other Los Gatos sources)
October 2007
Obtain commitment or letter of interest in funding from Housing Trust
October 2007
Apply for County CDBG / HOME funds
January 2008
Apply for Temporary Bridge Loan from Lenders for Community
Development
February 2008
Obtain funding Commitment from County HOME/DCBG
May 2008
Obtain commitment for loan from LCD
May 2008
Make offer on a 4-bdnn, 2-bath single-family home
June 2008
Complete architectural drawings and submit for permits as needed, determine
final cost of rehab, Select contractor
July 2008
Close Escrow
August 2008
Secure remainder of funding for project
August 2008
Drawings approved, pen-nits issued, begin construction
September 2008
Begin affirmative marketing in Town of Los Gatos
November 2008
Complete construction, final inspections, certificate of occupancy issues
December 2008
Furnish house, begin rent up, begin social worker functions
December 2008
Take out Temporary Bridge Loan with permanent financing
December 2008
100% rent up
March 2009
Ongoing property management, case management
Ongoing
SENIOR
SOLUTIONS
HOUSING
00 NN, FMIA
RESULTS FROM RESIDENT EVELAUTION OF SERVICES
FY 2005-2006
The mission of Senior Housing Solutions is to develop affordable housing to help extremely
low-income seniors improve their quality of life. The Senior Group Residence Program is an
innovative model combining housing, property management and case management to achieve
positive health and quality of life outcomes for seniors with less than $12,000 annual income.
By providing the primary stabilizing factor in a senior's life - housing that they can afford -
within a comprehensive program that addresses continued housing security, safety, reduced
dependence on family members, increased access to needed services, maintained disposal
income, improved social support, daily household and community interaction and emotional
support from peers and professional staff the Senior Group Residence Program makes a
positive impact on the economic, social, health and psychological needs of our residents.
Following are key findings and outcomes achieved through the Senior Group Residence
Program during FY 2005-2006 as measured by the Resident Evaluation of Serviccs;
Findings
• 91 % of residents have moved into the Senior Group Residence Program from
temporary housing i.e. shelter, with family or friends, or other temporary
housing
• 4% of residents who have moved into the Program lived at their prior residence for
3 or more years
* 54% of residents have maintained stable housing in the Senior Group Residence
Program for 3 or more years
Outcontes
• 74% of residents report that their life has improved since moving into the Senior
Group Residence Program
• 86% of our residents report there is another resident in the house to confide in when
troubled
• 96% of our residents report their physical health is better after moving into the
Senior Group Residence Program
• 100% of our residents have been able to maintain or increase their physical activity
• 100% of residents feel safe living in the house while 82% report their sense of safety
has improved since they moved into the Senior Group Residence Program
~iC~it~l' ri i)eF41.1 :3 G'Iv Cl fin
ffify-o
512 Valley Way / Milpitas, California 1 36035
ph 408-416-0271 / Ix 408.416.0278 1 ~vt,v srfi;ft!s ?i;, «It!Ltrrir-,y ~
Page I of I
July 02, 2007 07:43 PM
Photo Report
LG Ate-a 15 County SCE. DOW 73 CDOM, 73
Price: $005,000
#Bei 4 MIs# 720716
X Street: POLLARD
#Bath: 2 Status ACTIVE
Tract: CAM 0 PARK WEST
Age. 41 Zoning: R76
Builder:
APN#: 403-47-012
Stories: 1 STORY
8srclay: Pg. 75 Hx,27 Vt. 57
Gar: 2 CAR
Thomas: Pg. 872 Grid J1
Fireplace. YES
Appx lot Size: -5663 SF
Pool: IIOIIE
Lot Description Schools
4500+ - 6500 SF ES 59
Sq Ft: 1,884
LEVEL LOT ED 454
View.. 118GHBRD
RATIO MS 63
It11CED YARD HS 242
Type_ DETACHED Style: TRADITIOUAI_
HD 473
Dining Rooms Areas HeatkVCookg
SEP DR LAUND-IIISIDE GAS HEAT
Dimensions
SEP FR CE#ITL FORCD AIR
MB DR
FR KT
110 C00L1116
LR
TASTEFULLY UPDATED 4 BDRM 2 BATH HOME Wf ORIGINAL OV4NER. A++ SCHOOLS
PAINTED INSIDE & OUT HARDVMD FLOORS . KITCHEN HAS BEEN UPDATED WITH NEW
CABINETS AND COUNTERS, FURNACE IS 7 MO. OLD. LV ROOM OPENS UP TO A LRG PATIO_
BY RAPT. ONLY CALL LISTING AGENT AT (408) 396-OSW To SCHEDULE AN APPTy
reeittoy 21-AII)IM
408-354.7909 Fax: 408-364-7774
NO KEYSAFE APPT ONLY
EXCL RIGHT(ER)
Ustfng Type Disc
eS M.611frano 40H-338-0660 CR: 3Tour 1: 04-26.07
By. 0 1415. SULLIVAIII 408-370-2280 Tour 2:
(!4,20W XD:08.42107
http://Iistingsemail.wyldfyre.com/ViewReport/ReportDisplay.asp?Type=PropertyDetail 71312007
i
1590 ELWOOD DR
RESOLUTION 2008
CONCURRENT RESOLUTION OF THE TOWN COUNCIL AND REDEVELOPMENT
AGENCY OF THE TOWN OF LOS GATOS APPROVING DOCUMENTS FOR THE GRANT
OF REDEVELOPMENT HOUSING FUNDS TO SENIOR HOUSING SOLUTIONS FOR
ACQUISITION AND REHABILITATION OF SENIOR HOUSING AND MAKING RELATED
REQUIRED FINDINGS
WHEREAS, the Town Council (the "Town Council") of the Town of Los Gatos (the
"Town") adopted the Redevelopment Plan for the Central Los Gatos Redevelopment Project by
Ordinance No. 1882, adopted on November 25, 1991, as amended by Ordinance No. 1992,
adopted on December 5, 1994 (the "Redevelopment Plan"), setting foith the plan for
redevelopment of the Central Los Gatos Redevelopment Project Area (the "Project Area"); and
WHEREAS, the Redevelopment Agency of the Town of Los Gatos (the "Agency") is
responsible for implementation of the Redevelopment Plan; and
WHEREAS, a central objective of the Redevelopment Plan and the California
Community Redevelopment Law, Health and Safety Code Section 33000 et seq. (The
"Redevelopment Law"), is the creation of new housing to provide long-term affordable housing
opportunities for low and moderate income households; and
WHEREAS, the Agency has established a Low and Moderate Income Housing Fund
(the "Housing Fund") pursuant to Health and Safety Code Section 33334.2; and
WHEREAS, Senior Housing Solutions, a California nonprofit public benefit corporation
(the "Developer"), has requested a grant of Housing Fund monies from the Agency, to be utilized
to acquire a single family home in the Town, which Developer intends to rehabilitate and
operate as five units of affordable rental housing for very low income senior citizens (the
"Property"); and
WHEREAS, the Agency and the Town desire that the Agency provide a Eight Hundred
Thirty-Two Thousand Seven Hundred Dollar ($832,700) grant (the "Grant") to the Developer to
assist in financing the acquisition and rehabilitation of the Property; and
WHEREAS, the property is located outside of the Project Area; and
WHEREAS, the provisions of the Redevelopment Law applicable to the establishment
and use of proceeds of the Housing Fund (Health and Safety Code Sections 33334.2 and
33334.3) expressly contemplate and permit the use of proceeds from the Housing Fund outside
the Project Area upon findings by the Town and the Agency that such use will be of benefit to
the Project Area; and
ATTACHMENT 3
WHEREAS, the acquisition and rehabilitation of the Property as affordable senior
housing will benefit the Project Area and serve major Redevelopment Plan goals and objectives by
increasing the amount of housing available at affordable housing cost in the community; and
WHEREAS, the acquisition, rehabilitation, and operation of the Property by Developer
will be consistent with the Agency's Implementation Plan (the "Implementation Plan") for the
Project Area; and
WHEREAS, provisions of Redevelopment Law (Health and Safety Code Section
33334.30)) expressly allows for the use of Housing Fund monies to finance more than fifty
percent (50%) of the cost of a project if the use of the funds is necessary when commercial or
private financing is unavailable to finance the units at the level of affordability and quantity; and
WHEREAS, no alternate private or commercial financing is available with terms similar
to those proposed in this Grant that would allow Developer to provide five units of very low-
income housing for seniors at affordable rents; and
WHEREAS, staff has prepared a Revocable Grant Agreement, Deed of Trust, and
Regulatory Agreement (the "Agency Grant Documents") setting forth the terms and conditions of
the Grant, including the requirement that Developer operate the Property as affordable rental
housing for very low income senior citizens, which Agency Grant Documents are on file with the
Agency Secretary; and
WHEREAS, by staff reports accompanying this Resolution and incorporated into this
Resolution by this reference (the "Staff Reports"), the Agency and the Town has been provided
with additional information upon which the findings and actions set forth in this Resolution are
based; and.
WHEREAS, for the purpose of compliance with the California Environmental Quality
Act ("CEQA"), the Town and the Agency have determined that, pursuant to the California Code of
Regulations Section 15301, the making of the Grant and the acquisition and rehabilitation of the
Property is categorically exenapt from CEQA.
NOW, THEREFORE, BE IT RESOLVED THAT the Town Council and the Agency
Board hereby find and determine that the above Recitals are true and correct and serve as the
basis, in part, for the findings and actions of the Town and the Agency set forth below.
BE IT FURTHER RESOLVED that, based on information and analysis set forth in the
above Recitals and contained in the Staff Reports, the Town and the Agency hereby find and
determine: (i) pursuant to Health and Safety Code Section 33334.2(g) that the use of moneys
from the Housing Fund to fund the acquisition, rehabilitation, and operation of the Property will be
of benefit to the Project Area and the program of redevelopment pursuant to the Redevelopment
Plan, and (ii) pursuant to Health and Safety Code Section 33334.30) that the use of the Grant is
necessary because the Developer has made a good faith attempt, but has been unable to obtain
commercial or private means of financing the units at the same level of affordability and quantity.
BE IT FURTHER RESOLVED that the Agency hereby allocates Eight Hundred Thirty-
Two Thousand Seven Hundred Dollars ($832,700) of Agency Housing Fund monies to fiend the
Grant, and hereby amends the Agency's budget to the extent necessary to provide for such
allocation.
BE IT FURTHER RESOLVED that the Town and the Agency hereby approve the
Grant on the terms and conditions and with the affordability requirements set forth in the Grant
Documents.
BE IT FURTHER RESOLVED that the Agency hereby approves the Agency Grant
Documents and authorizes the Agency Executive Director to execute the documents in
substantially the form on file with the Agency Secretary, with such minor revisions as are
deemed necessary and appropriate by the Agency Executive Director, subject to Agency
Counsel's approval, and to take all actions necessary to provide and implement the Grant.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos and the Redevelopment Agency of the Town of Los Gatos held on the 19th day of
May, 2008, by the following vote:
COUNCIL/AGENCY MEMBERS:
AYES :
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR/CHAIR OF THE REDEVELOPMENT
AGENCY OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERIC ADMINISTRATOR/SECRETARY OF THE
REDEVELOPMENT AGENCY OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
REVOCABLE GRANT AGREEMENT
by and between
THE TOWN OF LOS GATOS REDEVELOPMENT AGENCY
and
SENIOR HOUSING SOLUTIONS
(185 Anne Way)
115 1\01 1558124.2
ATTACMENT 4
TABLE OF CONTENTS
Page No.
ARTICLE 1. DEFINITIONS AND EXHIBITS ..............................................................................2
1.1 Definitions ................................................................................................................2
1.2 Exhibits ....................................................................................................................3
ARTICLE 2. GRANT PROVISIONS .............................................................................................3
2.1 Grant...... ..................................................................................................................3
2.2 Interest 3
2.3 Use of Grant Funds ..................................................................................................4
2.4 Regulatory Agreement .............................................................................................4
2.5 Security ......4
2.6 Purchase Agreement ................................................................................................4
2.7 Agency Approval of Necessary Financing and Additional
Financing ..................................................................................................................4
2.8 Term and Repayment Schedule ...............................................................................5
29 Conditions Precedent to Disbursement of the Agency Grant ..................................5
ARTICLE 3. ACQUISITION AND REHABILITATION OF IMPROVEMENTS .......................6
3.1 Purchase of the Property; Rehabilitation of Improvements .....................................6
3.2 Prevailing Wages .....................................................................................................6
ARTICLE 4. ADDITIONAL GRANT REQUIREMENTS ............................................................7
4.1
Use, Maintenance, and Operation
..7
4.2
Inforination
..8
4.3
Changes
..8
4.4
Notification of Litigation
..8
4.5
Entry by the Agency
8
4.6
Indemnity
8
4.7
Insurance
..9
4.8
Hazardous Materials
10
4.9
Non-Discrimination
13
4.10
Mandatory Language in All Subsequent Deeds, Leases and
Contracts
13
4.11
Fees and Taxes
14
4.12
Records
15
4.13
Audits
15
4.14
Compliance with Applicable Laws
15
ARTICLE 5. TRANSFER .............................................................................................................15
5.1 Acknowledgement by the Grantee .........................................................................15
5.2 Unauthorized Transfer is Event of Default ............................................................16
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE .....................16
6.1 Representations and Warranties .............................................................................16
i
1151\01\559124.2
TABLE OF CONTENTS
Page No.
ARTICLE 7. DEFAULTS AND REMEDIES ...............................................................................18
7.1 Events of Default ..18
7.2 Remedies ................................................................................................................19
7.3 Remedies Cumulative ............................................................................................20
7.4 Waiver of Terms and Conditions ...........................................................................21
ARTICLE 8. GENERAL PROVISIONS ..21
8.1
Relationship of Parties ...........................................................................................21
8.2
No Claims
..............................22
8.3
Notices, Demands and Communications
..............................22
8.4
Non-Liability of Officials, Employees and Agents
..............................22
8.5
Enforced Delay
..............................22
8.6
Inspection of Books and Records
..............................23
8.7
Title of Parts and Sections
..............................23
8.8
Applicable Law.....
23
8.9
,Severability
.........................23
8.10
Binding Upon Successors
..............................23
8.11
Entire Understanding of the Parties
..............................23
8.12
Approval
..............................24
8.13
Discretion Retained by Town ................................................................................24
8.14
Amendments ..........................................................................................................24
8.15
Counterparts; Multiple Originals
...............................24
EXHIBIT A Legal Description of the Property
EXHIBIT B Approved Budget
11
11511011558124.2
REVOCABLE GRANT AGREEMENT
(185 Anne Way)
THIS REVOCABLE GRANT AGREEMENT (the "Agreement") is made as of
2008, by and between the Town of Los Gatos Redevelopment Agency, a public
body corporate and public (the "Agency"), and Senior Housing Solutions, a California nonprofit
public benefit corporation (the "Grantee"), with reference to the following facts:
RECITALS
A. The Town of Los Gatos (the "Town") adopted the Redevelopment Plan for the
Central Los Gatos Redevelopment Project Area (the "Redevelopment Plan"), The
Redevelopment Plan establisbed the Central Los Gatos Project Area (the "Project Area") and set
forth the goals, objectives, and proposed activities for redevelopment of the Project Area.
B. The Grantee desires to acquire certain real property located within the Town as
more particularly described in Exhibit A (the "Property") to be used as affordable housing for
very low-income seniors.
C. Through this Agreement and accompanying documents, the Agency is providing
a grant to the Grantee in the amount of Eight Hundred Thirty-Two Thousand Seven Hundred
Dollars ($832,700) from the Agency's Low and Moderate Income Housing Fund (the "Agency
Grant").
D. The Agency Grant will be revocable in the event of default pursuant to this
Agreement, and secured by a deed of trust recorded against the Property. As a condition of
providing the Agency Grant, the Agency will impose occupancy and affordability restrictions on
the Property to ensure that the improvements remain affordable to very low income households.
E. The Site is located outside of the Project Area. Pursuant to Health and Safety
Code Section 33334.2(g), the Agency Board and the Town Council have each made findings that
use of the Low and Moderate Income Housing Fund monies to assist in the development of the
Improvements will benefit the Project Area by improving the supply of housing available at
affordable housing cost to persons who work or live in the Project Area, thereby assisting in the
redevelopment of the Project Area.
WITH REFERENCE TO THE FACTS RECITED ABOVE, the Agency and the Grantee
agree as follows:
11511011558124.2
ARTICLE 1.
DEFINITIONS AND EXHIBITS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, the following definitions
shall apply:
(a) "Agency Deed of Trust" means the deed of trust, in a form to be provided
by the Agency, encumbering the Property and securing (i) repayment of the Agency Grant
following an Event of Default as defined in Section 7.1; and (ii) performance under the Agency
Regulatory Agreement.
(b) "Agency Grant" means the revocable grant to be made by the Agency to
the Grantee pursuant to this Agreement in the maximum principal amount of Eight Hundred
Thirty-Two Thousand Seven Hundred Dollars ($832,700), consisting of Redevelopment Low
and Moderate Income Housing Fund monies.
(c) "Agency Grant Documents" means this Agreement, the Agency Deed of
Trust, and the Agency Regulatory Agreement.
(d) "Agency Regulatory Agreement" means the regulatory agreement in a
form to be provided by the Agency, to be executed by the Agency and the Grantee and recorded
against the Property as a condition of the Agency funding of the Agency Grant.
(e) "Approved Budget" means the estimated budget for the development of
the Improvements as approved by the Agency and attached hereto as Exhibit B.
(f) "Approved Financing" means the financing (other than the Agency Grant)
for the acquisition of the Property and the development of the Improvements as approved by the
Agency pursuant to Section 2.7.
(g) "Control" means direct or indirect management or control: (i) of the
managing member or members in the case of a limited liability company; (ii) of the managing
general partner or general partners in the case of a partnership, and (iii) of a majority of the
directors in the case of a corporation.
(h) "Development" means the Improvements and the Property.
corporation.
(i) "Grantee" means Senior Housing Solutions, a California nonprofit benefit
0) "Improvements" means the single-family home on the Property to be
rehabilitated by the Grantee and used for affordable housing to senior households.
(k) "Purchase Agreement" means the purchase and sale agreement between
the current owner of the Property, as seller, and the Grantee, as buyer, for the Property.
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(1) "Term" means the term of this Agreement which shall commence as of the
date set forth above and shall expire on the fifty-fifth (55') anniversary of the recordation of the
Agency Deed of Trust and the Agency Regulatory Agreement against the Property.
(m) "Town" means the Town of Los Gatos.
(n) "Transfer" means any sale, assignment, or transfer, whether voluntary or
involuntary, of. (i) any rights and/or duties under this Agreement; (ii) any interest in the
Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life
estate, a leasehold interest, a security interest, or an interest evidenced by a land contract by
which possession of the Development is transferred and Grantee retains title; or (iii) any interest
in the Grantee, including general and limited partnership interests. The term "Transfer" shall
exclude the leasing of individual residential units within the Development pursuant to the
Agency Regulatory Agreement.
1.2 Exhibits.
The following exhibits are attached to and incorporated into this Agreement:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Budget
ARTICLE 2.
GRANT PROVISIONS
2.1 Grant.
The Agency shall grant to the Grantee the Agency Grant in the principal amount of Eight
Hundred Thirty-Two Thousand Seven Hundred Dollars ($832,700), consisting of
Redevelopment Low and Moderate Income Housing Funds, to be used by the Grantee for the
purpose set forth in Section 2.3 below.
2.2 Interest.
(a) Subject to the provisions of Section 2.2(b) below, if an Event of Default
occurs hereunder pursuant to Section 7. 1, the outstanding principal balance of the Agency Grant
shall be deemed to have accrued simple interest at the rate of five percent (5%) per annum,
commencing on the date of disbursement through the date of the Event of Default.
(b) If an Event of Default occurs, interest on the Agency Grant shall begin to
accrue as of the date of the Event of Default and continue until such time as the Agency Grant
funds are repaid in full or the Event of Default is completely cured, at the default rate of lesser
than ten percent (10%), compounded annually, or the highest rate permitted by law.
11511011558124.2
2.3 Use of Grant Funds.
The Grantee shall use the Agency Grant exclusively for the acquisition of the Property
pursuant to the Purchase Agreement approved by the Agency in accordance with Section 2.6,
and the rehabilitation of the Property. No other use of the Agency Grant is permitted without the
prior written consent of the Agency, which maybe granted or denied in the Agency's sole
discretion.
2.4 Regulatory Agreement.
As a condition to disbursement of the Agency Grant, the Grantee shall execute the
Agency Regulatory Agreement and record it against the Property. The Agency Regulatory
Agreement shall impose affordability, operations, and maintenance covenants on the
Development for the Term of the Agency Grant. The Agency Regulatory Agreement shall
include provisions required to meet the affordability covenant requirements of the California
Health and Safety Code Sections 33334.2 and 33334.3.
2.5 Security.
The Grantee shall secure its obligation to repay the Agency Grant upon an Event of
Default by executing the Agency Deed of Trust, and recording it as a lien against the Property,
senior in lien priority to the deeds of trust executed by the Grantee securing necessary financing
for the acquisition of the Property and the development of the Improvements, as reasonably
determined by the Agency.
2.6 Purchase A reement.
As of the date of this Agreement, the Grantee has submitted the Purchase Agreement to
the Agency and the Agency has approved the Purchase Agreement as consistent with the
provisions of this Agreement. The Grantee shall not amend (or permit the amendment of) the
Purchase Agreement without the prior written consent of the Agency, which shall not be
unreasonably withheld.
2.7 Agency Approval of Necessary Financing and Additional Financing.
No later than January 2, 2009 (or such later date as mutually acceptable to the Parties),
the Grantee shall secure the necessary financing (in addition to the Agency Grant) for the
acquisition of the Property and rehabilitation of the Improvements. The Parties anticipate that
such financing will be consistent with the Approved Budget attached as Exhibit B. Thereafter,
the Grantee shall submit evidence, reasonably acceptable to the Agency, that the Grantee has
secured such financing by providing a commitment letter or such other documentation
evidencing that funding has been committed or otherwise secured for the Development (each a
"Commitment"). The Agency shall approve or disapprove each proposed Commitment within
fifteen (15) business days following the date of the submission of the proposed Commitment.
The Agency's failure to either approve or disapprove of the proposed Commitment within such
fifteen (15) -day period shall be deemed approval. Any disapproval of the proposed Commitment
shall state in writing the reasons for disapproval and the changes which the Agency requests.
4
11511011558124.2
The Grantee shall thereafter submit revised Commitment to the Agency for its approval within
ten (10) business days after the Agency's notification of disapproval. If the revised Commitment
is disapproved, then the Grantee shall have an additional ten (10) business days to submit a
further revised Commitment. The periods for submission of a revised Commitment, review, and
approval or disapproval shall continue to apply until each proposed Commitment has been
approved or deemed approved by the Agency provided that final approval is obtained no later
then January 2, 2009 (or such later date approved by the Agency pursuant to Section 8.12).
Upon the Agency's approval (or deemed approval) the Commitments shall be referred to as the
"Approved Financing."
The Grantee shall not utilize any additional financing for the Development or place any
additional encumbrances on the Development other than the Approved Financing, without the
prior written consent of the Agency, which consent shall not be withheld unreasonably.
2.8 Term and Repayment Schedule.
This Agreement shall remain in effect for the entire Tenn. The Agency Grant shall be
repaid in full if an Event of Default occurs under the Agency Grant Documents. The Agency
Regulatory Agreement shall retrain in effect for the entire Term, regardless of any repayment of
the Agency Grant.
2.9 Conditions Precedent to Disbursement of the Agency Grant.
The Agency Grant shall be disbursed by the Agency for the account of the Grantee to the
title company handling the escrow for the acquisition of the Property, provided that the
conditions precedent set forth in this Section 2.9 are met. The Agency shall have no obligation
to disburse any portion of the Agency Grant unless and until the Grantee has satisfied, or caused
the satisfaction of the following conditions precedent; provided, however, certain conditions may
be satisfied simultaneously with the disbursement of Agency Grant proceeds (as reasonably
determined by the Agency):
(a) The Agency has received evidence reasonably satisfactory to the Agency
that the Grantee exists in good standing at the time of the proposed disbursement, and that the
Grantee has duly authorized the execution of, and performance under, this Agreement.
(b) The Grantee has acquired (or will acquire concurrently with first
disbursement) the fee interest in the Property pursuant to the Purchase Agreement.
(c) The Agency Regulatory Agreement and the Agency Deed of Trust have
been executed by the Grantee and recorded against the Property in the official records of Santa
Clara County.
(d) A title insurer reasonably acceptable to the Agency is unconditionally and
irrevocably committed to issuing a 2006 ALTA Lender's Policy of title insurance (with
endorsement number 21, and such other endorsements reasonably requested by the Agency)
insuring the priority of the Agency Regulatory Agreement and the Agency Deed of Trust in the
amount of the Agency Grant, subject only to such exceptions and exclusions as may be
115110115581242
reasonably acceptable to the Agency, and containing such endorsements as the Agency may
reasonably require.
(e) The Grantee has furnished the Agency with evidence of insurance
coverage satisfying the requirements of Section 4.7.
(f) The Grantee has closed the Approved Financing.
(g) The undisbursed proceeds of the Agency Grant, together with other funds
or firm commitments for fiends that the Grantee has obtained, are not less than the amount that
the Agency determines is necessary to pay for the acquisition of the Property, and the
rehabilitation of the Improvements and to satisfy all of the covenants contained in this
Agreement.
(h) The Agency has received a written request from the Grantee: (i)
reaffirming the accuracy as of the date of the disbursement request of Grantee's representation,
and warranties set forth in Article 5 below; (ii) certifying that Grantee is not in default under the
Agency Grant Documents or documents for other Approved Financing; and (iii) setting forth the
proposed uses of funds consistent with Section 2.3 above, the amount of funds needed, and,
where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.
ARTICLE 3.
ACQUISITION AND REHABILITATION OF IMPROVEMENTS
3.1 Purchase of the Property; Rehabilitation of Improvements.
The Grantee shall purchase the Property pursuant to the Purchase Agreement no later
than June 1, 2008 (or such later date approved by the Agency pursuant to Section 8.12).
Thereafter, the Grantee shall commence, or shall cause the commencement of, rehabilitation of
the Improvements no later than (or such later date approved by the Agency pursuant to Section
8.12), and shall complete, or shall cause the completion of, the rehabilitation no later than
( ) months following commencement of rehabilitation (or such later date
approved by the Agency pursuant to Section 8.12). The Grantee shall rehabilitate the
Improvements in accordance with all applicable laws, including but not limited to the building
permit to be obtained by the Grantee.
3.2 Prevailing Wages.
The Grantee shall and shall cause the contractor and subcontractors to pay prevailing
wages on any construction work on the Development, as those wages are determined pursuant to
Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Sections
1777.5 et sec and the implementing regulations of the Department of Industrial Relations (the
MIR") and the Grantee shall and shall cause the contractor and subcontractors to comply with
the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and
implementing regulations of the DIR. The Grantee shall and shall cause any contractor and
subcontractors to keep and retain such records as are necessary to determine if such prevailing
6
11511011555124.2
wages have been paid as required pursuant to Labor Code Sections 1720 et sett and apprentices
have been employed as required by Labor Code Sections 1777.5 et M. Copies of the currently
applicable current per diem prevailing wages are available from the DIR. During any
construction work, Grantee shall or shall cause the contractor to post at the Property the
applicable prevailing rates of per diem wages. Grantee shall indemnify, hold harmless and
defend (with counsel reasonably selected by the Agency) the Agency against any claim for
damages, compensation, fines, penalties or other amounts arising out of the failure or alleged
failure of any person or entity (including the Grantee, its contractor and subcontractors) to pay
prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ
apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the
DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seMc
1777.5 et seg., and the implementing regulations of the DIR in connection with any construction
or any other work undertaken or in connection with the Site.
ARTICLE 4.
ADDITIONAL GRANT REQUIREMENTS
4.1 Use, Maintenance, and Operation.
(a) The Grantee shall operate and maintain the Development throughout the
entire Tenn in compliance with the requirements of the Agency Regulatory Agreement.
(b) The Grantee shall maintain the Development in good repair and in a neat,
clean and orderly condition. If there arises a condition in contravention of this Section 4.1, and if
the Grantee has not cured such condition within thirty (30) days after receiving Agency notice of
such a condition, then in addition to any other rights available to the Agency, the Agency shall
have the right to enter the Property and perform all acts necessary to cure such condition, and to
establish or enforce a lien or other encumbrance against the Property to collect its costs of cure.
By execution of this Agreement, the Grantee hereby irrevocably grants such right of entry to the
Agency.
(c) If any portion of the Development is damaged or destroyed, then the
Grantee shall, at its cost and expense, diligently undertake to repair or restore such improvement.
Such work or repair shall be commenced within one hundred twenty (120) days after the damage
or loss occurs (or such longer period of time as is reasonably necessary as approved by the
Agency) and shall be complete within one (1) year thereafter. Any insurance proceeds collected
for such damage or destruction shall be applied to the cost of such repairs or restoration and, if
such insurance proceeds shall be insufficient for such purpose, then the Grantee shall make up
the deficiency.
(d) The Grantee shall develop a management plan for the Development,
which shall be submitted to the Agency for review and approval. The Grantee shall operate the
Development in compliance with the management plan approved by the Agency.
(e) The Grantee shall operate and maintain the Development in full
compliance with all applicable local, state, and federal laws and regulations.
7
1151%011558124.2
4.2 Information.
The Grantee shall provide any information reasonably requested by the Agency in
connection with the Development, including (but not limited to) any information required by the
State of California in connection with Grantee's use of the Agency Grant funds. Specific annual
reporting requirements regarding, among other things, the incomes and rents of all residential
tenants, shall be included in the Agency Regulatory Agreement.
4.3 Changes.
The Grantee shall promptly notify the Agency in writing of any changes in the location of
any place of business of the Grantee, and of any other change in fact or circumstance (including
the Grantee's assets) that both (a) was represented or warranted at any time by the Grantee to the
Agency, and (b) will materially adversely affect the Grantee's capacity to perform its obligations
under this Agreement.
4.4 Notification of Litigation.
The Grantee shall promptly notify the Agency in writing of (a) any litigation that (i)
affects the Grantee or the Development and (ii) would materially adversely affect the Grantee's
capacity to perform its obligations under this Agreement, and (b) any claims or disputes that
involve a material risk of litigation that would materially adversely affect the Grantee's capacity
to perform its obligations under this Agreement.
4.5 Entry by the Agency.
After notice to the Grantee, the Grantee shall permit the Agency, through its officers,
agents, or employees, at all reasonable times, to enter onto the Development to inspect the
Development for compliance with the Agency Grant Documents. The Agency is under no
obligation to supervise, inspect, or inform the Grantee of the progress of any construction of the
Development and the Grantee shall not rely upon the Agency for any such activity. The Agency
shall not unreasonably disturb any residential tenants in the course of any inspection conducted
pursuant to this Section 4.5.
4.6 hidemnity.
In consideration of the Agency's agreement to make the Agency Grant pursuant to this
Agreement, the Grantee agrees to indemnify, defend (with counsel reasonably chosen by the
Agency at the Agency's option) and hold harmless the Agency, the Town, their respective board
members, council members, commissioners, officers, agents, and employees: (i) from any and
all claims and losses accruing or resulting to any and all contractors, subcontractors,
materialmen, laborers, and any other person, firm or corporation furnishing or supplying work,
services, materials, or supplies in connection with the performance of this Agreement; (ii) all
claims which arise out of or in connection with the ownership, operation, or occupancy of the
Development by the Grantee or the Grantee's contractors, subcontractors, agents, employees, or
tenants, and (iii) Grant's breach of this Agreement. This indemnity shall not extend to any claim
arising solely from the Town's or Agency's gross negligence or the Agency's failure to perform
8
11511011558124.2
its obligations under this Agreement. This Section 4.6 shall survive the termination of this
Agreement.
4.7 Insurance.
(a) Required Coverage. The Grantee, or its permitted successor and assigns,
shall maintain and keep in force, at the Grantee's (or such successor's) sole cost and expense, the
following insurance:
(i) Worker's Compensation insurance, including Employer's Liability
coverage, with limits not less than One Million Dollars ($1,000,000) each accident, to the extent
required by law.
(ii) Comprehensive General Liability insurance with limits not less
than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations,
(iii) Comprehensive Automobile Liability insurance with limits not less
than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable; provided, however, that if the Grantee does not own or lease vehicles for purposes of
this Agreement, then no automobile insurance shall be required and the Parties to this Agreement
shall initial this provision signifying same.
Agency:
Grantee:
(iv) During the course of rehabilitation of the Improvements, Builders
Risk insurance, and following the completion of rehabilitation, Property insurance, covering the
Development covering all risks of loss, (excluding earthquake) and including flood (if required),
for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to
the Agency, naming the Agency as a Loss Payee, as its interest may appear.
(b) Contractor's Insurance. The Grantee shall cause any general contractor or
agent working on the Development, under direct contract with the Grantee to maintain insurance
of the types and in at least the minimum amounts described in subsections (a)(1), (a)(2), and
(a)(3) above, and shall require that such insurance shall meet all of the general requirements of
subsection (c) below. Subcontractors working on the Development under indirect contract with
the Grantee shall be required to maintain the insurance described in subsections (a)(1), (a)(2) and
(a)(3) above, except that the Comprehensive General Liability insurance limits shall not be less
than One Million Dollars ($1,000,000) each occurrence combined single limit. Liability and
Comprehensive Automobile Liability insurance to be maintained by such contractors and agents
pursuant to this subsection shall name as additional insureds the Agency, its board members,
officers, agents, and employees.
(c) General Requirements. The insurance is to be placed with insurance
companies with A.M. Best Co.'s rating of no less than A-VII. The required insurance shall be
9
11511011558124.2
provided under an occurrence form, and the Grantee shall maintain such coverage continuously
throughout the Term. Should any of the required insurance be provided under a form of
coverage that includes an annual aggregate limit or provides that claims investigation or legal
defense costs be included in such annual aggregate limit, such annual aggregate limit shall be
three (3) times the occurrence limits specified above.
Comprehensive General Liability, Comprehensive Automobile Liability and Property
insurance policies shall be endorsed to name as additional insureds the Agency and its board
members, officers, agents, and employees. All policies and bonds shall contain (i) the agreement
of the insurer to give the Agency at least thirty (3 0) days' notice prior to cancellation (including,
without limitation, for non-payment of premium) or any material change in said policies; (ii) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the Agency; (iii) a provision that no act or omission of the Grantee shall affect or limit
the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a waiver
by the insurer of all rights of subrogation against the Agency and its authorized parties in
connection with any loss or damage thereby insured against.
(d) Certificates of Insurance. No later than January 15 of each year during the
Tenn of this Agreement, the Grantee shall provide certificates of insurance, in form and with
insurers reasonable acceptable to the Agency, evidencing compliance with the requirements of
this Section, and shall provide complete copies of such insurance policies, including a separate
endorsement naming the Agency as additional insured.
4.8 Hazardous Materials.
(a) Certain Covenants and Agreements. The Grantee hereby covenants and
agrees that:
(i) The Grantee shall not knowingly permit the Development or any
portion thereof to be a site for the use, generation, treatment, manufacture, storage, disposal or
transportation of Hazardous Materials or otherwise knowingly permit the presence of Hazardous
Materials in, on or under the Development.
(ii) The Grantee shall keep and maintain the Development in
compliance with, and shall not cause or permit the Development or any portion thereof to be in
violation of, any Hazardous Materials Laws.
(iii) Upon receiving actual knowledge of the same the Grantee shall
immediately advise the Agency in writing of. (A) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened against the Grantee
or the Development pursuant to any applicable Hazardous Materials Laws; (B) any and all
claims made or threatened by any third party against the Grantee or the Development relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in the foregoing clause (A) and this clause (B) are hereinafter
referred to as "Hazardous Materials Claims"); (C) the presence of any Hazardous Materials in, on
or under the Development; or (D) the Grantee's discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Development classified as "borderzone property"
10
1151\01\558I24.2
under the provisions of California Health and Safety Code, Sections 25220 et seq., or any
regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Development under any Hazardous Materials
Laws. The Agency shall have the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims, and to
have its reasonable attorney's fees in connection therewith paid by the Grantee.
(iv) Without the Agency's prior written consent, which shall not be
unreasonably withheld, and which the Agency shall promptly grant or deny, the Grantee shall not
take any remedial action in response to the presence of any Hazardous Materials on, under, or
about the Development (other than in emergency situations or as required by governmental
agencies having jurisdiction in which case the Agency agrees to provide its consent), nor enter
into any settlement agreement, consent decree, or other compromise in respect to any Hazardous
Materials Claims.
(b) Indemnity. Without limiting the generality of the indemnification set forth
in Section 4.6, above, the Grantee hereby agrees to indemnify, protect, hold harmless and defend
(by counsel reasonably satisfactory to the Agency) the Agency, its board members, officers, and
employees from and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial action
requirements, enforcement actions of any kind, and all costs and expenses incurred in connection
therewith (including, but not limited to, attorney's fees and expenses), arising directly or
indirectly, in whole or in part, out of
(i) The failure of the Grantee, or any other person or entity to comply
with any Hazardous Materials Law relating in any way whatsoever to the handling, treatment,
presence, removal, storage, decontamination, cleanup, transportation or disposal of Hazardous
Materials into, on, under or from the Development; or
(ii) The presence in, on or under the Development of any Hazardous
Materials or any releases or discharges of any Hazardous Materials into, on, under or from the
Development; or
(iii) Any activity carried on or undertaken on or off the Development,
and whether by the Grantee or any successor in title or any employees, agents, contractors or
subcontractors of the Grantee or any successor in title, or any third persons at any tine
occupying or present on the Development, in connection with the handling, treatment, removal,
storage, decontamination, cleanup, transport or disposal of any Hazardous Materials at any time
located or present on or under the Development; provided, however, that the indemnification for
activities undertaken off the Development shall only apply to activities undertaken by the
Grantees or their employees, agents, contractors or subcontractors.
The foregoing indemnity shall further apply to any residual contamination on or
under the Development, or affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the generation, use, handling, treatment,
storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any
of such activities were or will be undertaken in accordance with Hazardous Materials Laws. The
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provisions of this subsection shall survive expiration of the Term or other termination of this
Agreement, and shall remain in full force and effect.
(c) No Limitation. The Grantee hereby acknowledges and agrees that the
Grantee's duties, obligations and liabilities under this Agreement, including, without limitation,
under subsection (b) above, are in no way limited or otherwise affected by any information the
Agency may have concerning the Development and/or the presence within the Development of
any Hazardous Materials, whether the Agency obtained such information from the Grantee or
from its own investigations.
(d) The Grantee hereby acknowledges and agrees that (1) this Section 4.8 is
intended as the Agency's written request for information (and the Grantee's response) concerning
the envirommental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Agreement (together with any
indemnity obligation applicable to a breach or any such representation and warranty) with
respect to the environmental condition of the Property is intended by the Parties to be an
"environmental provision" for purposes of California Code of Civil Procedure Section 736.
(e) In the event that any portion of the Property is determined to be
"environmentally impaired" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of
Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the
Agency's or the trustee's rights and remedies under the Deed of Trust, the Agency may elect to
exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien
on such environmentally impaired or affected portion of the Property and (2) exercise (a) the
rights and remedies of an unsecured creditor, including reduction of its claim against the Grantee
to judgment, and (b) any other rights and remedies permitted by law.
For purposes of determining the Agency's right to proceed as an unsecured creditor under
California Code of Civil Procedure Section 726.5(a), the Grantee shall be deemed to have
willfully permitted or acquiesced in a release or threatened release of hazardous materials, within
the meaning of California Code of Civil Procedure Section 726.5(4)(1), if the release or
threatened release of hazardous materials was knowingly or negligently caused or contributed to
by any lessee, occupant, or user of any portion of the Property and the Grantee know or should
have known of the activity by such lessee, occupant, or user which caused or contributed to the
release or threatened release.
All costs and expenses, including (but not limited to) attorneys' fees, incurred by the
Agency in connection with any action commenced under this paragraph, including any action
required by California Code of Civil Procedure Section 726.5(b) to determine the degree to
which the Property is environmentally impaired, plus interest thereon at the lesser of ten percent
(10%) or the maximum rate permitted by law, until paid, shall be added to the indebtedness
secured by the Agency Deed of Trust and shall be due and payable to the Agency upon its
demand made at any time following the conclusion of such action.
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4.9 Non-Discrimination.
The Grantee covenants by and for itself and its successors and assigns that there shall be
no discrimination against or segregation of a person or of a group of persons on account of race,
color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the
Grantee or any person claiming under or through the Grantee establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.
The foregoing covenant shall run with the land and shall survive termination of this Agreement.
4.10 Mandatory Language in All Subse, lent Deeds, Leases and Contracts.
All deeds, leases, or contracts entered into by the Grantee as to any portion of the
Property shall contain the following language:
In Deeds:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) and (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment
of the property herein conveyed, nor shall the grantee or any person claiming under or through
the grantee, establish or permit any practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with
the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not
be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Govermnent Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 513, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1)•"
In Leases:
"(1) Lessee herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) and (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of
the Governrtnent Code in the leasing, subleasing, transferring, use, occupancy, tenure or
enjoyment of the premises herein leased nor shall the lessee or any person claiming under or
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through the lessee, 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 in the premises herein leased.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be
construed to apply to housing for older persons, as defined in Section 129559 of the
Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1)
In Contracts:
°(1)There shall be no discrimination against or segregation of, any person or group of
persons on account of any basis listed in subdivision (a) and (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (in) and
paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of the Government Code
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor
shall the transferee or any person claiming under or through the transferee establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not
be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(0,11
4.11 Fees and Taxes.
(a) The Grantee shall be solely responsible for payment of all fees,
assessments, taxes, charges, and levies imposed by any public authority or utility company with
respect to the Development, and shall pay such charges prior to delinquency. However, the
Grantee shall not be required to pay and discharge any such charge so long as (a) the legality
thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if
requested by the Agency, the Grantee deposits with the Agency any funds or other forms of
assurance that the Agency in good faith from time to time determines appropriate to protect the
Agency from the consequences of the contest being unsuccessful.
(b) During the rehabilitation of the llnprovements, the Grantee shall require
that its contractors and subcontractors exercise their option to obtain a Board of Equalization
14
11511011558124.2
sub-permit for the development of the Improvements and allocate all eligible tax payments
pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law, as may be amended from
time to time, to the Town. Prior to beginning the rehabilitation of the Improvements, the Grantee
shall require that its contractor and subcontractors provide the Agency with either a copy of the
sub-pennit or a statement that sales and use tax does not apply to their portion of the
rehabilitation of the Improvements.
4.12 Records.
(a) The Grantee shall maintain complete, accurate, and current records
pertaining to the Development for a period of five (5) years after the creation of such records,
and shall permit any duly authorized representative of the Agency to inspect and copy records,
including records pertaining to rent, income, and household size of residents of the Development.
Records inust be kept accurate and current.
(b) The Agency shall notify the Grantee of any records it deems insufficient.
The Grantee shall have fifteen (15) business days after the receipt of such a notice to correct any
deficiency in the records specified by the Agency in such notice, or if a period longer than fifteen
(15) business days is reasonably necessary to correct the deficiency, then the Grantee shall begin
to correct the deficiency within fifteen (15) business days and correct the deficiency as soon as
reasonably possible.
4.13 Audits.
The Grantee shall make available for examination at reasonable intervals and during
normal business hours to the Agency all books, accounts, reports, files, and other papers or
property with respect to all matters covered by this Agreement, and shall permit the Agency to
audit, examine, and make excerpts or transcripts from such records. The Agency may make
audits of any conditions relating to this Agreement.
4.14 Compliance with Applicable Laws.
The Grantee shall cause the operation of the Development to be performed in compliance
with (1) all applicable laws, ordinances, rules and regulations of federal, state, county or
municipal governments or agencies now in force or that may be enacted hereafter, and (2) all
directions, rules and regulations of any fire marshal, health officer, building inspector, or other
officer of every governmental agency now having or hereafter acquiring jurisdiction.
ARTICLE 5.
TR ANSFF.R
5.1 Acknowledgement b the Grantee.
This Agreement is entered into solely for the purpose of providing the Agency Grant to
the Grantee and the Grantee's subsequent use of the Agency Grant in accordance with the terms
hereof. The Grantee recognizes that the qualifications and identity of the Grantee are of
particular concern to the Agency, in view of
15
11511011558124.2
(a) importance of the development of the Development by the Grantee to the
general welfare of the community consistent with redevelopment purposes;
(b) the land acquisition assistance and other public aids that have been made
available by law and by the government for the purpose of making such redevelopment possible;
(c) the reliance by the Agency upon the unique qualifications and ability of
the Grantee to assure the quality of the affordability, use, operation, and maintenance of the
Development deemed critical by the Agency;
(d) the fact that a change of ownership or control of the owner of the
Development, or of a substantial part thereof, or any other act or transaction involving or
resulting in a significant change in ownership or with respect to the identity of the parties in
control of the Grantee or the degree thereof is for practical purposes a transfer or disposition of
the Development;
(e) the fact that the Property is not to be acquired or used for speculation, but
only for operation by the Grantee in accordance with the Agency Grant Documents; and
(f) the importance to the Agency and the community of the standards of use,
operation and maintenance of the Development. The Grantee further recognizes that it is
because of such qualifications and identity that the Agency is entering into this Agreement with
the Grantee and that limited transfers are pern-fitted only as provided in this Agreement.
5.2 Unauthorized Transfer is Event of Default.
Unless pre-approved by the Agency in writing, no Transfer shall be permitted during the
Term. An unauthorized Transfer shall constitute an Event of Default hereunder, pursuant to
Section 7.1(c) below, which shall cause the Agency Grant to be due and payable with interest
pursuant to Sections 2.2 and 7.2(a) of this Agreement.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF THE GRANTEE
6.1 Representations and Warranties.
The Grantee hereby represents and warrants to the Agency as follows:
(a) Organization. The Grantee is a duly organized, validly existing,
California nonprofit corporation and in good standing under the laws of the State of California
and has the power and authority to own its property and carry on its business as now being
conducted.
(b) Authority of the Grantee. The Grantee has full power and authority to
execute and deliver this Agreement and to make and accept the borrowings contemplated
hereunder, to execute and deliver the Agency Grant Documents and all other documents or
16
11511011558124.2
instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement,
and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Agency Grant Documents and all other documents or instruments executed and delivered, or to
be executed and delivered, pursuant to this Agreement have been executed and delivered by
persons who are duly authorized to execute and deliver the same for and on behalf of the
Grantee, and all actions required under the Grantee's organizational documents and applicable
governing law for the authorization, execution, delivery and performance of this Agreement and
the Agency Grant Documents and all other documents or instruments executed and delivered, or
to be executed and delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Agency Grant
Documents and all other documents or instruments which have been executed and delivered
pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered,
will when so executed and delivered constitute, legal, valid and binding obligations of the
Grantee enforceable against it in accordance with their respective terins.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Agency Grant Documents or of any other documents or instruments
executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the
performance of any provision, condition, covenant or other term hereof or thereof, will conflict
with or result in a violation of any statute, rule or regulation, or any judgment, decree or order of
any court, board, commission or agency whatsoever binding on the Grantee, or any provision of
the organizational documents of the Grantee, or will conflict with or constitute a material breach
of or a default under any agreement to which the Grantee is a party, or will result in the creation
or imposition of any lien upon any assets or property of the Grantee, other than liens established
pursuant hereto.
(f) Compliance With Laws, Consents and Approvals. The development of
the Development will comply with all applicable laws, ordinances, rules and regulations of
federal, state and local governments and agencies and with all applicable directions, rules and
regulations of the fire marshal, health officer, building inspector and other officers of any such
govermnent or agency.
(g) Pending Proceedings. The Grantee is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of the Grantee,
threatened against or affecting the Grantee or the Development, at law or in equity, before or by
any court, board, commission or agency whatsoever which might, if determined adversely to the
Grantee, materially affect the Grantee's ability to repay the Agency Grant or impair the security
to be given to the Agency pursuant hereto.
(h) Title to Land. At the time of recordation of the Agency Deed of Trust,
Grantee will have good and marketable fee title to the Property and there will exist thereon or
with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever
other than those liens approved by the Agency under Section 2.5 of this Agreement, liens for
17
11511011558124.2
current real property taxes and assessments not yet due and payable, and liens in favor of the
Agency or approved in writing by the Agency.
(i) Financial Statements. The financial statements of the Grantee and other
financial data and information furnished by the Grantee to the Agency fairly present the
information contained therein. As of the date of this Agreement, there has not been any adverse,
material change in the financial condition of the Grantee from that shown by such financial
statements and other data and information.
0) Sufficient Funds. Upon the Grantee obtaining fee title to the Property, the
Grantee hold sufficient funds and/or binding commitments for sufficient funds to complete the
rehabilitation of the Improvements.
ARTICLE 7.
DEFAULTS AND REMEDIES
7.1 Events of Default.
Each of the following shall constitute an "Event of Default" by the Grantee under this
Agreement:
(a) Failure to Acquire the Property. A failure by the Grantee to acquire the
Property within the time set forth in Section 3.1.
(b) Failure to Rehabilitate Improvements. A failure by the Grantee to
commence or complete the rehabilitation of the Improvements within the time set forth in
Section 3.1.
(c) Breach of Covenants. Failure by the Grantee to duly perform, comply
with, or observe any of the material conditions, tenns, or covenants of any of the Agency Grant
Documents, and such failure having continued uncured for thirty (30) days after receipt of
written notice thereof from the Agency to the Grantee.
(d) Unauthorized Transfer. Any Transfer other than as permitted by Article 5.
(e) Representation or Warranty Incorrect. Any Grantee representation or
warranty contained in this Agreement, or in any application, financial statement, certificate, or
report submitted to the Agency in connection with any of the Agency Grant Documents, proving
to have been incorrect in any material respect when made.
(f) Default Under Other Financing. Failure to make any payment or perfornn
any of the Grantee's covenants, agreements, or obligations under the documents evidencing and
securing the Approved Financing.
(g) Insolvency. A court having jurisdiction shall have made or entered any
decree or order (i) adjudging the Grantee (or any general partner of the Grantee) to be bankrupt
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11511011558124.2
or insolvent, (ii) approving as properly filed a petition seeking reorganization of the Grantee (or
any general partner of the Grantee) or seeking any arrangement for the Grantee under the
bankruptcy law or any other applicable debtor's relief law or statute of the United States or any
state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of the
Grantee (or any general partner of the Grantee) in bankruptcy or insolvency or for any of their
properties, or (iv) directing the winding up or liquidation of the Grantee (or any general partner
of the Grantee), if any such decree or order described in clauses (i) to (iv), inclusive, shall have
continued unstayed or undischarged for a period of thirty (30) days; or the Grantee (or any
general partner of the Grantee) shall have admitted in writing its inability to pay its debts as they
fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of
the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of
default in this paragraph shall cause the Agency Grant to be immediately due and payable, with
interest, without the need for any action by the Agency.
(h) Assignment; Attachment. The Grantee (or any general partner of the
Grantee) shall have assigned its assets for the benefit of its creditors or suffered a sequestration
or attachment of or execution on any substantial part of its property, unless the property so
assigned, sequestered, attached or executed upon shall have been returned or released within
thirty (30) days after such event or prior to sooner sale pursuant to such sequestration,
attachment, or execution. The occurrence of any of the events of default in this paragraph shall
cause the Agency Grant to be immediately due and payable, with interest, without the need for
any action by the Agency.
(i) Suspension. The Grantee (or any general partner of the Grantee) shall
have voluntarily suspended its business.
0) Liens. There shall be filed any claim of lien (other than liens approved in
writing by the Agency) against the Property or any part thereof, or any interest or right made
appurtenant thereto, or the service of any notice to withhold proceeds of the Agency Grant and
the continued maintenance of said claim of lien or notices to withhold for a period of twenty (20)
days without discharge or satisfaction thereof or provision therefore satisfactory to the Agency.
(k) Condemnation. The condemnation, seizure, or appropriation of all or, in
the opinion of the Agency, a substantial part of the Development.
7.2 Remedies.
The occurrence of any Event of Default will either, at the option of the Agency or
automatically where so specified, relieve the Agency of any obligation to make the Agency
Grant and shall give the Agency the right to proceed with any and all remedies set forth in this
Agreement and the Agency Grant Documents, including but not limited to the following:
(a) Repayment of Grant, Foreclosure. The Agency shall have the right to
require immediate repayment of the Agency Grant, together with any accrued interest thereon as
described in Section 2.2. above. The Grantee waives all right to presentment, demand, protest or
notice of protest or dishonor. The Agency may proceed to enforce repayment of the Agency
Grant and to exercise any or all rights afforded to the Agency as a creditor and secured party
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under the law including the Uniform Commercial Code, including foreclosure under the Agency
Deed of Trust. The Grantee shall be liable to pay the Agency on demand all reasonable
expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses)
paid or incurred by the Agency in connection with the collection of the Agency Grant and the
preservation, maintenance, protection, sale, or other disposition of the security given for the
Agency Grant. Except as provided below, Grantee shall not have any direct or indirect personal
liability for any required repayment of the Grant and the sole recourse of the Agency with
respect to the repayment of the Agency Grant following an Event of Default shall be to the
property described in the Agency Deed of Trust; provided, however, that nothing contained in
the foregoing limitation of liability shall (a) limit or impair the enforcement against all such
security for the repayment of the grant of all the rights and remedies of the Agency thereunder,
or (b) be deemed in any way to impair the right of the Agency to assert the unpaid amount of the
Agency Grant, following an Event of Default, as demand for money within the meaning and
intendment of Section 431.70 of the California Code of Civil Procedure or any successor
provision thereto. The foregoing limitation of liability is intended to apply only to the obligation
for the repayment of the Agency Grant following an Event of Default; nothing contained herein
is intended to relieve the Grantee of its obligation to indemnify the Agency under this
Agreement, or under the Agency Regulatory Agreement, or liability for (i) fraud or willful
misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create
liens on the Property that are payable or applicable prior to any foreclosure under the Agency
Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market
value of any personal property or fixtures removed from the Property or disposed of other than in
accordance with the Agency Deed of Trust; and (iv) the misappropriation of any proceeds under
any insurance policies or awards resulting from condemnation or the exercise of the power of
eminent domain or by reason of damage, loss or destruction to any portion of the Property. The
foregoing limitation of liability shall not apply if the Agency is prevented, hindered or opposed
by Grantee from foreclosing under the Agency Deed of Trust.
(b) Specific Performance. The Agency shall have the right to mandamus or
other suit, action or proceeding at law or in equity to require the Grantee to perform its
obligations and covenants under the Agency Grant Documents or to enjoin acts on things which
may be unlawful or in violation of the provisions of the Agency Grant Documents.
(c) Right to Cure at Grantee's Expense. The Agency shall have the right (but
not the obligation) to cure any monetary default by the Grantee under a loan secured by the
Property. The Grantee agrees to reimburse the Agency for any funds advanced by the Agency to
cure a monetary default by the Grantee upon demand therefore, together with interest thereon at
the lesser often percent (10%) per annum or the maximum rate permitted by law, from the date
of expenditure until the date of reimbursement.
7.3 Remedies Cumulative.
No right, power, or remedy given to a party by the terms of this Agreement is intended to
be exclusive of any other right, power, or remedy; and each and every such right, power, or
remedy shall be cumulative and in addition to every other right, power, or remedy given to the
party. Neither the failure nor any delay on the part of a Party to exercise any such rights and
remedies shall operate as a waiver thereof, nor shall any single or partial exercise by a Party of
20
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any such right or remedy preclude any other or further exercise of such right or remedy, or any
other right or remedy.
7.4 Waiver of Terms and Conditions.
A party may at its discretion waive in writing any of the terms and conditions of this
Agreement, without completing an amendment to this Agreement. No waiver of any default or
breach shall be implied from any omission by the non-breaching Party to take action on account
of such default if such default persists or is repeated, and no express waiver shall affect any
default other than the default specified in the waiver, and such waiver shall be operative only for
the time and to the extent therein stated.
Waivers of any covenant, term, or condition contained herein shall not be construed as a
waiver of any subsequent breach of the same covenant, term, or condition. The consent or
approval by a Party to or of any act by the other party requiring further consent or approval shall
not be deemed to waive or render unnecessary the consent or approval to or of any subsequent
similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a
waiver of any default under this Agreement, nor shall it invalidate any act done pursuant to
notice of default, or prejudice the exercising Party in the exercise of any right, power, or remedy
hereunder.
ARTICLE 8.
GENERAL PROVISIONS
8.1 Relationship of Parties.
Nothing contained in this Agreement or any Agency Grant Document shall be interpreted
or understood by any of the parties, or by any third persons, as creating the relationship of
employer and employee, principal and agent, limited or general partnership, or joint venture
between the Agency and the Grantee or its agents, employees or contractors, and the Grantee
shall at all times be deemed an independent contractor and shall be wholly responsible for the
manner in which it or its agents, or both, perform the services required of it by the terns of this
Agreement and the Agency Regulatory Agreement for the acquisition and operation of the
Development.
The Grantee has and retains the right to exercise full control of employment, direction,
compensation, and discharge of all persons assisting in the performance of services under the
Agreement. In regards to the acquisition and operation of the Development, the Grantee shall be
solely responsible for all matters relating to payment of its employees, including compliance
with Social Security, withholding, and all other laws and regulations governing such matters, and
shall include requirements in each contract that contractors shall be solely responsible for similar
matters relating to then employees. The Grantee shall be solely responsible for its own acts and
those of its agents and employees.
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8.2 No Claims.
Nothing contained in this Agreement shall create or justify any claim against the Agency
or the Town by any person that the Grantee may have employed or with whom the Grantee may
have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or
the performance of any work or services with respect to the purchase of the Property, or the
rehabilitation or operation of the Improvements, and the Grantee shall include similar
requirements in any contracts entered into for the such purposes.
8.3 Notices, Demands and Communications.
Formal notices, demands, and communications between the Agency and the Grantee shall
be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, return
receipt requested, or delivered by an express delivery service with a receipt showing date of
delivery, or hand delivered with a receipt showing date of delivery, to the principal offices of the
Parties as follows:
Agency: Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
Attn: Executive Director
Grantee: Senior Housing Solutions
512 Valley Way
Milpitas, CA 95035
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section. Delivery shall be deemed to have occurred at the time indicated on the receipt for
delivery or refusal of delivery.
8.4 Non-Liability of Officials, Employees and Agents.
No member, official, employee or agent of the Town or the Agency shall be personally
liable to the Grantee, 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 Grantee or any successor or on any
obligation under the terms of this Agreement.
8.5 Enforced Delav.
In addition to specific provisions of this Agreement, performance by either party shall not
be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; quarantine restrictions; freight embargoes; lack of
transportation; or court order; or any other similar causes (other than lack of funds of the Grantee
or the Grantee's inability to finance the acquisition of the Property or rehabilitation or operation
of the Development) beyond the control or without the fault of the party claiming an extension of
22
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time to perform. An extension of time for any cause will be deemed granted if notice by the
party claiming such extension is sent to the other within ten (10) days from the commencement
of the cause and such extension of time is not rejected in writing by the other Party within ten
(10) days of receipt of the notice. In no event shall the Agency be required to agree to
cumulative delays in excess of one hundred twenty (120) days.
8.6 Inspection of Books and Records.
The Agency has the right at all reasonable times to inspect on a confidential basis the
books, records, and all other documentation of the Grantee pertaining to its obligations under this
Agreement. The Grantee also has the right at all reasonable times to inspect the books, records,
and all other documentation of the Agency pertaining to its obligations under this Agreement.
8.7 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any part of its provision.
8.8 Applicable Law.
This Agreement shall be interpreted under and pursuant to the laws of the State of
California. The venue for any litigation arising in connection with this Agreement shall be the
Superior Court of the County of Santa Clara.
8.9 Seyerability.
If any term, provision, covenant or condition of this Agreement is held in a final
disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect unless the rights and obligations of
the parties have been materially altered or abridged by such invalidation, voiding or
unenforceability.
8.10 Binding Upon Successors.
This Agreement shall be binding upon and inure to the benefit of the heirs,
administrators, executors, successors, and assigns of each of the parties. However, there shall be
no Transfer except pursuant to the terms of this Agreement. Any reference in this Agreement to
a specifically named party shall be deemed to apply to any successor, heir, administrator,
executor, or assign of such Party who has acquired an interest in compliance with the terms of
this Agreement, or under law.
8.11 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the parties. This
Agreement shall not be construed as if it had been prepared by one of the parties, but as if both
parties had prepared it. The parties to this Agreement (and their counsel) have read and
reviewed this Agreement and agree that any rule of construction to the effect that ambiguities are
23
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to be resolved against the drafting party (including, but not limited to, Civil Code Section 1654,
as may be amended form tinge to time) shall not apply to the interpretation of this Agreement.
8.12 App _ royal.
Whenever this Agreement calls for Agency approval, consent, or waiver, the approval,
consent, or waiver of the Agency Executive Director shall constitute the approval, consent, or
waiver of the Agency, without further authorization required from the Agency Board. The
Agency hereby authorizes the Agency Executive Director or his or her designee to deliver such
approvals or consents as are required by this Agreement, to extend time deadlines, or to waive
requirements under this Agreement, on behalf of the Agency (including, but not limited to the
requirements set forth in Sections 2.6, 2.7, 2.9, and 3. 1), and to take such actions and execute
such documents on behalf of the Agency as may be necessary to carry out this Agreement. Any
consents or approvals required under this Agreement shall not be unreasonably withheld or
made, except where it is specifically provided that a sole discretion standard applies.
8.13 Discretion Retained by Town.
The Grantee acknowledges that execution of this Agreement by the Agency does not
constitute approval by the Town of any required permits, applications, or allocations, for the
Development, and in no way limits the discretion of the Town in the pen-nit allocation and
approval process regarding the Project or the Development.
8.14 Amendments.
Except for approvals and consents otherwise specified herein, amendments (if any) to this
Agreement shall be approved in the same manner as this Agreement. The parties can amend this
Agreement, including any deadlines provided in this Agreement, only by means of a writing
signed by both Parties.
8.15 Counterparts; Multiple Originals.
This Agreement may be executed in counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original.
SIGNATURES ON FOLLOWING PAGE
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above.
BY SIGNING BELOW, the parties agree to this Agreement as of the date first written
AGENCY:
TOWN OF LOS GATOS REDEVELOPMENT
AGENCY, a public body, corporate and politic
By:
Name:
Its:
GRANTEE:
SENIOR HOUSING SOLUTIONS, a California
nonprofit corporation
By:
Name:
Its:
25
l 151\01\558124.2
EXHIBIT A
(Legal Description of the Property)
All that certain real property situated in the Town of Los Gatos, County of Santa Clara, State of
California, described as follows:
A-1
115 1\01\558124.2
EXHIBIT B
(Approved Budget)
11511011558124.2
B-1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Town of Los Gatos
Redevelopment Agency
110 E. Main Street
Los Gatos, CA 95030
Attn: Assistant Executive Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE 27383
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Senior Housing Solutions)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is made and entered into as of 2008, by and between the Town of Los Gatos
Redevelopment Agency, a public body, corporate and politic (the "Agency") and Senior Housing
Solutions, a California nonprofit public benefit corporation (the "Owner").
RECITALS
A. The Agency and the Owner have entered into a Revocable Grant Agreement dated
as of 2008 (the "Grant Agreement"), pursuant to which the Agency made a
revocable grant to the Owner which the Owner used to purchase the real property located in the
Town of Los Gatos, County of Santa Clara, more particularly described in Exhibit A attached
hereto and incorporated herein (the "Property").
B. The Property is improved with a four (4)-bedroom single family house, which
Owner intends to rehabilitate into five (5) single-room occupancy units of senior housing in
accordance with the Grant Agreement.
C. The Agency has agreed to grant funds to Owner on the condition that the Property
be maintained and operated in accordance with Health and Safety Sections 33334.2 et seMc and
in accordance with additional restrictions concerning affordability, operation, and maintenance
of the Property, as specified in this Agreement.
D. The fiends granted to Owner pursuant to the Grant Agreement are Redevelopment
Low and Moderate Income Housing Funds. Pursuant to Health and Safety Code Section
33334.3, the Agency must restrict properties assisted with fiends from the Agency's Low and
Moderate Income Housing Fund, so that the developments remain affordable to low and
moderate income households for the longest feasible time. This Agreement is intended to
implement these requirements of the California Community Redevelopment Law.
11511011558223.2 1
ATTACEEM ' 5
E. The Agency has agreed to grant funds to Owner on the condition that the Property
be maintained and operated in accordance with Health and Safety Sections 33334.2 et sew., and
in accordance with additional restrictions concerning affordability, operation, and maintenance
of the Property, as specified in this Agreement.
F. In consideration of receipt of the Grant, the Owner has agreed to observe all the
terms and conditions set forth below.
G. In order to ensure that the Property will be used and operated in accordance with
these conditions and restrictions, the Agency and the Owner wish to enter into this Agreement.
THEREFORE, the Agency and the Owner hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following terms shall have the
respective meanings assigned to them in this Article 1.
(a) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a household, as 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 Owner with a reasonably similar method of calculation of adjusted income as
provided in said Section 6914.
(b) "Agency" shall mean the Town of Los Gatos Redevelopment Agency, a
public body, corporate and politic.
(c) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(d) "Deed of Trust" shall mean the deed of trust executed by the Owner in
favor of the Agency and recorded against the Property which secures repayment of the Grant and
performance of this Agreement.
(e) "Grant" shall mean all funds granted to Owner by the Agency pursuant to
the Grant Agreement.
(f) "Grant Agreement" shall mean the Grant Agreement, dated of even date
herewith, entered into by and between the Agency and the Owner.
(g) "Median Income" shall mean the median gross yearly income, adjusted for
household size in the County of Santa Clara, California as determined by the U.S. Department of
Housing and Urban Development ("HUD") and as published from time to time by the State of
California Department of Housing and Community Development. In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen (18)
11511011558223.2 2
months, the Agency shall provide the Owner with other income determinations which are
reasonably similar with respect to methods of calculation to those previously published by HUD
and the State.
(h) "Owner" shall mean Senior Housing, Solutions„ a California nonprofit
corporation.
(i) "Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
0) "Rent" shall mean the total of monthly payments by the tenants of a Unit
for the following: use and occupancy of the Unit and the Property and associated facilities,
including the common areas within the Property and parking; any separately charged fees or
service charges assessed by the Owner which are required of all tenants, other than security
deposits; 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 cable or telephone service; 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 Owner, and paid
by the Tenant.
(k) "Senior Household" means a household in which at least one person is
sixty-two (62)-years of age, or older (or which otherwise meets State and federal law regarding
eligibility for residing in a housing development restricted to senior citizens).
(1) "Tenant" shall mean a household occupying a Unit.
(m) "Term" shall mean the period of time beginning on the date of this
Agreement and ending ninety-nine (99) years following the date of this Agreement.
(n) "Town" shall mean the Town of Los Gatos.
(o) "Units" shall mean the five (5) single room occupancy units to be
rehabilitated by the Owner on the Property.
(p) "Very Low Income Household" shall mean a household with an Adjusted
Income that does not exceed the qualifying limits for very low income households, adjusted for
household size, as established and amended from time to time pursuant to Section 8 of the
United States Housing Act of 1937, and as published by the State of California Department of
Housing and Community Development.
(q) "Very Low Income Units" shall mean the Units which, pursuant to Section
2.1 below, are required to be occupied by Very Low Income Households.
11511011558223.2
ARTICLE 2.
AFFORDABILITY COVENANTS
2.1 Occupancy Requirements.
(a) Very Low Income Households. All of the Units shall be rented to and
occupied by or, if vacant, available for occupancy by persons who qualify, at the time of initial
occupancy, as Very Low Income Households. If, upon recertification of a Very Low Income
Household's income, the Owner determines that the Household's Adjusted Income has increased
and exceeds the qualifying income for a Very Low Income Household set forth in Section 1.1(q)
above, the Tenant shall be permitted to continue to occupy the Unit at the restricted rent set forth
in Section 2.2 below.
(b) Senior Occupancy. All Units on the Property shall be occupied or held
available for occupancy by Senior Households. The Property shall be operated at all times in
compliance with the provisions of. (i) the Unruh Act, including but not limited to California
Civil Code Sections 51.2, 51.3 and 51.4 which relate to the requirements for lawful senior
housing; (ii) the United States Fair Housing Act, as amended, 42 U.S.C. Section 3607(b) and 24
CFR 100.304, which relate to lawful senior housing; (iii) the California Fair Employment and
Housing Act, Government Code Section 12900 et seq., which relates to lawful senior housing;
and (iv) any other applicable law or regulation (including the Americans With Disabilities Act,
to the extent applicable to the Property). Owner shall develop and implement appropriate age
verification procedures to ensure compliance with the requirements of this Section. The Owner
shall provide the Agency with a copy of its written verification procedures. The Owner agrees to
indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the Agency
and the Town) the Agency and the Town, and their respective boardmembers, councilmembers,
officers and employees, from all suits, actions, claims, causes of action, costs, demands,
judgments and liens arising out of the Owner's failure to comply with applicable legal
requirements related to housing for seniors and persons with disabilities. The provisions of this
subsection shall survive expiration of the Term or other termination of this Agreement, and shall
remain in full force and effect.
(c) Allowable Rent. The rent charged to Tenants of the Very Low Income
Units shall not exceed one-twelfth (1/121h) of thirty percent (30%) of fifty percent (50%) of
Median Income, adjusted for a one-person household size.
2.2 Lease Provisions. Owner shall include in leases for all Units provisions which
authorize Owner to immediately terminate the tenancy of any household one or more of whose
members misrepresented any fact material to the household's qualification as a Very Low
Income Household or Senior Household. Each lease or rental agreement shall also provide that
the household is subject to annual certification in accordance with Section 3.1 below.
2.3 Condominium Conversion. The Owner shall not convert Units to condominium
or cooperative ownership or sell condominium or cooperative conversion rights to the Property
during the Tenn of this Agreement.
11511011558223.2 4
ARTICLE 3.
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification. The Owner 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. The Owner shall make a good faith effort to verify that the
income provided by an applicant or occupying household in an income certification is accurate
by taking one or more of the following steps as a part of the verification process: (1) obtain a
pay stub for the most recent pay period; (2) obtain an income tax return for the most recent tax
year; (3) conduct a credit agency or similar search; (4) obtain an income verification form from
the applicant's current employer; (5) obtain an income verification form from the Social Security
Administration and/or the California Department of Social Services if the applicant receives
assistance from either of such agencies; or (6) if the applicant is unemployed and has no such tax
return, obtain another form of independent verification. Copies of tenant income certifications
shall be available to the Agency upon request.
3.2 Annual Report to Agency. No later than January 31" of each year during the
Term, Owner shall submit an annual report for the previous calendar year to the Agency, in a
form approved by the Agency. The annual report shall include, for each Unit covered by this
Agreement, the Rent and the income and household size of the Senior Household occupying the
Unit. The report shall also state the date the tenancy commenced for each rental Unit and such
other information as the Agency may be required by law to obtain.
3.3 Additional Information. Owner shall provide any additional information
reasonably requested by the Agency with respect to the Owner's compliance with the terins of
this Agreement. The Agency shall have the right to examine and make copies of all books,
records or other documents of Owner which pertain to any Very Low Income Unit to determine
compliance with this Agreement.
3.4 Records. The Owner shall maintain complete, accurate and current records
pertaining to the Property, and shall pen-nit any duly authorized representative of the Agency to
inspect records, including records pertaining to income and household size of Tenants in the
Units. All household lists, applications and waiting lists relating to Very Low Income Units
shall at all times be kept separate and identifiable from any other business of the Owner 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 Owner shall retain
copies of all materials obtained or produced with respect to occupancy of the Very Low Income
Units for a period of at least three (3) years following the date such materials are obtained or
produced.
3.5 On-site Inspection. The Agency shall have the right to perform an on-site
inspection of the Property at least one (1) time per year. The Owner agrees to cooperate in such
inspection.
11511011558223.2 5
ARTICLE 4.
OPERATION OF THE PROPERTY
4.1 Use of the Propert y. The Property shall be operated only for residential use as
permanent housing for Very Low Income Households that are comprised of Senior Households.
4.2 Compliance with Grant Agreement. Owner shall comply with all the terins and
provisions of the Grant Agreement.
4.3 Property Tax Exemption. Owner shall not apply for a property tax exemption for
the Property under any provision of law other than Revenue and Taxation Section 214(8) without
the Agency's prior written consent.
4.4 Taxes and Assessments. The Owner shall pay when due all real property taxes
and assessments assessed and levied on the Property and shall remove any levy or attachment
made on the Property. The Owner may, however, contest the validity or amount of any tax,
assessment, or lien on the Property.
4.5 Nondiscrimination. The Owner covenants by and for itself and its successors and
assigns that there shall be no discrimination against or segregation of a person or of a group of
persons on account of race, color, religion, creed, sex, sexual orientation, marital status, ancestry
or national origin in the construction, sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property, nor shall the Owner or any person claiming under or through the
Owner establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, vendees or employees in the Property. The foregoing covenant shall run with the
land and shall remain in effect in perpetuity. All deeds, leases or contracts made or entered into
by Owner as to the Units or the Property or portion thereof, shall contain covenants concerning
discrimination as prescribed by the Grant Agreement.
4.6 Section S Certificate Holders. The Owner will accept as tenants, on the same
basis as all other prospective tenants, persons who are recipients of federal certificates or
vouchers for rent subsidies pursuant to the existing housing program under Section 8 of the
United States Housing Act, or its successor. The Owner shall not apply selection criteria to
Section S certificate or voucher holders that is more burdensome than criteria applied to all other
prospective tenants, nor shall the Owner apply or permit the application of management policies
or lease provisions with respect to the Property which have the effect of precluding occupancy of
Units by such prospective Tenants.
4.7 Preferences. Owner shall give a preference in the rental of any Units to eligible
households: (i) displaced by activity of the Agency or the Town, as provided in Health and
Safety Code Section 33411.3, and (ii) that live or work in the Town.
1151%01\558223.2
ARTICLE 5.
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. The Owner is responsible for all management
functions with respect to the Property, including without limitation the selection of tenants,
certification and recertification of household size, age, and income, evictions, collection of rents
and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital
items, and security. The Agency shall have no responsibility for management of the Property.
The Owner shall retain a professional property management company approved by the Agency
in its reasonable discretion to perform its management duties hereunder.
5.2 Management Agent. The Agency shall have the right to review and approve the
qualifications of the management entity proposed by Owner for the Property. The Agency
hereby approves Senor Housing Solutions as the initial management entity for the Property. The
contracting of management services to a management entity shall not relive Owner of its primary
responsibility for proper performance of management duties. In the event Owner does contract
management services the Property shall be managed by an experienced management agent
reasonably acceptable to the Agency, with demonstrated ability to operate residential facilities
like the Property in a manner that will provide decent, safe, and sanitary housing (as approved,
the "Management Agent"). The Owner shall also submit such additional information about the
background, experience and financial condition of any proposed Management Agent as is
reasonably necessary for the Agency to determine whether the proposed Management Agent
meets the standard for a qualified Management Agent set forth above. If the proposed
Management Agent meets the standard for a qualified Management Agent set forth above, the
Agency shall approve the proposed Management Agent by notifying the Owner in writing.
Unless the proposed Management Agent is disapproved by the Agency within thirty (30) days,
which disapproval shall state with reasonable specificity the basis for disapproval, it shall be
deemed approved.
5.3 Periodic Reports; Performance Review. In addition to the annual report provided
by the Owner pursuant to Section 3.2, the Owner shall provide the Agency periodic reports and
other information regarding the operation of the Property, as reasonably requested by the
Agency. The Agency reserves the right to conduct an annual (or more frequently, if deemed
reasonably necessary by the Agency) review of the management practices and financial status of
the Property. The purpose of each periodic review will be to enable the Agency to determine if
the Property is being operated and managed in accordance with the requirements and standards
of this Agreement. The Owner shall cooperate with the Agency in such reviews.
5.4 Replacement of Management Agent. If, as a result of a periodic review, the
Agency determines in its reasonable judgment that the Property is not being operated and
managed in accordance with any of the material requirements and standards of this Agreement,
the Agency shall deliver notice to Owner of its intention to cause replacement of the
Management Agent, including the reasons therefor. Within fifteen (15) days of receipt by Owner
of such written notice, Agency staff and the Owner shall meet in good faith to consider methods
for improving the financial and operating status of the Property. If after a reasonable period as
determined by the Agency (not to exceed sixty (60) days), the Agency determines that the Owner
11511011558223.2 7
is not operating and managing the Property in accordance with the material requirements and
standards of this Agreement, the Agency may require replacement of the Management Agent.
If, after the above procedure, the Agency requires in writing the replacement of the
Management Agent, Owner shall promptly dismiss the then Management Agent, and shall
appoint as the Management Agent a person or entity meeting the standards for a Management
Agent set forth in Section 5.2 above and approved by the Agency pursuant to Section 5.2 above.
Any contract for the operation or management of the Property entered into by Owner
shall provide that the contract can be terminated as set forth above. Failure to remove the
Management Agent in accordance with the provisions of this Section shall constitute default
under this Agreement, and the Agency may enforce this provision through legal proceedings as
specified in Section 6.5.
5.5 Approval of Management Policies. The Owner shall submit its written
management policies with respect to the Property to the Agency for its review, and shall amend
such policies in any way necessary to ensure that such policies comply with the provisions of this
Agreement.
5.6 Property Maintenance. The Owner agrees, for the entire Term of this Agreement,
to maintain all interior and exterior improvements, including landscaping, on the Property in
good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with
all applicable laws, rules, ordinances, orders and regulations of all federal, state, county,
municipal, and other governmental agencies and bodies having or claiming jurisdiction and all
their respective departments, bureaus, and officials, and in accordance with the following
maintenance conditions:
(a) Landscaping. The Owner agrees to have landscape maintenance
performed every other week, including replacement of dead or diseased plants with comparable
plants. Borrower agrees to adequately water the landscaping on the Property. No improperly
maintained landscaping on the Property shall be visible from public streets and/or rights of way.
including:
(b) Yard Area. No yard areas on the Property shall be left unmaintained,
(1) broken or discarded furniture, appliances and other, household
equipment stored in yard areas for a period exceeding one (1) week;
(2) packing boxes, lumber trash, dirt and other debris in areas visible
from public property or neighboring properties; and
(3) vehicles parked or stored in other than approved parking areas.
(c) Building. No buildings located on the Property may be left in an
unmaintained condition so that any of the following exist:
(1) violations of state law, uniform codes, or Town ordinances;
115 1 10 1155 8223.2
(2) conditions that constitute an unsightly appearance that detracts
from the aesthetics or value of the Property or constitutes a private or public nuisance;
malicious mischief
(3) broken windows;
(4) graffiti (must be removed within 72 hours); and
(5) conditions constituting hazards and/or inviting trespassers, or
(d) Sidewalks. The Owner shall maintain, repair, and replace as necessary all
public sidewalks and street trees adjacent to the Property.
The Agency places prime importance on quality maintenance to protect its investment
and to ensure that all Agency-assisted affordable housing projects within the Town are not
allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Property
will be acceptable to the Agency assuming the Owner agrees to provide all necessary
improvements to assure the Property is maintained in good condition. The Owner shall make all
repairs and replacements necessary to keep the improvements in good condition and repair.
In the event that the Owner breaches any of the covenants contained in this section and
such default continues for a period of seven (7) days after written notice from the Agency with
respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after
written notice from the Agency with respect to landscaping and building improvements, then the
Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right
to enter upon the Property and perforin or cause to be perfbimed all such acts and work
necessary to cure the default. By execution of this Agreement the Owner hereby irrevocably
grants such right of entry to the Agency. Pursuant to such right of entry, the Agency shall be
permitted (but is not required) to enter upon the Property and perform all acts and work
necessary to protect, maintain, and preserve the improvements and landscaped areas on the
Property, and to attach a lien on the Property, or to assess the Property, in the amount of the
expenditures arising from such acts and work of protection, maintenance, and preservation by the
Agency and/or costs of such cure, including a ten percent (10%) administrative charge, which
amount shall be promptly paid by the Owner to the Agency upon demand.
5.7 Safety Conditions. The Owner agrees to implement and maintain throughout the
Term the following security measures in the Property:
(a) maintain lighting in parking areas;
(b) work with the Police Department to implement and operate an effective
neighborhood watch program; and
(c) provide added security including dead-bolt locks for every entry door, and
where entry doors are damaged, replace them with solid-core doors.
11511011558223.2 9
ARTICLE 6.
MISCELLANEOUS
6.1 Term. The provisions of this Agreement shall apply to the Property for the entire
Tenn even if the entire Grant is paid in full prior to the end of the Tern; provided, however, that
the provisions of Section 4.5 of the Agreement shall run with the Property and shall remain in
effect in perpetuity. This Agreement shall bind any successor, heir or assign of Owner, whether
a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except
as expressly released by the Agency. The Agency makes the Grant on the condition, and in
consideration of, this provision, and would not do so otherwise.
6.2 Com In iance with Grant Agreement and Program Requirements. The Owner's
actions with respect to the Property shall at all times be in full conformity with: (i) all
requirements of the Grant Agreement; and (ii) all requirements imposed on projects assisted with
Redevelopment Low and Moderate Income Housing Fund monies under California Health and
Safety Code Section 33334.2 et seg.
6.3 Notice of Expiration of Term. At least six (6) months prior to the expiration of
the Term, the Owner shall provide by first-class mail, postage prepaid, a notice to all Tenants
containing (a) the anticipated date of the expiration of the Term, (b) any anticipated increase in
Rent upon the expiration of the Tenn, (c) a statement that a copy of such notice will be sent to
the Agency, and (d) a statement that a public hearing may be held by the Agency on the issue
and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any
such hearing. The Owner shall also file a copy of the above-described notice with the Agency.
6.4 Covenants to Run With the Land. The Agency and the Owner hereby declare
their express intent that the covenants and restrictions set forth in this Agreement shall run with
the land, and shall bind all successors in title to the Property, provided, however, that on the
expiration of the Tern 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 releases
such conveyed portion of the Property from the requirements of this Agreement.
6.5 Owner Default, Enforcement b the Agency. If Owner fails to perform any
obligation under this Agreement, and fails to cure the default within thirty (30) days after the
Agency has notified the Owner in writing of the default (or such shorter timeframe as set forth
herein) or, if the default cannot be cured within thirty (30) days, failed to commence to cure
within thirty (30) days and thereafter diligently pursue such cure to completion (in no event to
exceed sixty (60) days), the Agency shall have the right to enforce this Agreement by any or all
of the following actions, or any other remedy provided by law:
(a) Revoking the Grant. The Agency may exercise any rights or remedies
permitted under the Deed of Trust.
1151\01\558223.2 10
(b) Action to Compel Performance or for Damages. The Agency may bring
an action at law or in equity to compel Owner's perfonnance of its obligations under this
Agreement, and/or for dainages.
(c) Remedies Provided Under Grant Agreement. The Agency may exercise
any other remedy provided under the Grant Agreement.
(d) Sublease of Units. The Agency may sublease any Unit for One Dollar
($1.00) for the remaining portion of the Term and lease such Unit to eligible Very Low Income
Households.
6.6 Attorneys' Fees and Costs. In any action brought to enforce this Agreement, the
prevailing party shall be entitled to all costs and expenses of suit, including attorneys' fees. This
section shall be interpreted in accordance with California Civil Code Section 1717 and judicial
decisions interpreting that statute. The parties to this Agreement have read and reviewed this
Agreement and agree that this Agreement reflects the mutual intentions of the parties and any
rule of construction (including, but not limited to, Civil Code Section 1654 as may be amended
from time to time) to the effect that ambiguities are to be resolved against the drafting party shall
not apply to the interpretations of this Agreement.
6.7 Recording and Filing. The Agency and Owner shall cause this Agreement, and
all amendments and supplements to it, to be recorded against the Property in the Official Records
of the County of Santa Clara.
6.8 Governing Law. This Agreement shall be governed by the laws of the State of
California. The venue for any litigation arising in connection with this Agreement shall be the
Superior Court of the County of Santa Clara.
6.9 Amendments. Except for approvals and consents otherwise specified herein,
amendments to this Agreement (if any) shall be approved in the same manner as this Agreement.
This Agreement may be amended only by a written instrument executed by all the parties hereto
or their successors in title (following approval by the Agency Board, to the extent applicable),
and duly recorded in the real property records of the County of Santa Clara, California.
6.10 Notices, Demands and Communications. Formal notices, demands, and
communications among the Agency and the Owner shall be sufficiently given if, and shall not be
deemed given unless, secured personally, or dispatched by certified mail, return receipt
requested, or by facsimile transmission or reputable overnight delivery service with a receipt
showing date of delivery, to the principal offices of the Agency and the Owner as follows:
Agency: Town of Los Gatos Redevelopment Agency
110 E. Main Street
Los Gatos, CA 95030
Attn: Redevelopment Manager
11 511011558223.2 11
Owner: Senior Housing Solutions
512 Valley Way
Milpitas, CA 95035
Attention: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section 6.10. Delivery shall be deemed to have occurred at the time indicated on the receipt for
delivery or refusal of delivery.
6.11 Capitalized Terms. Any capitalized terms not defined herein shall have the
meaning attributed to them in the Grant Agreement.
6.12 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions of this
Agreement shall not in any way be affected or impaired thereby.
6.13 Counterparts; Multiple Originals.
This Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original.
Remainder of Page Left Xntentionally Blank
11511011558223.2 12
IN WITNESS WHEREOF, the Agency and the Owner have executed this Agreement by
duly authorized representatives, all on the date first written above.
AGENCY:
TOWN OF LOS GATOS REDEVELOPMENT
AGENCY, a public body corporate and politic
By:
Name:
Its:
OWNER:
SENIOR HOUSING SOLUTIONS, a California
nonprofit corporation
By:
Name:
Its:
11511011558223.2 13
EXHIBIT A
Property Description
All that certain real property situated in the Town of Los Gatos, County of Santa Clara,
State of California, described as follows:
11511011558223.2 A-1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Town of Los Gatos Redevelopment Agency
I10 E. Main Street
Los Gatos, CA 95030
Attention: Assistant Executive Director
No fee for recording pursuant to
Government Code Section 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
(185 Anne Way)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (the "Deed of Trust") is made as of this day of
,200 , by and among Senior Housing Solutions, a California nonprofit corporation
("Trustor"), North American Title Company ("Trustee"), and the Town of Los Gatos
Redevelopment Agency, a public body, corporate and politic ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property located in the Town of Los Gatos,
County of Santa Clara, State of California, that is described in the attached Exhibit A,
incorporated herein by this reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said Property and intended to be installed therein;
11511011558229.2
ATTACHI FNT 6
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 5.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or shall be attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now Or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquaintances to the Trustee, its successors and
assigns forever.
Trustor further hereby assigns and transfers to Beneficiary, absolutely and
unconditionally, all of Trustor's right, title and interest in and to the following property: (a) any
and all leases and occupancy agreements now existing or hereafter entered into affecting all or
any part of the Security, together with all benefits and advantages to be derived therefrom, and
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all rights and benefits now or hereafter accruing to Trustor under any and all guarantees of the
obligations of any tenant there under and all guarantees of the obligations of any tenant there
under, all as the same may be amended, extended, renewed or modified from time to time
(collectively, the "Leases"); provided, however that such grant is subject to the provisions of
Article 3 below; and (b) all rents, royalties, profits, revenues, incomes and other benefits of and
from Leases and the Security whether now due, past due or to become due, including without
limitation, all prepaid rents, reserve accounts, security and other deposits (the "Rents and
Profits"); provided, however, that such grant is subject to the provisions of Article 3, below.
FOR THE PURPOSE OF SECURING:
(a) Payment of just indebtedness of Trustor to Beneficiary as set forth in the Agency
Documents (defined in Article I below) until paid or cancelled. Said principal and other
payments shall be due and payable as provided in the Agency Documents; and
(b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein; and
(c) Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Agency Documents (defined in Section 1.1 below).
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1.
DEFINITIONS
All capitalized terms used but not defined in this Deed of Trust shall have the meanings
set forth in the Grant Agreement, as defined below. In addition to the terns defined elsewhere in
this Deed of Trust and the Grant Agreement, the following terms shall have the following
meanings in this Deed of Trust:
Section 1.1 The term "Agency Documents" means this Deed of Trust, the Grant
Agreement, the Regulatory Agreement, and any other instruments between Trustor and the
Beneficiary relating to the Property.
Section 1.2 The term "Grant Agreement" means that certain Revocable Grant
Agreement between Trustor and Beneficiary.
Section 1.3 The term "Principal" means the principal amount required to be paid under
the Grant Agreement.
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Section 1.4 The term "Regulatory Agreement" means the regulatory agreement and
declaration of restrictive covenants dated of even date herewith executed by the Trustor and the
Beneficiary, the performance obligations of which are secured by this Deed of Trust.
ARTICLE 2.
MAINTENANCE AND MODIFICATION
OF THE PROPERTY AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agrees that at all times prior to full payment of the sum owed under the
Agency Documents, the Trustor will, at the Trustor's own expense, maintain, preserve and keep
the Security or cause the Security to be maintained and preserved in good condition. The Trustor
will from time to time make or cause to be made all repairs, replacements and renewals deemed
proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters
or for the making of improvements or additions to the Security.
Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary shall exercise its rights as agent of Trustor
only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those
actions as hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or other persons
who have furnished or claim to have furnished labor, services or materials in connection with the
Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently contesting provided that Trustor
shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the
Recorder of Santa Clara County, a surety bond in an amount 1 and 112 times the amount of such
claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
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limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law. As to
these exceptions, Beneficiary will grant and/or direct the Trustee to grant such easements.
ARTICLE 3.
ASSIGNMENT OF LEASES, RENTS AND PROFITS
Section 3.1 Assi reign nent.
As set forth above, Trustor has absolutely, presently and unconditionally assigned,
transferred, conveyed and set over to the Beneficiary (the "Assignment") all of the Trustor's
right, title and interest in and to the Leases, Rents and Profits to be applied by Beneficiary to the
indebtedness secured by this Deed of Trust (the "Indebtedness"). This Assignment shall be fully
operative without any further action on the part of Trustor or Beneficiary and Beneficiary shall
be entitled, at its option, to all Rents and Profits whether or not Beneficiary takes possession of
the Security. Trustor hereby further grants to Beneficiary the right to (a) enter and take
possession of the Security for the purposes of collecting the Rents and Profits, (b) dispossess by
the usual summary proceedings of any tenant defaulting in the payment thereof to Beneficiary,
(c) let the Security of any part thereof, and (d) apply the Rents and Profits, after payment of all
necessary charges and expenses (including attorneys fees and costs) to the Indebtedness. This
Assignment shall continue in effect until the Indebtedness is paid in full. The execution of this
Deed of Trust constitutes Trustor's irrevocable consent to Beneficiary's entry and taking
possession of the Security pursuant to this Assignment, whether or not sale or foreclosure has
been instituted. Neither the exercise of any rights under this Assignment by Beneficiary nor the
application of the Rents and Profits to the Indebtedness shall cure or waive an Event of Default
or notice of default, and shall be cumulative with all other rights and remedies of Beneficiary.
Section 3.2 Trustor's License.
Notwithstanding anything in Section 3.1 above to the contrary, as long as an Event of
Default (described below) has not occurred, Trustor shall have a license to collect and receive all
Rents and Profits. Upon the occurrence and/or continuance of an Event of Default, such license
shall be deemed automatically revoked, without regard to the adequacy of Beneficiary's Security
and without notice to or demand upon Trustor, and any Rents and Profits received thereafter by
Trustor shall be immediately turned over to Beneficiary. Upon the occurrence and/or
continuance of an Event of Default, Trustor agrees to deliver the original copies of all Leases to
Beneficiary. Trustor hereby irrevocably appoints Beneficiary its true and lawful attorney-in-fact
to enforce in Trustor's name or Beneficiary's name or otherwise all rights of Trustor in the
instruments, including without limitation, checks and money orders, tendered as payments of
Rents and Profits and to do any and all things necessary and proper to carry out the purposes of
this Assignment.
Section 3.3 Trustor's Covenants.
Except as required by senior lenders, Trustor shall not: (i) execute an assignment of the
rents or any part thereof from the Security; (ii) except where the lessee is in default there under,
1151\01\559229.2
terminate or consent to the cancellation or surrender of any Lease having an unexpired teen of
two (2) years or more unless, promptly after the cancellation or surrender of any Lease, a new
Lease is entered into with a new lessee satisfactory to Beneficiary and on terms at least as
favorable to the lessor there under as were the terms of the Lease so terminated or canceled; (iii)
modify any Lease or give consent to any assignment or subletting without Beneficiary's prior
written consent; (iv) accept prepayments of any installments of rent or additional rent to become
due under the Leases, except prepayments in the nature of security for the performance of the
lessee's obligations there under; or (v) in any other manner impair the value of the Security or the
security of the Trustee or Beneficiary for the payment of the Indebtedness. Trustor shall not
execute any Lease for all or a substantial portion of the Security except for actual occupancy by
the lessee there under, and shall at all times promptly and faithfully perform, or cause to be
performed, all of the covenants, conditions and agreements contained in all Leases now or
hereafter existing, on the part of the lessor there under to be kept and performed. Trustor shall,
from time to time upon request of Beneficiary, specifically assign to Beneficiary as additional
security hereunder, by a written instrument approved by Beneficiary, all right, title and interest
of Trustor in and to any and all Leases, together with all security therefor and all monies payable
there under, subject to the Trustoe's conditional license to collect the Rents. Trustor shall also
execute and deliver to Beneficiary any notification, financing statement or other document
reasonably required by Beneficiary to perfect the Assignment as to any of the Leases. Each
Lease shall provide that, in the event of the enforcement by the Trustee or Beneficiary of the
remedies provided for by law or by this Deed of Trust, any person succeeding to the interest of
Trustor as a result of such enforcement shall not be bound by any payment of rent or additional
rent for more than one (1) month in advance, and that nothing in the Lease or Deed of Trust
affects or impairs the rights of Beneficiary to terminate the Lease in connection with the
Beneficiary's or Trustee's exercise of its remedies hereunder, to the extent permitted by
applicable law relating to the use of Tax Credit Funds to the extent that Tax Credit Funds have
been used for the Development.
Section 3.4 Foreclosure.
Upon a sale of the Security pursuant to foreclosure of this Deed of Trust, all right, title
and interest of Trustor in and to the Leases shall, by virtue of this Deed of Trust and the
Assignment, automatically vest in and become the absolute property of the purchaser of the
Security without any further act or assiglunent by Trustor. Trustor hereby irrevocably appoints
Beneficiary and its successors and assigns, as its agent and attorney-in-fact, to execute all
instruments of assignment or further assurances in favor of such purchaser of the Property as
may be necessary or desirable for such purpose. Nothing contained herein shall prevent
Beneficiary from terminating through foreclosure the Lease of any tenant subordinate to this
Deed of Trust.
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ARTICLE 4.
TAXES AND INSURANCE, ADVANCES
Section 4.1 Taxes Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes,
assessments, charges and levies imposed by any public authority or utility company which are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor
shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a)
the legality thereof shall be promptly and actively contested in good faith and by appropriate
proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant
to this Section 4.1. With respect to taxes, special assessments or other similar governmental
charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any
part of the Security; provided, however, if such taxes, assessments or charges may be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this Section 4.1 shall not be construed to require that
Trustor maintain a reserve account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
In the event that Trustor shall fail to pay any of the foregoing items required by this
Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any amount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
the maximum rate permitted by law, shall become an additional obligation of Trustor to the
Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts.
Section 4.2 Provisions Respecting Insurance.
Trustor agrees to provide and maintain insurance conforming in all respects to that
required under the Agency Documents during the course of construction and following
completion, and at all times until all amounts secured by this Deed of Trust have been paid and
all other obligations secured hereunder fulfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time
prior to the Beneficiary's receipt of the entire Principal and all amounts secured by this Deed of
Trust.
Section 4.3 Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fail to keep the Security in accordance with the Agency Documents, the
Beneficiary, after at least seven (7) days prior notice to Beneficiary, may (but shall be under no
obligation to) take out the required policies of insurance and pay the premiums on the same or
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11511011558229.2
may make such repairs or replacements as are necessary and provide for payment thereof, and all
amounts so advanced therefor by the Beneficiary shall become an additional obligation of the
Trustor to the Beneficiary (together with interest as set forth below) and shall be secured hereby,
which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid,
shall bear interest from the date of the advance at the lesser of twelve percent (12%) per annum
or the maximum rate permitted by law.
ARTICLE 5.
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 5.1 Awards and Damages.
(a) All judgments, awards of damages, settlements and compensation made in
connection with or in lieu of (1) taking of all or any part of or any interest in the Property by or
under assertion of the power of eminent domain, (2) any damage to or destruction of the Property
or in any part thereof by insured casualty, and (3) any other injury or damage to all or any part of
the Property ("Funds") are hereby assigned to and shall be paid to the Beneficiary by a check
made payable to the Beneficiary. The Beneficiary is authorized and empowered (but not
required) to collect and receive any Funds and is authorized to apply them in whole or in part
upon any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary
shall determine at its sole option. The Beneficiary shall be entitled to settle and adjust all claims
under insurance policies provided under this Deed of Trust and may deduct and retain from the
proceeds of such insurance the amount of all expenses incurred by it in connection with any such
settlement or adjustment. All or any part of the amounts so collected and recovered by the
Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for
its disposition. Application of all or any part of the Funds collected and received by the
Beneficiary or the release thereof shall not cure or waive any default under this Deed of Trust.
The rights of the Beneficiary under this Section 5.1 are subject to the rights of senior mortgage
lender, if any.
(b) Notwithstanding the above, so long as (i) there are not Events of Default
and (ii) the Security will not be impaired, after its repair or restoration, which shall be
determined by the Beneficiary in its sole discretion, the Beneficiary will permit the Funds held
by the Beneficiary to be used for repair or restoration but may condition such application upon
the deposit with the Beneficiary of such additional funds which the Beneficiary determines are
needed to pay all cost of the repair or restoration, (including without limit taxes, financing
charges, insurance and rent during the repair period), on establishment of an arrangement for lien
releases and disbursement of fiends acceptable to the Beneficiary and on delivery to Beneficiary
of:
(1) plans and specifications for the work, contract for the work signed
by a contractor acceptable to the Beneficiary, a cost breakdown for the work and a payment and
performance bond for the work, all of which shall be acceptable to the Beneficiary; and
11511011558229.2
(2) evidence acceptable to the Beneficiary: (a) that after completion of
the work the income from the Property will be sufficient to pay all expenses and debt service for
the Property; (b) of continuation of leases acceptable to and required by the Beneficiary; (c) that,
upon completion of the work, the size, capacity and total value of the Property will be at least as
great as it was before the damage or condemnation occurred; (d) that there has been no material
or substantial adverse change in the financial condition or credit of Trustor since the date of this
Deed of Trust; and (e) of satisfaction of additional conditions that the Beneficiary may
reasonably establish to protect the Security.
ARTICLE 6.
AGREEMENTS AFFECTING THE PROPERTY;
FURTHER ASSURANCES PAYMENT OF PRINCIPAL AND INTEREST
Section 6.1 Other Agreements Affecting Propert y.
The Trustor shall duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under the Agency Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Section 6.2 Agreement to Pay Attorneys and EUenses.
In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary
should employ attorneys or incur other expenses for the collection of amounts due or the
enforcement of performance or observance of an obligation or agreement on the part of the
Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred
by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the
indebtedness secured by the lien of this Deed of Trust, and shall bear interest froin the date such
expenses are incurred at the lesser of twelve percent (12%) per annum or the maximum rate
pennitted by law.
Section 6.3 Payment of the Principal.
Following an Event of Default, the Trustor shall pay to the Beneficiary the Principal and
any other payments including interest as set forth in the Agency Documents in the amounts and
by the times set out therein.
Section 6.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall
constitute a fixtures filing under the California Commercial Code. As to any personal property
not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement
under the California Commercial Code.
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Section 6.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees
to perform all acts which the Beneficiary may reasonably request so as to enable the Beneficiary
to maintain such valid perfected security interest in the Security in order to secure the payment of
the Agency Documents in accordance with their terms. The Beneficiary is authorized to file a
copy of any such financing statement in any jurisdiction(s) as it shall deem appropriate from time
to time in order to protect the security interest established pursuant to this instrument.
Section 6.6 Operation of the Security.
The Trustor shall operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Agency Documents.
Section 6.7 Inspection of the Security.
At any and all reasonable times during business hours, the Beneficiary and its duly
authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the
right, without payment of charges or fees, to inspect the Security.
Section 6.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Trustor
itself or any person claiming under or through it establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. Trustor shall
comply with the non-discrimination provisions set forth in the Grant Agreement. The foregoing
covenants shall ran with the land.
ARTICLE 7.
HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, and shall not cause or
pen-nit the Property to be in violation of any federal, state or local laws, ordinances or regulations
relating to industrial hygiene or to the environmental conditions on, under or about the Property
including, but not limited to, soil and ground water conditions. Trustor shall not use, generate,
manufacture, store or dispose of on, under, or about the Property or transport to or from the
Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or
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related materials, including without limitation, any substances defined as or included in the
definition of "hazardous substances," hazardous wastes," "hazardous materials," or "toxic
substances" under any applicable federal or state laws or regulations (collectively referred to
hereinafter as "Hazardous Materials").
Trustor shall immediately advise Beneficiary in writing if at any time it receives written
notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Trustor or the Property pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party
against Trustor or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above hereinafter referred to a "Hazardous Materials Claims"); and (iii) Trustor's discovery of
any occurrence or condition on any real property adjoining or in the vicinity of the Property that
could cause the Property or any part thereof to be classified as "border-zone property" under the
provision of California Health and Safety Code, Sections 25220 et seg., or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership,
occupancy, transferability or use of the Property under any Hazardous Materials Law.
Beneficiary shall have the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to
have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall
indemnify and hold harmless Beneficiary and its council members, supervisors, directors,
officers, employees, agents, successors and assigns from and against any loss, damage, cost,
expense or liability directly or indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on,
under, or about the Property including without limitation: (a) all foreseeable consequential
damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the
Property and the preparation and implementation of any closure, remedial or other required
plans; and (c) all reasonable costs and expenses incurred by Beneficiary in connection with
clauses (a) and (b), including but not limited to reasonable attorneys fees. Trustor's obligation to
indemnify under this Article 7 shall be interpreted broadly to apply to any legal or administrative
proceeding, arbitration, or enforcement action.
Without Beneficiary's prior written consent, which shall not be unreasonably withheld,
Trustor shall not take any remedial action in response to the presence of any Hazardous
Materials on, under or about the Property, nor enter into any settlement agreement, consent
decree, or other compromise in respect to any Hazardous Material Claims, which remedial
action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgment,
impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's
prior consent shall not be necessary in the event that the presence of Hazardous Materials on,
under, or about the Property either poses an immediate threat to the health, safety or welfare of
any individual or is of such a nature that an immediate remedial response is necessary and it is
not reasonably possible to obtain Beneficiary's consent before taking such action, provided that
in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken.
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1 15 1 10 11558229.2
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected Property" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's
or the Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to
exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien
on such environmentally impaired or affected portion of the Property and (2) exercise (a) the
rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor
to judgment, and (b) any other rights and remedies permitted by law. For purposes of
determining the Beneficiary's right to proceed as an unsecured creditor under California Code of
Civil Procedure Section 726.5(a), the Trustor shall be deemed to have willfully permitted or
acquiesced in a release or threatened release of hazardous materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and the Trustor knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
threatened release. All costs and expenses, including (but not limited to) attorneys fees, incurred
by the Beneficiary in connection with any action commenced under this paragraph, including any
action required by California Code of Civil Procedure Section 726.5(b) to determine the degree
to which the Property is environmentally impaired, plus interest thereon at the rate specified in
the Agency Documents until paid, shall be added to the indebtedness secured by this Deed of
Trust and shall be due and payable to the Beneficiary upon its demand made at any time
following the conclusion of such action.
ARTICLE 8.
EVENTS OF DEFAULT AND REMEDIES
Section 8.1 Events of Default.
The term "Event of Default" as used in this Deed of Trust shall have the same meaning as
the term "Event of Default" as defined and used in Section 7 of the Grant Agreement.
Section 8.2 Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and the unpaid Principal
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under the Agency Documents shall immediately become due and payable, upon written notice by
the Beneficiary to the Trustor (or automatically where so specified in the Agency Documents),
and no omission on the part of the Beneficiary to exercise such option when entitled to do so
shall be construed as a waiver of such right.
Section 8.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default shall have occurred and be continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Security and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts which it deems
necessary or desirable to preserve the value or marketability of the Property, or part thereof or
interest therein, increase the income therefrom or protect the security thereof. The entering upon
and taking possession of the Security shall not cure or waive any Event of Default or Notice of
Default and Election to Sell (as defined below) hereunder or invalidate any act done in response
to such Default or pursuant to such Notice of Default and Election to Sell and, notwithstanding
the continuance in possession of the Security, Beneficiary shall be entitled to exercise every right
provided for in this Deed of Trust, or by law upon occurrence of any Event of Default, including
the right to exercise the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof,
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Default and Election to Sell"), which notice Trustee or Beneficiary shall cause to be
duly filed for record in the Official Records of Santa Clara County; or
(d) Exercise all other rights and remedies provided herein, in the instr rnents
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby,
or provided by law.
Section 8.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall give notice to the Trustee and shall deposit with Trustee this
Deed of Trust which is secured hereby (and the deposit of which shall be deemed to constitute
evidence that the unpaid principal amount of the under the Agency Documents is immediately
due and payable), and such receipts and evidence of any expenditures made that are additionally
secured hereby as Trustee may require.
(a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be
recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then
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required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse
of such time as may then be required by law and after recordation of such Notice of Default and
Election to Sell and such notice has been given as required by law, sell the Security, at the time
and place of sale fixed by it in said Notice of Default and Election to Sell, whether as a whole or
in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may
determine unless specified otherwise by the Trustor according to California Civil Code Section
2924g(b), at public auction to the highest bidder, for cash in lawful money of the United States
payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good
and sufficient deed or deeds conveying the property so sold, but without any covenant or
warranty, express or implied. The recitals in such deed or any matters of facts shall be
conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor,
Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and
defend the title of such purchaser or purchasers.
(b) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of. (i) the unpaid Principal amount of the Grant; (ii) all other amounts owed
to Beneficiary under the Grant Documents; (iii) all other sums then secured hereby; and (iv) the
remainder, if any, to Trustor.
(c) Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Default and Election to Sell.
Section 8.5 Receiver.
If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of
right and without further notice to Trustor or anyone claiming under the Security, and without
regard to the then value of the Security or the interest of Trustor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part
thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice
of any application therefor. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of
entry as provided herein, and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 8.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
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Section 8.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default shall exhaust or impair any such right, power or
remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder shall not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary
of its right hereunder or impair any rights, power or remedies consequent on any Event of
Default by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the
payment of any sums secured hereby, (ii) takes other or additional security or the payment of any
sums secured hereby, (iii) waives or does not exercise any right granted in the Agency
Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Agency
Documents, (v) consents to the granting of any easement or other right affecting the Security, or
(iv) makes or consents to any agreement subordinating the lien hereof, any such act or omission
shall not release, discharge, modify, change or affect the original liability under this Deed of
Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any
part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released);
nor shall any such act or omission preclude the Beneficiary from exercising any right, power or
privilege herein granted or intended to be granted in any Event of Default then made or of any
subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or
instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby.
Section 8.8 Suits to Protect the Security.
The Beneficiary shall have power to (a) institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security there under or be prejudicial to the interest of the
Beneficiary.
Section 8.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Trustee or the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs
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of claim and other documents as may be necessary or advisable in order to have the claims of the
Beneficiary allowed in such proceedings and for any additional amount which may become due
and payable by the Trustor hereunder after such date.
Section 8.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in
taking any action to collect any sums owing under the Giant Documents or in proceedings
against the Security, in connection with the delivery, acceptance, performance, default,
endorsement or guaranty of this Deed of Trust.
ARTICLE 9.
MISCELLANEOUS
Section 9.1 Amendments.
Except for approvals and consents otherwise specified herein, amendments (if any) to this
Deed of Trust shall be approved in the same manner as this Deed of Trust. This Deed of Trust
cannot be waived, changed, discharged or terminated orally, but only by an amendment in
writing signed by Beneficiary and Trustor following approval by the Board of the Beneficiary (to
the extent applicable).
Section 9.2 Reconve.. any Trustee.
Upon written request of Beneficiary stating that all sums secured hereby have been paid
or forgiven, and all obligations secured hereby (including, but not limited to, the obligations set
forth in the Regulatory Agreement) and upon surrender of this Deed of Trust to Trustee for
cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee
shall reconvey the Security to Trustor, or to the person or persons legally entitled thereto.
Section 9.3 Notices.
If at any time after the execution of this Deed of Trust it shall become necessary or
convenient for one of the parties hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication shall be in writing and shall be served
personally or by depositing the same in the registered United States mail, return receipt
requested, postage prepaid and (1) if intended for Beneficiary shall be addressed to:
Town of Los Gatos Redevelopment Agency
110 E. Main Street
Los Gatos, CA 95030
Attention: Redevelopment Manager
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and (2) if intended for Trustor shall be addressed to:
Senior Housing Solutions
512 Valley Way
Milpitas, CA 95035
Attention: Executive Director
Any notice, demand or communication shall be deemed given, received, made or communicated
on the date personal delivery is effected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either
party may change its address at any time by giving written notice of such change to Beneficiary
or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the
date such change is desired to be effective.
Section 9.4 Successors and Joint Trustors.
Where an obligation is created herein binding upon Trustor, the obligation shall also
apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust
have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be
deemed to be a joint and several obligation of the Trustor and such transferee. Where Trustor is
more than one entity or person, all obligations of Trustor shall be deemed to be a joint and
several obligation of each and every entity and person comprising Trustor.
Section 9.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 9.6 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any tern
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered to have been
first paid or applied to the full payment of that portion of the debt which is not secured or
partially secured by the lien of this Deed of Trust.
Section 93 Goveming Law.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California. The venue for any litigation arising in comlection with this Deed of Trust
shall be the Superior Court of the County of Santa Clara.
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Section 9.8 Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
the feminine and neuter and vice versa, if the context so requires.
Section 9.9 Deed of Trust, Mortgaje.
Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
Section 9.10 Actions.
Trustor agrees to appear in and defend any action or proceeding purporting to affect the
Security.
Section 9.11 Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, shall be conclusive proof of proper
appointment of the successor trustee.
Section 9.12 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 9.13 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
Section 9.14 Legal Advice.
Each party has received independent legal advice from its attorneys with respect to the
advisability of executing this Deed of Trust and the meaning of the provisions hereof. The
provisions of this Deed of Trust shall be construed as to the fair meaning and not for or against
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any party based upon any attribution of such party as the sole source of the language and/or
meaning in question.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written.
TRUSTOR:
SENIOR HOUSING SOLUTIONS, a
California nonprofit corporation
By:
Bob Campbell
Executive Director
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STATE OF CALIFORNIA
COUNTY OF
On , 20_, before me, ,
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
11511011558229.2
EXHIBIT A
(LEGAL DESCRIPTION OF THE PROPERTY)
All that certain real property situated in the Town of Los Gatos, County of Santa Clara, State
of California, described as follows:
115 1%01\558229.2 A-1