22-1114_JAMBOREE HOUSING CORPORATION_Affordable Housing Disposition and Development AgreementAFFORDABLE HOUSING DISPOSITION
AND DEVELOPMENT AGREEMENT
(City Hall — Paseo Adelanto Mixed Use Permanent Supportive Housing)
among
THE CITY OF SAN JUAN CAP.ISTRANO,
a California municipal corporation
and
THE SAN JUAN CAPISTRANO HOUSING AUTHORITY,
a Housing Successor Agency
ti
and
JAMBOREE HOUSING CORPORATION,
a California nonprofit public benefit corporation
61147.80021\40183270.13
This AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(City Hall — Paseo Adelanto Mixed Use Permanent Supportive Housing) ("Agreement") is dated
as of November 14, 2022 ("Date of Agreement"), for reference purposes only, and is entered into
among the City of San Juan Capistrano, a California municipal corporation ("City"), the San Juan
Capistrano Housing Authority, a housing successor agency ("Housing Authority"), and Jamboree
Housing Corporation, a California nonprofit public benefit corporation ("Developer"). The City,
the Housing Authority, and the Developer are sometimes referred to in this Agreement, each
individually, as a "Party," or collectively, as the "Parties."
RECITALS
This Agreement is entered into with reference to the following recitals of fact ("Recitals")
that City, Housing Authority, and Developer believe to be true as of the Effective Date of this
Agreement:
A. City is the owner of that certain real property located at 32400 Paseo Adelanto, San
Juan Capistrano, California (APN 668-101-23) and more specifically described in Exhibit "A"
attached to this Agreement ("Property"). The Property is improved with the City of San Juan
Capistrano City Hall and associated facilities.
B. On April 8, 2020, City and Developer entered into that certain Exclusive
Negotiation Agreement for the potential redevelopment of the Property to create affordable
housing units and a new city hall. On March 16, 2021, City and Developer entered into that certain
First Amended Exclusive Negotiation Agreement for additional time to assess the viability of the
redevelopment.
C. As a result of those negotiations, the Parties desire that a portion of the Property
comprising approximately two and nine hundred seventy-seven thousandths (2.977) acres ("City
Hall Property"), will be retained by City and developed with a new city hall ("City Hall
Project"), and the remainder of the Property, comprising approximately one and two-tenths (1.2)
acres ("PSH Property"), will be sold to Developer for a purchase price of Eight Million Seven
Hundred Fifty Thousand Dollars ($8,750,000.00) ("Purchase Price") and thereafter utilized by
Developer for development and operation of a permanent supportive housing apartment
community containing fifty (50) units with housing for extremely low- and very low-income
households earning fifty percent (50%) or less of the area median income ("PSH Project"). The
City Hall Project and PSH Project shall collectively be referred to herein as the "Project."
D. Subject to the terms and conditions of this Agreement, City has agreed to make the
following funds available to Developer to assist with Developer's obligation to construct and
complete the City Hall Project: (i) the Purchase Price (i.e., $8,750,000.00); (ii) gap funding in the
amount of Nine Hundred Fifty Thousand Dollars ($950,000.00); and (iii) owner contingency to
fund the cost of potential City -directed changes in the amount of Two Hundred Forty -Two
Thousand Five Hundred Dollars ($242,500.00).
E. Subject to the terms and conditions of this Agreement, Developer has agreed to
make certain grant funds in the amount of Five Hundred Thousand Dollars ($500,000.00) available
to assist with Developer's obligation to construct and complete the City Hall Project.
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F. Subject to the terms and conditions of this Agreement, City has agreed to provide
financial assistance to Developer to assist with Developer's obligation to construct and complete
the PSH Project, in the form of one loan in the amount of One Million Three Hundred Thirteen
Thousand Two Hundred and Twelve Dollars ($1,313,212.00), sourced from City Housing In -Lieu
Fees (the "City Project Loan").
G. Subject to the terms and conditions of this Agreement, Housing Authority has
agreed to provide financial assistance to Developer to assist with Developer's obligation to
construct and complete the PSH Project, in the form of two (2) loans, as follows: (i) a loan in the
amount of Four Million Nine Hundred Thirty -Four Thousand Five Hundred Eighty -Eight Dollars
($4,934,588.00), sourced from the housing bond proceeds held in the Housing Authority's low and
moderate income housing asset fund (the "Housing Authority Housing Fund Loan"), and (ii) a
loan in the amount of One Million Dollars ($1,000,OOp.00), sourced from the Housing Authority's
Administration Fund (the "Housing Authority Admin Fund Loan").
H. Subject to the terms and conditions of this Agreement, Developer has agreed to
secure financing for the remaining costs to construct and complete the PSH Project, including from
the following identified sources: (i) a loan from the County in the amount of Two Million Three
Hundred Eighty -Four Thousand Six Hundred Thirty Dollars ($2,384,630.00); (ii) a loan from the
Orange County Housing Fund Trust in the amount of Three Million Three Hundred Three
Thousand Three Hundred Fifteen Dollars ($3,303,315.00); (iii) equity from the syndication of nine
percent (9%) federal tax credits in the approximate amount of Twenty Million Dollars
($20,000,000.00); and (iv) a construction loan in the approximate amount of Twenty -Five Million
Seven Hundred Thousand Dollars ($25,700,000.00) ) ("Senior Construction Loan") from Bank of
America, N.A. (together with its successors and assigns, "Senior Construction Lender"), to be
repaid with a permanent loan in the approximate amount of Five Million Eight
Hundred Forty -Five Thousand Three Hundred Sixty -Two Dollars ($5,845,362.00) from Senior
Construction Lender ("Senior Permanent Loan").
I. The Developer's proposed acquisition of the PSH Property and subsequent
construction and completion of the PSH Project on the PSH Property pursuant to the terms of this
Agreement is in the best interest of the City and the health; safety, and welfare of the City's
taxpayers and residents and is in accordance with the public purposes set forth in applicable law.
Implementation of this Agreement will further the goals and objectives of the City's general plan
by promoting development of low income housing and public facilities and services.
J. On February 15, 2022, the Project was found statutorily exempt from further
review pursuant to Government Code section 65583.2(h) and (i), which applies when sites are re-
zoned to accommodate the Regional Housing Needs Assessment allocation for low and very low
income housing, and results in the future approval for multifamily rental projects on those
sites to be considered a "use by right," which is defined to mean that the review shall not include
approval that would constitute a "project" for purposes of CEQA. Approval of this
Agreement for the previously described disposition of the PSH Property and development of the
Property is a follow-on action covered by the same exemption that is applicable to the Project. A
Notice of Exemption was filed on February 17, 2022. No actions were filed to challenge the
CEQA determination within the applicable statute of limitations period and thus the CEQA
determination for the Project is presumed valid. (Pub. Resources Code, section 21167.2.)
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NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which is acknowledged
by City and Developer, the Parties agree as follows:
TERMS AND CONDITIONS
ARTICLE 1.
DEFINITIONS; REPRESENTATIONS AND WARRANTIES;
EFFECTIVE DATE
1.1 Definitions. All initially capitalized terms not otherwise defined in this Agreement
shall have the following meanings:
1.1.1 "Additional Insureds" has the meaning ascribed to such term in
Section 6.4.
1.1.2 "Affiliate" means and refers to any person or entity, directly or indirectly,
Controlling or Controlled by or under common Control with the applicable person or entity,
whether by direct or indirect ownership of equity interests, by contract or otherwise.
1.1.3 "Agreement" means this Affordable Housing Disposition and
Development Agreement (City Hall —Paseo Adelanto Mixed Use Permanent Supportive Housing).
1.1.4 "CEC Grant' means grant funds in the amount of Five Hundred Thousand
Dollars ($500,000.00) Developer anticipates receiving from the California Energy Commission
following Developer's completion of construction of the City Hall Project, and which funds, to the
extent of Developer's receipt, Developer has agreed to contribute to the costs Developer incurs to.
develop the City Hall Project. The CEC Grant is reflected on the City Hall Project Budget as a
proposed source of funds; provided, however, that if the funds are not made available to Developer,
the City Hall Project Budget shall be automatically revised to omit the CEC Grant therefrom, and
Developer shall not construct the improvements to be funded by the CEC Grant.
1.1.5 Certificate of Completion" means the written certification of City that the
construction of the PSH Project has been completed in compliance with the terms and conditions
of this Agreement, substantially in the form of Exhibit "F" attached to this Agreement.
1.1.6 "CEQA" means the California Environmental Quality Act, Public
Resources Code Sections 21000, et seg.
1.1.7 "City" means the City of San Juan Capistrano, California, a California
municipal corporation.
1.1.8 "City -Directed Change" has the meaning ascribed to the term in
Section 5.2.2.
1.1.9 "City Hall Construction Contract" means the construction contract
between Developer and QDCI for construction of & City Hall Project. The City Hall Construction
Contract shall be a stipulated sum contract on an AIA form.
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1.1.10 "City Hall Exclusions and Clarifications" means the exclusions and
clarifications with respect to the construction of the City Hall Project attached as Exhibit' M-1" to
this Agreement.
1.1.11 "City Hall Plans and Specifications" means the plans and specifications
approved ofby the City, forthe construction ofthe City Hall Project attached as Exhibit "M-1" to
this Agreement.
1.1.12 "City Hall Project' has the meaning ascribed to the term in Recital C and
further means the demolition of the portion of the existing City of San Juan Capistrano City Hall
currently located on the City Hall Property, and the construction on the City Hall Property of a
new City of San Juan Capistrano City Hall, comprising approximately sixteen thousand three
hundred thirty eight square feet (16,338 sf) in two stories.
1.1.13 "City Hall Project Commencement Date" means the date construction of
the City Hall Project shall commence, which shall be no later than sixty (60) days after the Close
of Escrow.
1.1.14 "City Hall Project Completion Date" means the date that is twenty-four
(24) months after the City Hall Project Commencement Date.
1.1.15 City Hall Project Users" means, collectively, City employees, and the
guests, visitors, contractors, subcontractors, and invitees of the City Hall Project.
1.1.16 "City Hall Property" has the meaning ascribed to the term in Recital C.
The proposed boundary lines of the City Hall Property are depicted in Exhibit "A-1" and described
in Exhibit "A-2" both attached to this Agreement.
1.1.17 "City Hall Relocation Date" means December 1, 2022.
1.1.18 "City Hall Schedule of Performance" means the schedule for the
performance of certain actions by the Parties pursuant to this Agreement with respect to the City
Hall Project, attached as Exhibit "M-3" to this Agreement.
1.1.19 "City Manager" means the City Manager of the City or his or her designee
or successor in function.
1.1.20 "City Project Loan" has the meaning ascribed to the term in Recital F.
1.1.21 "City Project Loan Note" means the promissory note made by Developer
in favor of City in substantially the form of Exhibit "L" attached to this Agreement evidencing the
City Project Loan.
1.1.22 "City Project Loan Deed of Trust' means the deed of trust made by
Developer for the benefit of City in substantially the form of Exhibit "K" attached to this
Agreement, which pledges the PSH Property as collateral to secure repayment of the City Project
Loan Note.
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1.1.23 "City Requirements" has the meaning ascribed to the term in Section 2.6.2.
1.1.24 "City's Title Notice Response" means the written response of the City to
the Developer's Title Notice, in which the City either (i) elects to cause the removal from the
Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions
to coverage under the proposed Title Policy that were objected to in the Developer's Title Notice,
or (ii) elects not to cause the removal from the Preliminary Report of any matters shown in
Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy
that were objected to in the Developer's Title Notice.
1.1.25 "Close of Escrow" or "Closing" means the recording of the Grant Deed for
the PSH Property in the official records of the Recorder of the County, and completion of each of
the actions set forth in ARTICLE III by the Escrow Holder for the City to sell the PSH Property
to the Developer and the Developer to purchase the PSH Property from the City.
1.1.26 "Construction Financing" means one or more loans that Developer shall
obtain from one or more Institutional Lenders, the proceeds of which are to be used and applied to
pay the reasonable costs of obtaining such loan(s) and either: (a) the PSH Project Costs; or (b) to
refinance only the outstanding amount owed under a prior loan obtained by Developer to finance
the amount described in "(a)" of this Section, including the reasonable costs of obtaining such loan
(without any other amounts). Such loan(s) shall provide for normal and customary disbursement
controls for the payment of PSH Project Costs and normal and customary fees and expenses for
loan(s) of similar size and purpose. The Construction Financing is set forth in the PSH Project
Budget and includes the Senior Construction Loan.
1.1.27 "Construction Financing Documents" means the various documents and
instruments made by and between Developer and one or more Institutional Lenders that evidence
or perfect the Construction Financing or the security for repayment of the Construction Financing,
including any associated Security Instrument.
1.1.28 "Control" means and refers to possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of person or entity, whether
by ownership of equity interests, by contract or otherwise.
Control.
1.1.29 "Controlling" and "Controlled" mean and refer to exercising or having
1.1.30 "County" means the County of Orange, Califomia.
1.1.31 "County Loan" means that certain loan from the County of Mental Health
Services Act Funds in the original principal amount of approximately Two Million Three Hundred
Eighty -Four Thousand Six Hundred Thirty Dollars ($2,384,630.00) for permanent financing of the
PSH Project, with any interest and principal due annually from residual receipts and all principal
and accrued interest due fifty-five (55) years after the date the Construction Financing converts to
permanent financing, and which is secured by a Permitted Security Instrument senior in lien
priority to the City Project Loan Deed of Trust and to the Housing Authority Loans Deed of Trust.
61147.80021\40183270.13
1.1.32 "Date of Approval" means the date this Agreement is approved by the City
Council.
1.1.33 "Developer" means Jamboree Housing Corporation, a California nonprofit
public benefit corporation and its successors and assigns that are permitted by this Agreement.
1.1.34 "Developer's Title Notice" means a written notice from the Developer to
the City indicating the Developer's objection to specific matters shown in the Preliminary Report
as exceptions to coverage under the proposed Title Policy for the PSH Property, describing in
suitable detail the actions that the Developer reasonably believes are indicated to cure or correct
each of the Developer's objections.
1.1.35 "Due Diligence Investigations" means the Developer's due diligence
investigations of the PSH Property to determine the suitability of the PSH Property for
development and operation of the PSH Project, including, without limitation, investigations of the
environmental and geotechnical suitability of the PSH Property, as deemed appropriate in the
reasonable discretion of the Developer, all at the sole cost and expense of the Developer.
1.1.36 "Due Diligence Investigation Rejection Notice" means a written notice of
the Developer delivered to the City and the Escrow Holder, prior to the end of the Due Diligence
Period, indicating the Developer's rejection of the condition of the PSH Property and refusal to
accept a conveyance of fee title to the PSH Property, describing in reasonable detail the actions
that the Developer reasonably believes are indicated to allow the Developer to accept the condition
of the PSH Property.
1.1.37 "Due Diligence Period" means the date commencing on the Effective Date
and ending at 5:00 p.m. on the one hundred twentieth (120'') day following the Effective Date.
1.1.38 "Effective Date" has the meaning ascribed to the term in Section 1.2.3.
1.1.39 "ENA" means that certain Exclusive Negotiation Agreement (City Hall
Site), dated April 7, 2020, by and between City and Developer, as it may have been amended
and/or extended from time to time.
1.1.40 "Environmental Claims" has the meaning ascribed to the term in
Section 6.3.
1.1.41 "Environmental Laws" means all federal, state, local, or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government
authority regulating, relating to, or imposing liability of standards of conduct concerning any
hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene
(and only to the extent that the occupational health or industrial hygiene laws, ordinances, or
regulations relate to Hazardous Substances on, under, or about the Property), occupational or
environmental conditions on, under, or about the Property, as now or may at any later time be in
effect, including without limitation, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation
and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et sem.]; the Clean Water Act, also
known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the
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Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials
Transportation Act ("HMTA") [49 USC Section 1801 et M.]; the Insecticide, Fungicide,
Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seg.];
the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42
USC Section 6901 et sem.]; the Surface Mining Control and Reclamation Act [30 USC Section 101
et sec .] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et
seg.]; the Occupational Safety and Health Act [29 USC Section 655 and 6571; the California
Underground Storage of Hazardous Substances Act [California Health & Safety Code
Section 25288 et sem.]; the California Hazardous Substances Account Act [California Health &
Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement
Act [California Health & Safety Code Section 24249.5 et seMc .] the Porter -Cologne Water Quality
Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations
promulgated under the statutes cited above and any other federal, state, or local law, statute,
ordinance, or regulation now in effect or later enacted that pertains to occupational health or
industrial hygiene, and only to the extent the occupational health or industrial hygiene laws,
ordinances, or regulations relate to Hazardous Substances on, under, or about the Property, or the
regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater,
surface water, or land use.
Section 6.3.
1.1.42 "Environmental Matters" has the meaning ascribed to the term in
1.1.43 "Escrow" has the meaning ascribed to the term in Section 2.1.
1.1.44 "Escrow Closing Date" means, the date that is on or before the fifth (5th)
business day following the Escrow Holder's receipt of written confirmation from both City and
Developer of the satisfaction or waiver of all conditions precedent to the Close of Escrow;
provided, however, that subject to extension due to Unavoidable Delay, the Escrow Closing Date
shall occur no later than December 31, 2024.
1.1.45 ."Escrow Holder" means First American Title Insurance Company,
through its office located at 18500 Von Karman Avenue, Suite 600, Irvine, CA 92612, or such
other escrow holder mutually agreed upon in writing by both City and Developer.
Section 3.1.
1.1.46 "Escrow Opening Date" has the meaning ascribed to the term in
1.1.47 "Event of Default" has the meaning ascribed to the term in Section 8.1.
1.1.48 "FIRPTA Affidavit" means an affidavit complying with Section 1445 of
the United States Internal Revenue Code.
1.1.49 "Governmental Agency" means any and all courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal,
state, county, district, municipal, city, or otherwise) whether now or later in existence with
jurisdiction over the Property, the PSH Project and/or the City Hall Project.
61147.8002140183270.13
1.1.50 "Governmental Requirements" means all codes, statutes, ordinances,
laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental
Agency.
1.1.51 "Grant Deed" means a deed substantially in the form of Exhibit "C" to this
Agreement, conveying all of the City's interest in the PSH Property to the Developer.
1.1.52 "Hazardous Substances" means, without implied limitation, substances
defined as "hazardous substances," "hazardous material," "toxic substance," "solid waste" or
"pollutant or contaminate" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et S�Mc.; the TSCA; the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801, et sem.; the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States
Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor
authority, as hazardous substances [40 CFR Part 3021; and those substances defined as "hazardous
waste" in Section 25117 of the California Health and Safety Code or, as "hazardous substances"
in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes
that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws
or regulations and in the regulations adopted pursuant to said laws, and shall also include manure,
asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum
products, and substances designated as a hazardous substance pursuant to 33 USC Section 1321
or listed pursuant to 33 USC Section 1317. Notwithstanding the foregoing, "Hazardous
Substances" shall not include such products in quantities as are customarily used in the
construction, maintenance, development or management of residential developments or associated
buildings and grounds, or typically used in residential activities in a manner generally used in other
comparable residential developments, or substances commonly ingested by a significant
population living within the PSH Project including, without limitation, alcohol, aspirin, tobacco
and saccharine and shall not include such products in quantities as are customarily used in the
construction, maintenance, development or management of commercial developments or
associated buildings and grounds, or typically used in commercial activities in a manner generally
used in other comparable commercial developments, or substances commonly ingested by a
significant population within the City Hall Project including, without limitation, alcohol, aspirin,
tobacco and saccharine.
1.1.53 "Housing Authority Admin Fund Loan" has the meaning ascribed to the
tern in Recital G.
1.1.54 "Housing Authority Admin Fund Loan Note" means the promissory note
made by Developer in favor of Housing Authority in substantially the form of Exhibit "I" attached
to this Agreement evidencing the Housing Authority Housing Admin Fund Loan.
1.1.55 "Housing Authority Housing Fund Loan" has the meaning ascribed to the
term in Recital G.
1.1.56 "Housing Authority Housing Fund Loan Note" means the promissory
note made by Developer in favor of Housing Authority in substantially the form of Exhibit "J"
attached to this Agreement evidencing the Housing Authority Housing Fund Loan.
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1.1.57 "Housing Authority Loans Deed of Trust" means the deed of trust made
by Developer for the benefit of Housing Authority in substantially the form of Exhibit "H" attached
to this Agreement, which pledges the PSH Property as collateral to secure repayment of the
Housing Authority Admin Fund Loan and Housing Authority Housing Fund Loan.
1.1.58 "Indemnified Parties" has the meaning ascribed to the term in Section 6.3.
1.1.59 "Institutional Lender" means any of the following: (a) a bank (State,
Federal or foreign), trust company (in its individual or trust capacity), insurance company, credit
union, savings bank (State or Federal), pension, welfare or retirement fund or system, real estate
investment trust (or an umbrella partnership or other entity of which a real estate investment trust
is the majority owner), Federal or State agency regularly making or guaranteeing mortgage loans,
investment bank or a subsidiary of a Fortune 500 company; or (b) any person or entity that is an
Affiliate of or is a combination of any one or more of the persons or entities described in "(a)" of
this Section.
1.1.60 "Lender" means the holder of any Security Instrument and its successors
and assigns.
1.1.61 "Notice of Agreement" means a notice substantially in the form of Exhibit
"D" to this Agreement to be recorded against the PSH Property at the Close of Escrow to provide
constructive record notice of the existence and application of this Agreement to the PSH Property.
1.1.62 "Acceptance of Completion" means the written certification of City that
the construction of the City Hall Project has been completed in compliance with the terms and
conditions of this Agreement.
1.1.63 "OCHFT" means the Orange County Housing Finance Trust.
1.1.64 "OCHFT Loan" means that certain loan from the OCHFT in the original
principal amount of approximately Three Million Three Hundred Three Thousand Three Hundred
Fifteen Dollars ($3,303,315.00) as construction financing for the PSH Project, with any interest
and principal due annually from residual receipts and all principal and accrued interest due fifty-
five (55) years after the date the Construction Financing converts to permanent financing, and
which is secured by a Permitted Security Instrument senior in lien priority to the City Project Loan
Deed of Trust, but junior in priority to the Housing Authority Loans Deed of Trust. OCHFT's
commitment to provide the OCHFT Loan is set forth in that certain loan commitment letter issued
to Developer on January 3, 2022, a copy of which has been provided to City and Housing
Authority. Notwithstanding that the OCHFT Loan is construction financing, the OCHFT Loan is
not anticipated to close and fund at the Closing. Developer shall keep City informed regarding the
status of the closing of the OCHFT Loan. At such closing, each of City and Housing Authority
agrees to and shall execute subordination agreements as necessary to achieve the priority
contemplated in Section 2.2.3.
1.1.65 "Parties" means, collectively, the City and the Developer.
1.1.66 "Party" means, individually, the City or the Developer, as applicable.
61147.80021\40183270.13
1.1.67 "PCO Statement" means a preliminary change of ownership statement
provided for in California Revenue and Taxation Code Section 480.3.
1.1.68 "Permanent Loan" means any loan that the Developer shall obtain from an
Institutional Lender, the proceeds of which are to be used and applied solely to pay: (1) the
reasonable costs of obtaining such loan; (2) the then current outstanding principal and interest
under any Construction Financing; and (3) any reasonable and customary fees or charges of the
Institutional Lender providing the Construction Financing relating to pay-off of the Construction
Financing. The Permanent Loans are set forth in the PSH Project Budget. The Senior Permanent
Loan is a "Permanent Loan" hereunder and a security instrument securing the Senior Permanent
Loan is hereby approved by City.
1.1.69 "Permitted Exceptions" means (i) any and all items shown in Schedule B
of the Preliminary Report as exceptions to coverage under the proposed Title Policy that the
Developer accepts, pursuant to Section 2.4; (ii) any other exceptions from coverage under the
proposed Title Policy that the Developer accepts, pursuant to Section 2.4; (iii) non -delinquent
property taxes and assessments; (iv) any documents, encumbrances, and/or agreements expressly
contemplated pursuant to this Agreement to be recorded at the Close of Escrow, and (v) any
encumbrance recorded against the PSH Property with Developer's consent or as a result of the
activities of Developer.
1.1.70 "Permitted Security Instrument" means any Security Instrument: (a) that
encumbers only the PSH Property or any interest in the PSH Property; (b) that is held by a Lender
that is an Institutional Lender, subject to the jurisdiction of the courts of the State, and that is not
immune from suit and cannot elect to be immune from suit; and (c) only secures: (i) the repayment
of money used to pay or reimburse the PSH Project Costs; (ii) a bona fide Permanent Loan (and
shall specifically include a deed of trust securing the Senior Permanent Loan), including, but not
limited to any security instrument securing any delivery assurance fee or other delivery assurance
obligation relating to a Permanent Loan; (iii) a delivery assurance fee regarding a Permanent Loan
that is refundable to Developer at the close of the Permanent Loan; or (iv) any Refinancing. Each
of the deed of trust securing the County Loan and the deed of trust securing the OCHFT Loan is a
Permitted Security Instrument. Promptly after execution, Developer shall promptly deliver a copy
of any Security Instrument to the City, with the Lender's name and notice address.
1.1.71 "Permitted Transfer" means any of the following types of Transfer by
Developer, which unless otherwise provided do not require the City's prior written approval and
where, except for a Transfer described in subsections .1, .2, .3, and .4, below, the person or entity
to which such Transfer is made expressly and unconditionally assumes in a written assignment
and assumption agreement between such person or entity, Developer and City that is in a form
reasonably acceptable to City (as evidenced by execution of such assignment and assumption
agreement by the City Manager), all obligations of Developer under this Agreement:
1.1.71.1 Any Transfer to an Institutional Lender: (1) pursuant to a
Permitted Security Instrument as collateral for (i) bona fide Construction Financing to pay all or
any part of the PSH Project Costs or (ii) bona fide Permanent Loan; or (2) pursuant to a Permitted
Security Instrument as collateral for a bona fide Permanent Loan.
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1.1.71.2 Any Transfer directly resulting from the foreclosure or deed in
lieu of foreclosure of a Permitted Security Instrument for a loan from an Institutional Lender to
the PSH Project or as otherwise permitted under Section 7.5.7 7 (and the first Transfer by such
Institutional Lender or its nominee following such foreclosure or deed in lieu of foreclosure so
long as such transferee assumes the obligations of Developer hereunder solely as to the PSH
Project and shall not include or require the assumption of any obligations hereunder relating to or
in connection with the City Hall Project (and any related acquisition financing and security
instrument to such transferee from an Institutional Lender in connection with such first Transfer)).
1.1.71.3 Any Transfer of stock or equity in the Party that does not change
management or operational Control of the PSH Project, with no material change in beneficial
ownership (with the exception of any conveyance to member(s) of the immediate family(ies) of
the transferor(s) or trusts for their benefit) and which constitutes a tax-free transaction under
Federal income tax law and California real estate transfer tax.
1.1.71.4 The lease of residential units in the PSH Project consistent with
the Regulatory Agreement.
1.1.71.5 Any Transfer of this Agreement with respect to the PSH Project
and the PSH Property to a limited partnership in which the managing general partner is Developer
or an Affiliate of Developer.
1.1.71.6 The Transfer or sale of limited partnership interests in Developer
while the Developer is in the form of a limited partnership.
1.1.71.7 In the event that any general partner of the Developer, while the
Developer is in the form of a limited partnership, is removed by the Tax Credit Investor for cause
following default under the partnership agreement, the Transfer of the general partner interest to:
(i) a 501(c)(3) tax exempt nonprofit corporation or its Affiliate selected by the Tax Credit Investor
and approved by the City, which approval shall not be withheld unreasonably, delayed or
conditioned, or (ii) the Tax Credit Investor or an affiliate of the Tax Credit Investor.
1.1.71.8 The Transfer of the PSH Project by Developer, while the
Developer is in the form of a limited partnership, to one or more of the general partners of the
Developer or their Affiliates at the end of the tax credit compliance period for the PSH Project;
and
1.1.71.9 Any dilution of a general partner's interest in the Developer
while the Developer is in the form of a limited partnership, in accordance with the Developer's
limited partnership agreement.
1.1.72 "Preliminary Report" means a preliminary report issued by the Title
Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of
all documents listed in Schedule B of the report as exceptions to coverage under the proposed Title
Policy.
1.1.73 Prevailing Wage Action. Any of the following: (a) any determination by
the Califomia Department of Industrial Relations that prevailing wage rates should have been paid,
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but were not; (b) any determination by the California Department of Industrial Relations that
higher prevailing wage rates than those paid should have been paid; (c) any administrative or legal
action or proceeding arising from any failure to comply with the Federal Davis -Bacon Act
(codified as 40 U.S.C. §§ 3141 et seg.) or California Labor Code Sections 1720 through 1781, as
amended from time to time, regarding prevailing wages, including maintaining certified payroll
records; or (d) any administrative or legal action or proceeding to recover wage amounts at law or
in equity.
1.1.74 "Property" has the meaning ascribed to the term in Recital A and further
described in Exhibit "A".
1.1.75 "PSH Project Plans and Specifications" has the meaning ascribed to the
term in Section 2.6.1 and further identified in Exhibit "B-1"
1.1.76 "PSH Project" has the meaning ascribed in Recital C and further means the
demolition of the portion of the existing City of San Juan Capistrano City Hall currently located
on the PSH Property, and the construction and redevelopment of the PSH Property as a fifty (50)
unit Permanent Supportive Housing development containing twenty-four (24) units made available
to Extremely Low Income (< 30%) and Very Low Income (<50%) households and one unrestricted
manager's unit, consisting of approximately forty-five thousand four hundred one square feet
(45,401 so contained in three (3) stories, including all required or associated on-site and off-site
improvements, all hardscape and all landscaping, all as specifically described in the Scope of
Development, and all to be developed in accordance with the PSH Project Plans and Specifications
to be approved by the City and any conditions imposed by the City in its approval of the PSH
Project Plans and Specifications. For ten (10) of the twenty-four (24) restricted units for Extremely
Low Income (< 301/6) and Very Low Income (<509,6) households, best efforts will be made to give
preference to veterans consistent with state and federal law.
1.1.77 "PSH Project Budget" means the PSH Project Costs and anticipated
sources of funds to pay the PSH Project Costs as set forth in the PSH Project Budget, dated as of
July 14, 2022, and approved by the City Manager as of the Effective Date and attached as Exhibit
"134" to this Agreement, as may be modified from time to time pursuant to Section 7.2.
1.1.78 "PSH Project Commencement Date" means the date construction of the
PSH Project shall commence, which shall be no later than sixty (60) days after the Closing Date.
1.1.79 "PSH Project Completion Date" means the date that is thirty (30) months
after the PSH Project Commencement Date.
1.1.80 "PSH Project Costs" means all of the costs of acquisition of the PSH
Property and development and construction of the PSH Project.
1.1.81 "Project Easements" means, collectively, (i) a nonexclusive access
easement in favor of the PSH Project Users over the driveways and drive aisles on the City Hall
Property, and (ii) a nonexclusive easement in favor of the City Hall Project Users for the use of
four (4) parking spaces located on the PSH Property.
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1.1.82 "Project Easement Agreements" means one or more documents or
agreements that establish the Project Easements.
1.1.83 "PSH Project Users" means, collectively, the tenants, guests, visitors,
contractors, subcontractors, and invitees of the PSH Project.
1.1.84 "PSH Property" has the meaning ascribed to the term in Recital C. The
proposed boundary lines of the PSH Property are depicted in Exhibit "A-3" and described in
Exhibit "A-4" (both of which exhibit refer to and identify the PSH as the "Jamboree Parcel").
1.1.85 "PSH Property Transfer" means and refers to any "change in ownership,"
as defined in Revenue and Taxation Code Sections 60, et seg., of all or any portion of the PSH
Property.
1.1.86 "PSH Schedule of Performance" means the schedule for the performance
of certain actions by the Parties pursuant to this Agreement with respect to the PSH Project,
attached to this Agreement as Exhibit `13-3".
1.1.87 "PSH Scope of Development" means the detailed description of the PSH
Project attached to this Agreement as Exhibit `13-211
.
1.1.88 "Purchase Price" means the purchase price for the PSH Property in the
amount of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00).
1.1.89 "QDCI" means Quality Development and Construction, Inc., who shall
serve as Developer's general contractor for the City Hall Project.
1.1.90 "Record", "recorded", "recording" or "recordation" each mean and refer
to recordation of the referenced document in the official records of the Recorder of the County of
Orange, California.
1.1.91 "Refinancing" means any loan secured by a Permitted Security Instrument
that the Developer obtains from an Institutional Lender subsequent to recordation of the Permanent
Loan for any of the following purposes: (1) to pay off all or a portion of an existing loan secured
by a Permitted Security Instrument where the Lender providing the new loan will disburse loan
proceeds to or on behalf of Developer exceeding the amount of principal and interest under the
existing loan being paid plus the amount of any reasonable and customary fees and costs associated
with obtaining such new loan that are actually paid by Developer and not rebated or refunded to
Developer; (2) disbursing funds to or on behalf of Developer without paying off any existing loan
secured by a Permitted Security Instrument; or (3) any loan extension, modification or equivalent
regarding an existing loan to Developer secured by a Permitted Security Instrument that results in
the Lender of the existing loan disbursing additional loan proceeds to or on behalf of Developer in
excess of the original principal amount of the loan.
1.1.92 "Regulatory Agreement" means a regulatory agreement and declaration of
restrictive covenants, conditions and restrictions restricting the use of property for affordable
housing in substantially the form of Exhibit "G" attached to this Agreement, which shall be
recorded against the PSH Property at the Close of Escrow.
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1.1.93 "Security Instrument" means any security instrument, deed of trust,
security deed, contract for deed, deed to secure debt, or other voluntary real property (including
leasehold) security instrument(s) or agreement(s) intended to grant real property (including
leasehold) security for any obligation (including a purchase -money or other promissory note)
encumbering the Property, as entered into, renewed, modified, consolidated, increased, decreased,
amended, extended, restated, assigned (wholly or partially), collaterally assigned, or supplemented
from time to time, unless and until paid, satisfied, and discharged of record. If two or more such
security instruments are consolidated or restated as a single lien or held by the same Lender (as
applicable), then all such security instruments so consolidated or restated shall constitute a single
Security Instrument. A participation interest in a security instrument (or partial assignment of the
secured loan) does not itself constitute a Security Instrument.
1.1.94 "Senior" means, referring to multiple Security Instruments, the Security
Instrument that is most senior in lien of the same type. Where Senior is used as a comparative term
as against any specified Security Instrument, such term refers to any Security Instrument of the
same type that is senior in lien to such specified Security Instrument. If only one Security
Instrument of a particular type exists, then it shall be deemed the Senior Security Instrument of
such type.
1.1.95 "Senior Construction Lender" has the meaning as set forth in Recital H.
1.1.96 "Senior Construction Loan" has the meaning as set forth in Recital H.
1.1.97 "Senior Loan" has the meaning as set forth in Section 2.2.3.
1.1.98 "Senior Permanent Loan" has the meaning as set forth in Recital H.
1.1.99 "State" means the State of California.
1.1.100 "Subordinate Loan" means any loan approved through revisions to
the PSH Project Budget by the City Manager pursuant to Section 7.2, and which is secured by a
Permitted Security Instrument which, if the principal amount of such loan is less than the principal
amount of the Housing Authority Housing Fund Loan, Housing Authority Admin Loan, or City
Project Loan, is junior in lien priority to the Housing Authority Loans Deed of Trust and/or City
Project Loan Deed of Trust (as applicable).
1.1.101 "Tax Credit Equity" means the equity investment toward the cost
of development and construction of the PSH Project contributed to the Developer (when in the
form of limited partnership) by the Tax Credit Investor, in the amount set forth in the PSH Project
Budget.
1.1.102 "Tax Credit Investor" means, collectively, the limited partner and
special limited partner in Developer (when in the form of a limited partnership) that provides the
Tax Credit Equity for the development and construction of the PSH Project.
1.1.103 "Tax Credits" means an allocation from TCAC of nine percent
(9%) federal low income housing tax credits to finance a portion of the PSH Project Costs, all in
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accordance with Section 42 of the Internal Revenue Code of 1986, as amended, all associated
Internal Revenue Service regulations and all associated TCAC regulations.
1.1.104 "TCAC" means the California Tax Credit Allocation Committee or
successor in function.
1.1.105 "TCAC Regulatory Agreement" means the regulatory agreement
required to be recorded against the PSH Property by TCAC to obtain the Tax Credits.
1.1.106 "Title Company" means First American Title Insurance Company,
through its office located at 18500 Von Karman Avenue, Irvine, CA 92612, or such other title
company mutually agreed upon in writing by both City and Developer
1.1.107 "Title Policy" means a standard ALTA owners' policy of title
insurance issued by the Title Company, with coverage in the full amount of the Purchase Price and
insuring fee title to the PSH Property, subject only to the Permitted Exceptions. However, at
Developer's option, Developer may acquire an ALTA extended coverage policy. City shall pay
for the standard ALTA policy. Developer shall pay for any additional or ALTA extended coverage
policy.
1.1.108 "Transfer" means any of the following:
1.1.108.1 Any assignment, conveyance, grant, hypothecation, mortgage,
pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right
or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or
obligation or any part of it (including the grant of any easement, lien, or other encumbrance); or
1.1.108.2 Any conversion, exchange, issuance, modification, reallocation,
sale, or other transfer of any direct or indirect equity interest(s) in the owner of such property, right
or obligation by the holders of such equity interest(s); or
1.1.108.3 Any merger, consolidation, sale, or lease of all or substantially
all of the assets of the Developer or a series of such sales, assignments and the like that, in the
aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets
of the Developer; or
1.1.108.4 Any PSH Property Transfer; or
1.1.108.5 The recordation of any deed of trust, mortgage, lien or similar
encumbrance against all or any portion of the PSH Property or the PSH Project, except as
contemplated and/or permitted pursuant to the terms of this Agreement.
1.1.109 "Unavoidable Delay" means any delay that is caused exclusively
by acts or failures to act by the other Party or that is beyond the reasonable control of the Party
asserting Unavoidable Delay, including, without limitation, delay caused by strikes, acts of God,
weather, inability to obtain labor or materials, inability to obtain governmental permits or
approvals, pandemics, epidemics, governmental restrictions, civil commotion, fire or similar
causes, but excluding circumstances subject to Section 9.7.2.
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1.1.110 "Verizon Wireless License" means that certain Wireless
Communications Site License Agreement dated August 30, 2017, between the City, as "Licensor"
to Los Angeles SMSA Limited Partnership d/b/a Verizon Wireless, as "Licensee" ("Verizon
Wireless"), pursuant to which the City licenses to Verizon Wireless certain portions of the PSH
Property for the construction, operation, and maintenance of a communications facility, along with
certain non-exclusive access rights, as more particularly set forth therein, as amended by that
certain First Amendment to Wireless Communications Site License Agreement between the City
and Verizon Wireless, entered into on or about September 6, 2018.
1.1.111 "Verizon Wireless License Assignment" means an assignment and
assumption agreement in a form reasonably acceptable to the City and the Developer, to be entered
into between the City and the Developer and made effective as of the Close of Escrow.
1.2 Representations and Warranties.
1.2.1 City Representations and Warranties. The representations and warranties
of City contained in this Section 1.2.1 shall be based upon the actual knowledge of the City
Manager as ofthe Effective Date. All representations and warranties contained in this Section 1.2.1
are true and correct as of the Effective Date. City's liability for misrepresentation or breach of
warranty, representation or covenant, wherever contained in this Agreement, shall survive the
execution and delivery of this Agreement and the Closing. City hereby makes the following
representations, covenants and warranties and acknowledges that the execution of this Agreement
by Developer has been made in material reliance by Developer on such covenants, representations
and warranties:
1.2.1.1 City is a California municipal corporation, duly formed and
operating under the laws of the State of California. City has the legal power, right and authority to
enter into this Agreement and to execute the instruments and documents referenced herein, and to
consummate the transactions contemplated hereby.
1.2.1.2 The persons executing this Agreement and the instruments
referenced herein for or on behalf of City hereby represent and warrant that such persons have
been authorized to act on behalf of City and this Agreement is valid and enforceable against City
in accordance with its terms and each instrument to be executed by City pursuant hereto or in
connection therewith will, when executed, shall be valid and enforceable against City in
accordance with its terms. No approval, consent, order or authorization of, or designation or
declaration of any other person, is required in connection with the valid execution and delivery of
and compliance with this Agreement by City.
1.2.1.3 City has taken all requisite action and obtained all requisite
consents for agreements or matters to which City is a party in connection with entering into this
Agreement and the instruments and documents referenced herein and in connection with the
consummation of the transactions contemplated hereby.
1.2.1.4 Neither the execution of this Agreement nor the consummation
of the transactions contemplated hereby shall result in a breach of or constitute a default under any
other agreement, document, instrument or other obligation to which the City is a party or by which
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the City may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ,
injunction, order or decree of any court or governmental body applicable to the City or to the
Property. City makes no such representation or warranty with respect to the Surplus Land Act.
1.2.1.5 This Agreement is, and all agreements, instruments and
documents to be executed by the City pursuant to this Agreement shall be, duly executed by and
shall be valid and legally binding upon the City and enforceable in accordance with their respective
terms.
1.2.1.6 The Property is a legally formed parcel in the approximate size
of four and one hundred seventy-seven thousandths (4.177) acres.
1.2.1.7 City is the owner of the entire right, title and interest in and to
the Property.
1.2.1.8 Except as otherwise set forth in one or more environmental
reports obtained by Developer prior to the Effective Date, as verbally reported to City, the PSH
Property has not been used for the purposes of storing, manufacturing, releasing, or dumping
Hazardous Substances.
1.2.1.9 There are no pending or, to the best of City's knowledge,
threatened claims, allegations or lawsuits of any kind that could materially and adversely affect
the value of the PSH Property or prohibit the, sale thereof, nor to the best of City's knowledge, is
there any governmental investigation of any type or nature pending or threatened against or relating
to the Property or the transactions contemplated hereby.
1.2.1.10 Except (i) as disclosed in the Preliminary Report, (ii) the
Verizon Wireless License, and (iii) the access agreement, temporary construction easements, and
permanent easements for purposes of completing the City and the Orange County Transportation
Authority project to replace the existing railroad bridge and construct a new bridge over San Juan
Creek, no portion of the Property is subject to any lease, license, option, or use agreement and no
person or entity other than City has any right to occupy and/or use the Property.
1.2.1.11 If the City becomes aware of any act or circumstance that would
change or render incorrect, in whole or in part, any representation or warranty made by the City
under this Agreement, whether as of the date given or any time thereafter, whether or not such
representation or warranty was based upon the City's knowledge and/or belief as of a certain date,
the City will promptly give written notice of such changed fact or circumstance to the Developer.
1.2.2 Developer Representations and Warranties. The representations and
warranties of Developer contained in this Section 1.2.2 shall be based upon the actual knowledge
of Developer's Chief Development Officer as of the Effective Date. All representations and
warranties contained in this Section 1.2.2 are true and correct as of the Effective Date. The
Developer's liability for misrepresentation or breach of warranty, representation or covenant,
wherever contained in this Agreement, shall survive the execution and delivery of this Agreement
and the Closing. The Developer hereby makes the following representations, covenants and
warranties and acknowledges that the execution of this Agreement by City has been made in
material reliance by City on such covenants, representations and warranties:
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1.2.2.1 The Developer is a California nonprofit public benefit
corporation, lawfully entitled to do business in the State of California and the City. The Developer
has the legal right, power and authority to enter into this Agreement and to execute the instruments
and documents referenced herein and to consummate the transactions contemplated hereby.
1.2.2.2 The persons executing this Agreement and the instruments
referenced herein on behalf of the Developer hereby represent and warrant that such persons have
the power, right and authority to bind the Developer.
1.2.2.3 The Developer has taken all requisite action and obtained all
requisite consents in connection with entering into this Agreement and the instruments and
documents referenced herein and in connection with the consummation of the transactions
contemplated hereby, and no consent of any other party is required for the Developer's
authorization to enter into Agreement.
1.2.2.4 Neither the execution of this Agreement nor the consummation
of the transactions contemplated hereby shall result in a breach of or constitute a default under any
other agreement, document, instrument or other obligation to which the Developer is a party or by
which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation
or any writ, injunction, order or decree of any court or governmental body applicable to the
Developer or to the Property.
1.2.2.5 This Agreement is, and all agreements, instruments and
documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by
and shall be valid and legally binding upon the Developer and enforceable in accordance with their
respective terms. No approval, consent, order or authorization of, or designation or declaration of
any other person, is required in connection with the valid execution and delivery of in compliance
with this Agreement by the Developer.
1.2.2.6 If the Developer becomes aware of any act or circumstance that
would change or render incorrect, in whole or in part, any representation or warranty made by the
Developer under this Agreement, whether as of the date given or any time thereafter, whether or
not such representation or warranty was based upon the Developer's knowledge and/or belief as
of a certain date, the Developer will promptly give written notice of such changed fact or
circumstance to the City.
1.2.3 Effective Date. This Agreement is dated November 14, 2022
for reference purposes only. This Agreement shall not become effective until the date on
which all of the following have occurred ("Effective Date"): (a) this Agreement is
approved and executed by the appropriate authorities of Developer and delivered to City; (b)
Developer has delivered to City a certified copy of the official action taken by all of the entities
comprising the Developer approving this Agreement, substantially in the form attached to this
Agreement as Exhibit "E"; (c) following all legally required notices and hearings, this
Agreement is approved by the City Council; and (d) this Agreement is executed by the
authorized representatives of City.
1.2.4 Exhibit List. The following is a list of the Exhibits attached to this
Agreement. Each of the Exhibits is incorporated by this reference into the text of this Agreement.
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Exhibit A
Legal Description of Property
Exhibit A-1
Depiction of City Hall Property
Exhibit A-2
Legal Description of City Hall Property
Exhibit A-3
Depiction of PSH Property
Exhibit A-4
Legal Description of PSH Property
Exhibit B-1
PSH Project Plans and Specifications
Exhibit B-2
PSH Scope of Development
Exhibit B-3
PSH Schedule of Performance
Exhibit B-4
PSH Project Budget
Exhibit C
Form of Grant Deed
Exhibit D
Form of Notice of Agreement
Exhibit E
Form of Official Action of Developer
Exhibit F
Form of Certificate of Completion
Exhibit G
Form of Regulatory Agreement
Exhibit H
Form of Housing Authority Loans Deed of Trust
Exhibit I
Form of Housing Authority Admin Fund Loan Note
Exhibit J
Form of Housing Authority Housing Fund Loan Note
Exhibit K
Form of City Project Loan Deed of Trust
Exhibit L
Form of City Project Loan Note
Exhibit M-1
City Hall Project Plans and Specifications, including the following
• Exhibit M-1-a90%DD Set-Startingon Page306
• Exhibit M -1-b Updated Entitlement Package-startingon Page327
• Exhibit M-1 -c Preliminary Hydrology Study- Starting on Page 354
• Exhibit M -1-d Preliminary Water Quality Management Plan- starting on Page 544
• Exhibit M-1 -e ID Specifications- starting on Page 834
• ExhibitM-1-f Division 1 Exclusions and Clarifications -starting on Page"916
• Exhibit M -1-g Paseo Adelanto City Items to Complete for PSH
to Obtain Certificate of Occupancy - starting on Page 918
Exhibit M-2
City Hall Scope of Development
Exhibit M-3
City Hall Project Schedule of Performance
Exhibit M-4
City Hall Project Budget, including the following
• Developer's Sources and Funds Summary
• QDCI's Construction Cost Budget
Exhibit M-5
Hero's Landing Plans and Specifications, including the following
• ID Complete Plan Set
• ID Specifications
Exhibit N
Performance Bond
Exhibit O
Payment Bond
ARTICLE H.
PSH PROPERTY DISPOSITION
2.1 Purchase and Sale. In exchange for the Purchase Price and the Developer's other
covenants and undertakings set forth in this Agreement, the City shall sell the PSH Property to the
Developer and the Developer shall purchase the PSH Property from the City pursuant to the terms
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and conditions of this Agreement and Developer shall thereafter construct the PSH Project on the
PSH Property pursuant to the PSH Project Plans and Specifications. For the purposes of
exchanging funds and documents to complete the sale from the City to the Developer and the
purchase by the Developer from the City of the PSH Property pursuant to the terms of this
Agreement, the City and the Developer agree to open an escrow ("Escrow") with the Escrow
Holder. ARTICLE III of this Agreement constitutes the joint escrow instructions of the Parties to
the Escrow Holder for completion of the Escrow for the sale of the PSH Property, as contemplated
by this Agreement. The Developer and the City shall execute such further escrow instructions,
consistent with the provisions of this Agreement, as may be reasonably requested by the Escrow
Holder. In the event of any conflict between the provisions of this Agreement and any other escrow
instructions requested by the Escrow Holder, the provisions of this Agreement shall control.
2.2 Payment of Purchase Price.
2.2.1 Developer shall deposit funds in the amount of the Purchase Price into the
Escrow, at least one (1) business day preceding the Escrow Closing Date.
2.2.2 Non -Recourse. The Developer shall not have any director indirect personal
liability for payment of the principal of, or interest on, the Housing Authority Housing Fund Note,
Housing Authority Admin Fund Note, the City Project Loan Note or the performance of the
covenants of the Developer under the Housing Authority Loans Deed of Trust or under the City
Project Loan Deed of Trust. The sole recourse ofthe City with respect to the principal of, or interest
on, the Housing Authority Housing Fund Note, Housing Authority Admin Fund Note, or the City
Project Loan Note, and defaults by Developer in the performance of its covenants under the
Housing Authority Loans Deed of Trust or under the City Project Loan Deed of Trust shall be to
the PSH Property, as described in the Housing Authority Loans Deed of Trust or in the City Project
Loan Deed of Trust (as applicable).
2.2.3 Subordination. Except for any Subordinate Loan, each of the Housing
Authority Loans Deed of Trust and City Project Loan Deed of Trust shall be subordinated to other
loans from Institutional Lenders, including the Senior Construction Loan, the Senior Permanent
Loan, and any Refinancing of any such loans (in each case, a "Senior Loan"), provided all of the
proceeds of the proposed Senior Loan, less any transaction costs, and with respect to any
Refinancing, less any amounts necessary to pay for PSH Project repairs, any deferred developer
fee, or any loans to the PSH Project made by any partner, must be used to provide financing for
the PSH Project. Each of this Agreement and the Regulatory Agreement shall be subordinated to
any Senior Loan that satisfies the criteria in the preceding sentence. Each of the Housing Authority
Loans Deed of Trust and City Project Loan Deed of Trust shall be subordinated to the lien(s)
securing the County Loan as well as any occupancy and affordability restrictions recorded by the
County in connection with the County Loan. The City Project Loan Deed of Trust (but not the
Housing Authority Loans Deed of Trust) shall be subordinated to the lien(s) securing the OCHFT
Loan as well as any occupancy and affordability restrictions recorded by the OCHFT in connection
with the OCHFT Loan. The City Manager or his/her designee on behalf of the City is authorized
to execute the subordination agreement without the necessity of any further action or approval.
2.3 Eminent Domain.If any portion of the PSH Property or any interest in any portion
of the PSH Property, becomes the subject of any eminent domain proceeding prior to Close of
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Escrow, other than such a proceeding by the City, including the filing of any notice of intended
condemnation or proceedings in the nature of eminent domain commenced by any Governmental
Agency, the City shall immediately give the Developer notice of such occurrence, and the
Developer shall have the option, exercisable within ten (10) business days after receipt of such
notice from the City, to either: (1) cancel the Escrow and terminate this Agreement and the Escrow,
in which case the Parties and the Escrow Holder shall proceed in accordance with Section 3.10; or
(2) continue with this Agreement in accordance with its terms, in which event the City shall assign
to the Developer any right of the City to receive any condemnation award attributable to the PSH
Property.
2.4 Title Approval. As soon as practicable following the Effective Date, City shall
obtain from Title Company the Preliminary Report and deliver a copy of the Preliminary Report
to the Developer. Within thirty (30) days following the Developer's receipt of a Preliminary
Report, the Developer shall deliver the Developer's Title Notice to the City. If the Developer fails
to deliver the Developer's Title Notice to the City within thirty (30) days following the Developer's
receipt of the Preliminary Report, the Developer will be deemed to approve the status of title to
the PSH Property. Within twenty (20) days following receipt by the City of Developer's Title
Notice, if any, the City shall serve City's Title Notice Response. If the City does not serve City's
Title Notice Response, if necessary, within twenty (20) days following its receipt of Developer's
Title Notice, the City shall be deemed to elect not to remove any matter objected to in Developer's
Title Notice, if any, from the Preliminary Report. If the City elects in City's Title Notice Response
to cause the removal of any matter objected to in Developer's Title Notice from the Preliminary
Report, the City shall cause the removal of each such objectionable matter from the Preliminary
Report within sixty (60) days following receipt by the Developer of City's Title Notice Response
or such other period of time that may be agreed to in writing by both the City and the Developer.
If the City is unwilling or unable to cause the removal of any matter objected to in Developer's
Title Notice from the Preliminary Report, then, within ten (10) days following the Developer's
receipt of City's Title Notice Response stating that the City is unwilling to remove or cause the
removal of any matter objected to in Developer's Title Notice or upon the expiration of the above
sixty (60) day time period during which the City elected to remove such objectionable matters
from the Preliminary Report and was unable to do so, the Developer may either (1) refuse to accept
the title to and conveyance of the PSH Property, in which case the Parties shall have the right,
subject to Section 2.4.2, to cancel the Escrow and terminate this Agreement without liability to
any Party or any other person, by delivery of a written notice of termination to the Escrow Holder,
or (2) by failing to timely deliver a written notice of termination to Escrow Holder pursuant to the
foregoing clause (1), be deemed to waive its objection to any items set forth in Developer's Title
Notice.
2.4.1 If at any time prior to the Close of Escrow the Title Company issues an
updated Preliminary Report containing any previously undisclosed matter affecting title to the PSH
Property, or the City becomes aware of any previously undisclosed matter affecting title to the
PSH Property, following the delivery of the Developer's Title Notice, the City shall provide
written notice to the Developer of such matter, together with any updated Preliminary Report
related to such matter. The City and the Developer shall have such rights and obligations with
respect to such previously undisclosed title matters as they did with respect to any title matters set
forth in the original Preliminary Report as set forth in Section 2.4.
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2.4.2 Before exercising any right a Party may have under this Section 2.4 to
cancel the Escrow and terminate this Agreement, such Party shall notify the non -terminating Party
in writing of its election to terminate and shall, upon the non -terminating Party's request, which
must be delivered, if at all, within three (3) days following its receipt of the terminating Party's
notice of election to terminate, meet and confer with the non -terminating Party for a period of
thirty (30) days. During such time, the Parties shall meet as often as reasonably requested by any
Party to negotiate, in good faith, methods and means by which the objectionable title matter may
be eliminated or mitigated. Nothing herein shall constitute an agreement, representation, or
warranty by any Party that an acceptable resolution of the objectionable title matter will be
achieved, nor shall any Party be obligated to expend any funds or undertake any other action
whatsoever with respect to such title matter unless such agreement is reduced to a writing which
is approved by both Parties, in their sole and absolute discretion. If, at the end of such thirty (30)
day period, the Parties have not been able to agree on a mutually acceptable method of resolving
such title matter, or if any proposed agreement is disapproved by the City Council, the Escrow
shall be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties
shall proceed pursuant to Section 3.10.
2.4.3 The City covenants and agrees not to place any matters of record against the
PSH Property (other than Permitted Exceptions and any matters arising from City's issuance or
exercise of any remedy related to any approval for the PSH Project), prior to the Close of Escrow,
without the prior written consent of Developer, which consent Developer may withhold in its sole
and absolute discretion.
2.5 Developer Investigations.
2.5.1 The Developer shall have until the expiration of the Due Diligence Period
to complete all of its Due Diligence Investigations with respect to the entirety of the PSH Property.
The Developer shall complete all of its Due Diligence Investigations within the Due Diligence
Period and shall conduct all of its Due Diligence Investigations at its sole cost and expense. The
Developer shall rely solely and exclusively upon the results of its Due Diligence Investigations of
the PSH Property, including, without limitation, investigations regarding geotechnical soil
conditions, compliance with applicable laws pertaining to the use of the PSH Property by the
Developer and any other matters relevant to the condition or suitability of the PSH Property for
the PSH Project, as the Developer may deem necessary or appropriate. Subject to City's express
representations and warranties in Section 1.2.1, City makes no representation or warranty to the
Developer relating to the condition of the PSH Property or suitability of the PSH Property for any
intended use or development by the Developer. The Developer shall deliver a Due Diligence
Investigation Rejection Notice to the City prior to the end of the Due Diligence Period. If the
Developer does not timely deliver its Due Diligence Investigation Rejection Notice prior to the
end of the Due Diligence Period, the Developer shall be deemed to have accepted the condition of
the PSH Property in its current condition. If the condition of the PSH Property is rejected, then any
Party shall have the right, subject to Section 2.4.2, to cancel the Escrow and terminate this
Agreement, in its sole discretion, without liability to the other Party or any other person, by
delivery of a written notice of termination to the other Party and Escrow Holder. Subject to City's
express representations and warranties in Section 1.2.1, the Developer shall accept all conditions
of the PSH Property, without any liability of the City whatsoever, upon the Developer's deemed
acceptance of the condition of the PSH Property by its failure to timely deliver its Due Diligence
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Investigation Rejection Notice. Subject to City's express representations and warranties in
Section 1.2.1, the Developer's failure to timely deliver its Due Diligence Investigation Rejection
Notice shall evidence the acceptance of the condition of the PSH Property by the Developer in its
existing "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition, as of the last day
of the Due Diligence Period. In its sole discretion the Developer may, subject to City's express
representations and warranties in Section 1.2.1, accept the PSH Property in its "AS IS," "WHERE
IS" and "SUBJECT TO ALL FAULTS" condition at any time before the end of the Due Diligence
Period. The Developer shall conduct during the Due Diligence Period such environmental
assessment(s) of the PSH Property as the Developer deems appropriate. If such assessment(s)
reveal the presence of any Hazardous Substances on the PSH Property in levels that exceed
applicable Governmental Requirements, the City and the Developer shall negotiate in good faith
in an effort to reach agreement as to the allocation of responsibility and cost of remediation thereof.
2.5.2 Any Due Diligence Investigations of the PSH Property by the Developer
shall not unreasonably disrupt any then -existing use or occupancy of the PSH Property or the
operations of the City. The Developer shall be liable for any damage or injury to any person or
property arising from the acts of the Developer, its employees, agents or representatives during the
course of any Due Diligence Investigations on the PSH Property and the Developer shall
indemnify, defend with counsel reasonably acceptable to the City and hold harmless the
Indemnified Parties from any and all actual and alleged liens, claims, demands or liability arising
from any Due Diligence Investigations by the Developer on the Property other than for discovery
of existing conditions on the PSH Property, or to the extent caused by the active negligence or
willful misconduct of any of the Indemnified Parties. Prior to commencing any Due Diligence
Investigations on the PSH Property, the Developer shall deliver copies of certificates of insurance
to the City evidencing compliance by the Developer with the liability insurance requirements of
Section 6.3.4.
2.5.3 Before exercising any right a Party may have under this Section 2.5 to
cancel the Escrow and terminate this Agreement, such Party shall notify the non -terminating Party
in writing of its election to terminate and shall, upon the non -terminating Party's request, which
must be delivered, if at all, within three (3) days following its receipt of the terminating Party's
notice of election to terminate, meet and confer with the non -terminating Party for a period of
thirty (30) days. During such time, the Parties shall meet as often as reasonably requested by any
Party to negotiate, in good faith, methods and means by which the objectionable due diligence
matter may be eliminated or mitigated. Nothing herein shall constitute an agreement,
representation, or warranty by any Party that an acceptable resolution of the objectionable due
diligence matter will be achieved, nor shall any Party be obligated to expend any funds or
undertake any other action whatsoever with respect to such due diligence matter unless such
obligation is reduced to a writing which is approved by both Parties, in their sole and absolute
discretion. If, at the end of such thirty (30) day period, the Parties have not been able to agree on
a mutually acceptable method of resolving the objectionable due diligence matter, or if any
proposed agreement is disapproved by the City Council, the Escrow shall be cancelled, this
Agreement shall be terminated without liability to any Party, and the Parties shall proceed pursuant
to Section 3.10.
2.6 Developer to Obtain all PSH Proiect Entitlements.
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2.6.1 Pursuant to the ENA, Developer has developed and presented to City staff
and the City Council, for review, the following (collectively, the "PSH Project Plans and
Specifications"):
2.6.1.1 A proposed complete conceptual development plan for the PSH
Project on the PSH Property that describes and depicts: (1) the location and placement of proposed
buildings and (2) the architecture and elevations of the proposed buildings;
2.6.1.2 The proposed unit mix, showing unit size and affordability
levels, including one unrestricted manager's unit, for the PSH Project;
2.6.1.3 A proposed time schedule and cost estimates for the
development of the PSH Project on the PSH Property; and
2.6.1.4 A proposed financing plan identifying financing sources for all
private and public improvements proposed for the PSH Project.
2.6.2 To the extent applicable to the PSH Project and/or PSH Property, the City's
zoning, building and land use regulations (whether contained in ordinances, the City's municipal
code, conditions of approval, policies, practice or elsewhere) (collectively, the "City
Requirements"), shall be applicable to the use and development of the PSH Project on the PSH
Property by the Developer. The Developer acknowledges that all PSH Project Plans and
Specifications and any changes to the PSH Project Plans and Specifications shall be subject to the
City Requirements. No action by the City with reference to this Agreement or any related
documents shall be deemed to constitute a waiver of any City Requirements regarding the PSH
Property, the PSH Project, the Developer, any successor -in -interest of the Developer or any
successor -in -interest to the PSH Property. The City Requirements may only be changed or waived
by modification or variance approved by the City and consistent with this Agreement. No
entitlement, permit or other approval from the City for development of the PSH Project on the
PSH Property shall attach to any portion of the PSH Property or otherwise become effective to
allow the Developer to develop the PSH Project on the PSH Property until after the Developer
owns fee title to that portion of the PSH Property to which such entitlement, permit or other
approval pertains. Under no circumstances shall the Developer commence development of any
portion of the PSH Project on the PSH Property prior to the,Developer owning fee title to the PSH
Property.
2.6.3 The approval of the Scope of Development shall not be binding on the City
Council or the Planning Commission of the City regarding any approvals of the PSH Project
required by such bodies. The Developer obtains no right to develop the PSH Project on the PSH
Property or any portion of the PSH Property by virtue of this Agreement, except that following the
Close of Escrow, the Developer shall possess the same rights as any other owner of property within
the City that desires to develop its property in a manner consistent with the City's General Plan. If
any revisions of the PSH Scope of Development are required by a Governmental Agency (other
than the City) having jurisdiction over the PSH Property or the PSH Project, the Developer shall
promptly make any such revisions that are generally consistent with the PSH Scope of
Development.
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2.6.4 Notwithstanding any provision to the contrary in this Agreement, following
the Close of Escrow, the Developer agrees to accept and comply fully with any and all conditions
of approval applicable to all approvals, permits and other governmental actions regarding the
development or operation of the PSH Project on the PSH Property, so long as such conditions of
approval are consistent with the PSH Scope of Development and this Agreement in all material
respects.
2.6.5 Developer to Pay All Costs and Expenses. The Parties agree that the City
shall not provide any financial assistance to the Developer in connection with the PSH Project
except as may be expressly set forth in this Agreement. The Developer shall be solely responsible
for paying for the costs of all design work, construction, labor, materials, fees and permit expenses
associated with the PSH Project. The Developer shall pay any and all fees pertaining to the review
and approval of the PSH Project by the City, any other Governmental Agency and utility service
providers, including the costs of preparation of all required construction, planning and other
documents reasonably required by a Governmental Agency pertinent to the development or
operation of the PSH Project on the PSH Property, including, but not limited to, specifications,
drawings, plans, maps, permit applications, land use applications, zoning applications,
environmental review and disclosure documents and design review documents. The Developer
shall pay for any and all costs, including, but not limited to, the costs of design, construction,
relocation and securing of permits for sewer or utility improvements and connections, that may be
required in development of the PSH Project, whether located on or off of the PSH Property. The
Developer shall obtain any and all necessary approvals, prior to the commencement of applicable
portions of construction, and the Developer shall take reasonable precautions to ensure the safety
and stability of surrounding properties during said construction. In accordance with this
Section 2.6.5, Developer shall be responsible for the costs, or (if applicable) prompt
reimbursement to the City upon delivery of an invoice for the costs, of the following:
2.6.5.1 all fees or expenses of engineers, architects, financial
consultants, legal, planning or other consultants or contractors, retained by the Developer for any
study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or
design activities, drawings, specifications or other activity or matter relating to the PSH Property
or the PSH Project or the negotiation of this Agreement that may be undertaken by the Developer;
2.6.5.2 all fees, charges and costs, make all deposits and provide all
bonds or other security associated with the submission to and processing by the City of any and
all applications and other documents and information to be submitted to the City by the Developer
pursuant to this Agreement or otherwise associated with the PSH Project; and
2.6.6 The Developer shall obtain all entitlements, permits and other approvals for
use and development of the PSH Project on the PSH Property from each applicable Governmental
Agency, within the time period for such actions specifically set forth in the Schedule of
Performance, subject to any extensions of time authorized by this Agreement upon the occurrence
of an Unavoidable Delay.
2.7 Delivery of PSH Property in Demolition -Ready Condition. At the Close of
Escrow, the City will deliver possession of the PSH Property to Developer in a demolition -ready
condition, free of all occupants, free of all equipment, personal property and furnishings desired
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to be retained by City, and free and clear of any contractual rights, except (i) as disclosed in the
Preliminary Report, (ii) the Verizon Wireless License, and (iii) temporary construction easements
and permanent easements for purposes of completing the City and the Orange County
Transportation Authority project to replace the existing railroad bridge and construct a new bridge
over San Juan Creek) created by or with the consent of the City for any person or entity to access,
use or occupy the PSH Property (other than City as otherwise allowed under this Agreement and
Developer). Further, notwithstanding the foregoing, Developer will be responsible for utility shut
off and removal.
ARTICLE III.
3.1 Opening of Escrow. For purposes of this Agreement, the opening of Escrow shall
be the first date on which a fully executed copy of this Agreement is deposited with Escrow Holder
("Escrow Opening Date"). The Developer shall cause the Escrow to be opened within five (5)
days following the Effective Date. Escrow Holder shall promptly confirm in writing to each of the
Parties the date of the Escrow Opening Date. This ARTICLE III shall constitute the joint escrow
instructions of the City and the Developer to Escrow Holder for conduct of the Escrow to complete
the purchase and sale of the PSH Property between them, as contemplated in this Agreement.
3.2 Conditions to Close of Escrow. The conditions set forth below shall be satisfied
or waived in writing by the respective benefited Party on or before the Escrow Closing Date or the
Party benefited by any unsatisfied condition shall not be required to proceed to close Escrow.
3.2.1 Developer's Conditions to Close of escrow. The Developer's obligation
to purchase the PSH Property from the City on the Escrow Closing Date shall be subject to the
satisfaction of the following conditions precedent, each of which can only be waived in writing by
the Developer:
3.2.1.1 The Developer agrees, or is deemed, to accept the title to and
conveyance of the PSH Property, pursuant to Section 2.4;
3.2.1.2 The Developer fails to deliver a Due Diligence Investigation
Rejection Notice to the City prior to the expiration of the Due Diligence Period;
3.2.1.3 The City's planning commission finds, pursuant to Government
Code Section 65402, that the PSH Project is consistent with the City's General Plan;
3.2.1.4 Developer has received and accepted a Tax Credit reservation
for the PSH Project from TCAC.
3.2.1.5 Developer has received the commitments for funding to make
the construction and operation of the PSH Project and City Hall Project financially feasible in the
Developer's reasonable discretion;
3.2.1.6 The Title Company is unconditionally committed to issue the
Title Policy for the PSH Property, subject to any Permitted Exceptions, to the Developer;
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3.2.1.7 Developer approves the Escrow Holder's estimated Escrow
closing/settlement statement;
3.2.1.8 The representations, warranties and covenants of the City set
forth in Section 1.2.1 are true and correct in all material respects on the Effective Date and on the
Escrow Closing Date;
3.2.1.9 The Developer has obtained all entitlements required in
connection with the development of the PSH Property, subject to conditions of approval acceptable
to Developer in Developer's sole discretion, any applicable appeal period has expired without
appeal having been timely filed or, if an appeal is timely filed, such appeal has been denied, and
no legal action has been timely instituted against Developer or the City alleging the invalidity of
such entitlements;
3.2.1.10 Either (i) appropriate legal descriptions for each of the City Hall
Property and PSH Property have been prepared, consistent with Exhibit "A-2" and Exhibit "A4"
(with the PSH Property identified thereon as "Jamboree Parcel"), or (ii) a parcel map or other
subdivision map has been filed, establishing each of the City Hall Property and PSH Property as a
separate legal parcel.
3.2.1.11 The City has completed all of its material obligations required
by this Agreement to be completed prior to the Close of Escrow;
3.2.1.12 The City deposits the items into the Escrow required by
Section 3.4.
3.2.2 City's and Housing Authority's Conditions to Close of Escrow. The
City's obligation to sell the PSH Property to the Developer on or before the Escrow Closing Date
shall be subject to the satisfaction of the following conditions precedent, which can only be waived
in writing by the City:
3.2.2.1 The Developer agrees, or is deemed, to accept the title to and
conveyance of the PSH Property, pursuant to Section 2.4;
3.2.2.2 The Developer fails to deliver a Due Diligence Investigation
Rejection Notice to the City prior to the expiration of the Due Diligence Period;
3.2.2.3 The City's planning commission finds, pursuant to Government
Code Section 65402, that the Project is consistent with the City's General Plan;
3.2.2.4 The Title Company is unconditionally committed to issue
lender's policies of title insurance ensuring the lien priority of the Housing Authority Housing
Fund Loan, Housing Authority Admin Fund Loan, and the City Project Loan, subject to any
Permitted Exceptions, to the City;
3.2.2.5 The Developer submits to the City evidence satisfactory to the
City, in the City's reasonable discretion, that the Developer has obtained all entitlements necessary
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for the development of the PSH Property from each applicable Governmental Agency, including
the City;
3.2.2.6 The Developer has completed all of its material obligations
required by this Agreement to be completed prior to the Close of Escrow;
3.2.2.7 The Developer submits to the City the Developer's
organizational documents;
3.2.2.8 The Developer submits to the City a copy of the construction
contract for the PSH Project in substantially final form (with a copy of the final construction
contract being delivered to the City by Close of Escrow);
3.2.2.9 The Developer submits to the City a copy of the City Hall
Construction Contract in substantially final form (with a copy of the final City Hall Construction
Contract being delivered to the City by Close of Escrow);
3.2.2.10 The Developer submits to the City copies of the Construction
Financing Documents in substantially final form (with copies of the final Construction Financing
Documents being delivered to the City through Close of Escrow);
3.2.2.11 The Developer submits to the City a document evidencing a
commitment from the Tax Credit Investor to Developer to provide the Tax Credit Equity;
3.2.2.12 The Developer submits to the City documents evidencing a
commitment from an Institutional Lender to Developer to provide the Permanent Loan and
evidencing a commitment from the County to Developer to provide the County Loan;
3.2.2.13 The Developer submits to the City the documents evidencing the
County Loan;
3.2.2.14 The Developer submits to the City, documents evidencing a
commitment from the Lender(s) of all Subordinate Loan(s) to Developer to provide the
Subordinate Loan(s); The representations, warranties and covenants of the Developer set forth in
Section 1.2.2 are true and correct in all material respects on the Effective Date and on the Escrow
Closing Date; and
3.2.2.15 Either (i) appropriate legal descriptions for each of the City Hall
Property and PSH Property have been prepared, consistent with Exhibit "A-2" and Exhibit "A-4"
or (ii) a parcel map or other subdivision map has been filed, establishing each of the City Hall
Property and PSH Property as a separate legal parcel.
3.2.2.16 Developer furnishes a Faithful Performance Bond and a Labor
and Material Payment Bond each in an amount equal to one hundred percent (100%) of the cost
of the City Hall Project and related offsite improvements. Each bond shall be in substantially the
forms set forth in Exhibits "N" and "O", respectively, and shall be secured from a surety company
that meets all State of California bonding requirements, as defined in California Code of Civil
Procedure Section 995.120, and that is a California admitted surety insurer. Notwithstanding the
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foregoing, however, City agrees to reasonably consider changes to the forms of the bonds that are
reasonably requested by a qualified surety insurer.
3.2.2.17 The Developer deposits the items into the Escrow required by
Section 3.3.
3.3 Developer's Escrow Deposits. Following satisfaction or waiver of each of the
Developer's conditions to Close of Escrow set forth in Section 3.2.1, the Developer shall deposit
the following funds and documents into Escrow at least one (1) business days prior to the Escrow
Closing Date in a writing delivered to the Parties:
3.3.1 PCO Statement. A PCO Statement executed by the authorized
representative(s) of the Developer.
3.3.2 Notice of Agreement. The Notice of Agreement executed by the authorized
representative(s) of the Developer in recordable form, to be recorded against the PSH Property at
the Close of Escrow.
3.3.3 Regulatory Agreement. The Regulatory Agreement executed by the
authorized representative(s) of Developer in recordable form, to be recorded against the PSH
Property at the Close of Escrow.
3.3.4 Construction Financing Security Instrument(s). A Permitted Security
Instrument(s) securing repayment of the Construction Financing, executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the PSH Property at the
Close of Escrow.
3.3.5 Purchase Price. Developer shall deposit funds in the amount of the
Purchase Price.
3.3.6 Housing Authority Admin Fund Loan Note. The Housing Authority
Admin Fund Loan Note signed by the authorized representative(s) of Developer.
3.3.7 Housing Authority Housing Fund Loan Note. The Housing Authority
Housing Fund Loan Note signed by the authorized representative(s) of Developer.
3.3.8 Housing Authority Loans Deed of Trust. The Housing Authority Loans
Deed of Trust executed by the authorized representative(s) of Developer in recordable form, to be
recorded against the PSH Property at the Close of Escrow.
3.3.9 City Project Loan Note. The City Project Loan Note signed by the
authorized representative(s) of Developer.
3.3.10 City Proiect Loan Deed of Trust. The City Project Loan Deed of Trust
executed by the authorized representative(s) of Developer in recordable form, to be recorded
against the PSH Property at the Close of Escrow.
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3.3.11 County Loan Security Instrument. Permitted Security Instrument
securing repayment of the County Loan, executed by the authorized representative(s) of Developer
in recordable form, to be recorded against the PSH Property at the Close of Escrow.
3.3.12 County Loan Land Use Restriction Agreement. Agreement restricting
occupancy and rents in the PSH Project as required by the County Loan, executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the PSH Property at the
Close of Escrow.
3.3.13 Subordinate Loan(s) Security Instrument(s). Permitted Security
Instrument(s) securing repayment of the Subordinate Loan(s) executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the PSH Property at the
Close of Escrow.
3.3.14 Subordinate Loan Land Use Restriction Agreement(s). Agreement(s)
restricting occupancy and rents in the PSH Project as required by the Subordinate Loans, executed
by the authorized representative(s) of Developer in recordable form, to be recorded against the
PSH Property at the Close of Escrow.
3.3.15 Subordination Agreements. Subordination agreement(s) subordinating
this Agreement, the Regulatory Agreement, the Housing Authority Loans Deed of Trust, and the
City Project Loan Deed of Trust, in the form provided by an Institutional Lender, reasonably
approved by the Housing Authority and City, respectively, and executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the PSH Property at the
Close of Escrow.
3.3.16 Prolect Easement Agreements. The Project Easement. Agreements
executed by the authorized representative(s) of Developer in recordable form, to be recorded
against the PSH Property and City Hall Property at the Close of Escrow.
3.3.17 Performance Bond. The Performance Bond in an amount equal to one
hundred percent (100%) of the cost of the City Hall Project and related offsite improvements issued
by a surety company that meets all State of California bonding requirements, as defined in
California Code of Civil Procedure Section 995.120, and that is a California admitted surety
insurer.
3.3.18 Labor and Material Payment Bond. The Labor and Material Payment
Bond in an amount equal to one hundred percent (100%) of the cost of the City Hall Project and
related offsite improvements issued by a surety company that meets all State of California bonding
requirements, as defined in California Code of Civil Procedure Section 995.120, and that is a
California admitted surety insurer.
3.3.19 Verizon Wireless License Assignment. The Verizon Wireless License
Assignment executed by the authorized representative(s) of Developer.
3.3.20 Other Funds and Documents. Such documents required from Developer
under the terms of this Agreement to close the Escrow, including funds as required to pay all
Escrow closing costs, which shall be the sole responsibility of Developer, or by the Escrow Holder
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in the performance of the Escrow Holder's contractual or statutory obligations relating to the
Escrow.
3.4 City's and Housing Authority's Escrow Deposits. Following satisfaction or
waiver of each of the City's conditions to Close of Escrow set forth in Section 3.2.2, the City shall
deposit the following funds and documents into Escrow at least one (1) business days prior to the
Escrow Closing Date:
3.4.1 Grant Deed. The Grant Deed executed by the authorized representative(s)
of the City in recordable form.
3.4.2 FIRPTA Affidavit (City). The FIRPTA Affidavit completed and executed
by the authorized representative(s) of the City.
3.4.3 Notice of Agreement. The Notice of Agreement executed by the authorized
representative(s) of the City in recordable form.
3.4.4 Regulatory Agreement. The Regulatory Agreement signed by the
authorized representative(s) of the City in recordable form, which shall be recorded against the
PSH Property.
3.4.5 Deposit Funds Under ENA. Any remaining and refundable portion of the
deposit made by Developer under the ENA to be applied to any costs of Escrow to be borne by
Developer and then, if any funds still remain, be returned to the Developer by Escrow Holder.
3.4.6 Housing Authority Loan Funds. The principal amount of the Housing
Authority Housing Fund Loan and the principal amount of the Housing Authority Admin Fund
Loan.
3.4.7 City Loan Funds. The principal amount of the City Project Fund Loan.
Developer acknowledges and agrees that the City disbursed funds in the amount of One Hundred
and Fifty Thousand Dollars ($150,000.00) to Developer prior to the Effective Date, as
predevelopment funding (the "Predevelopment Funds"). Developer also acknowledges and
agrees that in the event this Agreement is terminated prior to the Close of Escrow, and in
connection with said termination Developer shall remit the design plans for the City Hall Project
and PSH Project to City as entirely City property and relinquish any and all control to such plans
and shall be relieved from repaying the Predevelopment Funds to City. Developer also
acknowledges and agrees that at the Close of Escrow, Developer is obligated to and shall reimburse
City for the Predevelopment Funds.
3.4.8 Subordination Agreements. Subordination agreement(s) subordinating
this Agreement, the Regulatory Agreement, the Housing Authority Loans Deed of Trust, and the
City Project Loan Deed of Trust, in the form provided by an Institutional Lender, reasonably
approved by the Housing Authority and City, respectively, and executed by the authorized
representative(s) of the Housing Authority and City, respectively, in recordable form, which shall
be recorded against the PSH Property.
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3.4.9 Proiect Easement Agreements. The Project Easement Agreements
executed by the authorized representative(s) of City in recordable form, to be recorded against the
PSH Property and City Hall Property at the Close of Escrow.
3.4.10 Verizon Wireless License Assignment. The Verizon Wireless License
Assignment executed by the authorized representative(s) of City.
3.4.11 Other Funds and Documents. Such other funds or documents required
from the City under the terms of this Agreement to close the Escrow or by the Escrow Holder in
the performance of the Escrow Holder's contractual or statutory obligations regarding the Escrow.
3.5 Closing Procedure.When each of the Developer's Escrow required deposits, as set
forth in Section 3.3, and each of the City's and Housing Authority's Escrow required deposits, as
set forth in Section 3.4, are deposited into Escrow, Escrow Holder shall request confirmation in
writing from the City, the Housing Authority, and the Developer that each of their respective
conditions to the Close of Escrow, as set forth in Section 3.2, are satisfied or waived. Upon Escrow
Holder's receipt of written confirmation from the City, the Housing Authority, and the Developer
that each of their respective conditions to the Close of Escrow are either satisfied or waived,
Escrow Holder shall close the Escrow for the Property by doing all of the following:
3.5.1 Recordation of Documents. File the documents set forth in Section 3.7
with the Office of the Recorder of the County, for recordation in the order set forth in Section 3.7.
3.5.2 Distribution of Recorded Documents. Distribute each recorded document
to the Party or person designated for such distribution in Section 3.7.
3.5.3 PCO Statement. File the PCO Statement with the Office of the Recorder
of the County.
3.5.4 FMPTA Affidavit. File the FIRPTA Affidavit with the United States
Internal Revenue Service.
3.5.5 Title Policy. Obtain and deliver the Title Policy to the Developer.
3.5.6 Distribution of Funds.
3.5.6.1 Funds deposited by Developer comprising the Purchase Price
shall be held in Escrow, and disbursed pursuant to the terms of Section 5.15 of this Agreement.
3.5.6.2 Funds deposited by the Housing Authority comprising the
principal amount of the Housing Authority Housing Fund Loan and the principal amount of the
Housing Authority Admin Fund Loan shall be disbursed to Developer at the Close of Escrow.
3.5.6.3 Funds deposited by the City comprising the principal amount of
the City Project Loan shall be disbursed to Developer at the Close of Escrow.
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3.5.7 Original Notes. Deliver the original Housing Authority Housing Fund
Loan Note and Housing Authority Admin Fund Loan Note to the Housing Authority. Deliver the
original City Project Fund Loan Note to the City.
3.5.8 Original Verizon Wireless License Assignment. Deliver the original
Verizon Wireless License Assignment to Developer.
3.6 Close of Escrow. The Close of Escrow shall occur on or before the Escrow Closing
Date. The City, the Housing Authority, and the Developer may mutually agree to change the
Escrow Closing Date by joint written instruction to the Escrow Holder. The City Manager and
Executive Director are authorized to agree to one or more extensions of the Escrow Closing Date
on behalf of the City and Housing Authority, respectively, up to a maximum time period extension
of six (6) months in the aggregate, in the City Manager's sole and absolute discretion. If for any
reason the Close of Escrow has not occurred by the Escrow Closing Date, then any Party not then
in default of this Agreement may cancel the Escrow and terminate this Agreement, subject to the
notice and cure provisions of Section 8.1 (to the extent applicable), without liability to any other
Party or any other person for such termination and cancellation, by delivering written notice of
termination to the other Party(ies) and Escrow Holder and, thereafter, the Parties shall proceed
pursuant to Section 3.10 if the non -terminating Party is not in default or pursuant to Section 8. 1,
8.2, or 8.3 (as applicable) if the non -terminating Party is in default. Without limiting the right of
any Party to terminate this Agreement, pursuant to the preceding sentence, if Escrow does not
close on or before the Escrow Closing Date, and no Party has exercised its contractual right to
cancel Escrow and terminate this Agreement before such time, then Escrow shall close as soon as
reasonably possible following the first date on which Escrow Holder is in a position to close the
Escrow pursuant to the terms and conditions of this Agreement.
3.7 Recordation and Distribution of Documents. As applicable, Escrow Holder shall
cause the following documents to be recorded in the official records of the Recorder of the County
in the following order at the Close of Escrow: (a) the Grant Deed; (b) the land use restriction
agreement required by the County for the County Loan; (c) the Regulatory Agreement; (d) the
Permitted Security Instrument(s) securing the Construction Financing; (e) the deed of trust
securing the County Loan; (f) the Notice of Agreement; (g) the Housing Authority Loans Deed of
Trust; (h) the City Project Loan Deed of Trust; (i) the land use restriction agreement required by
the Lender of the Subordinate Loan(s); 0) the deed of trust securing the Subordinate Loan(s); (k)
the Subordination Agreements described in Sections 3.3.15 and 3.4.8; and (1) any other documents
to be recorded through the Escrow upon the joint instructions of the City and the Developer. The
Escrow Holder shall deliver conformed copies of all documents filed for recording in the official
records of the County through the Escrow to the City, the Developer and any other entity or person
designated in the written joint escrow instructions of the Parties to receive an original or conformed
copy of each such document. Each copy of a document filed for recording shall show all recording
information. The Parties intend and agree that this Section 3.7 shall establish the relative priorities
of the documents to be recorded in the official records of the County through the Escrow, by
providing for recordation of senior interests prior in time to junior interests, as provided in this
Section 3.7.
3.8 Escrow Closing Costs, Taxes and Title Policy Premium. The City and the
Developer shall each pay one-half (1/2) of the Escrow fees and such other costs as Escrow Holder
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may charge for the conduct of the Escrow. Escrow Holder shall notify the Developer and the City
of the costs to be borne by each of them at the Close of Escrow by delivering the Escrow Holder's
estimated closing/settlement statement to both the City and the Developer at least four (4) business
days prior to the Escrow Closing Date. The City shall pay the premium charged by the Title
Company for the standard Title Policy for the PSH Property, exclusive of any endorsements or
other supplements to the coverage of such Title Policy that may be requested by the Developer, as
well as documentary transfer taxes and any and all other charges, fees and taxes levied by a
Governmental Agency relative to the conveyance of any portion of the PSH Property through the
Escrow transaction contemplated in this Agreement. The Developer shall pay any and all recording
fees relative to the conveyance of any portion of the PSH Property through the Escrow transaction
contemplated in this Agreement.
3.9 Escrow Cancellation Charges. If the Escrow fails to close due to the City's
material default under this Agreement and the Escrow is cancelled and this Agreement is
terminated, the City shall pay all ordinary and reasonable Escrow and title order cancellation
charges. If the Escrow fails to close due to the Housing Authority's material default under this
Agreement and the Escrow is cancelled and this Agreement is terminated, the City shall pay all
ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close
due to the Developer's material default under this Agreement and the Escrow is cancelled and this
Agreement is terminated, the Developer shall pay all ordinary and reasonable Escrow and title
order cancellation charges. If the Escrow fails to close for any reason other than the material default
of either the Developer, the City, or Housing Authority and the Escrow is cancelled and this
Agreement is terminated, the Developer and the City shall each pay one-half (1/2) of any ordinary
and reasonable Escrow and title order cancellation charges.
3.10 Escrow Cancellation. If this Agreement is terminated and the Escrow cancelled
pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement
and cancel the Escrow, other than due to the material default of another Party, the Parties shall do
each of the following:
3.10.1 Cancellation Instructions. The Parties shall, within three (3) business days
of receipt of Escrow Holder's written request, execute any reasonable Escrow cancellation
instructions requested by Escrow Holder;
3.10.2 Return of Funds and Documents. Within ten (10) days of receipt by the
Parties of a settlement statement of Escrow and title order cancellation charges from Escrow
Holder: (a) the Developer or Escrow Holder shall return to the City any documents previously
delivered by the City to the Developer or Escrow Holder, (b) the Developer or Escrow Holder shall
return to the Housing Authority any documents previously delivered by the Housing Authority to
the Developer or Escrow Holder, (c) the City or Escrow Holder shall return to the Developer all
documents previously delivered by the Developer to the City or Escrow Holder; (d) the Housing
Authority or Escrow Holder shall return to the Developer all documents previously delivered by
the Developer to the Housing Authority or Escrow Holder; (e) Escrow Holder shall return to the,
Developer any funds deposited by Developer into Escrow, less the Developer's share of customary
and reasonable Escrow and title order cancellation charges, if any; (f) Escrow Holder shall return
to the City any funds deposited by City into Escrow if it has already been deposited, less the City's
share of customary and reasonable Escrow and title order cancellation charges, if any; and (g)
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Escrow Holder shall return to the Housing Authority any funds deposited by Housing Authority
into Escrow if it has already been deposited, less the Housing Authority's share of customary and
reasonable Escrow and title order cancellation charges, if any.
3.11 Report to IRS. Following the Close of Escrow and prior to the last date on which
such report is required to be filed with the Internal Revenue Service, if such report is required
pursuant to Section 6045(e) of the Internal Revenue Code, Escrow Holder shall report the gross
proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099-
B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to
Section 6045(e). Upon the filing of such reporting form with the Internal Revenue Service, Escrow
Holder shall deliver a copy of the filed form to the City and the Developer.
3.12 Oblintions that Survive Escrow Cancellation and Termination.
Notwithstanding anything to the contrary in this Agreement, termination of this Agreement shall
not relieve any Party from any indemnification obligations under this Agreement and/or from any
liability from a default under this Agreement.
ARTICLE IV.
PSH PROJECT DEVELOPMENT
4.1 Developer Covenant to Undertake PSH Project. The Developer covenants, for
itself, its successors and assigns, to and for the benefit of the City, that the Developer shall
commence and complete the development of the PSH Project on the PSH Property within the time
period for such actions set forth in the PSH Schedule of Performance. The Developer covenants
and agrees for itself, its successors, and assigns, that the PSH Property shall be improved and
developed with the PSH Project in substantial conformity with the terms and conditions of this
Agreement, the PSH Scope of Development, the PSH Schedule of Performance, any and all plans,
specifications and similar development documents required by this Agreement, except for such
changes as may be mutually agreed upon in writing by and between the Parties, and all applicable
laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the
PSH Property or the PSH Project. The covenants of this Section 4.1 shall run with the land of the
PSH Property until the date of recordation of the Certificate of Completion.
4.2 Developer shall have access over the City Hall Property as necessary for design and
construction of the PSH Project beginning upon the City Hall Relocation Date and terminating
upon issuance of the Certificate of Completion.
4.3 City and OCTA shall have access over portions of the City Hall Property and PSH
Property as necessary for design and construction of the City and the Orange County
Transportation Authority project to replace the existing railroad bridge and construct a new bridge
over San Juan Creek. The terms of such access shall be set forth in one or more temporary
construction easement agreements to be recorded against the City Hall Property and PSH Property
prior to or at the Close of Escrow.
4.4 City may elect to participate in any and all design meetings with Developer and its
construction manager, architect, and other design professionals as appropriate in the course of the
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development and completion of design drawings and specifications for the PSH Project Plans and
Specifications in order to facilitate the approval of same. City shall promptly review all drawings
and specifications for each phase within the time frame for such decision in accordance with the
PSH Schedule of Performance (or if no such time is provided then within five (5) business days
following City's receipt of drawings and specifications). City shall give Developer written notice
of its approval or disapproval thereof, specifying in the case of its disapproval each specific reason
therefore. City shall have the sole and absolute right to disapprove such drawings and
specifications that (i) do not meet the requirements of the approved entitlements, (ii) do not comply
with requirements of law, (iii) are not consistent with the prior approved drawings and
specifications, or (iv) propose changes in work or materials that would result in a material change
in appearance or diminution in quality of the PSH Project. If no written objections are received by
Developer from City within such the aforementioned applicable time period, then the submittal
shall be deemed approved. The Parties hereby acknowledge and agree that each subsequent phase
of drawings and specifications are intended to add additional detail to the previously approved
phase of drawings and specifications and are not intended to otherwise change the previously
approved drawings and specifications. City may request and obtain changes to previously
approved drawings and specifications that are non -material changes (i.e., changes that do not
increase Developer's cost or time). Developer acknowledges that this provision in no way
alleviates Developer from its obligation to proceed through the City's normal development review
procedure process pursuant to law and the City's Municipal Code.
4.5 Developer Changes to PSH Proiect Plans and Specifications During Course of
Construction. The Developer shall have the right during the course of construction of the PSH
Project to make "minor field changes," without seeking the approval of the City, if such changes
do not affect the type of use to be conducted within all or any portion of a structure. As used in
this Section 4.5, "minor field changes" shall be defined as those changes from the approved PSH
Project Plans and Specifications that have no substantial effect on the PSH Project or are made in
order to expedite the work of construction in response to field conditions. The Developer shall
submit all other changes for the PSH Project, i.e. those changes which are not "minor field
changes", to the City for its review and approval no less than fifteen (15) days prior to the date
that the Developer intends to implement such changes. The City shall have ten (10) days from its
receipt of such proposed changes to review the same and advise the Developer in writing whether
such changes are acceptable to the City in its reasonable discretion. Any proposed changes which
are not disapproved by the City within such ten (10) day period shall be deemed approved. Nothing
contained in this Section 4.5 shall be deemed to constitute a waiver of or change in the City
Requirements (if any) governing "minor field changes" or other changes or in any approvals by
the City otherwise required (if any) for "minor field changes."
4.6 Construction Start and Completion of PSH Project. The Developer shall
commence construction of the PSH Project no later than the PSH Project Commencement Date
and, thereafter, shall diligently proceed to complete the construction of the PSH Project in a good
and workmanlike manner in substantial conformity with the approved plans, specifications, and
conditions forthe PSH Project approved by the City and the PSH Schedule of Performance, subject
to Unavoidable Delays. The Developer shall obtain a Certificate of Completion on or before the
PSH Project Completion Date, subject to Unavoidable Delays. The Developer will, promptly upon
Developer's completion of construction of the PSH Project, cause the PSH Project to be inspected
by each Governmental Agency with jurisdiction over the PSH Project, shall correct any defects
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and deficiencies that may be disclosed by any such inspection and shall cause to be duly issued all
occupancy certificates and other licenses, permits and authorizations necessary for the operation
and occupancy of the completed PSH Project. The Developer shall do and perform all of the
foregoing acts and things and cause to be issued and executed all such occupancy certificates,
licenses, and authorizations for the PSH Project on or before the PSH Project Completion Date.
After commencement of the work of improvement of the PSH Project, the Developer shall not
permit the work of improvement of the PSH Project to cease or be suspended for a time period in
excess of sixty (60) consecutive calendar days, subject to Unavoidable Delays.
4.7 Compliance with Laws. All work performed in connection with the development
of the PSH Project shall comply with all applicable Governmental Requirements.
4.8 PSH Schedule of Performance. The PSH Schedule of Performance establishes
various dates and times for the accomplishment of various tasks assigned to the City and the
Developer and the satisfaction of the conditions precedent to the close of the Escrow. The Parties
agree that time is of the essence in the performance of such tasks and the satisfaction of conditions
precedent, in view of the large investment of resources that all Parties recognize will be required
for the undertaking of the PSH Project. If the date or time for the performance of*a task or the
satisfaction of a condition, as set forth in either the text of this Agreement or in the PSH Schedule
of Performance, may not be achieved, then prior to such date or time set forth in the text of this
Agreement or the PSH Schedule of Performance, the Parties shall consider whether a modification
to the text of this Agreement or to the PSH Schedule of Performance is indicated. Any decision to
approve a modification to a time or date established in either the text of this Agreement or the PSH
Schedule of Performance shall be subject to the sole discretion of each Party. Any modification of
a time or date for performance of a particular task or satisfaction of a particular condition that does
not result in a change of more than one hundred eighty (180) days may be approved on behalf of
the City by the City Manager, in his or her reasonable discretion. A modification of a time or date
for performance of a task or satisfaction of a condition (or a series of such modifications) that
results in an aggregate change of more than one hundred eighty (180) days shall be subject to the
approval of the City Council, in its sole and absolute discretion. Notwithstanding anything to the
contrary in this Section 4.8, if performance of a task or satisfaction of a condition in the Schedule
Performance is prevented or delayed by Unavoidable Delays, the deadline for completion of such
task or satisfaction of such condition shall be extended by the period of such Unavoidable Delays.
4.9 Developer Attendance at City Meetings. The Developer agrees to have one or
more of its employees or consultants who are knowledgeable regarding this Agreement and the
development of the PSH Project, such that such person(s) can meaningfully respond to City
questions regarding the progress of the PSH Project, attend City Council meetings, when requested
to do so on not less than ten (10) days prior written notice by City staff.
4.10 City's Right to Inspect PSH Project and PSH Property. Officers, employees,
agents and representatives of the City shall have the right of reasonable access to the PSH Property,
without the payment of charges or fees, during normal construction hours, during the period of
construction of the PSH Project to inspect the PSH Project and PSH Property. Such officers,
employees, agents or representatives of the City shall be those persons who are designated by the
City Manager. Any and all officers, employees, agents or representatives of the City who enter the
PSH Property shall identify themselves at the construction management office on the Property,
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upon their entrance on to the PSH Property, and shall at all times be accompanied by a
representative of the Developer, while on the PSH Property. The Developer shall make a
representative of the Developer available for this purpose at all times during normal construction
hours, upon not less than forty-eight (48) hours' prior written notice from the City.
Notwithstanding the foregoing, City's construction management representative, as designated by
the City Manager, shall have full access to the PSH Property during the period of construction of
the PSH Project. The City shall indemnify and hold the Developer harmless from injury, property
damage or liability arising out of the exercise by the City of the right of access to the PSH Property
provided in this Section 4.10, other than injury, property damage or liability arising from the active
negligence or willful misconduct of the Developer or its officers, agents or employees. The City
shall inspect relevant portions of the PSH Property, prior to issuing any written statements
reflecting adversely on the Developer's compliance with the terms and conditions of this
Agreement pertaining to development of the PSH Project. If in the City's reasonable judgment it
is necessary, the City shall have the further right, from time to time, to retain a consultant or
consultants to inspect the PSH Project and verify compliance by the Developer with the provisions
of this Agreement. The Developer acknowledges and agrees that any such inspections are for the
sole purpose of protecting the City's rights under this Agreement, are made solely for the City's
benefit, that the inspections may be superficial and general in nature, and are for the purposes of
informing the City of the progress of the PSH Project and the conformity of the PSH Project with
the terms and conditions of this Agreement, and that the Developer shall not be entitled to rely on
any such inspection(s) as constituting an approval, satisfaction or acceptance of any materials,
workmanship, conformity of the PSH Project with this Agreement or otherwise. The Developer
agrees to make its own regular inspections of the work of construction of the PSH Project to
determine that the quality of the PSH Project and all other requirements of the work of construction
of the PSH Project are being performed in a manner satisfactory to the Developer. The Developer
also agrees to promptly notify the City in writing should the Developer's inspections show any
matters that will prevent the PSH Project from being completed by the PSH Project Completion
Date set forth therefore in the Schedule of Performance. Without limiting the foregoing, the
Developer shall permit the City upon not less than forty-eight (48) hours' prior written notice to
examine and copy all books and account records and other papers relating to the PSH Property and
the construction of the PSH Project. The Developer will use commercially reasonable efforts to
cause all contractors, subcontractors and materialmen to cooperate with the City to enable such
examination.
4.12 Cost of Construction. Except as otherwise provided in this Agreement, the cost
and expense of undertaking and completing the PSH Project, including, without limitation,
constructing all legally imposed on- and off-site improvements, and providing all utilities therefor,
shall be borne by Developer at its sole cost, expense and liability. Developer shall be solely
responsible for payment of all City land use, construction, inspection, plan check and development
impact fees imposed by the City with respect to the development of the PSH Project. Developer
shall bear all costs and expenses associated with the processing and obtaining of the entitlements
and except as otherwise provided in this Agreement, shall bear all costs and expenses associated
with any and all terms, conditions, requirements, mitigation measures and other exactions imposed
on, or required in connection with, the entitlements.
4.13 Prevailing Wages.
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4.13.1 The Developer acknowledges that the City has not made any representation,
express or implied, to the Developer or any person associated with the Developer regarding
whether or not laborers employed relative to the construction of the PSH Project must be paid the
prevailing per diem wage rate for their labor classification, as determined by the State of
California, pursuant to Labor Code Sections 1720, et M. The Developer agrees with the City that
the Developer shall assume the responsibility and be solely responsible for determining whether
or not laborers employed relative to the construction of the PSH Project must be paid the prevailing
per diem wage rate for their labor classification.
4.13.2 The Developer, on behalf of itself, its successors, and assigns, waives and
releases the City from any right of action that may be available to it pursuant to Labor Code
Sections 1726 and 1781. The Developer acknowledges the protections of Civil Code Section 1542
relative to the waiver and release contained in this Section 4.13, which reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY."
BY INITIALING BELOW, THE DEVELOPER KNOWINGLY
AND VOLUNTARILY WAIVES THE PROVISIONS OF
SECTIO 1542 OL�LY IN CONNECTION WITH THE
WAN S AND LE SES OF THIS SECTION 4.13.2.
4.13.3 Additionally, in accordance with Section 8.6, the Developer shall
indemnify, defend with counsel acceptable to the City and hold the City harmless against any
claims pursuant to Labor Code Sections 1726 and 1781 and Prevailing Wage Actions arising from
this Agreement and pertaining to the development, construction, and/or operation of the PSH
Project.
4.14 Certificate of Completion.
4.14.1 Following the substantial completion of construction of the PSH Project,
and upon written request from the Developer for issuance of a Certificate of Completion as to.the
PSH Project, the City shall inspect the PSH Project to determine whether or not the PSH Project
has been substantially completed in compliance with this Agreement. If the City determines in it's
reasonable discretion that the PSH Project is complete and in substantial compliance with this
Agreement, the City Manager shall furnish the Developer with a Certificate of Completion. If the
City determines that the PSH Project is not in compliance with this Agreement, the City Manager
shall send written notice of each non -conformity to the Developer. The completion of the City
Hall Project shall not be required hereunder for the issuance of the Certificate of Completion for
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the PSH Project or for any certificate of occupancy or any other similar permit for the occupancy
and/or use of the PSH Project, nor shall any default hereunder relating to the City Hall Project
("City Hall Project Default"), including, but not limited to under Section 8.1.4.4, be considered a
default hereunder as to the PSH Project or relieve any obligation by the City to issue the Certificate
of Completion for the PSH Project or any certificate of occupancy or other similar permit for
occupancy and/or use of the PSH Project. Further, in no event shall any Institutional Lender
holding a Security Instrument on the PSH Project ("PSH Lender") or any successor to any PSH
Lender (or its nominee) following any foreclosure or deed in lieu of foreclosure of any Permitted
Security Instrument be obligated to cure any City Hall Project Default either to prevent the
termination of this Agreement as to the PSH Project or to cause the issuance of the Certificate of
Completion for the PSH Project or any certificate of occupancy or other similar permit for
occupancy and/or use of the PSH Project.
4.14.2 The Certificate of Completion, upon issuance, shall be evidence of the
City's conclusive determination of satisfactory substantial completion of the entirety of the PSH
Project pursuant to the terms of this Agreement. The City's issuance of the Certificate of
Completion does not constitute a waiver of the Developer's and contractors' responsibilities to
comply with the City approved plans and specifications. Additionally, the City reserves all rights
and remedies related to defective construction including but not limited to Code of Civil Procedure
Section 337.15.
4.14.3 The City shall not unreasonably withhold the issuance of a Certificate of
Completion. After the recordation of a Certificate of Completion, any person then owning or
thereafter purchasing, leasing or otherwise acquiring any interest in the PSH Property improved
with the PSH Project shall not (because of such ownership, purchase, lease or acquisition) incur
any obligation or liability under this Agreement regarding construction or installation of the PSH
Project except that such person shall be bound by any reservations, covenants, conditions,
restrictions and other interests recorded against the PSH Property pursuant to this Agreement and
the Grant Deed.
4.14.4 If the City fails or refuses to issue a Certificate of Completion following
written request from the Developer, the City shall, within fifteen (15) calendar days of the
Developer's written request or within three (3) calendar days after the next regular meeting of the
City Council, whichever date occurs later, provide the Developer with a written statement setting
forth the reasons for the City's failure or refusal to issue a Certificate of Completion. The statement
shall also contain the City's opinion of the action(s) the Developer must take to obtain a Certificate
of Completion from the City. If the reason for the Developer's failure to complete the PSH Project
is confined to the immediate unavailability of specific items or materials for construction or
landscaping at a price reasonably acceptable to the Developer or other minor building "punch -
list" items, the City may issue its Certificate of Completion upon the posting of a bond or
irrevocable standby letter of credit by the Developer in a form reasonably acceptable to the City
in an amount representing the fair value of the work on the PSH Project remaining to be completed,
as reasonably determined by the City. If the City fails to provide such written statement, within
the specified time period, the Developer shall be deemed conclusively and without further action
of the City to have satisfied the requirements of this Agreement with respect to the PSH Project,
as if a Certificate of Completion had been issued by the City pursuant to this Agreement.
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4.14.5 A Certificate of Completion shall not constitute evidence of compliance
with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer
of a mortgage securing money loaned to finance the PSH Project, or any parts thereof. A Certificate
of Completion shall not be deemed to constitute a notice of completion under Section 3093 of the
California Civil Code, nor shall it act to terminate the continuing covenants, restrictions or
conditions contained in the Grant Deed or any other instruments recorded against the PSH Property
pursuant to this Agreement. A Certificate of Completion is not evidence of the compliance of the
PSH Project with any City Requirements or any building code, conditions of approval, land use,
zoning or other requirements of the City or any Governmental Agency with jurisdiction over the
PSH Property, other than the City.
4.14.6 In addition to the requirements of Section 4.14, above, a Certificate of
Completion shall not be issued until a Certificate of Occupancy has been issued for the PSH
Project.
4.15 Proiect Marketlnls Plan. At least six (6) months prior to the substantial completion
of construction of the PSH Project, Developer shall submit to the City Manager an affirmative fair
housing marketing plan for the PSH Project. Within ten (10) calendar days after the City Manager
receives such marketing plan submitted by Developer, the City Manager shall approve or
disapprove such marketing plan. The City's failure to approve such marketing plan within the
specified ten (10) calendar day period, shall constitute City's deemed approval of such marketing
plan.
ARTICLE V.
CITY HALL PROJECT DEVELOPMENT
5.1 Developer Covenant to Undertake City Hall Project; Design and Construction
Requirements.
5.1.1 The Developer covenants, for itself, its successors and assigns, to and for
the benefit of the City, that the Developer shall commence and complete the development of the
City Hall Project on the City Hall Property within the time period for such actions set forth in the
City Hall Schedule of Performance. The Developer covenants and agrees for itself, its successors,
and assigns, that the City Hall Property shall be improved and developed with the City Hall Project
in substantial conformity with the terms and conditions of this Agreement, the City Hall Plans and
Specifications, City Hall Exclusions and Clarifications, City Hall Schedule of Performance, City
Hall Project Budget, and any and all plans, specifications and similar development documents
approved by the City, except for such changes as may be mutually agreed upon in writing by and
between the Parties, and all applicable laws, regulations, orders and conditions of each
Governmental Agency with jurisdiction over the City Hall Property or the City Hall Project.
5.1.2 Developer shall have access over the City Hall Property as necessary for
design and construction of the City Hall Project beginning upon the City Hall Relocation Date and
terminating upon issuance of the Acceptance of Completion.
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5.1.3 City and OCTA shall have access over portions of the City Hall Property
and PSH Property as necessary for design and construction of the City and the Orange County
Transportation Authority project to replace the existing railroad bridge and construct a new bridge
over San Juan Creek. The terns of such access shall be set forth in one or more temporary
construction easement agreements to be recorded against the City Hall Property and PSH Property
prior to or at the Close of Escrow.
5.1.4 Developer shall famish all plans, labor, technical and professional design
services, supervision, materials and equipment, other than such materials and equipment as may
be specified to be furnished by City, and perform all operations necessary to complete construction
of the City Hall Project in substantial conformance with the City Hall Plans and Specifications.
Developer is an independent contractor and not an agent of City. The Developer shall be liable to
City for any damages to the extent arising as a result of the Developer's failure to comply with the
obligations of this paragraph. Developer shall have no liability to City for any damages to the
extent caused by City's willful misconduct or active negligence.
5.1.5 Developer shall construct the City Hall Project in a skillful and competent
manner, consistent with the standards generally recognized as being employed by professionals
qualified to perform such services in the same discipline in the State of California.
5.1.6 Developer shall have only appropriately licensed contractors and
subcontractors performing work on the City Hall Project as required by the Business and
Professions Code.
5.1.7 Developer shall ensure that all contractors and subcontractors perform all
services for the City Hall Project in a skillful and competent manner, consistent with the standards
generally recognized as being employed by professionals qualified to perform such services in the
same discipline in the State of California.
5.1.8 City may elect to participate in any and all design meetings with Developer
and its construction manager, architect, and other design professionals as appropriate in the course
of the development and completion of design drawings and specifications for the City Hall Project
Plans and Specifications in order to facilitate the approval of same. City shall promptly review all
drawings and specifications for each phase within the time frame for such decision in accordance
with the City Hall Schedule of Performance (or if no such time is provided then within five (5)
business days following City's receipt of drawings and specifications). City shall give Developer
written notice of its approval or disapproval thereof, specifying in the case of its disapproval each
specific reason therefore. City shall have the sole and absolute right to disapprove such drawings
and specifications that (i) do not meet the requirements of the approved entitlements, (ii) do not
comply with requirements of law, (iii) are not consistent with the prior approved drawings and
specifications, or (iv) propose changes in work or materials that would result in a material change
in appearance or diminution in quality of the City Hall Project. If no written objections are received
by Developer from City within such the aforementioned applicable time period, then the submittal
shall be deemed approved. The Parties hereby acknowledge and agree that each subsequent phase
of drawings and specifications are intended to add additional detail to the previously approved
phase of drawings and specifications and are not intended to otherwise change the previously
approved drawings and specifications. City may request and obtain changes to previously
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approved drawings and specifications that are non -material changes (i.e., changes that do not
increase Developer's cost or time). Developer acknowledges that this provision in no way
alleviates Developer from its obligation to comply with City Requirements.
5.1.9 Developer shall use commercially reasonable efforts to erect a fence and
landscape the northern boundary of the City Hall Property to screen any impacts of the City Hall
Project and PSH Project on neighboring lots to the north of the City Hall Project.
5.1.10 Developer shall offer a training session on the City Hall Project building
system operations within ten (10) calendar days following a request by the City Manager. The
training session shall accommodate employees reasonably designated by the City Manager for
such training.
5.2 Changes in Work.
5.2.1 _Developer Changes to City Hall Plans and Specifications During
Course of Construction. The Developer shall have the right during the course of construction of
the City Hall Project to make "minor field changes," without seeking the approval of the City, if
such changes do not affect the type of use to be conducted within all or any portion of a structure.
As used in this Section 5.2, "minor field changes" shall be defined as those changes from the
approved City Hall Plans and Specifications that have no substantial effect on the City Hall Project
or are made in order to expedite the work of construction in response to field conditions. The
Developer shall submit all other changes for the City Hall Project, i.e. those changes which are not
"minor field changes", to the City for its review and approval no less than fifteen (15) days prior
to the date that the Developer intends to implement such changes. The City shall have ten (10)
days from its receipt of such proposed changes to review the same and advise the Developer in
writing whether such changes are acceptable to the City in its reasonable discretion. Any proposed
changes which are not disapproved by the City within such ten (10) day period shall be deemed
approved. Nothing contained in this Section shall be deemed to constitute a waiver of or change
in the City Requirements (if any) governing "minor field changes" or other changes or in any
approvals by the City otherwise required (if any) for "minor field changes."
5.2.2 City -Directed Changes. City shall have the right during the course of
construction of the City Hall Project to order changes to the City Hall Project that are within the
general scope of the City Hall Project consisting of additions, deletions or other revisions (any
such change, a "City -Directed Change"), pursuant to the terms of this Section 5.2.2.
5.2.2.1 City shall submit any proposed City -Directed Change to
Developer, in writing. Within fifteen (15) business days after Developer's receipt of any such
request, Developer shall submit a fixed price proposal for the requested change to City (a "Fixed
Price Proposal"). The Fixed -Price Proposal shall contain a quantity survey including quantity
calculations, area calculations, unit prices, labor hours, rates and any other information applicable
to the Fixed -Price Proposal. If Developer's time of performance is changed as a result of the
proposed City -Directed Change, the extent of any time extensions shall be included in the Fixed -
Price Proposal. If City objects to Developer's Fixed -Price Proposal, City shall promptly notify
Developer, and City and Developer shall thereafter meet and confer to determine if the Parties are
able to reach agreement.
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5.2.2.2 If City and Developer are unable to reach an agreement as to a
Fixed Price Proposal, then within five (5) business days following the meet and confer, City shall
submit to Developer a proposal to perform the proposed City -Directed Change on a time and
materials basis with a not -to -exceed price (a "Time and Materials Proposal"). The cost of such
City -Directed Change shall then be determined on the basis- of the reasonable expenditures and
savings of those performing the work attributable to the City -Directed Change, including, in the
case of an increase in the costs as set forth in the City Hall Project Budget, a percentage fee for
overhead and profit of fifteen percent (15%) of its actual cost for each subcontractor and a fee for
QDCI of eight percent (8%). For work performed by QDCI's own forces, Developer's mark-up
shall be limited to actual cost plus a percentage fee for overhead and profit often percent (101/6),
or as otherwise agreed in writing between City and Developer. For purposes of calculating the fee
for overhead and profit of QDCI and QDCI's subcontractors, actual cost is defined pursuant to
subparagraph 5.2.2.4 below. Developer shall keep and present an itemized accounting of all costs
incurred in performing the changed work together with appropriate supporting data. If City objects
to Developer's Time and Materials Proposal, City shall promptly notify Developer, and City and
Developer shall thereafter meet and confer to determine if the Parties are able to reach agreement.
5.2.2.3 If City and Developer are unable to reach an agreement as to a
Time and Materials Proposal, City shall have the right to employ a separate contractor or
contractors to perform such work. Developer shall afford such separate contractor(s) reasonable
opportunity for the introduction and storage of their materials and equipment for the execution of
the additional work and shall fully and properly coordinate its work with the work of such separate
contractor(s).
5.2.2.4 For the purposes of subparagraph 5.2.2.2 above, actual cost shall
be defined and limited to (i) the actual net cost of materials directly attributable to such work,
including sales tax and cost of delivery; (ii) the actual cost of labor, including social security,
unemployment insurance, and fringe benefits required by agreement or custom; workers'
compensation insurance directly attributable to such work; (iii) bond and insurance premiums (if
any) directly attributable to such work; (iv) rental value of equipment and machinery obtained and
used specifically for such work; and (v) the additional cost of field supervisory personnel for
supervision directly attributable to such work. Actual cost does not include any item which could
be deemed to be a general conditions cost or overhead, such as but not limited to, the cost of QDCI
and subcontractor supervisory personnel presently assigned to the City Hall Project, and field
office and related expenses; unless additional costs for such items are incurred pursuant to an
approved extension to the time of performance caused by the proposed City -Directed Change.
5.2.2.5 Developer may propose alternative material submittals should
those materials meet similar performance specifications identified in Exhibit "M-5". The Parties
will meet and confer regarding such proposed alternative. The use of such proposed alternative is
subject to City's approval in its discretion.
5.3 Construction Start and Completion of City Hall Project. The Developer shall
commence construction of the City Hall Project no later than the City Hall Project Commencement
Date and, thereafter, shall diligently proceed to complete the construction of the City Hall Project
in a skillful and competent manner, consistent with the standards generally recognized as being
employed by professionals qualified to perform such services in the same discipline in the State of
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California, in substantial conformity with the approved plans, specifications, and conditions for
the City Hall Project approved by the City and the City Hall Schedule of Performance, subject to
Unavoidable Delays. After commencement of the work of improvement of the City Hall Project,
the Developer shall not permit the work of improvement of the City Hall Project to cease or be
suspended for a time period in excess of thirty (30) consecutive calendar days, subject to
Unavoidable Delays. The Developer will, promptly upon completion of construction of the City
Hall Project, cause the City Hall Project to be inspected by each Governmental Agency with
jurisdiction over the City Hall Project, shall correct any defects and deficiencies that may be
disclosed by any such inspection and shall cause to be duly issued all occupancy certificates and
authorizations necessary for the occupancy of the completed City Hall Project. The Developer
shall do and perform all of the foregoing acts and things and cause to be issued and executed all
such occupancy certificates and authorizations for the City Hall Project on or before the date set
forth therefor in the City Hall Schedule of Performance as the completion date for the City Hall
Project. The Developer shall obtain an Acceptance of Completion on or before the City Hall
Project Completion Date, subject to Unavoidable Delays.
5.4 Compliance with Laws. All work performed in connection with the development
of the City Hall Project shall comply with all applicable Governmental Requirements.
5.5 City Hall Schedule of Performance. The City Hall Schedule of Performance
establishes various dates and times for the accomplishment of various tasks assigned to the City
and the Developer and the satisfaction of the conditions precedent to Developer's obligation to
commence construction of the City Hall Project. The Parties agree that time is of the essence in
the performance of such tasks and the satisfaction of conditions precedent, in view of the large
investment of resources that all Parties recognize will be required for the undertaking of the City
Hall Project. If the date or time for the performance of a task or the satisfaction of a condition, as
set forth in either the text of this Agreement or in the City Hall Schedule of Performance, may not
be achieved, then prior to such date or time set forth in the text of this Agreement or the City Hall
Schedule of Performance, the Parties shall consider whether a modification to the text of this
Agreement or to the City Hall Schedule of Performance is indicated. Any decision to approve a
modification to a time or date established in either the text of this Agreement or the City Hall
Schedule of Performance shall be subject to the sole discretion of each Party. Any modification of
a time or date for performance of a particular task or satisfaction of a particular condition that does
not result in a change of more than one hundred eighty (180) days may be approved on behalf of
the City by the City Manager, in his or her reasonable discretion. A modification of a time or date
for performance of a task or satisfaction of a condition (or a series of such modifications) that
results in an aggregate change of more than one hundred eighty (180) days shall be subject to the
approval of the City Council, in its sole and absolute discretion. Notwithstanding anything to the
contrary in this Section 5.5, if performance of a task or satisfaction of a condition in the City Hall
Schedule Performance is prevented or delayed by Unavoidable Delays, the deadline for completion
of such task or satisfaction of such condition shall be extended by the period of such Unavoidable
Delays.
5.6 Developer Attendance at City Meetings. The Developer agrees to have one or
more of its employees or consultants who are knowledgeable regarding this Agreement and the
development of the City Hall Project, such that such person(s) can meaningfully respond to City
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questions regarding the progress of the City Hall Project, attend City Council meetings, when
requested to do so on not less than ten (10) days prior written notice by City staff.
5.7 City's Right to Inspect City Hall Project and City Hall Property. Officers,
employees, agents and representatives of.the City shall have the right of reasonable access to the
City Hall Property, without the payment of charges or fees, during normal construction hours,
during the period of construction of the City Hall Project for inspection of the City Hall Project
and City Hall Property. Such officers, employees, agents or representatives of the City shall be
those persons who are designated by the City Manager. Any and all officers, employees, agents or
representatives of the City who enter the City Hall Property shall identify themselves at the
construction management office on the Property, upon their entrance on to the City Hall Property,
and shall at all times be accompanied by a representative of the Developer, while on the City Hall
Property. The Developer shall make a representative of the Developer available for this purpose
at all times during normal construction hours, upon not less than forty-eight (48) hours' prior
written notice from the City. Notwithstanding the foregoing, City's construction management
representative, as designated by the City Manager, shall have full access to the City Hall Property
during the period of construction of the City Hall Project. The City shall indemnify and hold the
Developer harmless from injury, property damage or liability arising out of the exercise by the
City of the right of access to the City Hall Property provided in this Section 5.7, other than injury,
property damage or liability arising from the active negligence or willful misconduct of the
Developer or its officers, agents or employees. The City shall inspect relevant portions of the City
Hall Property, prior to issuing any written statements reflecting adversely on the Developer's
compliance with the terms and conditions of this Agreement pertaining to development of the City
Hall Project. If in the City's reasonable judgment it is necessary, the City shall have the further
right, from time to time, to, retain a consultant or consultants to inspect the City Hall Project and
verify compliance by the Developer with the provisions of this Agreement. The Developer
acknowledges and agrees that any such inspections are for the sole purpose of protecting the City's
rights under this Agreement, are made solely for the City's benefit, that the inspections may be
superficial and generalin nature, and are for the purposes of informing the City of the progress of
the City Hall Project and the conformity of the City Hall Project with the terms and conditions of
this Agreement, and that the Developer shall not be entitled to rely on any such inspection(s) as
constituting an approval, satisfaction or acceptance of any materials, workmanship, conformity of
the City Hall Project with this Agreement or otherwise. At its own cost, Developer agrees to make
its own regular and special testing and inspections of the work of construction of the City Hall
Project to determine that the quality of the City Hall Project and all other requirements of the work
of construction of the City Hall Project are being performed in a manner satisfactory to the
Developer. The Developer also agrees to promptly notify the City in writing should the
Developer's inspections show any matters that will prevent the City Hall Project from being
completed by the City Hall Project Completion Date set forth therefore in the Schedule of
Performance. Without limiting the foregoing, the Developer shall permit the City upon not less
than forty-eight (48) hours' prior written notice to examine and copy all books and account records
and other papers relating to the City Hall Property and the construction of the City Hall Project.
The Developer will use commercially reasonable efforts to cause all contractors, subcontractors
and materialmen to cooperate with the City to enable such examination.
5.8 Cost of Construction. Except as set forth in this Section 5.8, the costs and expenses
incurred by Developer in undertaking and completing the City Hall Project, including, without
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limitation, constructing all legally imposed on- and off-site improvements, and providing all
utilities therefor, shall be borne by Developer at its sole cost, expense, and liability.
5.8.1 Through a collaborative planning and design process with City, Developer
has estimated that as of the Effective Date, the costs to construct the City Hall Project will be
approximately Ten Million Two Hundred Thousand Dollars ($10,200,000.00), as reflected in the
City Hall Project Budget, attached as Exhibit "M-4".
5.8.2 Subject to the terms and conditions of this Agreement, including, without
limitation, the terms of Section 1.1.4, Developer agrees to make the CEC Grant in the amount of
Five Hundred Thousand Dollars ($500,000.00) available to assist with Developer's obligation to
construct and complete the City Hall Project.
5.8.3 City agrees to make available the following funds to Developer to construct
and complete the City Hall Project, subject to the terms and conditions in this paragraph:
5.8.3.1 The Purchase Price of the PSH Property, which is Eight Million
Seven Hundred Fifty Thousand Dollars ($8,750,000.00);
5.8.3.2 Gap financing in the amount of Nine Hundred Fifty Thousand .
Dollars ($950,000.00) (the "Gap Financing").
5.8.3.3 Owner contingency in the amount of Two Hundred Forty -Two
Thousand Five -Hundred Dollars ($242,500.00) (the "Owner Contingency"). The Owner
Contingency shall be utilized to fund City -Directed Changes. Any request for a disbursement of
the Owner Contingency shall include proposed invoices, associated scopes of work, and any
additional information and documents reasonably necessary to evidence that such disbursement is
for purposes of funding a City -Directed Change, and shall be submitted to the City Manager for
review and approval, not to be unreasonably withheld or delayed. Any Owner Contingency not
expended in accordance with this paragraph shall remain the property of the City in its entirety.
5.8.3.4 The Purchase Price, Gap Financing, and Owner Contingency is
the amount of ($9,942,500.00) shall be defined as the "City Budgeted Amount." Except as
otherwise set forth in this Agreement and subject to the terms of this Agreement, City shall not be
obligated to contribute any funds to Developer beyond the City Budgeted Amount.
5.8.4 Notwithstanding any provision to the contrary in this Agreement, City shall
be solely responsible to pay, independent from the City Budgeted Amount, all of the following
additional costs associated with the City Hall Project:
5.8.4.1 Any and all application fees and costs associated with the
processing and obtaining of the entitlements for the City Hall Project. Developer acknowledges
that City has paid such fees for both the City Hall Project and PSH Project in the total amount of
Twenty -Six Thousand Three Hundred Sixteen Dollars and Twenty -Six Cents ($26,316.26).
5.8.4.2 Any and all impact fees associated with the City Hall Project,
including, without limitation, impact fees charged by other public agencies.
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5.8.4.3 Any and all City land use, plan check, permit, construction,
inspection permit fees and costs associated with the City Hall Project.
5.8.4.4 Any and all costs to remove and/or relocate all personnel, and
all furnishings, personal property, equipment, and other items and possessions from the existing
City of San Juan Capistrano City Hall facility.
5.8.4.5 Any and all costs associated with City's temporary off-site City
Hall operations, including, without limitation, any brokerage fees and/or commissions incurred in
connection with the obtainment of such temporary space, space rent, the cost of any tenant
improvements, set-up costs, furnishings, and/or costs incurred in relocating to such temporary
space.
5.8.4.6 Any and all costs incurred .by City for consultants and other
professionals, including without limitation a construction manager, retained by City in connection
with the City Hall Project.
5.8.4.7 Any and all costs associated with any City -Directed Changes, as
determined pursuant to the procedure in Section 5.2.2 above.
5.8.4.8 Any and all costs associated with any City Hall Exclusions and
Clarifications.
5.8.4.9 Any increased costs of construction attributable to an event of
an Unavoidable Delay for which Developer is entitled to a time extension under this Agreement.
5.8.4.10 Any increase in the cost of materials and/or labor occurring after
the Date of Approval (any such cost increase, a "Cost Increase"), as reasonably substantiated
through documentation provided by Developer and reasonably acceptable to City.
5.8.4.10.1 Promptly following the date Developer becomes
aware of a Cost Increase, Developer shall notify the City Manager, in writing, of the Cost Increase,
and promptly following such notification representatives of Developer and City shall meet and
confer, and Developer shall in good faith attempt to propose value engineering options and other
potential methods for cost savings. If following such efforts a Cost Increase remains, then within
twenty-one (21) days thereafter, City shall seek City Council approval for such Cost Increase.
Until such time as the City Council approves the Cost Increase, Developer shall have no obligation
to continue work on any portion of the City Hall Project affected by the Cost Increase. If the City
Council elects not to fund the Cost Increase, Developer's obligation to construct the City Hall
Project shall automatically terminate; provided Developer shall remain entitled to disbursement
for any substantiated costs incurred by Developer prior to the date of such termination with respect
to construction of the City Hall Project pursuant to the provisions of Section 5.15.
5.8.4.10.2 City and Developer acknowledge and agree that the
termination of Developer's obligation to construct the City Hall Project pursuant to
Section 5.8.4.10.1 shall have no effect on the provisions of this Agreement, and/or the Parties
obligations hereunder, pertaining to the development, construction and operation of the PSH
Project, including construction of the public improvements that serve both the City Hall Property
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and the PSH Property; provided, however, that in the event of such termination, City shall be
obligated to fund the costs for the public improvements identified in Exhibit M -1-g, all of which
are necessary for completion of the PSH Project. As of the Effective Date, the estimated cost of
such public improvements is Nine Hundred Seventy Eight Thousand Dollars ($978,000); provided
that City's funding obligation pursuant to this Section 5.8.4.10.2 shall also include any Cost
Increase that has occurred with respect to such public improvements.
5.8.4.10.3 Developer acknowledges and agrees that any
Unavoidable Delay in accordance with Section 9.7 for the PSH Project will have no effect on
Developer's obligation to continue with Developer's obligation to construct the City Hall Project
pursuant to this Agreement, and/or the Parties' obligations hereunder, pertaining to the
development and construction of the City Hall Project, except in the case that there is a similar
Unavoidable Delay for the City Hall Project.
5.9 Prevailina Wages. The City Hall Project is subject to the prevailing wage
requirements of the California Prevailing Wage Law, including California Labor Code
section 1720 et seq. (PWL) The Director of Industrial Relations has determined the general
prevailing rate of per diem wages in the locality in which this work is to be performed, copies of
which are on file and will be made available to any interested party upon request at the office of
the City or online at http://www.dir.ca.gov/dlsr. The Developer shall post these rates at the job site.
The Developer shall comply with all applicable Labor Code provisions, including but not limited
to, employment of apprentices, hours of labor and debarment of contractors. The Developer shall
indemnify, defend and hold harmless the Indemnified Parties against any and all claims, demands,
damages, defense costs or liabilities based on failure to adhere to the above referenced statutes.
5.9.1 The Developer shall cause all Persons performing construction work on the
City Hall Project, to comply with all applicable provisions of the PWL and other applicable wage
Laws.
5.9.2 The City hereby notifies the Developer and the Developer hereby
acknowledges that the PWL includes, without limitation, Labor Code Section 1771.1(b) that
provides that the following requirements described in Labor Code Section 1771.1(a) shall be
included in all bid invitations and "public work" contracts: A contractor or subcontractor shall not
be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of
the Public Contract Code, or engage in the performance of any contract for "public work", unless
it is currently registered and qualified to perform "public work" pursuant to Section 1725.5. It is
not a violation of Section 1771.1 for an unregistered contractor to submit a bid that is authorized
by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5 of the
Public Contract Code if the contractor is registered to perform "public work" pursuant to
Section 1725.5 at the time the contract is awarded.
5.9.3 The Developer acknowledges that an obligation applicable to "public
works" under the PWL for "public works" include, without limitation, ensuring that:
5.9.3.1 pursuant to Labor Code Section 1771.1(b), a bid shall not be
accepted nor any contract or subcontract entered into without proof of the contractor or
subcontractor's current registration to perform "public work" pursuant to Section 1725.5;
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5.9.3.2 pursuant to Labor Code Section 1771.4(a)(1), the call for bids
and contract documents shall specify that the project is subject to compliance monitoring and
enforcement by the California Department of Industrial Relations ("DIR');
5.9.3.3 pursuant to Labor Code Section 1771.4(a)(2), it posts or requires
the prime contractor to post job site notices, as prescribed by regulation; and
5.9.3.4 pursuant to Labor Code Section 1773.3(a)(1), it provides notice
to the DIR of any "public works" contract subject to the requirements of the PWL, within thirty
(30) days of the award, but in no event later than the first day in which a contractor has workers
employed upon the public work. Pursuant to Labor Code Section 1773.3(a)(2), the notice shall be
transmitted electronically in a format specified by the DIR and shall include the name and
registration number issued by the DIR pursuant to Section 1725.5 of the contractor, the name and
registration number issued by the DIR pursuant to Section 1725.5 of any subcontractor listed on
the successful bid, the bid and contract award dates, the contract amount, the estimated start and
completion dates, job site location, and any additional information that the DIR specifies that aids
in the administration and enforcement of the PWL. PWC -100 is the name of the form currently
used by the DIR for providing the notice, but the Developer shall determine and use whatever form
the DIR requires.
5.9.4 The City shall not be responsible for the Developer's failure to comply with
any applicable provisions of the PWL.
5.9.5 The Developer's violations of the PWL shall constitute a breach of this
Agreement.
5.9.6 Any subcontract entered into by Developer for the construction of City Hall
Project shall incorporate the provisions of the State Labor Code. Pursuant to the provisions of the
California Labor Code Section 1773.2, the minimum prevailing rate of per diem wages for each
craft, classification, or type of worker needed to execute the subcontract shall be those determined
by the Department of Industrial Relations of the State of California, which are on file in the Public
Works Department at City Hall and are available to any interested party on request.
5.9.7 Attention is directed to the provisions of Sections 1777.5 and 1777.6 of the
Labor Code, concerning the employment of apprentices by the Developer or any subcontractor
under him. The Developer and any subcontractor under him shall comply with the requirements
of said sections in the employment of apprentices. It shall be the Developer's sole responsibility
to evaluate and include the cost of complying with all labor compliance requirements.
5.9.8 Information relative to apprenticeship standards and administration of the
apprenticeship program may be obtained from the Department of Industrial Relations, California,
or the Division of Apprenticeship Standards and its branch offices.
5.9.9 Wage Determination. As required by the California Labor Code, the
Developer shall, as a penalty, forfeit to the City forty dollars ($40.00) for each calendar day, or
portion thereof, for each workman paid less than the stipulated prevailing rates for such work or
craft in which such workman is employed for work done under this contract by him or by any
subcontractor under him. In addition, the difference between such stipulated prevailing wage rates
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and the amount paid to each workman for each calendar day or portion thereof for which each
workman was paid less than the stipulated prevailing wage rate, shall be paid to each workman by
the Developer.
5.9.10 As required by the California Labor Code, the Developer shall, as a penalty,
forfeit to the City twenty-five ($25.00) for each workman employed in the execution of the contract
by the Developer or by any subcontractor under him for each calendar day during which such
workman is required or permitted to work more than eight (8) hours in any one (1) calendar day
and forty (40) hours in any one (1) calendar week, unless such worker received compensation for
all hours worked in excess of eight (8) hours per day at not less than 1.5 times the basic rate of
pay.
5.10 PAYROLL RECORDS
5.10.1 All invoices shall include a copy of Developer's Certified Payroll and proof
that Certified Payroll has been submitted to the DIR. Developer shall also submit a list of the
prevailing wage rates for all employees and subcontractors providing services under this
Agreement, as applicable, with Developer's first invoice. If these rates change at any time during
the term of the Agreement, Developer shall submit a new list of rates to the City with its first
invoice following the effective date of the rate change.
5.10.2 The Developer's attention is directed to the following provisions of Labor
Code Section 1776, "Payroll record of wages paid; Inspections; Forms; Effect of noncompliance;
Penalties". The Developer shall be responsible for the compliance with these provisions by their
subcontractors.
"(a) Each contractor and subcontractor shall keep accurate payroll records, showing the
name, address, social security number, work classification, straight time and overtime hours
worked each day and week, and the actual per diem wages paid to each journeyman, apprentice,
worker, or other employee employed by him or her in connection with the public work. Each
payroll record shall contain or be verified by a written declaration that it is made under penalty of
perjury, stating both of the following:
(1) The information contained in the payroll record is true and correct.
(2) The employer has complied with the requirements of Sections 1771, 1811, and 1815 for any
work performed by his or her employees on the public works project.
(b) The payroll records enumerated under subdivision (a) shall be certified and shall be
available for inspection at all reasonable hours at the principal office of the contractor on the
following basis:
(1) A certified copy of an employee's payroll record shall be made available for inspection or
furnished to the employee or his or her authorized representative on request.
(2) A certified copy of all payroll records enumerated in subdivision (a) shall be made available
for inspection or furnished upon request to a representative of the body awarding the contract and
the Division of Labor Standards Enforcement of the Department of Industrial Relations.
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(3) A certified copy of all payroll records enumerated in subdivision (a) shall be made available
upon request by the public for inspection or for copies thereof. However, a request by the public
shall be made through either the body awarding the contract or the Division of Labor Standards
Enforcement. If the requested payroll records have not been provided pursuant to paragraph (2),
the requesting party shall, prior to being provided the records, reimburse the costs of preparation
by the contractor, subcontractors, and the entity through which the request was made. The public
may not be given access to the records at the principal office of the contractor.
(c) Unless required to be furnished directly to the Labor Commissioner in accordance with
paragraph (3) of subdivision (a) of Section 1771.4, the certified payroll records shall be on forms
provided by the Division of Labor Standards Enforcement or shall contain the same information
as the forms provided by the division. The payroll records may consist of printouts of payroll data
that are maintained as computer records, if the printouts contain the same information as the forms
provided by the division and the printouts are verified in the manner specified in subdivision (a).
(d) A contractor or subcontractor shall file a certified copy of the records enumerated in
subdivision (a) with the entity that requested the records within 10 days after receipt of a written
request.
(e) Except as provided in subdivision (f), any copy of records made available for inspection
as copies and furnished upon request to the public or any public agency by the awarding body or
the Division of Labor Standards Enforcement shall be marked or obliterated to prevent disclosure
of an individual's name, address, and social security number. The name and address of the
contractor awarded the contract or the subcontractor performing the contract shall not be marked
or obliterated. Any copy of records made available for inspection by, or furnished to, a
multiemployer Taft -Hartley trust fund (29 U.S.C. See. 186(c)(5)) that requests the records for the
purposes of allocating contributions to participants shall be marked or obliterated only to prevent
disclosure of an individual's full social security number, but shall provide the last four digits of
the social security number. Any copy of records made available for inspection by, or furnished to,
a joint labor-management committee established pursuant to the federal Labor Management
Cooperation Act of 1978 (29 U.S.C. See. 175a) shall be marked or obliterated only to prevent
disclosure of an individual's social security number.
(f)(1) Notwithstanding any other provision of law, agencies that are included in the Joint
Enforcement Strike Force on the Underground Economy established pursuant to Section 329 of
the Unemployment Insurance Code and other law enforcement agencies investigating violations
of law shall, upon request, be provided nonredacted copies of certified payroll records. Any copies
of records or certified payroll made available for inspection and furnished upon request to the
public by an agency included in the Joint Enforcement Strike Force on the Underground Economy
or to a law enforcement agency investigating a violation of law shall be marked or redacted to
prevent disclosure of an individual's name, address, and social security number.
(2) An employer shall not be liable for damages in a civil action for any reasonable act or omission
taken in good faith in compliance with this subdivision.
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(g) The contractor shall inform the body awarding the contract of the location of the records
enumerated under subdivision (a), including the street address, city, and county, and shall, within
five working days, provide a notice of a change of location and address.
(h) The contractor or subcontractor has 10 days in which to comply subsequent to receipt
of a written notice requesting the records enumerated in subdivision (a). In the event that the
contractor or subcontractor fails to comply within the 10 -day period, he or she shall, as a penalty
to the state or political subdivision on whose behalf the contract is made or awarded, forfeit one
hundred dollars ($100.00) for each calendar day, or portion thereof, for each worker, until strict
compliance is effectuated. Upon the request of the Division of Labor Standards Enforcement, these
penalties shall be withheld from progress payments then due. A contractor is not subject to a
penalty assessment pursuant to this section due to the failure of a subcontractor to comply with
this section.
(i) The body awarding the contract shall cause to be inserted in the contract stipulations to
effectuate this section.
0) The director shall adopt rules consistent with the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and the
Information Practices Act of 1977 (Title 1.8 (commencing with Section 1798) of Part 4 of Division
3 of the Civil Code) governing the release of these records, including the establishment of
reasonable fees to be charged for reproducing copies of records required by this section."
5.10.3 Additionally, in accordance with Section 8.5, the Developer shall
indemnify, defend with counsel acceptable to the City and hold the City harmless against any
claims pursuant to Labor Code Sections 1726 and 1781 arising from this Agreement or the
construction of the Project.
5.11 NONDISCRIMINATION.
5.11.1 Developer and its subcontractors shall not unlawfully discriminate against
any employee or applicant for employment because of the race, religious creed, color, national
origin, ancestry, physical disability, mental disability, medical condition, genetic information,
marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran
or military status of any person. Developer and subcontractors shall insure that evaluation and
treatment of their employees and applicants for employment are free of such discrimination.
Developer and subcontractors shall comply with the provisions of the Fair Employment and
Housing Act (Government Code, Section 12900 et seg.). The applicable regulations of the Fair
Employment and Housing Commission implementing Government Code, Section 12990, set forth
in Chapter 5 of Division 4 of Title 2 of the California Administration Code are incorporated into
this contract by reference and made a part hereof as if set forth in full. Developer and its
subcontractors shall give written notice of their obligations under this clause to labor organizations
with which they have a collective bargaining or other agreement.
5.11.2 Developer shall include the nondiscrimination and compliance provisions
of this clause in all subcontracts to perform work under the contract.
5.12 Safety.
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DEVELOPER SHALL EXECUTE AND MAINTAIN ITS WORK SO AS TO AVOID
INJURY OR DAMAGE TO ANY PERSON OR PROPERTY. DEVELOPER SHALL AT
ALL TIMES BE IN COMPLIANCE WITH ALL APPLICABLE LOCAL, STATE AND
FEDERAL LAWS, RULES AND REGULATIONS, AND SHALL EXERCISE ALL
NECESSARY PRECAUTIONS FOR THE SAFETY OF EMPLOYEES APPROPRIATE
TO THE NATURE OF THE WORK AND THE CONDITIONS UNDER WHICH THE
WORK IS TO BE PERFORMED. SAFETY PRECAUTIONS, WHERE APPLICABLE,
SHALL INCLUDE, BUT SHALL NOT BE LIMITED TO: (A) ADEQUATE LIFE
PROTECTION AND LIFESAVING EQUIPMENT AND PROCEDURES; (B)
INSTRUCTIONS IN ACCIDENT PREVENTION FOR ALL EMPLOYEES AND
SUBCONTRACTORS, SUCH AS SAFE WALKWAYS, SCAFFOLDS, FALL
PROTECTION LADDERS, BRIDGES, GANG PLANKS, CONFINED SPACE
PROCEDURES, TRENCHING AND SHORING, EQUIPMENT AND OTHER SAFETY
DEVICES, EQUIPMENT AND WEARING APPAREL AS ARE NECESSARY OR
LAWFULLY REQUIRED TO PREVENT ACCIDENTS OR INJURIES; AND (C)
ADEQUATE FACILITIES FOR THE PROPER INSPECTION AND MAINTENANCE OF
ALL SAFETY MEASURES.
5.13 Additionally, in accordance with Section 8.5, the Developer shall indemnify,
defend with counselacceptable to the City and hold the City harmless against any claims pursuant
to Labor Code Sections 1726 and 1781 arising from this Agreement or the construction or
operation of the Project.
5.14 Trenching Requirements. Developer shall comply with the following provisions,
to the extent applicable:
5.14.1 Labor Code Section 6705
"No contract for public works involving an estimated expenditure in excess of twenty-five
thousand dollars ($25,000.00), for the excavation of any trench or trenches five feet or more in
depth, shall be awarded unless it contains a clause requiring submission by the contractor and
acceptance by the awarding body or by a registered civil or structural engineer, employed by the
awarding body, to whom authority to accept has been delegated, in advance of excavation, of a
detailed plan showing the design of shoring, bracing, sloping, or other provisions to be made for
worker protection from the hazard of caving ground during the excavation of such trench or
trenches. If such plan varies from the shoring system standards, the plan shall be prepared by a
registered civil or structural engineer.
Nothing in this section shall be deemed to allow the use of a shoring, sloping, or protective
system less effective than that required by the Construction Safety Orders.
Nothing in this section shall be construed to impose tort liability on the awarding body or
any of its employees.
The terms "public works" and "awarding body", as used in this section, shall have the same
meaning as in Sections 1720 and 1722, respectively, of the Labor Code."
5.14.2 Public Contract Code Section 7104
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"Any public works contract of a local public entity which involves digging trenches or
other excavations that extend deeper than four feet below the surface shall contain a clause which
provides the following:
(a) That the contractor shall promptly, and before the following conditions are disturbed,
notify the local public entity, in writing, of any:
(1) Material that the contractor believes may be material that is hazardous waste, as defined
in Section 25117 of the Health and Safety Code, that is required to be removed to a Class I, Class
II, or Class III disposal site in accordance with provisions of existing law.
(2) Subsurface or latent physical conditions at the site differing from those indicated by
information about the site made available to bidders prior to the deadline for submitting bids.
(3) Unknown physical conditions at the site of any unusual nature, different materially from
those ordinarily encountered and generally recognized as inherent in work of the character
provided for in the contract.
(b) That the local public entity shall promptly investigate the conditions, and if it finds that
the conditions do materially so differ, or do involve hazardous waste, and cause a decrease or
increase in the contractor's cost of, or the time required for, performance of any part of the work
shall issue a change order under the procedures described in the contract.
(c) That, in the event that a dispute arises between the local public entity and the contractor
whether the conditions materially differ, or involve hazardous waste, or cause a decrease or
increase in the contractor's cost of, or time required for, performance of any part of the work, the
contractor shall not be excused from any scheduled completion date provided for by the contract,
but shall proceed with all work to be performed under the contract. The contractor shall retain any
and all rights provided either by contract or by law which pertain to the resolution of disputes and
protests between the contracting parties."
5.15 Payment for Construction of City Hall Proiect.
5.15.1 Not more than once per month, Developer shall provide City with an
invoice, which may be in the form of a G702 Application and Certification for Payment (a
"Payment Request"), for the work performed to the City for approval, which shall not be
unreasonably withheld.
5.15.2 The City Manager shall provide written notice to Escrow to release the
undisputed Payment Request amount to Developer within fifteen (15) days following Developer
submission of the Payment Request to the City. However, the City Manager may withhold
authorizing Escrow to make the payment pending receipt of any outstanding reports required by
the Agreement. In addition, the final progress payment will not be released until the Developer
provides the City Manager with a set of Plans and Specifications showing the as -built conditions.
If the City Manager disputes any portion of the Payment Request, the City Manager shall promptly
provide Developer with a written explanation ofthe disputed portion and the Parties shall promptly
meet and confer in an effort to reach agreement.
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5.16 Acceptance of Completion of the City Hall Project.
5.16.1 Following the substantial completion of construction of the City Hall
Project, and upon written request from the Developer for issuance of an Acceptance of
Completion for the City Hall Project, the City shall inspect the City Hall Project to determine
whether or not the City Hall Project has been substantially completed in compliance with this
Agreement. If the City determines that the City Hall Project is complete and in compliance with
this Agreement, the City Manager shall furnish an Acceptance of Completion for the City Hall
Project. If the City determines that the City Hall Project is not in compliance with this
Agreement, the City Manager shall send written notice of each non -conformity to the Developer.
5.16.2 The Acceptance of Completion, upon issuance, shall be evidence of the
City's conclusive determination of satisfactory substantial completion of the entirety of the City
Hall Project pursuant to the terms of this Agreement. The City's issuance of the Acceptance of
Completion does not constitute a waiver of the Developer's and contractors' responsibilities to
comply with the City approved plans and specifications. Additionally, the City reserves all rights
and remedies related to defective construction including but not limited to Code of Civil Procedure
Section 337.15.
5.16.3 If the City fails or refuses to issue an Acceptance of Completion following
written request from the Developer, the City shall, within fifteen (15) calendar days of the
Developer's written request or within three (3) calendar days after the next regular meeting of the
City Council, whichever date occurs later, provide the Developer with a written statement setting
forth the reasons for the City's failure or refusal to issue an Acceptance of Completion. The
statement shall also contain the City's opinion of the action(s) the Developer must take to obtain
an Acceptance of Completion from the City. If the reason for the Developer's failure to complete
the City Hall Project is confined to the immediate unavailability of specific items or materials for
construction or landscaping at a price reasonably acceptable to the Developer or other minor
building "punch -list" items, the City may issue its Acceptance of Completion upon the posting of
a bond or irrevocable standby letter of credit by the Developer in a form reasonably acceptable to
the City in an amount representing the fair value of the work on the City Hall Project remaining to
be completed, as reasonably determined by the City. If the City fails to provide such written
statement, within the specified time period, the Developer shall be deemed conclusively and
without further action of the City to have satisfied the requirements of this Agreement with respect
to the City Hall Project, as if an Acceptance of Completion had been issued by the City pursuant
to this Agreement. An Acceptance of Completion shall not constitute evidence of compliance with
or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a
mortgage securing money loaned to finance the City Hall Project, or any parts thereof. An
Acceptance of Completion shall not be deemed to constitute a notice of completion under
Section 3093 of the California Civil Code. An Acceptance of Completion is not evidence of the
compliance of the City Hall Project with any City Requirements or any building code, conditions
of approval, land use, zoning or other requirements of the City or any Governmental Agency with
jurisdiction over the City Hall Property, other than the City.
5.16.4 In addition to the requirements of Section 5.16, above, an Acceptance of
Completion shall not be issued until a Certificate of Occupancy has been issued for the City Hall
Project.
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ARTICLE VI.
6.1 Obligation to Refrain from Discrimination. The Developer for itself, its
successors and assigns to all or any part or portion of the PSH Property and/or PSH Project,
covenants and agrees that there shall be no discrimination against or segregation of any person, or
group of persons, on account of sex, marital status, race, color, religion, creed, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the PSH
Property nor shall the Developer, 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, sub -tenants, sub -lessees or
vendees of the PSH Property. With respect to familial status, this Section 6.1 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 this Section 6.1 shall be construed to affect Section 51.2, 51.3,
51.4, 51.10, 51.11 and 799.5 of the Civil Code relating to housing for senior citizens. Subdivisions
(d) of Section 51 and Section 1360 of the Civil Code and subdivision (n), (o), and (p) of
Section 12955 of the Government Code shall apply to this Section 6.1. The covenant of this
Section 6.1 shall run with the land of the PSH Property and shall be enforceable against the
Developer and its successors and assigns in perpetuity and be a covenant in the Grant Deed and
the Notice of Agreement.
6.2 Form of Non -Discrimination and Non -Segregation Clauses. The Developer for
itself, its successors and assigns to all or any part or portion of the PSH Property and/or PSH
Project, covenants and agrees that:
6.2.1 The Developer, such successors and such assigns shall refrain from
restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the
PSH Property (or any portion thereof) on the basis of sex, marital status, race, color, religion,
creed, ancestry or national origin of any person. With respect to familial status, this Section 6.2.1
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 this Section 6.2.1 shall be construed
to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code relating to housing for
senior citizens. Subdivisions (d) of Section 51 and Section 1360 of the Civil Code and subdivision
(n), (o), and (p) of Section 12955 of the Government Code shall apply to this Section 6.2.1.
6.2.2 All deeds, leases or contracts pertaining to the PSH Property shall contain
or be subject to substantially the following non-discrimination or non -segregation covenants:
6.2.2.1 In deeds: "The 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 race, color,
creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee 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
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61147.8002 N0183270.13
of tenants, lessees, sub -tenants, sub -lessee, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land.
Notwithstanding the foregoing paragraph, with respect to familial
status, the foregoing paragraph 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 the
foregoing paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5
of the Civil Code relating to housing for senior citizens. Subdivisions (d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to foregoing paragraph."
6.2.2.2 In leases: "The lessee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and this lease is made and
accepted upon and subject to the following conditions: That there shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed, religion,
sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee 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, sub -lessee, sub -tenants, or vendees in the premises herein leased.
Notwithstanding the foregoing paragraph, with respect to familial
status, the foregoing paragraph 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 the
foregoing paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5
of the Civil Code relating to housing for senior citizens. Subdivisions (d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to the foregoing paragraph"
6.2.2.3 In contracts: "There shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed or leased, nor shall the transferee 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, sub -lessees, sub -tenants, or vendees of the premises herein transferred." The foregoing
provision shall be binding upon and shall obligate the contracting party or parties and any
subcontracting party or parties, or other transferees under the instrument.
"Notwithstanding the foregoing paragraph, with respect to familial
status, the foregoing paragraph 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 the
foregoing paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5
of the Civil Code relating to housing for senior citizens. Subdivisions (d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to the foregoing paragraph."
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6.2.3 The covenant of this Section 6.2 shall run with the land of the PSH Property
in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall
be covenants set forth in the Grant Deed.
6.3 Environmental Indemnity of the City by the Developer. The Developer agrees,
at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel
selected by the Developer and reasonably acceptable to the City) the City and its commissions,
agents, attorneys, officers, employees, and authorized representatives (collectively, the
"Indemnified Parties"), from and against any and all claims, demands, damages, losses,
liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings,
costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and
costs of attorneys, environmental consultants and other experts, and all foreseeable and
unforeseeable damages or costs of any kind or of any nature whatsoever (collectively,
"Environmental Claims") that may, at any time, be imposed upon, incurred or suffered by, or
claimed, asserted or awarded against, the Indemnified Parties, directly or indirectly relating to or
arising from any of the following "Environmental Matters" existing as described in the
Preliminary Report and those first occurring following the Close of Escrow, or arising from the
Developer's ownership of the PSH Property or construction or operation of the PSH Project:
6.3.1 The presence of Hazardous Substances on, in, under, from or affecting all
or any portion of the PSH Property or the PSH Project which first arose following the Close of
Escrow.
6.3.2 The storage, holding, handling, release, threatened release, discharge,
generation, leak, abatement, removal or transportation of any Hazardous Substances on, in,'under,
from or affecting the PSH Property or the PSH Project which first arose or occurred following the
Close of Escrow.
6.3.3 The violation of any law, rule, regulation, judgment, order, permit, license,
agreement, covenant, restriction, requirement or the like by the Developer, its agents or
contractors, relating to or governing in any way Hazardous Substances on, in, under, from or
affecting the PSH Property or the PSH Project.
6.3.4 The failure of the Developer, its agents or contractors, to properly complete,
obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the
like in connection with the Developer's activities on the PSH Property or regarding the PSH
Project.
6.3.5 The failure of Developer, its agents or contractors, in compliance with
applicable Environmental Laws, to implement and enforce any monitoring, notification or other
precautionary measures that becomes necessary under applicable Environmental Laws to protect
against the release, potential release or discharge of Hazardous Substances on, in, under, from or
affecting the PSH Property or the PSH Project.
6.3.6 The failure of the Developer, its agents or contractors, in compliance with
applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any
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Hazardous Substances existing, stored or generated on, in, under or from the PSH Property or the
PSH Project which existence or storage first commenced following the Close of Escrow.
6.3.7 Any investigation, inquiry, order, hearing, action or other proceeding by or
before any Governmental Agency in connection with any Hazardous Substances on, in, under,
from or affecting the PSH Property or the PSH Project which Hazardous Substances became
present following the Close of Escrow or the Developer's violation of any applicable
Environmental Law relating to the PSH Property or the PSH Project.
6.3.8 The Developer shall pay to the Indemnified Parties all costs and expenses
including, without limitation, reasonable attorneys' fees and costs, incurred by the Indemnified
Parties in connection with enforcement of the aforementioned environmental indemnity.
6.4 Insurance.
In order to protect the City and its commissions, agents, attorneys, officers, employees and
authorized representatives (collectively, "Additional Insureds") against any and all claims and
liability for death, injury, loss and damage resulting from the Developer's actions in connection
with this Agreement, the City Hall Project, the PSH Property, and the PSH Project, the Developer
shall secure and maintain the insurance coverage, described in and required by this Section 6.4.
The City shall not have any obligation under this Agreement until the Developer provides the
required policies and/or certificates evidencing the insurance required by this Section 6.4 to the
City and the City approves such evidence of insurance. The Developer shall pay any deductibles
and self-insured retentions under all insurance policies issued in satisfaction of the terms of this
Agreement. Developer shall retain all insurance policies as set forth in this Section 6.4 until
recordation of the Certificate of Completion and issuance of the Acceptance of Completion.
6.4.1 Workers' Compensation Insurance Requirement. The Developer shall
submit written proof that the Developer is insured against liability for workers' compensation in
accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement,
the Developer makes the following certification, required by Section 1861 of the Labor Code:
"I am aware of the provisions of section 3700 of the Labor Code
which require every employer to be insured against liability for
workers' compensation or to undertake self-insurance in accordance
with the provisions of that code, and I will comply with such
provisions before commencing the performance of the work of the
Agreement."
The Developer shall require each contractor and sub -contractor performing work on the City Hall
Project and PSH Project to provide workers' compensation coverage for all of such contractor's
or sub -contractor's employees, unless the contractor's or sub -contractor's employees are covered
by workers' compensation insurance provided by the Developer. If any class of employees
engaged in work or services performed in connection with the Project is not covered by Labor
Code Section 3700, the Developer shall provide and/or require each contractor or sub -contractor
to provide adequate workers' compensation insurance covering such employees. Each workers'
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compensation policy procured pursuant to this Section 6.4.1 shall contain a full waiver of
subrogation clause in favor of the Additional Insureds.
6.4.2 Liability and Permanent Insurance Requirements.
6.4.2.1 The Developer shall maintain in full force and effect, from the
Effective Date until the issuance of the Certificate of Completion, subject to Section 6.4.2.4, the
following insurance coverage:
6.4.2.1.1 Commercial General Liability Insurance coverage,
including, but not limited to, Premises -Operations, Contractual Liability Insurance (specifically
covering all indemnity obligations of the Developer pursuant to this Agreement), Products -
Completed Operations Hazards, Personal Injury (including bodily injury and death), and Property
Damage for liability arising out of the construction of the City Hall Project or PSH Project or both
and/or the Developer's operations concerning the PSH Property or the PSH Project or both. The
commercial general liability insurance coverage shall have minimum limits for Bodily Injury and
Property Damage liability of ONE MILLION DOLLARS ($1,000,000.00) each occurrence and
TWO MILLION DOLLARS ($2,000,000.00) aggregate.
6.4.2.1.2 Automobile Liability Insurance against claims of
Personal Injury (including bodily injury and death) and Property Damage covering all owned,
leased, hired and non -owned vehicles used by the Developer with minimum limits for Bodily
Injury and Property Damage of ONE MILLION DOLLARS ($1,000,000.00) each occurrence.
Such insurance shall be provided by a business or commercial vehicle policy.
6.4.2.1.3 If the Developer hires a consultant to provide design
services, such as architectural or engineering services in connection with the City Hall Project or
PSH Project or both, the Developer shall require each such consultant to provide Professional
Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the
performance of such design services, with limits of not less than ONE MILLION DOLLARS
($1,000,000.00).
6.4.2.2 During the construction of the City Hall Project and PSH
Project, the Developer shall require that each contractor performing work on the City Hall Project
or PSH Project or both maintain the following insurance coverage, as specified below, at all times
during the performance of said work, or the Developer shall provide for such contractors "wrap"
coverage, as specified below, at all times during the performance of said work:
6.4.2.2.1 The Developer shall maintain Builder's Risk
Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to
100% of the completed insurable value of the City Hall Project and PSH Project or portion of the
City Hall Project and PSH Project on which such contractor is performing work.
6.4.2.2.2 Each general contractor and each sub -contractor
shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION
DOLLARS ($1,000,000.00) per occurrence and TWO MILLION DOLLARS ($2,000,000.00)
aggregate to protect the Developer during the construction of the City Hall Project and PSH Project
from claims involving bodily injury and/or death and damage to the property of others.
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6.4.2.2.3 Each general contractor and each sub -contractor
shall maintain Automobile Liability Insurance against claims of personal injury (including bodily
injury and death) and property damage covering all owned, leased, hired and non -owned vehicles
used in the performance of the contractor's obligations with minimum limits for bodily injury and
property damage of ONE MILLION DOLLARS ($1,000,000.00) each occurrence and TWO
MILLION DOLLARS ($2,000,000.00) aggregate. Such automobile liability insurance shall be
provided by a business or commercial vehicle policy.
6.4.2.3 The insurance required in Section 6.4.2.1 and Section 6.4.2.2
above shall include endorsements naming the Additional Insureds as additional insured for liability
arising out of this Agreement and any operation related to this Agreement.
6.4.2.4 Any insurance coverage required under this Agreement shall not
be written on a "claims made" basis. The applicable certificate of insurance must clearly provide
that the coverage is on an "occurrence" basis. The requirements of this Section 6.4.2.4 shall survive
any expiration or termination of this Agreement and the recordation of the Grant Deed and any
Certificate of Completion.
6.4.2.5 Receipt by the City of evidence of insurance that does not
comply with the above requirements shall not constitute a waiver of the insurance requirements of
this Agreement.
6.4.2.6 Subject to Section 6.4.2.4, all of the insurance coverage required
under this Section 6.4shall be maintained by the Developer or its contractors, as required by the
terms of this Agreement, until the issuance of the Certificate of Completion and shall not be
reduced, modified, or canceled without, at least, thirty (30) days prior written notice to the City.
Also, phrases such as "endeavor to" and "but failure to mail such notice shall impose no obligation
or liability of any kind upon the company" shall not be included in the cancellation wording of any
certificates of insurance or any coverage for the Additional Insureds. The Developer shall promptly
obtain replacement coverage for any insurance policy that is terminated, canceled, non -renewed,
or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.
6.4.2.7 All insurance to be obtained and maintained by the Developer
under this Section 6.4 shall be issued by a company or companies listed in the then current "Best's
Key Rating Guide" publication with a minimum of an "A:VII" rating and be admitted to conduct
business in the State of California by the State of California Department of Insurance.
6.4.2.8 The City will not accept self-insurance in satisfaction of the
insurance requirements of this Section 6.4.
6.4.2.9 All insurance obtained and maintained by the Developer in
satisfaction of the requirements of this Agreement shall be primary to and not contributing to any
insurance maintained by the Additional Insureds.
6.4.2.10 Insurance coverage in the minimum amounts set forth in this
Section 6.4 shall not be construed to relieve the Developer of any liability, whether within, outside,
or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues
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the coverage; nor shall it preclude the Additional Insureds from taking such other actions as are
available to them under any other provision of this Agreement or otherwise at law.
6.4.3 Failure by the Developer to maintain all insurance coverage required by this
Section 6.4 in effect shall be an Event of Default by the Developer. The City, at its sole option,
may exercise any remedy available to them in connection with such an Event of Default.
Alternatively, the City may, at its sole option, purchase any such required insurance coverage and
the City shall be entitled to prompt payment from the Developer for any premiums and associated
costs paid by the City for such insurance coverage. Any election by the City to purchase or not to
purchase insurance otherwise required to be carried by the Developer shall not relieve the
Developer of its obligation to obtain and maintain the insurance coverage required by this
Agreement.
ARTICLE VII.
PSH PROJECT FINANCING
7.1 PSH Project Financing. Developer shall finance the development of the PSH
Project in accordance with the PSH Project Budget. Further, City and Developer agree that the
financing of the PSH Project shall comply with all of the following:
7.1.1 Tax Credit Financing. Prior to the Effective Date, Developer applied for
an allocation of Tax Credits to finance a portion of the PSH Project Costs. On June 15, 2022,
Developer received a reservation of Tax Credits in the amount of One Million Eight Hundred
Thousand Three Hundred Ninety Five Dollars ($1,800,395.00).
7.1.2 Permanent Loan. Prior to the Close of Escrow, Developer shall obtain for
the City's review and approval, which approval shall not be unreasonably withheld, conditioned
or delayed, a conditional forward loan commitment for each Permanent Loan. City hereby
approves the Senior Permanent Loan.
7.2 PSH Project Budget. By its execution of this Agreement, the City has given its
approval to the PSH Project Budget. While the PSH Project Budget has been prepared based on
the best, good faith estimate of Developer of the costs which are likely to be incurred for the PSH
Project, the Parties recognize that events and circumstances not currently contemplated, some of
which are outside of the control of the Parties, could result in changes in the PSH Project Costs,
necessitating changes in the PSH Project Budget. To the extent that Developer is required to make
changes to the PSH Project Budget, Developer shall promptly submit a revised PSH Project Budget
to the City Manager for review and approval, which review and approval shall not be unreasonably
withheld, conditioned or delayed.
7.3 Only Permitted Exceptions. Developer shall not record and shall not allow to be
recorded against the PSH Property any Security Instrument, lien or other encumbrance that is not
a Permitted Exception. Developer shall remove or cause to be removed (or provide a statutory
bond in the amount of such lien) any non -Permitted Exception made or recorded against the PSH
Property or shall assure the complete satisfaction of any such non -Permitted Exception to the
satisfaction of the City, in the City's sole and absolute discretion. The covenants of Developer set
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forth in this Section regarding the placement of encumbrances on the PSH Property shall run with
the land of the PSH Property and bind successive owners of the PSH Property, until recordation
(or deemed issuance) of the Certificate of Completion for the PSH Project.
7.4 City Right to Discharge Prohibited Encumbrances. After sixty (60) calendar
days' Notice to Developer of a non -Permitted Exception and provided that Developer has not
caused such non -Permitted Exception to be removed pursuant to Section 7.3, the City shall have
the right, but not the obligation, to satisfy or remove any non -Permitted Exception against the PSH
Property or the PSH Project and receive reimbursement from Developer for any amounts paid or
incurred in satisfying or removing any such non -Permitted Exception, upon demand. Any amount
expended by the City to discharge a non -Permitted Exception that is not reimbursed to the City by
Developer within thirty (30) calendar days following written demand for payment from the City
shall accrue interest at an annual rate equal to the lesser of eight percent (81/o) per annum or the
maximum highest rate of interest allowed by law under the circumstances, until paid in full.
Nothing in this Section 7.4, though, shall require Developer to pay or make provisions for the
payment of any tax, assessment, lien or charge that Developer is in the process of contesting the
validity or amount thereof, in good faith, and so long as such contest shall not subject all or any
portion of the PSH Property to forfeiture or sale.
7.5 Rights of Lender and City Regarding Permitted Security Instruments.
7.5.1 Notice of Liens. The Developer shall promptly notify the City of any
Security Instrument or lien asserted against or attached to all or any portion of the PSH Project or
the PSH Property, other than as listed in Section 3.7, prior to the date of issuance of a Certificate
of Completion for the PSH Project, whether by voluntary act of Developer or otherwise; provided,
however, that no notice of filing of preliminary notices or mechanic's liens need be given by
Developer to the City, prior to suit being filed to foreclose any such mechanic's lien.
7.5.2 Notice of Default to Lenders. Whenever the City delivers any notice of
default to Developer under this Agreement, the City shall send a copy of such notice of default to
each Lender holding a Permitted Security Instrument of which the City has received notice and a
contact address for transmittal of such notices. Each Lender receiving a copy of any such notice
of default shall have the right, at its option, to commence the cure or remedy of any default of
Developer set forth in such notice and to diligently and continuously proceed with such cure or
remedy such default, within the cure period allowed to Developer under this Agreement. The City
shall accept such performance by a Lender with the same force and effect as if furnished by
Developer. If such default can only be remedied or cured by the Lender upon obtaining possession
of the PSH Property, the City shall allow the Lender an opportunity to obtain possession with
diligence and continuity through exercise of remedies under such Lender's Permitted Security
Instrument and to remedy or cure such default within ninety (90) days after obtaining possession
of the PSH Property. If the default reasonably requires more than ninety (90) days to cure,
however, then the time available to a Lender to cure pursuant to this Section 7.5 shall be the
reasonable time required to complete such cure, as long as the Lender has commenced the cure of
the default within such ninety (90) day period and diligently pursues the cure to completion. During
such extension of time, the City shall not terminate this Agreement or exercise other remedies
under this Agreement by reason of such default. All Developer specific defaults shall be deemed
cured upon Transfer of Developer's interest in the PSH Property to the Lender, its assignee or
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nominee, pursuant to exercise of remedies under a Permitted Security Instrument. In addition, any
Lender properly completing the PSH Project with the consent of the City shall be entitled, upon
written request made to the City, to a Certificate of Completion from the City. Nothing contained
in this Agreement shall be deemed to permit, authorize or require any Lender to undertake or
continue the construction or installation of any portion of the PSH Project (beyond the extent
necessary to conserve or protect improvements or construction already made) prior to or after
acquiring title to or possession of the PSH Property, without expressly assuming Developer's
obligations under this Agreement by written agreement reasonably satisfactory to the City, in
which the Lender agrees to complete the PSH Project in the manner provided in this Agreement;
provided, however, in no event shall any Lender, nor any successor in interest to the PSH Project,
be obligated to complete any obligations relating to the City Hall Project, nor cure any City Hall
Default. Any Lender desiring to complete the PSH Project must provide the City with evidence
reasonably satisfactory to the City that the Lender has the qualifications (or will engage one or
more licensed contractor(s) or consultant(s) with such qualifications) and financial capability
necessary to perform such obligations.
7.5.3 No Termination of Permitted Security Instruments by Default. An
Event of Default by Developer under this Agreement shall not defeat or render invalid the lien of
any Permitted Security Instrument made in good faith and for value as to all or any part of the PSH
Property, whether or not the Lender is subordinated to this Agreement; but unless otherwise
provided in this Agreement, this Agreement shall be binding and effective against any owner of
the PSH Property, whose title thereto is acquired pursuant to exercise of remedies under a
Permitted Security Instrument or from a person or entity exercising any such remedies.
7.5.4 Lender Rights on Termination or Modification. No termination of this
Agreement shall be binding upon a Lender unless the termination occurs after notice to such
Lender and such Lender's failure to cure all then existing defaults under this Agreement (except
any Developer specific defaults), pursuant to this Section 7.5, or with such Lender's prior written
consent. No modification of this Agreement that materially affects the rights of a Lender shall be
binding upon the Lender without its prior written consent.
7.5.5 No Construction Obligation of Lender. A Lender shall in no way be
obligated by the provisions of this Agreement to construct or complete the development of the
PSH Project (or the City Hall Project) or to guarantee such construction or completion, but may
do so pursuant to and in accordance with this Section 7.5. Nothing in this Agreement shall be
deemed to construe, permit, or authorize any Lender to devote all or any portion of the PSH
Property to any uses, or to construct any improvements thereon, other than those uses or the PSH
Project provided for or authorized by this Agreement.
7.5.6 City Right to Cure Obligations. In the event of a default by Developer
under any Permitted Security Instrument, prior to the date of issuance of a Certificate of
Completion for the PSH Project, where the Lender has not exercised its option to complete the
PSH Project under Section 7.5.2, the City may cure the default of Developer under the applicable
Permitted Security Instrument, but is under no obligation to do so, prior to completion of any sale
or foreclosure of all or any portion of the PSH Property under the applicable Permitted Security
Instrument. The City shall be entitled to reimbursement from Developer of all costs and reasonable
expenses incurred by the City in curing any default of Developer under any Permitted Security
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Instrument, under demand. Any amount expended by the City to cure a default of Developer under
any Permitted Security Instrument that is not reimbursed to the City, by Developer within thirty
(30) calendar days after notice of such amount to Developer, shall accrue interest at an annual rate
equal to the lesser of eight percent (8%) per annum or the maximum highest rate of interest allowed
by law under the circumstances until paid in full.
7.5.7 Foreclosure of Permitted Security Instrument. Foreclosure of any
Permitted Security Instrument, whether by judicial proceedings or by power of sale, or any
conveyance by deed in lieu of foreclosure, shall not require the consent of the City or constitute a
default under this Agreement.
ARTICLE VIII.
DEFAULTS, REMEDIES AND TERMINATION
8.1 Defaults — General.
8.1.1 Subject to any extensions of time provided for in this Agreement, failure or
delay by any Party to perform any term or provision of this Agreement shall constitute an "Event
of Default' under this Agreement; provided, however, that if a Party otherwise in default
commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt
of written notice from the injured Party specifying such default, and shall diligently and
continuously prosecute such cure, correction or remedy to completion (and where any time limits
for the completion of such cure, correction or remedy are specifically set forth in this Agreement,
then within said time limits), such Party shall not be deemed to be in default under this Agreement
and no Event of Default shall be deemed to have occurred.
8.1.2 The injured Party shall give written notice of default to the Party in default,
specifying the default complained of by the non -defaulting Party. Delay in giving such notice shall
not constitute a waiver of any default nor shall it change the time of default.
8.1.3 Any failure or delays by any Party in asserting any of their rights and/or
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by any Party in asserting any of its rights and/or remedies shall not deprive that
Party of its right to institute and maintain any actions or proceedings that it may deem necessary
to protect, assert or enforce any such rights or remedies.
8.1.4 In addition to other acts or omissions of the Developer that may legally or
equitably constitute a default or breach of this Agreement, the occurrence of any of the following
specific events, prior to the issuance of a Certificate of Completion with respect to the PSH Project
or the issuance of a Acceptance of Completion with respect to the City Hall Project, shall constitute
an "Event of Default' under this Agreement and shall not be subject to the notice and cure
provisions of Section 8.1.1:
8.1.4.1 Any material default by the Developer under any Security
Financing Instrument for any purpose or reason that remains uncured following any applicable
notice and expiration of any applicable cure period under such Security Financing Instrument.
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8.1.4.2 Any representation, warranty or disclosure made to the City by
the Developer regarding this Agreement, the PSH Project, or the City Hall Project is knowingly
materially false or intentionally misleading.
8.1.4.3 The construction of the PSH Project is delayed or suspended for
a period in excess of that permitted under Section 4.6 or the Developer has not been issued, or
entitled to be issued, a Certificate of Completion by the PSH Project Completion Date.
8.1.4.4 The construction of the City Hall Project is delayed or suspended
for a period in excess of that permitted under Section 5.3 or the Developer has not been issued, or
entitled to be issued, an Acceptance of Completion by the City Hall Project Completion Date.
8.1.4.5 There occurs any event of dissolution, reorganization or
termination of the Developer that adversely and materially affects the operation or value of the
PSH Property or the PSH Project, and such event is not corrected within five (5) business days
following written notice of such event from the City to the Developer.
8.1.4.6 The Developer Transfers its interest in this Agreement, the PSH
Property, or the PSH Project, or any portion thereof, whether voluntarily or involuntarily or by
operation of law, in violation of the terms and conditions of this Agreement and such action is not
cured within the period prescribed in Section 9.2.2.
8.1.4.7 The Developer becomes insolvent or a receiver is appointed to
conduct the affairs of the Developer under state or federal law.
8.1.4.8 The Developer's legal entity status authorized by the Secretary
of State of the State of California to transact business in California is suspended or terminated and
is not promptly reinstated.
8.2 DEVELOPER'S ELECTION RE: SPECIFIC ENFORCEMENT OF
AGREEMENT OR WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW. UPON
THE OCCURRENCE OF AN EVENT OF DEFAULT PERTAINING TO THE CONVEYANCE
OF THE PSH PROPERTY BY THE CITY UNDER THIS AGREEMENT PRIOR TO CLOSE
OF ESCROW, THE DEVELOPER SHALL, AS ITS SOLE AND EXCLUSIVE REMEDY,
HAVE THE RIGHT TO EXERCISE ONE OF THE ALTERNATIVE REMEDIES DESCRIBED
IN SECTIONS 8.2.1 AND 8.2.2. THE DEVELOPER'S ELECTION, ONCE MADE, SHALL BE
IRREVOCABLE.
8.2.1 WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES. THE DEVELOPER MAY WAIVE THE
REMEDIES SET FORTH IN SECTION 8.2.2 AND MAY CANCEL THE ESCROW
PURSUANT TO SECTION 3.10, AND UPON CANCELLATION OF THE ESCROW, THE
DEVELOPER SHALL BE RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT
TO PURCHASE OR ACCEPT TITLE TO THE PSH PROPERTY AND TO CONSTRUCT THE
PSH PROJECT AND CITY HALL PROJECT, AND ANY SUCH ESCROW CANCELLATION
SHALL BE WITHOUT ANY LIABILITY OF THE DEVELOPER TO THE CITY OR
HOUSING AUTHORITY OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS.
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THE DEVELOPER SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY
EXPENDED BY THE DEVELOPER IN REASONABLE RELIANCE ON THIS AGREEMENT
PRIOR TO THE DATE OF THE OCCURRENCE OF THE EVENT OF DEFAULT BY THE
CITY OR HOUSING AUTHORITY, NOT TO EXCEED AN AGGREGATE TOTAL OF TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00); PROVIDED HOWEVER IF THE
EVENT OF DEFAULT IS THE HOUSING AUTHORITY'S FAILURE TO FUND THE
HOUSING AUTHORITY HOUSING FUND LOAN AND/OR THE HOUSING AUTHORITY
ADMIN FUND LOAN OR THE CITY'S FAILURE TO FUND THE CITY PROJECT LOAN
WHEN ALL CONDITIONS TO FUNDING FOR SUCH LOANS AS SET FORTH IN THIS
AGREEMENT HAVE BEEN MET, THE DEVELOPER SHALL BE ENTITLED TO RECOVER
ITS REASONABLE DOCUMENTED DIRECT COSTS INCURRED FOR THE PSH PROJECT
AND CITY HALL PROJECT PRIOR TO THE DATE THE EVENT OF DEFAULT OCCURS
FROM THE CITY AND/OR THE HOUSING AUTHORITY, AS APPLICABLE. THE
DEVELOPER WAIVES ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE CITY
AND HOUSING AUTHORITY ARISING FROM AN EVENT OF DEFAULT BY THE CITY
OR HOUSING AUTHORITY PRIOR TO THE CLOSE OF ESCROW. THE DEVELOPER
ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO
THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 8.2.1, WHICH CIVIL CODE
SECTION READS AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY."
BY INITIALING BELOW, THE DEVELOPER KNOWINGLY
AND VOLUNTARILY WAIVES THE PROVISIONS OF
SECTION 1542 SOLELY IN CONNECTION WITH THE
WAIVERS AND RELEASES OF RVSACTION 8.2.1.
DEVELOPER'S
IN CONNECTION WITH THE W,&L EKS OF THIS SECTION 8.2.1, THE
DEVELOPER FURTHER WAIVES THE RIGHT TO RECORD A NOTICE OF PENDENCY
OF ACTION AGAINST ALL OR ANY PORTION OF THE PSH PROPERTY EXCEPT
DEVELOPER MAY RECORD SUCH A NOTICE IN CONNECTION WITH ANY SUIT FOR
SPECIFIC PERFORMANCE PERMITTED HEREUNDER IN THE EVENT DEVELOPER
ELECTS NOT TO WAIVE ITS RIGHT TO SEEK SPECIFIC PERFORMANCE UNDER
SECTION 8.2.2.
8.2.2 SPECIFIC PERFORMANCE. THE DEVELOPER MAY WAIVE THE
REMEDIES SET FORTH IN SECTION 8.2.1 AND, IN ACCORDANCE WITH CIVIL CODE
SECTION 3384, ET SEQ., INSTITUTE AN ACTION AGAINST THE CITY FOR SPECIFIC
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PERFORMANCE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT WHICH WERE
TO HAVE BEEN COMPLETED BY THE CITY PRIOR TO THE CLOSE OF ESCROW.
8.3 CITY'S AND HOUSING AUTHORITY'S ELECTION RE: SPECIFIC
ENFORCEMENT OF AGREEMENT OR WAIVER OF RIGHT TO SPECIFIC
PERFORMANCE AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO
CLOSE OF ESCROW. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
PERTAINING TO DEVELOPER'S FAILURE TO CLOSE ESCROW AND ACQUIRE THE
PSH PROPERTY FROM THE CITY UNDER THIS AGREEMENT, CITY AND HOUSING
AUTHORITY SHALL, AS THEIR SOLE AND EXCLUSIVE REMEDY, HAVE THE RIGHT
TO EXERCISE ONE OF THE ALTERNATIVE REMEDIES DESCRIBED IN SECTIONS 8.2.1
AND 8.2.2. THE CITY AND HOUSING AUTHORITY'S ELECTION, ONCE MADE, SHALL
BE IRREVOCABLE.
8.3.1 WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES. THE CITY AND HOUSING AUTHORITY
MAY WAIVE THE REMEDIES SET FORTH IN SECTION 8.2.2 AND MAY CANCEL THE
ESCROW PURSUANT TO SECTION 3.10, AND UPON CANCELLATION OF THE
ESCROW, THE CITY AND HOUSING AUTHORITY SHALL BE RELIEVED OF ANY
OBLIGATION UNDER THIS AGREEMENT TO SELL THE PSH PROPERTY AND
CONTRIBUTE FUNDS TO CONSTRUCTION OF THE PSH PROJECT AND CITY HALL
PROJECT, AND ANY SUCH ESCROW CANCELLATION SHALL BE WITHOUT ANY
LIABILITY OF THE CITY OR HOUSING AUTHORITY TO DEVELOPER OR ANY OTHER
PERSON ARISING FROM SUCH ACTIONS. THE CITY AND HOUSING AUTHORITY
SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY EXPENDED BY
THE CITY AND HOUSING AUTHORITY IN REASONABLE RELIANCE ON .THIS
AGREEMENT PRIOR TO THE DATE OF THE OCCURRENCE OF THE EVENT OF
DEFAULT BY THE DEVELOPER, NOT TO EXCEED AN AGGREGATE TOTAL OF TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00). THE CITY AND HOUSING
AUTHORITY WAIVE ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE
DEVELOPER ARISING FROM AN EVENT OF DEFAULT BY THE DEVELOPER PRIOR TO
THE CLOSE OF ESCROW. THE CITY AND HOUSING AUTHORITY ACKNOWLEDGE
THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND
RELEASE CONTAINED IN THIS SECTION 8.2.1, WHICH CIVIL CODE SECTION READS
AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY."
BY INITIALING BELOW, THE CITY AND HOUSING
AUTHORITY KNOWINGLY AND VOLUNTARILY WAIVE
THE PROVISIONS OF SECTION 1542 SOLELY IN
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CONNECTION WITH THE WAIVERS AND RELEASES OF
THIS SECTION 8.2.1.
CITY'S INITIALS ?%
HOUSING AUTHORITY'S INITIALS ,.
8.3.2 SPECIFIC PERFORMANCE. THE CITY AND HOUSING
AUTHORITY MAY WAIVE THE REMEDIES SET FORTH IN SECTION 8.2.1 AND, IN
ACCORDANCE WITH CIVIL CODE SECTION 3384, ET SEQ., INSTITUTE AN ACTION
AGAINST THE DEVELOPER FOR SPECIFIC PERFORMANCE OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT WHICH WERE TO HAVE BEEN COMPLETED BY
THE DEVELOPER PRIOR TO THE CLOSE OF ESCROW.
8.4 Legal Actions Except as otherwise provided by Section 8.2 and/or Section 8.3, any
Party may institute legal action to cure, correct or remedy any default, to recover damages for any
default, or to obtain any other remedy available to that Party under this Agreement or at law or in
equity. Such legal actions must be instituted in the Superior Court of the State of California in and
for the County of Orange, California, in any other appropriate court within the County of Orange,
California.
8.4.1 The procedural and substantive laws of the State of California shall govern
the interpretation and enforcement of this Agreement, without regard to conflicts of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully
performed in and relates to real property located in the City of San Juan Capistrano, County of
Orange, California.
8.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in
this Agreement, the rights and remedies of the Parties set forth in this ARTICLE VIII are non-
exclusive and cumulative, and the exercise by any Party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or remedies
for the same default or any other default by the other Party(ies).
8.6 Developer Indemnification of the City. In addition to any other specific
indemnification or defense obligations of the Developer set forth in this Agreement, the Developer
agrees to indemnify, defend (upon written request by the City and with counsel reasonably
acceptable to the City) and hold harmless the Indemnified Parties, from any and all losses,
liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and
expenses, including, but not limited to reasonable attorney's fees of counsel retained by the
Indemnified Parties, expert fees, of whatever kind or nature, that are in any manner directly or
indirectly caused, occasioned or contributed to in whole or in part, through any act, omission, fault
or negligence, whether active or passive, of the Developer or the Developer's officers, agents,
employees, independent contractors or subcontractors of any tier, relating in any manner to this
Agreement, any work to be performed by the Developer related to this Agreement, the City Hall
Project, the PSH Property, or the PSH Project, or any authority or obligation exercised or
undertaken by the Developer under this Agreement. Without limiting the generality of the
foregoing, the Developer's obligation to indemnify the Indemnified Parties shall include injury or
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death to any person or persons, damage to any property, regardless of where located, including the
property of the Indemnified Parties, any workers' compensation or prevailing wage determination,
claim or suit or any other matter arising from or connected with any goods or materials provided
or services or labor performed regarding the City Hall Project, PSH Project, or the PSH Property
on behalf of the Developer by any person or entity. Notwithstanding anything to the contrary in
this Section 8.6, Developer shall not be required to indemnify the Indemnified Parties to the extent
any of such losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments,
costs and expenses are caused by the active negligence or willful misconduct of any of the
Indemnified Parties.
ARTICLE IX.
GENERAL PROVISIONS.
9.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement
are true and correct and are incorporated into this Agreement in their entirety by this reference.
9.2 Restrictions on Transfers.
9.2.1 The Developer acknowledges that the qualifications and identity of the
Developer are of particular importance to the City. The Developer further recognizes and
acknowledges that the City has relied and is relying on the specific qualifications and identity of
the Developer in entering into this Agreement with the Developer and, as a consequence, Transfers
are permitted only as expressly provided in this Agreement. The Developer shall promptly notify
the City in writing of any and all changes whatsoever in the identity of the business entities or
individuals either comprising or in Control of the Developer, as well as any and all changes in the
interest or the degree of Control of the Developer by any such person, of which information the
Developer or any of its partners, members or officers are notified or may otherwise have
knowledge or information.
9.2.2 Except as expressly permitted in this Agreement, the Developer represents
to the City that it has not made and agrees that it will not make or create, or suffer to be made or
created, any Transfer other than a Permitted Transfer, either voluntarily, involuntarily or by
operation of law without obtaining City's prior written consent, which consent shall not be
unreasonably withheld, conditioned, or delayed; provided, however, that with respect to the PSH
Property and/or PSH Project, such limitation shall apply only until the recordation of a Certificate
of Completion. In deciding whether to approve or disapprove any proposed Transfer for which
City consent is required, the City may consider the proposed transferee's financial strength and
the experience of the proposed transferee and its senior management in undertaking and
successfully completing projects of a similar type and size as the PSH Project or City Hall Project
(as applicable). Any Transfer made in contravention of this Section 9.2 shall be voidable at the
election of the City and this Agreement may be terminated by the City or the City may exercise
any other remedy available to the City under the terms of this Agreement, provided, however, that
(i) the City shall first notify the Developer in writing of its intention to terminate this Agreement
or to exercise any other remedy, and (ii) the Developer shall have thirty (30) calendar days
following its receipt of such written notice to commence and, thereafter, diligently and
continuously proceed to cure the default of the Developer and submit evidence of the initiation
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and satisfactory completion of such cure to the City, in a form and substance reasonably
satisfactory to the City.
9.2.3 The Developer shall provide the City no less than thirty (30) days prior
written notice of any proposed Permitted Transfer which the Developer desires to enter into, other
than a Permitted Transfer for which no notice shall be required. The Developer shall have the
burden of demonstrating to the City's reasonable satisfaction that the proposed Permitted Transfer
meets the conditions and requirements of this Agreement with respect to Permitted Transfers.
9.2.4 Notwithstanding anything in this Agreement to the contrary, with respect to
the PSH Project, the restrictions and prohibitions on Transfers contained in this Section 9.2 shall
terminate upon issuance of a Certificate of Completion for the PSH Project.
9.3 Notices. Demands and Communications Between the Parties.
9.3.1 Any and all notices, demands or communications submitted by any Party to
the other Party pursuant to or as required by this Agreement shall be proper, if in writing and
dispatched by messenger for immediate personal delivery, by a nationally recognized overnight
courier service or by registered or certified United States Mail, postage prepaid, return receipt
requested, to the principal office of the City or the Developer, as applicable, as designated in
Section 9.3.2. Such written notices, demands or communications may be sent in the same manner
to such other addresses as any Party may from time to time designate. Any such notice, demand
or communication shall be deemed to be received by the addressee, regardless of whether or when
any return receipt is received by the sender or the date set forth on such return receipt, on the day
that it is delivered by personal delivery, on the date of delivery by a nationally recognized
overnight courier service or three (3) calendar days after it is placed in the United States Mail, as
provided in this Section 9.3.
9.3.2 The following are the authorized addresses for the submission of notices,
demands or communications to the Parties:
TO DEVELOPER: Prior to completion of construction:
Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
(T) 949-263-8676
(F) 949-263-0647
Attention: Chief Development Officer
Following completion of construction:
Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
(T)949-263-8676
(F)949-263-0647
Attention: Asset Management
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COPY TO: Rutan & Tucker, LLP
18575 Jamboree Road, 9h Floor
Irvine, CA 92612
Attention: Patrick D. McCalla
(T) 714-641-5100
(F) 714-546-9035
X919wG
Tax Credit Investor: Bank of America, N.A.
MAI -225-02-02
225 Franklin Street
Boston, MA 02110
Attention: Asset Management
Facsimile: 617-346-2257
And: Banc of America CDC Spec
Company, Inc.
MA 1-225-02-02
225 Franklin Street
Boston, MA 02110
Attention: Asset Manage
Facsimile: 617-346-2257
And: Buchalter, a Professional Corporation
1000 Wilshire Boulevard, Suite 1500
Los Angeles, CA 90017
Attn: Michael A. Williamson, Esq.
Facsimile: (213) 630-5799
Matter No: B0965-687
TO CITY: City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attention: City Manager
(T)949-493-1171
(F) 949 493-1053
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COPY TO: Best Best & Krieger, LLP
18101 Von Karman Ave, Suite 1000
Irvine, CA 92614
Attention: Elizabeth Wagner Hull
(T)949-263-2600
(F)949-260-0972
TO HOUSING San Juan Capistrano Housing Authority
AUTHORITY: 32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attention: Executive Director
(T)949-493-1171
(F)949 493-1053
Best Best & Krieger, LLP
18101 Von Karman Ave, Suite 1000
Irvine, CA 92614
Attention: Elizabeth Wagner Hull
(T)949-263-2600
(F)949-260-0972
9.4 Conflict of Interest. No member, official or employee of the City, having any
conflict of interest, direct or indirect, related to this Agreement, the PSH Property, the City Hall
Property, the development or operation of the PSH Project, or the development of the City Hall
Project shall participate in any decision relating to this Agreement. The Parties represent and
warrant that they do not have knowledge of any such conflict of interest.
9.5 Warranty Against Payment of Consideration for Agreement. The Developer
warrants that it has not paid or given, and will not pay or give, any third party any money or other
consideration for obtaining this Agreement. Third parties, for the purposes of this Section 9.5, shall
not include persons to whom fees are paid for professional services, if rendered by attorneys,
financial consultants, accountants, engineers, architects and the like when such fees are considered
necessary by the Developer.
9.6 Non -liability of City, Officials and Employees. No member, official or employee
ofthe City shall be personally liable to the Developer, or any successor in interest of the Developer,
in the event of any default or breach by the City under this Agreement or for any amount that may
become due to the Developer or to its successor, or on any obligations under the terms of this
Agreement, except as may arise from the gross negligence or willful acts of such member, official
or employee.
9.7 Unavoidable Delay: Extension of Time of Performance.
9.7.1 Subject to specific provisions of this Agreement, performance by any Party
under this Agreement shall not be deemed, or considered to be, in default where any such default
is due to an Unavoidable Delay that is not attributable to the fault of the Party claiming an extension
of time to perform. An extension of time for any Unavoidable Delay shall be for the period of the
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Unavoidable Delay and shall commence to run from the date of occurrence of the Unavoidable
Delay, if the Party asserting the existence of the Unavoidable Delay provides the other Party with
written notice of the occurrence of the Unavoidable Delay, within twenty (20) days of the date the
Party claiming an extension knew of the commencement of such asserted Unavoidable Delay.
Otherwise, the extension of time for an Unavoidable Delay shall commence on the date of receipt
of written notice of the occurrence of the Unavoidable Delay by the Party not requesting an
extension of time to perform due to such Unavoidable Delay.
9.7.2 The Parties expressly acknowledge and agree that changes in either general
economic conditions or changes in the economic assumptions of either of them that may have
provided a basis for entering into this Agreement and that occur at any time after the execution of
this Agreement, do not constitute an Unavoidable Delay and do not provide any Party with grounds
for asserting the existence of an Unavoidable Delay in the performance of any covenant or
undertaking arising under this Agreement. Each Party expressly assumes the risk that changes in
general economic conditions or changes in such economic assumptions relating to the terms and
covenants of this Agreement could impose an inconvenience or hardship on the continued
performance of such Party under this Agreement. Notwithstanding the foregoing, the limitations
set forth in this section 9.7.2 shall not apply to delays in procurement of materials and/or labor due
to cost escalation or to delays attributable to the unavailability of labor and/or materials required
for the timely execution of the City Hall Project or PSH Project (as applicable), which are the
result of changes in general economic conditions that are outside of Developer's control, which
may include, but shall not be limited to, supply chain disruptions, transportation delays, and
material and/or labor shortages.
9.8 Inspection of Books and Records. The City shall have the right at all reasonable
times following not less than forty-eight (48) hours' prior written notice, at the City's cost and
expense, to inspect the books and records of the Developer pertaining to the PSH Property, the
PSH Project, the City Hall Property, and/or the City Hall Project, including but not limited to the
right to inspect the City Hall Construction Contract as well as all related soft costs relating to the
City Hall Project. The Developer shall also have the right at all reasonable times, at the Developer's
sole cost and expense, to inspect the books and records of the City pertaining to the PSH Property,
the PSH Project, the City Hall Property, and/or the City Hall Project to the extent relevant to the
Developer's obligations under this Agreement. Nothing in this Section 9.8 or elsewhere in this
Agreement shall, however, constitute a waiver or modification of any right or privilege which any
Party may have with respect to any document, statement, or other record, including, without
implied limitation, the attorney-client privilege, the attorney -work product privilege, any privilege
arising under any state or federal evidentiary code or rule, or any privilege or exclusionary right
arising under any state or federal freedom of information or public records disclosure law.
9.9 Real Estate Commissions. The City shall pay any fees or commissions or other
expenses related to its retention or employment of real estate brokers, agents or other professionals.
The Developer shall pay any fees or commissions or other expenses related to its retention or
employment of real estate brokers, agents or other professionals.
9.10 Binding on Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective heirs, executors, administrators, legal
representatives, successors, and assigns.
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9.11 Entire Agreement.
9.11.1 This Agreement shall be executed in three (3) duplicate originals, each of
which shall be deemed to be an original, but all of which together shall constitute one and the same
instrument. This Agreement, including all Exhibits attached hereto, constitutes the entire
understanding and agreement of the Parties regarding the Property, the Project, and the other
subjects addressed in this Agreement.
9.11.2 This Agreement integrates all of the terms and conditions mentioned in this
Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements
between the Parties with respect to the Property, the PSH Project, the City Hall Project, and the
other subjects addressed in this Agreement.
9.11.3 None of the terms, covenants, agreements or conditions set forth in this
Agreement shall be deemed to be merged with any deed conveying title to the PSH Property and
this Agreement shall continue in full force and effect before and after such conveyances.
9.11.4 All waivers of the provisions of this Agreement and all amendments to this
Agreement must be in writing and signed by the authorized representative(s) of all Parties.
9.12 Survival of Indemnity Obligations. All general and specific indemnity and
defense obligations of the Parties set forth in this Agreement shall survive the expiration or
termination of this Agreement, the execution or recordation of the Grant Deed, the issuance of a
Certificate of Occupancy with respect to the City Hall Project, and/or the issuance and recordation
of a Certificate of Completion.
9.13 Time Declared to be of the Essence. As to the performance of any obligation
hereunder as to which time is a component thereof, the performance of such obligation within the
time provided is of the essence.
9.14 Approvals. Except as otherwise provided in this Agreement, approvals required of
the City, the Housing Authority, or the Developer, or any officers, agents or employees of the City,
the Housing Authority, or the Developer, shall not be unreasonably withheld and approval or
disapproval shall be given within the time set forth in this Agreement or, if no time is given, within
a reasonable time.
9.15 Further Assurances. The Parties agree to reasonably consider such additional
actions or the execution of such other documents as may be reasonably necessary or convenient to
the financing, development, and operation of the PSH Project, or to the financing and development
of the City Hall Project, although nothing in this Section 9.15 shall be deemed a representation,
guaranty or commitment by any Party to take any action or execute any document.
9.16 City Approvals and Actions.
9.16.1 The City Manager shall have the authority, on behalf of the City (to the
extent not provided otherwise in this Agreement), to make approvals, issue interpretations, waive
provisions, grant extensions of time, approve and execute amendments to this Agreement and
changes to the attached exhibits, both prior to and following their execution, and execute
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documents, including, without limitation, the Certificate of Completion, Acceptance of
Completion, and any documents necessary to implement any changes in the number or
affordability of the Qualifying Units (as defined in the Regulatory Agreement), as may be required
by TCAC or the County, so long as such actions do not reduce the length of affordability of the
Qualifying Units (as defined in the Regulatory Agreement) or add to the costs incurred or to be
incurred by the City as specified herein. The City Manager reserves the right, in his or her sole and
absolute discretion, to submit any requested modification, interpretation, amendment or waiver to
the City Council.
9.16.2 The Executive Director shall have the authority, on behalf of the Housing
Authority (to the extent not provided otherwise in this Agreement), to approve and execute
amendments to this Agreement and changes to the attached exhibits that relate to the Housing
Authority Housing Fund Loan, and/or the Housing Authority Admin Loan, both prior to and
following their execution, so long as such actions do not reduce the length of affordability of the
Qualifying Units (as defined in the Regulatory Agreement) or add to the costs incurred or to be
incurred by the Housing Authority as specified herein. The Executive Director reserves the right,
in his or her sole and absolute discretion, to submit any requested modification or amendment to
the Housing Authority Board of Directors.
9.17 Tax Credit Investor Provisions. If and when the Developer is in the form of a
limited partnership and admits a Tax Credit Investor into Developer's partnership, the City agrees
to the following provisions for the benefit of the Developer's Tax Credit Investor:
9.17.1 The City will give the Tax Credit Investor a copy of any notice (at the Tax
Credit Investor's address provided in a notice by Developer to the City) that the City gives to the
Developer under this Agreement, the Regulatory Agreement and the City Project Loan documents,
provided that Developer has provided the address and contact information for the Tax Credit
Investor in writing to the City;
9.17.2 The Housing Authority will give the Tax Credit Investor a copy of any
notice that the Housing Authority gives to the Developer under this Agreement, the Housing
Authority Housing Fund Loan, and Housing Authority Admin Loan documents;
9.17.3 The City will give the Tax Credit Investor thirty (30) days after the Tax
Credit Investor's receipt of such Notice to cure a non-payment of any sum due under the City
Project Loan;
9.17.4 The Housing Authority will give the Tax Credit Investor thirty (30) days
after the Tax Credit Investor's receipt of such Notice to cure a non-payment of any sum due under
the Housing Authority Housing Fund Loan and Housing Authority Admin Loan;
9.17.5 The City will give the Tax Credit Investor sixty (60) days after the Tax
Credit Investor's receipt of such notice to cure any other default under this Agreement, the
Regulatory Agreement and the City Project Loan documents;
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9.17.6 The Housing Authority will give the Tax Credit Investor sixty (60) days
after the Tax Credit Investor's receipt of such notice to cure any other default under this Agreement,
the Housing Authority Housing Fund Loan, and Housing Authority Admin Loan documents;
9.17.7 If a non -monetary default is incapable of being cured within sixty (60) days,
the City and Housing Authority, respectively, will give the Tax Credit Investor an additional ninety
(90) days to cure such default or such additional time as is reasonably necessary to cure the default
provided the Tax Credit Investor has commenced to cure such default and is diligently proceeding
to cure such default through the end of such period;
9.17.8 If the Tax Credit Investor makes any such payment or otherwise cures such
default, the City and Housing Authority, respectively, will accept such action as curing such
default as if such payment or cure were made by the Developer;
9.17.9 The City and Housing Authority, respectively, will permit the Tax Credit
Investor to transfer the Tax Credit Investor's interest to any person or entity at any time provided
that, if at the time of such transfer the Tax Credit Investor has not made one hundred percent
(100%) of the capital contributions the Tax Credit Investor is required to make to the Developer
as and when due under the limited partnership agreement of the Developer, either (i) the Tax Credit
Investor shall remain liable to the Developer for such capital contributions, or the transferee of
the Tax Credit Investor's interest shall agree in writing to make such capital contribution;
9.17.10 The City and Housing Authority, respectively, will permit the Tax
Credit Investor to remove the general partner of the partnership in accordance with the partnership
agreement, provided that the substitute general partner is reasonably acceptable to the City and
Housing Authority, respectively; provided, however, that any general partner that is an Affiliate
of the Tax Credit Investor is hereby deemed to be acceptable to the City and Housing Authority,
respectively; and
9.17.11 The City and Housing Authority, respectively, will permit insurance
and condemnation proceeds received in connection with the PSH Property and/or PSH Project to
be used to rebuild the PSH Project provided that (i) sufficient funds are provided from other
sources to effectively rebuild the PSH Project to a lawful affordable housing multi -family
complex, and (ii) subject to the rights of any senior Project lenders, the City and Housing
Authority, respectively, shall hold all such proceeds and disburse them based on the progress of
construction, subject to such additional reasonable conditions as the City and Housing Authority,
respectively, may impose.
9.18 By execution of this Agreement, City hereby finds and determines as follows: (i)
that the development and construction of the City Hall Project and PSH Project are intrinsically
and inextricably related, in that both developments will be constructed on the current situs of the
existing City of San Juan Capistrano City Hall and both developments require the demolition of
the said City Hall facility, notwithstanding that each development will be independently financed;
(ii) negotiating and proceeding with both developments, simultaneously, through a single
developer will provide cost savings through economies of scale, and will facilitate a coordinated
development plan, including with respect to the development of public improvements that will
serve both developments; (iii) publicly bidding the City Hall Project would have resulted in
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significant delay in the Project, and would frustrate the purpose of City to facilitate a coordinated
development plan, in that the PSH Project is a private affordable housing development project that
will be financed through a combination of funding sources, including an allocation of federal tax
credits, the award of which followed a lengthy application process that, once approved, set forth
an inflexible closing and construction schedule; and (iv) as a result of all of the foregoing,
competitively bidding the City Hall Project would not produce an advantage, and it would be
practically impossible to obtain the coordinated development of the PSH Project and City Hall
Project, and therefor competitive bidding is not applicable.
[Signatures on Following Pages]
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SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(City Hall — Paseo Adelanto Mixed Use Permanent Supportive Housing)
CITY:
THE CITY OF SAN JUAN CAPISTRANO
a California municipal corporation
Dated: &'" /� , 2022
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By: caw3e=--�,
Cify A for ey
r
By:
rty ane
S-1
61147.80021\40183270.13
SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(City Hall — Paseo Adelanto Mixed Use Permanent Supportive Housing)
HOUSING AUTHORITY:
SAN JUAN CAPISTRANO HOUSING AUTHORITY
a successor housing authority
Dated: Acv Aw- / ti , 2022
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By:
1-4a] C/o Ase
r
By:
xecut or
S-2
61147.80021 \40183270.13
SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(City Hall – Paseo Adelanto Mixed Use Permanent Supportive Housing)
DEVELOPER:
JAMBOREE HOUSING CORPORATION,
a California nonprofit public benefit corporation
Dated: o dt4tr 3, 2022 By: VL ---7= —
Michae Massie, Chief Development Officer
S-3
61147.80021W0183270.13