HomeMy WebLinkAboutTFS Investments LLC Fultonia West Apartments 2013al
a¡r e lr3Recorded at the Request of
and When Recorded Return to:
City of Fresno
City Clerk's Office
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603
This Agreement is recorded at the request and for the benefit of the City of Fresno and is exempt
from the payment of a recording fee pursuant to Government Code Section 6103
CITY OF FRESNO
CITY OF FRESNO
HOME INVESTMENT PARTNERSHIPS PROGRAM
AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporation
and
TFS lnvestments, LLC
a California limited liability company
regarding
Fultonia West Apartments
541-545 N. Fulton Street
(4. P. N. : 452-27 4-0511 6)
South West Fresno, CA93728
TABLE OF CONTENTS
Paqe
RECITA1S.............. ..............3
ARTTCLE 1. DEF|NIT|ONS .................4
ARTICLE 2. TERMS OF THE LOAN...... .,.,.......,.7
ARTICLE 3. REPRESENTATION AND WARRANTIES OF DEVELOPER. ........ 9
ARTICLE 4. REPRESENTATION AND WARRANTIES BY DEVELOPER. ...... 1O
ARTICLE 5. COVENANTS AND AGREEMENTS OF DEVELOPER ............... 16
ARTICLE 6. DISBURSEMENT OF HOME FUNDS.... ....... 19
ARTICLE 7. CONSTRUCTION OF THE PROJECT .........21
ARTICLE 8. OPERATIONS OF THE PROJECT ............... 26
ARTICLE 9. INSURANCE AND INDEMNITY AND BONDS........... ................... 29
ARTICLE 10. DEFAULTAND REMEDY ........... 35
ARTICLE 11. GENERAL PROVISIONS. ........,..37
2
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
This HOME lnvestment Partnership¡ gram Agreement (hereinafter referred to as
the "Agreement") is entered into this,,2013, by and between the City ofFresno, a municipal corporation, acting- through its Development and Resource
Management Department - Housing and Community Development Division (hereinafter
referred to as the "C|TY"), and TFS Investments, LLC, a California limited liability company
(hereinafter referred to as'DEVELOPER').
RECITALS
A. WHEREAS, the CITY has received a HOME lnvestment Partnerships ('HOME")
Program grant from the U.S. Department of Housing and Urban Development (hereinafter
leferred to as ("HUD"), under Title ll of the Cranston-Gonzalez National Affordable Housing
Act of 1990, as amended (hereinafter referred to as the "Act").
B. WHEREAS, to advance the supply of Affordable rental housing within the City of
Fresno the CITY desires, among other things, to encourage investment in the affordább
rental housing market.
C' WHEREAS, the DEVELOPER desires to act as the owner/developer exercising
effective project control, as to the construction of a thirty-two (32)-unit multi-family
apartment complex of which thirteen (13) will be HOME-assisted units preserved as Low-
lncome rental housing, as defined by the HOME Program, and related on-site and off-site
improvements as more particularly described in EXHIBIT "8" - Project Description and
Schedule, incorporated herein.
D. WHEREAS, the Project will be constructed upon HOME Program eligible Property
owned by the DEVELOPER.
E. WHEREAS, to further its goal to increase the supply of Affordable Housing within
the City of Fresno, the CITY desires to assist the DEVELOPER by providing a Two Million
One Hundred Thousand dollars and 00/100 ($2,100,000.00) residual réceipts HOME
Program Loan to the Project (hereinafter referred to as "Loan"), at one percent (1o/o) for a
period of thirty years (30) for eligible HOME Project Property construction costs, upon the
terms and conditions in thís Agreement, as further identified in EXHIBIT "C'- Budget, to be
secured by the underlying Property and the Affordable Housing covenants attãched as
EXHIBIT uD" - Exemplar Declaration of Restriction, and Note, Exemplar Notes attached as
EXHIBIT "F" - Promissory Note loan, upon the terms and conditions in this Agreement.
upon completion of construction, the city will convert $4s0,000 of the $2.1 millión HOME
loan to a grant.
F. WHEREAS, the CITY conducted an envíronmental review of the Project pursuant to
the California Environmental Quality Act ("CEQA") guidelines on June gO, ZOl3, which
resulted in a Categorical Exemption. Additionally, the CITY completed an environmental
review of the Proje,ct pursuant to the National Environmental Policy Act ("NEPA") guidelines
on August 9,2013, that resulted in a Fínding of No significant lmpact.
G. WHEREAS, the CITY has determined that this Agreement is in the best interest of
and will materially contribute to, the Housing Element of the General Plan. Further, the
CITY has found that the Project: (i) will have a positive influence in the neighborhood and
surrounding environs, (ii) is in the vital and best interest of the Clry, and the health, safety,
and welfare of CITY residents, (iii) complies with applicable federat, State, and local laws
and requirements, (iv) will increase, improve, and preserve the community's supply of Low-
lncome Housing available at an affordable cost to Low-lncome househotd, as defined
hereunder, (v) planning and administrative expenses incurred in pursuit hereof are
necessary for the production, improvement, or preservation of Low-lncome Housing, and
(vi) will comply with any and all owner participation rules and criteria applicable theretó.
H. WHEREAS, the CITY and DEVELOPER have determined that the Project's HOME-
Assisted Units constitute routine programmatic/grantee lender activities utilizing available
and allocated program/grantee funding, outside the reach of the California Constitution
Article XXXIV and enabling legislation.
l. WHEREAS, the parties acknowledge and agree that the obligations and liabilities of
the DEVELOPER hereunder shall be joint and several unless and except to any extent
expressly provided othenryise.
J. WHEREAS, on August 28, 2013, the Housing and Community Development
Commission of the City of Fresno reviewed this HOME Agreement and recommended
approval.
K. WHEREAS, on July 8, 2013, the DEVELOPER's Managing Member reviewed and
approved the development of the Project and HOME Agreement.
NOW, THEREFORE, lN CONSIDERATION of the above recitals, which recitals are
contractual in nature, the mutual promises herein contained, and for other good and
valuable consideration hereby acknowledge, the parties agree as follows:
ARTICLE I. DEFINITIONS
The following terms have the meaning and content set forth in this Article wherever used in
this Agreement, attached exhibits or attachments that are incorporated into this Agreement
by reference.
1.1 Acquisition means vesting of the Property in fee title to the DEVELOPER.
1.2
amended.
ADA means the Americans with Disabilities Act of 1990, as most recently
1.3 Affirmative Marketing means a good faíth effort to attract eligible persons of
all racial, ethnic and gender groups, in the housing market area, to purchase the proposed
Housing Unit that proposed for rehabilitation on the eligíble Property, as hereinafter
defined.
1.4 Affordability Period means the minimum period of thirty (30) years
commencing from the date the CITY enters project completion information into HUD's
lntegrated Disbursement and lnformation System (lDlS), which date will be provided to the
DEVELOPER by the CITY and added as an administrative amendment hereto; City agrees
to enter project completion information into lDlS within 30 days of City's receipt thereof.
1.5 Affordable Housinq means thirteen (13) out of the thirty-two (32) Housing
units required to meet the affordability requirements o124 C.F.R. 92-252.
1.6 Budoet means the Budget for the development of the Project, as may be
amended upon the approval of the CITY's Housing and Community Development Division
Manager provided any increase in HOME Funds hereunder requires City Council Approval,
attached hereto as EXHIBIT'C'.
1.7 Certificate of Completion means that certificate issued, in the form attached
as EXHIBIT .E' ("Exemplar Certificate of Completion"), to the DEVELOPER by the CITY
evidencing completion of the Project and a release of construction related covenants for
the purposes of the Agreement.
1.8 CFR means the Code of Federal Regulations.
1.9 Commencement of Construction means the time the DEVELOPER or the
DEVELOPER's construction contractor begins substantial physical work on the Property,
including, without limitation, delivery of materials and any work, beyond maintenance of the
Property in its status quo condition, which shall take place in accordance with the Project
Schedule.
1.10 Declaration of Restrictions means the Declaration of Restrictions in the form
attached hereto as EXHIBIT "D", which contains the Affordability covenants and
requirements of this Agreement which shall run with the land and which the DEVELOPER
shall record or cause to be recorded against the Property no later than the date of
Commencement of Construction.
1.11 Deed of Trust means that standard form Deed of Trust (including the security
agreement) given by the DEVELOPER as Trustor, to the CITY as beneficiary, through
escrow established by the DEVELOPER at its sole cost and expense with Chicago Title
Company, and recorded against the Property to ensure the Note, together with the Deed of
Trust attached as EXHIBIT .G" and acceptable to the City Attorney, as well as any
amendments to, modification of and restatements of said Deed of Trust, which Deed of
Trust shall be subordinated to Project lenders per the Budget attached as EXHIBIT 'C".
There terms of any such Deed of Trust are hereby incorporated into this Agreement by this
reference.
1.12 Elioible Costs means the HOME eligible construction costs funded by the
Loan, consistent with the Project Budget attached as EXHIBIT 'C', allowable under 24
C.F.R. Paft 92, as specified in 24 C.F.R. 92.205 and 92.206, and not disallowed by 24
C.F.R. 92.214, provided, however, that costs incurred in connection with any activity that is
determined to be ineligible under the Program by HUD or the CITY shall not constitute
Eligible Costs.
1.13 Event of Default shall have the meaning assigned to such term under Section
10.1 hereunder.
1.14 Familv has the same meaning given that term in 24 C.F.R. 5.403.
1.15 Fundinq Sources means the CITY's HOME Funds, Redevelopment Agency
funds, and the DEVELOPER's funds, and any other funds that may become available to
the Project.
1.16 Hazardous Materials means any hazardous or toxic substances, materials,
wastes, pollutants or contaminants which are defined, regulated or listed as "hazardous
substances," "hazardous wastes," "hazardous materials," "pollutants," "contaminants" or
"toxic substances" under federal or state environmental and health safety laws and
regulations, including without limitation, petroleum and petroleum byproducts, flammable
explosives, urea formaldehyde insulation, radioactive materials, asbestos and lead.
Hazardous Materials do not include substances that are used or consumed in the normal
course of developing, operating or occupying a housing project, to the extent and degree
that such substances are stored, used and disposed of in the manner and in amounts that
are consistent with normal practice and legal standards.
1.17 HOME lnvestment Partnerships Funds (also referred to in this Agreement as
HOME Funds) means the HOME Program monies consisting of the Loan in an amount not
to exceed the sum of Two Million One Hundred Thousand dollars and 00/100
($2,100,000.00) to be used for eligible Project construction costs, pursuant to this
Agreement.
1.18 Household means one or more persons occupying the HOME Units within the
Project.
1.19 HUD means the United States Department of Housing and Urban
Development.
1.20 Loan means the Project Loan of HOME Funds, in the total amount of Two
Million One Hundred Thousand dollars and 00/100 ($2,100,000.00) and the aggregate
HOME per unit cap (24 CFR 92.250) for the thirteen (13) HOME-assisted Unit as
determined by the CITY and made available by the CITY to the Project pursuant to this
Agreement, as more specifically described in the Budget and in the Promissory Note
attached as EXHIBIT "F". The Loan shall be payable in accordance with the terms of the
Note, shall be secured by a deed of trust on each parcel constituting the Property, and shall
be subject to the Deed of Trust attached as EXHIBIT'G".
1.21 Loan Documents are collectively this Agreement, the Note (attached heretoas EXHIBIT "F"), Deed of Trust, Declaration of Restrictions, and all related
documents/instruments as they may be amended, modified or restated from time to time
along with all exhibits and attachments thereto, relative to the Loan.
1.22 Low-lncome Household means families whose annual income does not
exceed eighty percent (80%) of the median income for the Fresno, California area as
determined by HUD, except as HUD may establish income ceilings higher or lower than
eighty percent (80%) of the median for the area on the basis of HUD finding that such
variations are necessary.
1.23 Note means that certain assumable, HOME Loan Note in a principal amount
not to exceed the HOME Program per unit cap (24 C.F.R. 92.250) as determined by the
CITY, given by the DEVELOPER as promissor, in favor of the CITY as promisee,
evidencing the Loan and performance of the affordability and other covenants and
restrictions set forth in this Agreement, secured by the Deed of Trust as 2nd position lien
upon the Property, naming the CITY as beneficiary and provided to the CITY, no later than
the date of the Affordable Project funding hereunder, an exemplar of which is attached her
to as EXH|B|T "F", and incorporated herein, as well as any amendments to, modifications
of and restatements of said Note consented to by the CITY.
1.24 Proqram lncome has the meaning provided in the HOME Program including
24 C.F.R. 92.503.
1.25 Project means the construction of thirty-two (32) two- and three-bedroom
units located at 541-545 N. Fulton Street, Fresno, California 93728 (A.P.N. 452-274-05 and
452-274-16) and related on-site and off-site improvements all as described in the Project
Description and Schedule attached hereto and incorporated herein as EXHIBIT "8", upon
the property as more particularly described in EXH|BIT "A".
1.26 Proiect Completion Date means the date that the CITY shall have determined
that the Project: 1) has reached completion in accordance with the plans and specifications
as approved by the CITY; 2) is in compliance with all Housing Standards, and 3) has been
issued a Certificate of Occupancy, 4) final Project costs and Household income information
is entered into lDlS.
1.27 Project Schedule means the schedule for commencement and completion
and close of escrow of the Project included in EXHIBIT "8".
1.28 Propertv means the vacant property located at 541 - 545 N. Fulton Street,
Fresno, CA 93728 (A.P.N.: 452-274-05/16), more specifically described in the Property
Description attached to EXHIBIT uA".
1.29 Residual Receipts means Residual Receipts as defined in EXHIBIT "F".
1.30 Senior Financinq means the financing for the Project set forth on the Budget
and Finance Plan which shall be senior to the Loan.
1.31 Senior Lender means one or more lenders providing the Senior Financing for
the Affordable Project.
1.32 Unit means the thirty-two (32) units, and thirteen (13) Affordable Housing
Units to be constructed upon the Property and preserved as Affordable Housing Units for
the duration of the thirty (30) year Affordability Period.
ARTICLE 2. TERMS OF THE LOAN
2.1 Loan of HOME Funds. The CITY agrees to provide a loan of HOME Funds to
the DEVELOPER, in an amount not to exceed Two Million One Hundred Thousand dollars
and 00/100 ($2,100,000.00), all under the terms and condition provided in this Agreement.
The HOME Funds shall be used for payment of HOME eligible construction costs and
developer fee.
2.2 Loan Documents. The DEVELOPER shall execute and deliver the Loan
Documents including the Note to the CITY, and notarized Deed of Trust to Chicago Title
Company for recordation against the Property, as provided for in this Agreement.
2.3 Term of Aqreement. This Agreement is effective upon the date of execution
and shall remain in force with respect to the Project for the duration of the Affordability
Period unless earlier terminated as provided herein. After the thirty (30) year Affordability
Period, this Agreement will expire. lt is understood and agreed upon, however, that if for
any reason this Agreement should be terminated in whole or in part as provided hereunder,
without default, the CITY agrees to record a Notice of Cancellation regarding this
Agreement upon the written request of the DEVELOPER.
2.4 Loan Repayment and Maturitv. The Loan will be due and payable in
accordance with the Note and not later than the Maturity date provided in the Note.
2.5 lncorporation of Documents. The DEVELOPER's HOME application dated
July 8, 2013, the CITY Council approved Minutes of September 12, 2013, approving this
Agreement, the Loan Documents, the Act and HUD regulations at24 C.R.F. Part 85, 92,
CPD 98-2 and all exhibits, attachments, documents and instruments referenced herein, as
now in effect and as may be amended from time to time, constitute part of this Agreement
and are incorporated herein by reference. All such documents have been provided to the
parties herewith or have been otherwise provided to/procured by the parties and reviewed
by each of them prior to execution hereof.
2.6 Covenants of DEVELOPER. The DEVELOPER for itself and its
agents/assigns covenants and agrees to comply with all the terms and conditions of this
Agreement and the requirements of 24 CFR Part 92.
2.7 Subordination. This Agreement, the Declaration of Restrictions and the Deed
of Trust may be subordinated to certain approved financing (in each case, a "senior
Lender"), to no worse than 2nd position, but only on condition that all of the following
conditions are satisfied: (a) All of the proceeds of the proposed Senior Loan, less any
transaction costs, must be used to provide construction financing for the Project consistent
with an approved financing plan; (b) the DEVELOPER must demonstrate to the CITY's
reasonable satisfaction that the DEVELOPER has a fully executed and recorded funding
agreement for Redevelopment Agency funding for pre-development and construction of the
project; (c) the subordination agreement must provide the CITY with adequate rights to
cure any defaults by the DEVELOPER including providing the CITY or its successor with
copies of any notices of default; (d) upon a determinatíon by the City Manager that the
conditions in this Section have been satisfied, the City Manager or his/her designee will be
authorized to execute the approved subordination agreement, inter-creditor agreements,
standstill agreements, and/or other documents as may be reasonably requested by the
Lender to evidence subordination to the Project financing, without the necessity of any
further action or approval provided that such agreements contain written provisions that are
no more onerous and which are consistent with the customary standard requirements
imposed by the financing source(s), on subordinate cash flow obligations under their then
existing senior financing policies, and further provided that the City Attorney approves such
document(s) as to form.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF DEVELOPER
3.1 Existence and Qualification. The DEVELOPER, represents and warrants to
the CITY as of the date hereof, that the DEVELOPER is a duly organized California
corporation in good standing with the State of California; the DEVELOPER has the
requisite power, right, and legal authority to execute, deliver, and perform its obligations
under the HOME Agreement has taken all actions necessary to authorize the execution,
delivery, performance, and observance of its obligations under this Agreement. This
Agreement, when executed and delivered by the DEVELOPER enforceable against the
DEVELOPER in accordance with its respective terms, except as such enforceability maybe limited by: (a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or other similar laws of general applicability affecting the enforcement of
creditors' rights generally, and (b) the application of general principles of equity without the
joinder of any other party.
3.2 No Litiqation Material to Financial Condition. The DEVELOPER represents
and warrants to the CITY as of the date hereof that, except as disclosed to and approved
by CITY in writing, no litigation or administrative proceeding before any court or
governmental body or agency is now pending, nor, to the best of the DEVELOPER's
knowledge, is any such litigation or proceeding now threatened, or antícipated against the
DEVELOPER that, if adversely determined, would have a material adverse effect on the
financial condition, business, or assets of the DEVELOPER or on the operation of the
Project.
3.3 No Conflict of lnterest. The DEVELOPER represents and warrants to the
CITY as of the date hereof that no officer, agent, or employee of the CITY directly or
indirectly owns or controls any interest in the DEVELOPER, and no person, directly or
indirectly owning or controlling any interest in the DEVELOPER, is an official, officer, agent,
or employee of the CITY.
3.4 No Leqal Bar. The DEVELOPER represents and warrants to the CITY, as of
the date hereof that the execution, delivery, performance, or observance by the
DEVELOPER of this Agreement will not, to the best of the DEVELOPER's knowledge,
materially violate or contravene any provisions of: (a) any existing law or regulation, or any
order of decree of any court, governmental authority, bureau, or agency; (b) governing
documents and instruments of the DEVELOPER; or (c) any mortgage, indenture, security
agreement, contract, undertaking, or other agreement or instrument to which the
DEVELOPER is a party or that is binding on any of its properties or assets, the result of
which would materially or substantially impair the DEVELOPER's ability to perform and
discharge its obligations or its ability to complete the Project under this Agreement.
3.5 No Violation of Law. The DEVELOPER represents and warrants to the CITY
as of the date hereof that, to the best of the DEVELOPER's knowledge, this Agreement
and the operation of the Project as contemplated by the DEVELOPER, do not violate any
existing federal, state or local laws of regulations.
o
3.6 No Litiqation Material to Proiect. The DEVELOPER represents and warrants
to the CITY as of the date hereof, except as disclosed to, and approved by the CITY in
writing, there is no action, proceeding, or investigation now pending, or any basis therefor
known or believed to exist by the DEVELOPER that questions the validity of this
Agreement, or of any action to be taken under this Agreement, that would, if adversely
determined, materially or substantially impair the DEVELOPER's ability to perform and
observe its obligations under this Agreement, or that would either directly or indirectly have
an adverse effect or impair the completion of the Project.
3.7 Assurance of Governmental Approvals and Licenses. The DEVELOPER
represents and warrants to the CITY, as of the date hereof, that the DEVELOPER has
obtained and, to the best of the DEVELOPER's knowledge, is in compliance with all
federal, state, and local governmental reviews, consents, authorizations, approvals, and
licenses presently required by law to be obtained by the DEVELOPER for the Project as of
the date hereof.
ARTICLE 4. REPRESENTATION AND WARRANTIES BY DEVELOPER
The DEVELOPER, for itself and its development team represents and warrants that:
4.1 Accessibility. The DEVELOPER covenants and agrees with the CITY that it
shall comply with 24 C.F.R. Par 8, which implements Section 504 of the Rehabilitation Act
of 1973 (29 U,S.C .794), including, without limitation, the construction of the Project so that
it meets the applicable accessibility requirements, including, but not limited to, the following
A. At least five percent (5%) of the dwelling units, or at least two (2), whichever
is greater, must be constructed to be accessible for persons with mobility disabilities. An
additional two percent (2o/ol of the dwelling units, or at least one (1) unit, whichever is
greater, must be accessible for persons with hearing or visual disabilities. These units
must be constructed in accordance with the Uniform Federal Accessibility Standards
(U.F.A.S.) or a standard that is equivalent or stricter. These mandates can be found at24
C.F.R. Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C.
7e4).
B. The design and construction requirements of the Fair Housing Act (Title Vlll
of the Civil Rights Act of 1968, as amended), including the following seven (7) requirements
of the Fair Housing Access¡bility Guidelines:
(i) Provide at least one accessible building entrance on an
accessible route.(¡i) Construct accessible and usable public and common use areas.(¡¡¡) Construct all doors to be accessible and usable by persons in
wheelchairs.(¡v) Provide an accessible route into and through the covered
dwelling unit.(v) Provide light switches, electrical outlets, thermostats and other
Environmental controls in accessible locations.
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(v¡) Construct reinforced bathroom walls for later installation of grab
bars around toilets, tubs, shower stalls and shower seats, where
such facilities are provided.
(vii) Provide usable kitchens and bathrooms such that an individual
who uses a wheelchair can maneuver about the space.
C. Title lll of the Americans with Disability Act of 1990 (ADA) as it relates to
the required accessibility of public and common use area of the Project.
D. The design and construction requirements as required by the CITY's
Universal Design Ordinance pursuant to FMC 11-110, including, but not limited to the
following requirements:
i. No step accessible entryway;ii. All interior doonrays and passageways at least 32 inches
wide;ii¡. One downstairs "flex room" and accessible bathroom
with reinforcements for grab bars;iv. Six square feet of accessible kitchen counter space; andv. Hallways at least 42 inches wide.
4.2 Affirmative Marketino. The DEVELOPER warrants, covenants and agrees
with the CITY that it shall comply with all affirmative marketing requirements, including
without limitation, those set out at 24 C.F.R. 92.350 and 92.351, in order to provide
information and otherwise attract eligible persons from all racial, ethnic and gender groups
in the housíng market in the sale of the Project Unit. The DEVELOPER shall be
responsible for complying with the CITY's "Affirmative Marketing Policy" document, as
amended from time to time. The DEVELOPER shall maintain records of actions taken to
affirmatively market units constructed in the future, and to assess the results of these
actions.
4.3 Availabilitv of HOME Funds. The DEVELOPER understands and agrees that
the availability of HOME Funds is subject to the control of HUD, or other federal agencies,
and should said Funds be encumbered, withdrawn or othenruise made unavailable to the
CITY, whether earned by or promised to the DEVELOPER, and/or should the CITY in any
fiscal year hereunder fail to allocate said Funds, the CITY shall not provide said Funds
unless and until they are made available for payment to the CITY by HUD and the CITY
receives and allocates said Funds. No other funds owned or controlled by the CITY shall
be obligated under this Agreement.
4.4 Compliance with Aqreement. The DEVELOPER warrants, covenants and
agrees that, in accordance with the requirements of 24 C.F.R. 92.252 and 24 C.F.R. Part
85, upon any uncured default by the DEVELOPER within the meaning of Article 10.1 of this
Agreement, the CITY may suspend or terminate this Agreement and all other agreements
with the DEVELOPER without waiver or limitation of rights/remedies othenruise available to
the CITY.
The DEVELOPER warrants, covenants and agrees that it
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4.5 Conflict of lnterest.
shall comply with the Conflict of lnterest requirements of 24 C.F.R. 92.356 including,
without limitation, that no officer, employee, agent or consultant of the DEVELOPER may
occupy a Project Unit. The DEVELOPER understands and acknowledges that no
employee, agent, consultant, officer or elected official or appointed official of the CITY, who
exercises any functions or responsibilities with respect to the Project, or who is in a position
to participate in a decision making process or gain inside information with regard to these
activities, may obtain a financial interest or benefit from the Project, or have an interest in
any contract, subcontract or agreement with respect thereto, or the proceeds thereunder,
either for him or herself or for anyone with which that person has family or business ties,
during his or her tenure or for one year thereafter. To the extent provided at 24 C.F.R.
92.356(f), no owner, developer or sponsor of the Project, or officer, employee, agent or
consultant thereof, may occupy a Project Unit.
4.6 Construction Standards. The DEVELOPER shall construct the proposed
Project Units assisted under this Agreement in compliance with all applicable local codes,
ordinances and zoning requirements in effect at the time of issuance of CITY building
permits.
4.7 Covenants and Restrictions to Run with the Land. The CITY and the
DEVELOPER expressly warrant, covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will run with the land, provided,
however, that, on expiration of this Agreement such covenants and restrictions shall expire,
provided that such agreements contain written provisions that are no more onerous and
which are consistent with the customary standard requirements imposed by the financing
source(s), on subordinate cash flow obligations under their then existing senior financing
policies, and further provided that City Attorney approves such document(s) as to form.
A. The CITY and the DEVELOPER hereby declare their understanding
and intent that the covenants and restrictions set forth herein directly benefit the land (a) by
enhancing and increasing the enjoyment and ownership of the proposed Project by a
certain Low-lncome Household, and (b) by making possible the obtaining of advantageous
financing for construction.
B. The DEVELOPER covenants and agrees with the CITY that after
issuance of a recorded Certification of Completion for the Project until the expiration of the
Affordability Period it shall cause three (3) of the Units to be rented as Affordable Housing
for Very Low-lncome households and ten (10) of the Units to be rented as Affordable
Housing for Low-lncome households.
C. Without waiver or limitation, the CITY shall be entitled to injunctive or
other equitable relief against any violation or attempted violation of any covenants and
restrictions, and shall, in addition, be entitled to damages available under law or contract
for any injuries or losses resulting from any violations thereof.
D. All present and future owners of the Property and other persons
claiming by, through, or under them shall be subject to and shall comply with the covenants
and restrictions. The acceptance of a deed of conveyance to the Property shall constitute
an agreement that the covenants and restrictions, as may be amended or supplemented
from time to time, are accepted and ratified by such future owners, tenant or occupant, and
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all such covenants and restrictions shall be covenants running with the land and shall bind
any person having at any time any interest or estate in the Property, all as though such
covenants and restrictions were recited and stipulated at length in each and every deed,
conveyance, mortgage or lease thereof.
E. The failure or delay at any time of the CITY or any other person
entitled to enforce any such covenants or restrictions shall in no event be deemed a waiver
of the same, or of the right to enforce the same at any time or from time to time thereafter
or an estoppel against the enforcement thereof.
4.8 Displacement of Persons. The DEVELOPER covenants and agrees with the
CITY that pursuant to 24 C.F.R. 92.353, it will take all reasonable steps to minimize the
displacement of any persons (families, individuals, businesses, nonprofit organizations and
farms). The parties acknowledge and agree that the Property is currently vacant land and
is not occupied.
4.9 Initial and Annual lncome Certification and Reportinq. The DEVELOPER
covenants and agrees with the CITY that it shall comply with the procedures for annual
income determinations at 24 C.F.R. 92.203. The DEVELOPER, shall obtain, complete and
maintain on file, immediately prior to initial occupancy, and annually thereafter, income
certifications from the Project Unit Household members. The DEVELOPER, shall make a
good faith effort to verify that the income provided by an applicant or occupying Household
in an income certificatíon is accurate by taking one or more of the following steps as part of
the verification process: (1) obtain a pay stub for the most recent pay period; (2) obtain an
income verification form from the applicant's current employer; (3) obtain an income
verification form from the Social Security Administration and California Department of
Social Services if the applicant receives assistance from either of such agencies; (4) obtain
income tax return for the most recent tax year; or (5) if the applicant is unemployed, obtain
another form of independent verification. Copies of Household income certification and
verification must be available for review and approval by the CITY prior at the initial lease
up. The DEVELOPER further warrants, covenants and agrees that it cooperate with the
CITY in the CITY's income certification/affordability monitoring activities.
4.10 Lead-Based Paint. The DEVELOPER covenants and agrees with the CITY
that it shall comply with all applicable requirements of the Lead-Based Paint Poisoning
Prevention Act of 42 U.S.C. 4821 et seq., 24 C.F.R. Part 35, including the HUD 1012 Rule,
and 24 C.F.R. 982.401O, and any amendment thereto, and Environmental Protection
Agency (EPA) Section 402 (c)(3) of the Toxic Substances Control Act (TSCA) to address
lead-based hazards created by renovation, repair, and painting activÍties that disturb lead-
based paint in target housing and child-occupied facilities. Contractors performing
renovations in lead-based paint units must be EPA-certified renovators. These
requirements apply to all units and common areas of the Project. The DEVELOPER shall
incorporate or cause incorporation of this provision in all contracts and subcontracts for
work performed on the Project, which Ínvolve the application of paint. The DEVELOPER
shall be responsible for all disclosure, inspection, testing, evaluation, and control and
abatement activities.
4.11 Minoritv Outreach Activities. The DEVELOPER covenants and agrees with
the CITY that it shall comply with all federal laws and regulations described in Subpart H of
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24 C.F.R. Part 92, including, without limitation, any requirement that the DEVELOPER
comply with the CITY's minority outreach program.
4.12 Other Laws and Requlations. The DEVELOPER covenants and agrees with
the CITY that, in addition to complying with the federal laws and regulations already cited in
this Agreement, the DEVELOPER has reviewed, and shall comply with and require all its
contractors and subcontractors on the Project to comply with, all other federal laws and
regulations that apply to the HOME Program, including, without limitation, requirements of
24 C.F.R. 58.6 and the Flood Disaster Protection Act of 1973, as amended (42 U.S.C.
4001 -4128 the following:
A. The DEVELOPER does not intend to use any financing that is secured
by a mortgage insured by HUD in connection with the Project as part of its land acquisition
and construction costs of the Project.
B. The Project is not located in a tract identified by the Federal
Emergency Management Agency as having specialflood requirements.
C. The Project requirements, Subpart F of 24 C.F.R. Part 92, as
applicable and in accordance with the type of Project assisted, including, but not limited to,
the HOME per-unit subsidy amount at24 C.F.R. 92.250.
D. The property standards at 24 CFR 92.251.
E. The Project "Labor" requirements, as applicable, of 24 C.F.R. 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5).
F. The provisions of Section 102 and 107 of the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor
Regulations (29 CFR Part 5), in regards to the construction and management of the
proposed Project.
G. The DEVELOPER and its contractors, subcontractors and service
providers for the Project, shall comply with all applicable local, State and federal
requirements concerning equal employment opportunity, including compliance with
Executive Order (E.O.) 11246, "Equal Employment Opportunity", as amended by E.O.
11375, (amending E.O. 11246 Relating to Equal Employment Opportunity), and as
supplemented by regulations at 41 C.F.R. part 60, "Office of Federal Contract Compliance
Programs, Equal Employment Opportunity, Department of Labor".
H. The provisions of the Copeland "Anti-Kickback" Act (18 U.S.C. 874), as
supplemented by Department of Labor regulations (29 C.F.R. part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or
Grants from the United States").
l. The provisions of the Clean Air Act (42 U.S.C.7401 et seq.) and the
FederalWater Pollution ControlAct (33 U.S.C. 1251 et seq.), as amended.
14
1352).
J. The provisions of the Byrd Anti-Lobbying Amendment (31 U.S.C.
K. The provision of E.O.s 12549 and 12689, "Debarment and
Suspension," as set forth at 24 C.F.R. part24.L. The provisions of the Drug-Free Workplace Act of 1988 (42 U.S.C.
701), in accordance with the Act and with HUD's rules at 24 CFR par|24, subpart F.
M. Title I of the Civil Rights Act of 1968 PL. 90-284.
N. E.O. 11063 on Equal Opportunity and Housing.
O. Section 3 of the Housing and Urban Development Act of 1968
P. The Housing and Community Development Act of 1974.
O. Clean Water Requirements 33 U.S.C. 1251.
R. Civil Rights Requirements, 29 U.S.C. 623, 42 U.S.C. 2000, 42 U.S.C.
6102,42 U.S.C 12112,42 U.S.C. 12132,49 U.S.C 5332,29 C.F.R. Part 1630,41 C.F.R.
and Part 60 et seq.
4.13 Faith Based Activities. The DEVELOPER warrants, covenants and agrees
with the CITY that it shall not engage in any prohibited activities described in 24 C.F.R.
92.257.
4.14 Reportinq Requirements. The DEVELOPER warrants, covenants and agrees
with the CITY that it shall submit performance reports to the CITY as detailed in Section7.17. Furthermore, the DEVELOPER agrees to provide, at the sole cost of the
DEVELOPER, an annual audited Financial Statements for the Project expenses and
ongoing financial transactions which occur as a result of this Agreement as detailed in
Section 5.6. The DEVELOPER agrees to account for the expenditure of HOME Funds
using generally accepted accounting principles, which financial documentation shall be
made available to the CITY and HUD upon their respective written request(s).
4.15 Affordabilitv Period. The DEVELOPER covenants and agrees with the CITY
that the HOME Project Units will be Affordable Housing available to a Low-lncome
Household and other requirements of 24 C.F.R. 92.252 to eligible Low-lncome tenants,
except upon foreclosure by a lender or transfer in lieu of foreclosure following default undera Deed of Trust. ln the event DEVELOPER fails to comply with this section, the
DEVELOPER shall return to the CITY all the HOME Funds disbursed to the DEVELOPER
by the CITY.
4.16 Terminated Proiects. The DEVELOPER understands and agrees that, if the
Project is terminated before completion, either voluntarily or othenruise, such constitutes an
ineligible activity and the CITY will not be required to provide any further HOME Program
assistance funding to the Project and the CITY may seek available relief.
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ARTICLE 5. COVENANTS AND AGREEMENTS OF DEVELOPER
The DEVELOPER covenants and agrees to the following, for the entire term of the
Agreement.
5.1 Adequate Repair and Maintenance. The DEVELOPER during its time on
title shall cause the maintenance the Project and Property to be in compliance with all
applicable codes, laws, and ordinances.
5.2 Affordable Rental Housinq. The DEVELOPER covenants and agrees that the
Affordable Project shall constitute thirteen (13) affordable Housing Units for rent and
preserved for a Low-lncome Household during the thirty (30) year affordability period. ln
the event the DEVELOPER fails to comply with the time period in which the Affordable
Units constitute Affordable Housing, the CITY shall without waiver or limitation, be entitled
to injunctive relief, as the DEVELOPER acknowledges that damages are not adequate
remedy at law for such breach.
5.3 Compliance with Envlronmental Laws. The DEVELOPER shall cause the
Project to be in compliance with, and not to cause or permit the Project to be in violation of,
any Hazardous Materials law, rule, regulation, ordinance, or statute. Although the CITY will
utilize its employees and agents for regular inspection and testing of the eligible Property,
the DEVELOPER agrees that, if the CITY has reasonable grounds to suspect any such
violation, the DEVELOPER shall be entitled to thirty (30) days' notice and opportunity to
cure such violation. lf the suspected violation is not cured, the CITY shall have the right to
retain an independent consultant to inspect and test the eligible Property for such violation.
lf a violation is discovered, the DEVELOPER shall pay for the reasonable cost of the
independent consultant.
Additionally, the DEVELOPER agrees:
A. That the CITY shall not be directly or indirectly responsible, obligated
or liable with the inspection, testing, removal or abatement of asbestos or other hazardous
or toxic chemicals, materials, substances, or wastes and that all cost, expense and liability
for such work shall be and remain solely with the DEVELOPER;
B. Not to transport to, or from, the proposed Property, or use, generate,
manufacture, produce, store, release, discharge, or dispose of on, under, or about the
Property, or surrounding real estate, or transport to or from the project site, or surrounding
real estate, any hazardous or toxic chemicals, materials, substance, or wastes or allow any
person or entity to do so except in such amounts and under such terms and conditions
permitted by applicable laws, rules, regulations, ordinances, and statutes;
C. To give prompt written notice to the CITY of the following:
(¡) Any proceeding or inquiry by any governmental authority with
respect to the presence of any hazardous or toxic chemicals,
materials, substance, or waste in or on the eligible Property or
the surrounding real estate or the migration thereof from or to
other property;
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(ii) All claims made or threatened by any third party against the
DEVELOPER, or such properties relating to any loss or injury
resulting from any hazardous or toxic chemicals, materials,
substance, or waste; and
(iii) The DEVELOPER's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of such properties that would cause such
properties or underlying or surrounding real estate or part thereof to be subject to any
restrictions on the ownership, occupancy, transferability, or use of the property under any
environmental law, rule, regulation, ordinance or statute; and
D. To indemnify, defend, and hold the CITY harmless from any and all
claims, actions, causes of action, demand, judgments, damages, injuries, administrative
orders, consent agreements, orders, liabilities, penalties, costs, expenses (including
attorney's fees and expenses), and disputes of any kind whatsoever arising out of or
relating to the DEVELOPER or any other party's use of release of any hazardous or toxic
chemicals, materials, substance, or waste on the Property regardless of cause or origin,
including any and all liability arising out of or relating to any investigation, site monitoring,
containment, cleanup, removal, restoration, or related remedial work of any kind or nature.
5.4 Compliance With Laws. The DEVELOPER shall promptly and faithfully
comply with, conform to and obey all present and future federal, state and local statutes,
regulations, rules, ordinances and other legal requirements applicable by reason of this
Agreement or othenruise to the Project including without limitation prevailing wage
requirements. The DEVELOPER acknowledges that the use of HOME Funds subjects the
Project to extensive federal regulation and covenants and agrees that it shall comply with,
conform to and obey (and take steps as are required of the DEVELOPER to enable the
CITY to comply with, conform to and obey) all federal statues, regulations, rules and
policies applicable to the Project.
5.5 Existence. Qualification, and Authoritv. The DEVELOPER shall provide to
the CITY any evidence required or requested by the CITY to demonstrate the continuing
existence, qualification, and authority of the DEVELOPER to execute thís Agreement and
to perform the acts necessary to carry out the Project.
5.6 Financial Statements and Audits. The DEVELOPER, as a subrecipient of
federal financial assistance, is required to comply with the provisions of the Single Audit Act
of 1984 (31 U.S.C. Sections 7501 et seq.), as amended. Annually, within one hundred and
eighty (180) days following: 1) the end of fiscal yea(s) in which the HOME Funds are
disbursed hereunder, and 2) the end of fiscal year(s) in which this contract shall terminate,
and otherwise upon the CITY's, written request during the term of this Agreement, the
DEVELOPER, at its sole cost and expense shall submit to the CITY:
A. Audited annual financial statements that are current, signed, and
prepared according to generally accepted accounting principles consistently applied
(except as othenryise disclosed therein).
B. Audited Financial Statements covering the income and expenses, and
the financial transactions for the Project during the prior fiscal year.
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5.7 lnspection and Audit of Books. Records and Documents. The DEVELOPER
shall be accountable to the CITY for all HOME Funds disbursed for the Project pursuant to
this Agreement. Any duly authorized representative of the CITY or HUD shall, at all
reasonable times, have access to and the right to inspect, copy, make excerpts or
transcripts, audit, and examine all books of accounts, records, files and other papers or
property, and other documents of the DEVELOPER pertaining to the Project or all matters
covered in this Agreement and for up to six (6) years after the expiration or termination of
this Agreement.
A. The DEVELOPER will maintain books and records for the Project
using generally accepted accounting principles. The DEVELOPER agrees to maintain
books and records that accurately and fully show the date, amount, purpose and payee of
all expenditures financed with HOME Funds and to keep all invoices, receipts and other
documents related to expenditures financed with HOME Funds for not less than six (6)
years after the expiratíon or termination of the Agreement. Books and records must be
kept accurate and current. For purposes of this section, "books, records and documents"
include, without limitation; plans, drawings, specifications, ledgers, journals, statements,
contracts/agreements, funding information, funding applications, purchase orders,
invoices, loan documents, computer printouts, correspondence, memoranda, and
electronically stored versions of the foregoing. This section shall survive the termination of
this Agreement.
B. The CITY may audit any conditions relating to this Agreement at the
CITY's expense, unless such audit shows a significant discrepancy in information reported
by the DEVELOPER in which case the DEVELOPER shall bear the cost of such audit. The
DEVELOPER shall also comply with any applicable audit requirements of 24 C.F.R.
92.506. This section shall survive the termination of this Agreement.
C. The DEVELOPER will cooperate fully with the CITY and HUD in
connection with any interim or final audit relating to the Project that may be performed
relative to the performance of this Agreement.
5.8 lnspection of Propertv. Any duly authorized representative of the CITY or
HUD shall, at all reasonable times, have access and the right to inspect the Property until
completion of the Project.
5.9 No Other Liens. The DEVELOPER shall not create or incur, or suffer to be
created or incurred, or to exist, any additional mortgage, pledge, encumbrance, lien,
charge, or other security interest of any kind on the eligible Property, other than those
related to the Project's construction or pre-development loans in relation to the Project,
consistent with the attached Budget, without the prior written consent of the CITY.
5.10 Nondiscrimination. The DEVELOPER shall comply with and cause any and
all contractors and subcontractors to comply with any and all federal, state, and local laws
with regard to illegal discrimination, and the DEVELOPER shall not illegally discriminate
against any persons on account of race, religion, sex, family status, age, handicap, or place
of national origín in its performance of this Agreement and the completion of the Project.
5.11 Ownership. Except as required in pursuit hereof, the DEVELOPER shall not
18
sell, lease, transfer, assign or otherwise dispose of all or any material part of any interest it
might hold in the Property or the Project without the prior written consent of the CITY,
which consent shall not be unreasonably withheld or delayed.
5.12 Payment of Liabilities. The DEVELOPER shall pay and discharge in the
ordinary course of its business all material obligations and liabilities, the nonpayment of
which could have a material or adverse impact on its financial condition, business, or
assets or on the operation of the Project, except such obligations and liabilities that have
been disclosed to the CITY in writing and are being contested in good faith.
5.13 Report of Events of Default. The DEVELOPER shall promptly give written
notice to the CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 6. DISBURSEMENT OF HOME FUNDS
Without waiver of limitation, the parties agree as follows, regarding HOME Funds:
6.1 Loan Commitments and Financino Plan. The DEVELOPER shall submit its
most current Finance Plan for the Project to the CITY within the time frame provided in the
Project Schedule. So long as the Finance Plan is consistent with the Budget, the CITY
shall accept the Finance Plan. lf the Finance Plan is not consistent with the Budget, then
within thirty (30) days after receiving the Finance Plan, the CITY, through its Development
and Resource Management Department, Housing and Community Development Division,
will review the Finance Plan and deliver notice to the DEVELOPER either approving or
disapproving the Finance Plan in its reasonable discretion. lf the CITY disapproves the
Finance Plan, it will specify the reason for the disapproval and ask the DEVELOPER to
provide any additional information the CITY may need to approve the Finance Plan. The
failure of the CITY to send notice within such thirty (30) day time period shall be deemed an
approval of the Finance Plan.
6.2 Finance Plan Content. The Finance Plan shall contain all Project pre-
construction and post-construction, and permanent loans. Upon the CITY'S receipt of
DEVELOPER'S fully funded, secured and executed construction/permanent loan in an
amount greater than or equal to the letter of credit, CITY agrees to release DEVELOPER'S
existing letter of credit. The total amount of the liens to be recorded against the Property as
presented in the Finance Plan shall not exceed the DEVELOPER's estimated construction
Budget.
Prior to the execution of the Agreement, DEVELOPER provided CITY with an
irrevocable letter of credit from Fresno First Bank located in Fresno, California in the
amount of one million three hundred forty-five thousand three hundred thirty-eight dollars
and 00/100 ($t,345,338.00) as a funding source. After fully executing the Agreement, the
DEVELOPER may apply for a construction/permanent loan.
6.3 Use of HOME Funds. The DEVELOPER warrants, covenants and agrees
that it shall request HOME Funds only for reimbursement of eligible costs incurred as
identified in the attached Budget, attached hereto as EXHIBIT "C", including costs
allowable under 24 C.F.R. 92.206, aggregating not more than Two Million One Hundred
19
Thousand dollars and 00/100 ($2,100,000.00). The CITY's obligations shall in no event
exceed the HOME Funds amount specified in this Agreement.
A. lf any such Funds shall be determined to have been requested and/or
used by the DEVELOPER for costs other than for eligible costs, and subject to the notice
and cure provisions of Section 10.2 hereunder, an equal amount from nonpublic funds shall
become immedíately due and payable by the DEVELOPER to the CITY; provided,
however, that the DEVELOPER shall, subject to its full cooperation with the CITY, be
entitled to participate in any opportunity to remedy, contest, or appeal such determination.
B. ln the event HOME Funds are requested to reimburse Eligible Costs
which subsequently lose eligibility as Eligible Costs, the DEVELOPER shall immediately
return such HOME Funds to the CITY.
C. The CITY will disburse HOME Funds, only to the DEVELOPER
through proper invoicing, for elígible costs of the Affordable Units as provided in this Article
6.
6.4 Conditions Precedent to Disbursement. The CITY shall not be obligated to
make or authorize any disbursements of HOME Funds unless the following conditions are
satisfied:
A. There exists no Event of Default as provided in Article 10, nor any act,
failure, omission or condition that with the passage of time or the giving of notice or both
would constitute an Event of Default.
B. The DEVELOPER has received and delivered to the CITY firm
commitments of, or Agreements for, sufficient funds to finance the Project.
C. The CITY has approved the requested reimbursement of eligible
Project costs.
D. The DEVELOPER has obtained insurance coverage and delívered to
the City evidence of insurance as required in Article 9.
E. The DEVELOPER is current with its compliance of reporting
requirements set forth in this Agreement.
F. The DEVELOPER has provided the CITY with a written request for
HOME Funds (provided by the CITY), for reimbursement of eligible Project costs, and
detailing such Eligible Costs applicable to the request.
Agreement.
G. The CITY has received certification required by Section 7.6 of this
H. The CITY has received, and continues to the have the right to
disburse, HOME Funds.
6.5 Requests for Reimbursement of HOME Funds. The DEVELOPER shall
20
request that the CITY reimburse funds for eligible construction cost using the CITY's
Request for Disbursement of Funds form. The DEVELOPER shall only request a
maximum of Two Million One Hundred Thousand dollars and 00/100 ($2,100,000.00) in
HOME Program assistance for the Project construction costs and developer fee. All
requests should provide in detail such Eligible Costs applicable to the request.
6.6 DEVELOPER Certification. The DEVELOPER shall submit to the CITY a
written certification that, as of the date of the Request for Reimbursement ("Certification"):
A. The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate in material
respects.
B. The DEVELOPER has carried out all of its obligations and is in
compliance with all the obligations or covenants specified in this Agreement, to the extent
that such obligations or covenants are required to have been carried out or are applicable
at the time of the request for the Reimbursement;
C. The DEVELOPER has not committed or suffered an act, event,
occurrence, or circumstance that constitutes an Event of Default or that with the passage of
time or giving of notice or both would constitute an Event of Default; and
D. The Disbursement requested will be used solely for reimbursement of
Eligible Construction Costs identified in this Agreement and must by supported by the
itemized obligations that have been properly incurred, expended and are properly
chargeable in connection with construction of the Project.
6.6 Disbursement of Funds. The disbursement of HOME Program Loan Funds
shall occur within the normal course of CITY business (approximately thirty (30) days) after
the CITY receives the Certification and to the extent of annually allocated and available
HOME Funds.
ARTICLE 7. CONSTRUCTION OF THE PROJECT
Without waiver of limitation, the parties agree as follows:
7.1 Pre-Construction Meetinq Reoardinq HOME Proqram Processes and
Procedures. The CITY will schedule, and the DEVELOPER shall attend a meeting prior to
construction with the CITY for the purpose of outlining the Project processes and
procedures.
7.2 Commencement and Completion of Project. The DEVELOPER shall
commence construction of the Project and, record a Notice of Completion of construction of
the Project in accordance with the Project Schedule as indentified in EXHIBIT'8".
7.3 Contracts and Subcontracts. Consistent with Section 5.3, all hazardous
waste abatement, construction work and professional services for the Project shall be
performed by persons or entities licensed or otherwise legally authorized to perform the
applicable work or service in the State of California and the City of Fresno. The
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DEVELOPER shall provide the CITY with copies of all agreements it has entered into with
any and all general contractors or subcontractors for this Project. The DEVELOPER shall
require that each such general contractor agreement contain a provision whereby the
party(ies) to the agreement, other than the DEVELOPER, agree to: (i) notify the CITY
immediately of any event of default by the DEVELOPER thereunder, (ii) notify the CITY
immediately of the filing of a mechanic's lien, (iii) notify the CITY immediately of termination
or cancellation of the construction agreement on the Project, and (iv) provide the CITY,
upon the CITY's request, an Estoppel Certificate certifying that the agreement is in full
force and effect and the DEVELOPER is not in default thereunder. The DEVELOPER
agrees to notify the CITY immediately of termination or cancellation of any such
agreement(s), notice of filing of a mechanic's lien, or breach or default by other party(ies)
thereto.
7.4 Damaqe to Propertv. To the extent consistent with the requirements of any
permitted encumbrance, or as othenruise approved by the CITY, and subject to Article g of
this Agreement, if any building or improvement constructed on the Property is damaged or
destroyed by an insurable cause, the DEVELOPER shall, at its cost and expense, diligently
undertake to repair or restore said buildings and improvements consistent with the original
Plans and Specifications of the Project. Such work or repair within ninety (90) days after
the insurance proceeds are made available to the DEVELOPER and shall be completed
within two (2) years thereafter. All insurance proceeds collected for such damage or
destruction shall be applied to the cost of such repairs or restoration and, if such insurance
proceeds shall be insufficient for such purpose, the DEVELOPER shall use its best efforts
to make up the deficiency.
7.5 Fees. Taxes and Other Levies. The DEVELOPER shall be responsible for
payment of all fees, assessments, taxes, charges and levies imposed by any public
authority or utility company with respect to the Property or the Project, and shall pay such
charges prior to delinquency. However, the DEVELOPER shall not be required to pay and
discharge any such charge so long as: (a) the legality thereof is being contested diligently
and in good faith and by appropriate proceedings, and (b) if requested by the CITY, the
DEVELOPER deposits with the CITY any funds or other forms of assurances that the
CITY, in good faith, may determine from time to time are appropriate to protect the CITY
from the consequences of the contest being unsuccessful. The DEVELOPER shall have
the right to apply for and obtain an abatement and/or exemption of the Project from real
property taxes in accordance with all applicable rules and regulations, including Section
214(9) of the California Revenue and Taxation Code.
7.6 Financinq. The DEVELOPER shall promptly inform the CITY of any new
financing or funding not included in the budget for the Project, and the DEVELOPER shall
provide the CITY with copies of all agreements with any and all funding sources for the
Project. The DEVELOPER shall require each agreement with any and all funding sources
not included in the Budget to contain a provision whereby the party(ies) to the agreement
other than the DEVELOPER, if permitted by the party(ies) applicable rules and regulations,
agree to notify the CITY immediately of any event of default by the DEVELOPER
thereunder. Should the DEVELOPER not comply with all the obligations of this section, the
loan shall become immedíately due and payable as provided for in this Agreement. This
Section shall survive expiration or termination of this Agreement.
22
7.7 ldentification Signaqe. Before the start of construction, the DEVELOPER
shall place a poster or sign, with a minimum four feet by four feet in size, identifying the
City of Fresno Development and Resource Management Department, Housing and
Community Development Division as a Project participant. The sign shall also include the
CITY's Housing logo, as well as the Equal Housing Opportunity logo, as mandated by
HUD. The font size shall be a minimum of 4 inches. The poster/sign shall be appropriately
place, and shall remain in place throughout the Project construction.
7.8 lnspections. The DEVELOPER shall permit, facilitate, and require its
contractors and consultants to permit and facilitate observation and inspection at the job
site by the CITY and other public authorities during reasonable business hours, for the
purpose of determining compliance with this Agreement, including without limitation those
annual on-site inspections required of the CITY by 24 C.F.R. 92.504(d).
7.9 Utilities. The DEVELOPER shall be responsible, at its sole cost and
expense, to determine the location of any utilities on the Property and to negotiate with the
utility companies for, and to, relocate the utilities, if any, as necessary to complete the
Project.
7.10 lnsurance and Bonds. The DEVELOPER shall submit for CITY approval
bonds, certificates and applicable endorsements for all insurance and bonds required by
this Agreement in accordance with Article 9.
7.11 Mechanic's Liens and Stop Notices. lf any claim of lien is filed against the
Property or a stop notice affecting any financing, HOME Program Funds or funding sources
for the Project is served on the CITY or any other third party in connection with the Project,
the DEVELOPER shall, within twenty (20) days of such filing or service, either pay and fully
discharge the lien or stop notice, effect the release of such lien or stop notice by delivering
to the CITY a surety bond in sufficient form and amount, or provide the CITY with other
assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or
discharged.
A. lf the DEVELOPER fails to discharge, bond or othenruise satisfy the
CITY with respect to any lien, encumbrance, charge or claim referred to in Section 7.11
above, then, in addition to any other right or remedy, the CITY may, but shall not be
obligated to, discharge such lien, encumbrance, charge, or claim at the DEVELOPER's
expense. Alternatively, the CITY may require the DEVELOPER to immediately deposit
with the CITY, the amount necessary to satisfy such lien or claim and any costs, pending
resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is
adversely determined against the DEVELOPER. The DEVELOPER hereby agrees to
indemnify and hold the CITY harmless from liability for such liens, encumbrances, charges
or claims together with all related costs and expenses.
7.12 Permits and Licenses. The DEVELOPER shall submit, for CITY approval, all
the necessary permits and licenses required for Commencement of Construction. As the
CITY may reasonably request, the DEVELOPER, at its sole cost and expense, shall
provide to the CITY copies of any and all permit approvals and authorizations including plot
plan, plat, zoning variances, sewer, building, and other permits required by governmental
authorities other than the CITY in pursuit of the Project, and for its stated purposes in
23
accordance w¡th all applicable building, environmental, ecological, landmark, subdivision,
zoning codes, laws, and regulations. DEVELOPER is responsible at its sole cost and
expense to determine the location of any utilities on the Property and to negotiate with the
utility companies for and to relocate the utilities, if any, as necessary to complete the
Project.
7.13 Plans and Specifications. The DEVELOPER has submitted to the CITY
preliminary plans and specifications for the Project under Conditional Use Permit file
number C-13-011 ("Project Preliminary Plans"). The DEVELOPER will construct the
Project in full conformance with the C|TY-approved Conditional Use Permit and plans and
specifications and modifications thereto approved by the CITY. The DEVELOPER shall
obtain the CITY's prior written approval for any modifications to the plans and
specifications.
B. The HOME Agreement shall contain by reference the desígn and site
plan of the Project; such design must be approved by the City Council with the HOME
Agreement.
C. Before Commencement of Construction, the DEVELOPER shall
submit to the CITY, for its review and approval, the final Plans and Specifications for the
Project. The DEVELOPER will construct the Affordable Rental Housing in full conformance
with the Plans and Specifications and modifications thereto approved by the CITY. The
DEVELOPER shall obtain the CITY's prior written approval for any modifications to the
Plans and Specifications.
7.14 The
DEVELOPER shall be solely responsible for all aspects of the DEVELOPER's conduct in
connection with the Project, including but not limited to, compliance with all local, state and
federal laws including without limitation, as to prevailing wage and public bidding
requirements. The Council of the City of Fresno has adopted Resolution No. 82-297
ascertaining the general prevailing rate of per diem wages and per diem wages for holidays
and overtime in the Fresno area for each craft, classification or type of workman needed in
the execution of contracts for the CITY. A copy of the resolution is on file at the Office of
the City Clerk. Actual wage schedules are available upon request at the City's
Construction Management Office. Without limiting the foregoing, the DEVELOPER shall be
solely responsible for the quality and suitability of the work completed and the supervision
of all contracted work, qualifications and financial conditions of and performance of all
contracts, subcontractors, consultants and suppliers. Any review or inspection undertaken
by the CITY with reference to the Project and/or payroll monitoring/auditing is solely for the
purpose of determining whether the DEVELOPER is properly discharging its obligation to
the CITY, and shall not be relied upon by the DEVELOPER or by any third parties as a
warranty or representation by the CITY as to governmental compliance and/or the quality of
work completed for the Project.
7.15 Property Condition. The DEVELOPER shall maintain the Project and all
improvements on site in a reasonably good condition and repair (and, as to landscaping, in
a healthy condition), all according to the basic design and related plans, as amended from
time to time. The DEVELOPER and those taking direction under the DEVELOPER shall:(i) maintain all on-site improvements according to all other applicable law, rules,
24
governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials; (ii) keep the improvements free from graffiti; (iii) keep
the Project Property free from any accumulation of debris or waste material; (iv) promptly
make repairs and replacements to on-site improvements; and (v) promptly replace any
dead, or diseased plants and/or landscaping (if any) with comparable materials.
7.16 Quality of Work. The DEVELOPER shall ensure that construction of the
Project employs building materials of a quality suitable for the requirements of the Project.
The DEVELOPER shall cause completion of the construction of the Project on the Property
in full conformance with applicable local, state and federal laws, statutes, regulations, and
building and housing codes.
7.17 Relocation. lf and to the extent that the construction of the proposed Project
results in the permanent or temporary displacement of residential tenants, the
DEVELOPER shall comply with all applicable local, state and federal statutes and
regulations with respect to relocation planning, advisory assistance and payment of
monetary benefits. The DEVELOPER shall be solely responsible for payment of any
relocation benefits to any displaced persons and any other obligations associated with
complying with said relocation laws.
7.18 Reportino Requirements.
following Project reports:
The DEVELOPER shall submit to the CITY the
A. From the date of execution of this Agreement, until issuance of the
final Certificate of Completion, the DEVELOPER shall submit a Quarterly Report, in a form
approved by the CITY, which will include, at a minimum, the following information:
progress of the Project and affirmative marketing efforts. The Quarterly Reports are due
fifteen (15) days after each March 31tt, June 30th, September 30th, and December 31tt,
during said period.
B. Annually, beginning on the first day of the month following the CIW's
issuance of the Certificate of Completion, and continuing until the termination of the
Agreement, the DEVELOPER shall submit an Annual Report to the CITY, in a form
approved by the CITY. The Annual Report shall include, at a minimum, the following
information: occupancy of each Project Unit including the annual income and the
household size, the date occupancy commenced, certification from an officer of the
DEVELOPER that the Project is in compliance with the Affordability requirements, and
such other information the CITY may be required by law to obtain. The DEVELOPER shall
provide any additional information reasonably requested by the Clry.
C. Annually, beginning on the first day of the month following the CITY's
issuance of the final Certificate of Completion, evidencing the construction of the Project,
and continuing until the expiration of the Agreement, the DEVELOPER shall submit proof of
insurance as required in Article 9.
7.19 tt
shall be the responsibility of the DEVELOPER to coordinate and schedule the work to be
performed so that the Commencement of the Construction and issuance of the Notice of
Completion will take place in accordance with the provisions of the Agreement and Project
25
Schedule. The time for performance contained in the Project Schedule shall be
automatically extended upon the following:
A. The time for performance of provisions of the Agreement by either
party shall be extended for a period equal to the period of any delay directly affecting the
Project or this Agreement which is caused by: war, insurrection, strike or other labor
disputes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of a public
enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, suits
filed by third parties concerning or arising out of this Agreement, or unseasonable weather
conditions ("force majeure"). An extension of time for any of the above specified causes
will be granted only if written notice by the party claiming such extension is sent to the other
party within ten (10) calendar days from the date the affected party learns of the
commencement of the cause and the resulting delay and such extension of time is
accepted by the other party in writing. ln any event, the Project must be completed no later
than one hundred eighty (180) calendar days after the scheduled completion date specified
in this Agreement, notwithstanding any delay caused by that included in this section.
B. Any and all extensions hereunder shall be by mutual written
agreement of the CITY's Housing and Community Development Division Manager and the
DEVELOPER, shall not cumulatively exceed one hundred eighty (180) days.
7.20 Certificate of Completion. Upon completion of the construction of the
Project, the DEVELOPER shall submit to the CITY: 1) certification in writing to that the
Project has been substantially constructed in accordance with the plans and specifications,
approved by the CITY; 2) a recorded Notice of Completion; 3) a cost-certifying final budget
where the DEVELOPER shall identify the actual costs of construction of the Project. This
final cost-certification shall identify costs in line-item format, consistent with the Project
Budget; 4) a request for a recorded Certification of Completion. Upon a determination by
the CITY that the DEVELOPER is in compliance with all of the DEVELOPER's construction
obligations, as specified in this Agreement, the CITY shall furnish, within thirty (30)
calendar days of a written request by the DEVELOPER, a recordable Certificate of
Completion for the Project in the form attached hereto as EXHIBIT "E'. The CITY will not
unreasonably withhold or delay furnishing the Certificate of Completion. lf the CITY fails to
provide the Certificate of Completion within the specified time, it shall provide the
DEVELOPER a written statement indicating in what respects the DEVELOPER has failed
to complete the Project in conformance with this Agreement or has othenruise failed to
comply with the terms of this Agreement, and what measures the DEVELOPER will need to
take or what standards it will need to meet in order to obtain the Certificate of Completion.
Upon the DEVELOPER taking the specified measures and meeting the specified
standards, the DEVELOPER will certify to the CITY in writing of such compliance and the
Clry shall deliver the recordable Certificate of Completion to the DEVELOPER in
accordance with the provisions of this section.
ARTICLE 8. OPERATIONS OF THE PROJECT
8.1 Operation of the Proiect. The DEVELOPER shall lease, operate and
manage the Project in full conformity with the terms of this Agreement.
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8.2 Occupancy Requirements. Three (3) of the Affordable HOME Units
shall be rented and occupied by, or if vacant, available for rental occupancy by those
whose annual household income at the time of initial occupancy is not greater than fifty
percent (50%) of the most recent annual median income, calculated and published by HUD
for the Fresno Metropolitan Statistical Area, applicable to such household's size, and at an
affordable rent consistent with HOME Program regulations (as provided at 24 C.F.R.
92.252) for the term of this Agreement. Ten (10) of the HOME Assisted Affordable Units
shall be rented and occupied by, or if vacant, available for rental occupancy by those
whose annual household income at the time of initial occupancy is not greater than sixty
percent (80%) of the most recent annual median income, calculated and published by HUD
for the Fresno Metropolitan Statistical Area, applicable to such household's size, and at an
affordable rent consistent with HOME Program regulations (as provided at 24 CFR 92.252)
for the term of this Agreement. The DEVELOPER shall comply with the income targeting
requirements of 24 CFR92.216.
8.3 Leasinq the HOME Units. Before leasing any Affordable Units, the
DEVELOPER shall submit its proposed form of lease agreement for the CITY's review and
approval. The DEVELOPER covenants and agrees to utilize only leases that have been
approved in advance by the CITY. The CITY shall respond to the DEVELOPER's
submission of a sample lease agreement within thirty (30) days. Should the CITY not
respond within thirty (30) days of the lease agreement submittal, the DEVELOPER shall be
authorized to use the submitted sample lease agreement. Additionally, the DEVELOPER
agrees not to terminate the tenancy or to refuse to renew or lease with a tenant of the Units
assisted with HOME Funds except for serious or repeated violation of the terms and
conditions of the lease agreement, for violation of applicable federal, state, or local law, or
for other good cause. Any such termination or refusal to renew must be preceded by not
less than thirty (30) days' written notice served by the DEVELOPER or its authorized
management entity upon the tenant specifying the grounds for such action. The
DEVELOPER agrees it shall annually report to the CITY the number of leases that were
not renewed or terminated and the reason for such non-renewal or termination.
8.4 Lease of HOME Units Provisions. ln addition to the requirements oÍ 24
C.F.R. 92.253, the leases are subject to the following:
A. The DEVELOPER shall include in its Leases for the HOME-
assisted Units, provisions which authorize the DEVELOPER to immediately terminate the
tenancy of any Household of which one or more of its members misrepresented any fact
material to the Household's qualification as a Very Low- or Low-lncome Household. Each
such lease agreement shall also provide that the Household is subject to annual
certification, and that, if the Household's annual income increases above the applicable
limits for Low-lncome, such Household's rent may be subject to increase to the lesser of: 1)
the amount payable by tenant under state or local law; or 2) thirty percent (30%) of the
Household's actual adjusted monthly income.
8.5 Final Manaoement Plan. Before leasing and at least sixty (60) calendar days
prior to the construction Completion Date, the DEVELOPER shall submit to the CITY, for
review and approval, a plan for marketing and managing the proposed Affordable Units
("Final Management Plan"). The Final Management Plan shall address in detail how the
DEVELOPER or its designated management entity plans to market the availability of the
27
Affordable Units to prospective tenants and how the DEVELOPER plans to certify the
eligibility of potential tenants. The Final Management Plan shall also address how the
DEVELOPER and/or the management entity plan to manage and maintain the Affordable
Units in accordance with HOME Program regulations at Section 92.251 Property
Standards, and shall include appropriate financial information and documentation. The
Final Management Plan shall contain detailed descriptions of policies and procedures with
respect to tenant selections and evictions. Topics to be covered in these procedures shall
include at a minimum the following:
o Interviewing procedures for prospective tenants;o Previous rental history of tenants with references;. Credit reports;. Criminal background checks;. Deposit amounts, purpose, use and refund policy;o EmploymenUlncome verification;. Occupancy restrictions;o lncome Limits;. Equal Housing Opportunity Statement;. Restrictions on use of the premises; and. TenanULandlord dispute resolution procedures.
The Final Management Plan shall contain copies of all standardized forms
associated with the above listed topics. The Final Management Plan shall include a form
lease agreement that the DEVELOPER proposes to enter into with the Very Low- and Low-
lncome tenants. The DEVELOPER shall abide by the terms of this Final Management
Plan, approved by the Clry, in marketing, managing and maintaining the Affordable Units.
At least ninety (90) calendar days prior to the Project Completion Date, the
DEVELOPER shall also submit any proposed management contract to the CITY for prior
review. The CITY shall have the right to review any proposed amendments, other than
renewals to the management contract, and any new management contracts during the term
of this Agreement. Such management contract(s) shall contain a provision expressing this
right.
8.6 Property Manaqement. The DEVELOPER shall comply with the following:
A. Management Responsibilities. The DEVELOPER directly and/or
through its designated management entity, is specifically responsible for all management
functions with respect to the Project including, without limitation, the selection of tenants,
certification and re-certification of Household size and income, evictions, collection of Rents
and deposits, construction management, affirmative marketing, maintenance, landscaping,
routine and extraordinary repairs, replacement of capital items and security. The CITY
shall have no responsibility for such management of the Project.
8.7 Maintenance and Securitv. The DEVELOPER shall (i) at its own expense
maintain the Project in good condition, in good repair and in decent, safe, sanitary,
habitable and tenantable living conditions for the benefit of the Unit occupants. The
DEVELOPER shall not commit or permit any waste on or to the Project, and shall prevent
and/or rectify any physical deterioration of the Project. The DEVELOPER shall maintain
28
the housing Units in conformance with all applicable federal, state and local laws,
ordinances, codes and regulations, the Final Management Plan, and this Agreement.
8.8 Nondiscrimination. All thirteen (13) of the HOME Assisted Units shall be
available for occupancy on a continuous basis to households who are income eligible. The
DEVELOPER shall not illegally discriminate or segregate in the constructed complex, the
use, enjoyment, occupancy or conveyance of any part of the Project or Property on the
basis of race, color, ancestry, national origin, religion, sex, marital status, family status,
source of income/rental assistance subsidy, physical or mental disability, Acquired lmmune
Deficiency Syndrome (AIDS) or AlDS-related conditions (ARC), sexual orientation, or any
other arbitrary basis. The DEVELOPER shall othenruise comply with all applicable local,
state and federal laws concerning nondiscrimination in housing. Neither the DEVELOPER
nor any person claiming under or through the DEVELOPER, shall establish or permit any
such practice or practices of illegal discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants or vendees of any Affordable Unit
or in connection with employment of persons for the construction of any Affordable Unit. All
deeds or contracts made or entered into by the DEVELOPER as to the Affordable Units or
the Project or portion thereof, shall contain covenants concerning nondiscrimination
consistent with this section. The DEVELOPER shall include a statement in all
advertisements, notices and signs for availability of Affordable Units for rent to the effect
that the DEVELOPER is an Equal Housing Opportunity ProvÍder.
A. Nothing in this section ís intended to require the DEVELOPER to
change the character, design, use or operation of the Project; or to require the
DEVELOPER to obtain licenses or permits other than those required for the Project.
8.9 Rent Schedule and Utility Allowances. The DEVELOPER covenants and
agrees not to charge rent to tenants for HOME Units in an amount which exceeds those
rents prescribed to the Project as they associate with particular income and rent limitations
levels as established annually by HUD, consistent with the HOME Program requirements
applicable to the Affordable Units in the Fresno, California area, as established by HUD,
and further covenants not to impose a monthly allowance for utility services to tenants of
such Affordable Units in excess of an amount approved by HUD in accordance with 24
CFR 92.252. The DEVELOPER agrees to furnish to the CITY with a certificate setting forth
the maximum monthly rentals for the HOME Units and the monthly allowances for utilities
and services to be charged during any annual period until the expiration of the Affordability
Period. The DEVELOPER shall reexamine the income of each tenant Household living in
the Affordable Units at least annually.
ARTICLE 9. INSURANCE AND INDEMNITY AND BONDS
Without waiver of limitation, the parties agree as follows regarding DEVELOPER
Insurance, lndemnity, and Bond Obligations:
9.1 Insurance Requirements. Throughout the life of this Agreement,
DEVELOPER shall pay for and maintain in full force and effect all policies of insurance
hereunder with an insurance company(ies) either (i) admitted by the California Insurance
Commissioner to do business in the State of California and rated not less than "A-Vll" in
29
Best's lnsurance Rating Guide, or (ii) authorized by the CITY's Risk Manager. The
following policies of insurance are required:
(i) COMMERCIAL GENERAL LIABILITY insurance which shall be at least as
broad as the most current version of Insurance Services Office (lSO)
Commercial General Liability Coverage Form CG 00 01 and include
insurance for "bodily injury," "property damage" and "personal and advertising
injury" with coverage for premises and operations (including the use of owned
and non-owned equipment), products and completed operations, and
contractual liability (including, without limitation, indemnity obligations under
the Agreement) with limits of liability of not less than the following:
$1,000,000 per occurrence for bodily injury and property damage
$1,000,000 per occurrence for personal and advertising injury
$2,000,000 aggregate for products and completed operations
$2,000,000 general aggregate applying separately to work performed
under the Agreement
(¡i) COMMERCIAL GENERAL LIABILITY insurance which shall be at as
board as the most current version of Insurance Service Office (lSO) Business
Auto Coverage Form CA 00 01, and include coverage for all owned, hired,
and non-owned automobiles or other licensed vehicles (Code 1-Any Auto)
with limíts of liability of not less than $1,000,000 per accident for bodily injury
and property damage.
(ii¡) WORKERS' COMPENSATION insurance as required under the California
Labor Code.
(iv) EMPLOYEE LIABILITY insurance with limits of liability of not less than
$1,000,000 each accident, $1,000,000 disease policy limit and $1,000,000
diseased each employee.
(v) BUILDERS RISK (Course of Construction) insurance, obtained by the
Developer or subcontractor in an amount equal to the completion value of the
Project with no coinsurance penalty provisions. (Only required if the project
includes new construction of a building; or renovation of, or addition to, an
existing building.)
(vi) CONTRACTOR POLLUTION LIABILTY (Unless waived in writing by the
City's Risk Manager or his/her designee, Pollution Liability is required, by the
Developer or the Contractor for all environmental and water remediation
work and for all work transporting fuel. Unless waived in writing by the City's
Risk Manager or his/her designee, the Pollution Liability is also required for
demolition, renovation, HVAC, plumbing or electrical (including, without
limitation, lighting) work on any structure built prior to the year 1990)
insurance with limits of liability of not less than the following:
$1,000,000 per occurrence or claim
$2,000,000 general aggregate per annual policy period
30
ln the event the DEVELOPER purchases an Umbrella or Excess insurance policy(ies) to
meet the minimum limits of insurance set forth above, this insurance policy(ies) shall "follow
form" and afford no less coverage than the primary insurance policy(ies).
ln the event the DEVELOPER involves any lead-based, mold or asbestos environmental
hazard, either the Automobile Liability insurance policy or the Pollution Liability insurance
policy shall be endorsed to include Transportation Pollution Liability insurance covering
materials to be transported by the DEVELOPER pursuant to the HOME Agreement.
ln the event the DEVELOPER involves any lead-based environmental hazard (e.9., lead-
based paint), the DEVELOPER's Pollution Liability insurance policy shall be endorsed to
include coverage for lead based environmental hazards. ln the event the DEVELOPER
involves any asbestos environmental hazard (e.9., asbestos remediation), the
DEVELOPER's Pollution Liability insurance policy shall be endorsed to include coverage
for asbestos environmental hazards. ln the event the HOME Agreement involves any mold
environmental hazard (e.9., mold remediation), the Pollution LiabiliÇ insurance policy shall
be endorsed to include coverage for mold environmental hazards and "microbial maüer
including mold" within the definition of "Pollution" under the policy.
The DEVELOPER shall be responsible for payment of any deductibles contained in any
insurance policies required hereunder and the DEVELOPER shall also be responsible for
payment of any self-insured retentions. Any deductibles or self-insured retentions must be
declared to, and approved by, the CITY's Risk Manager or his/her designee. At the option
of the CITY's Risk Manager or his/her designee, either (i) the insurer shall reduce or
eliminate such deductibles or self-insured retentions as respects CITY, its officers, officials,
employees, agents and volunteers; or (ii) the DEVELOPER shall provide a financial
guarantee, satisfactory to CITY's Risk Manager or his/her designee, guaranteeing payment
of losses and related investigations, claim administration and defense expenses. At no
time shall CITY be responsible for the payment of any deductibles or self-insured
retentions.
All policies of insurance required hereunder shall be endorsed to provide that the coverage
shall not be cancelled, non-renewed, reduced in coverage or in limits except after thirty (30)
calendar day written notice has been given to CITY. Upon issuance by the insurer, broker,
or agent of a notice of cancellation, non-renewal, or reduction in coverage or in limits, the
DEVELOPER shall furnish CITY with a new certificate and applicable endorsements for
such policy(ies). ln the event any policy is due to expire during the work to be performed
for CITY, the DEVELOPER shall provide a new certificate, and applicable endorsements,
evidencing renewal of such policy not less than fifteen (15) calendar days prior to the
expiration date of the expiring policy.
The General Liability and Automobile Liability insurance policies shall be written on an
occurrence form. The Pollution Liability insurance policy shall be written on either an
occurrence form, or a claims-made form. The General Liability, Automobile Liability and
Pollution Liability insurance policies shall name CITY, its officers, officials, agents,
employees and volunteers as an additional insured. All such policies of insurance shall be
endorsed so the DEVELOPER's insurance shall be primary and no contribution shall be
required of CITY. The coverage shall contain no special limitations on the scope of
protection afforded to CITY, its officers, officials, employees, agents and volunteers. lf the
31
DEVELOPER maintains higher limits of liability than the minimums shown above, the CITY
requires and shall be entitled to coverage for the higher limits of liability maintained by the
DEVELOPER. The General Liability insurance policy shall also name the CITY, its officers,
officials, agents, employees and volunteers as additional insureds for all ongoing and
completed operations. The Builders Risk (Course of Construction) insurance policy shall
be endorsed to name the CITY as loss payee. Any Workers' Compensation insurance
policy shall contain a waiver of subrogation as to City, its officers, officials, agents,
employees and volunteers.
The DEVELOPER shall furnish CITY with all certificate(s) and applicable endorsements
effecting coverage required hereunder. All certificates and applicable endorsements are to
be received and approved by the CITY's Risk Manager or his/her designee before work
commences. Upon request of CITY, the DEVELOPER shall immediately furnish CITY with
a complete copy of any insurance policy required under this HOME Agreement, including
all endorsements, with said copy certified by the underwriter to be a true and correct copy
of the original policy. This requirement shall survive expiration or termination of this
Agreement.
Claims-Made Policies - lf any coverage required is written on a claims-made coverage
form:
(i) The retroactive date must be shown, and must be before the effective date of
the commencement of work by the DEVELOPER.
(ii) Insurance must be maintained and evidence of insurance must be provided
for at least 5 years after completion of the work or termination of the HOME
Agreement, whichever first occurs.
(iii) lf coverage is canceled or non-renewed, and not replaced with another
claims-made policy form with a retroactive date prior to the effective date of the
HOME Agreement, or work commencement date, the DEVELOPER must
purchase extended reporting period coverage for a minimum of 5 years after
completion of the work or termination of the HOME Agreement, whichever first
occurs.
(iv) A copy of the claims reporting requirements must be submitted to CITY for
review.
(v) These requirements shall survive expiration or termination of the HOME
Agreement.
lf at any time during the life of the HOME Agreement or any extension, the DEVELOPER,
its contractor, or any of its subcontractors fail to maintain any required insurance in full
force and effect, all work under this HOME Agreement shall be discontinued immediately,
and all payments due or that become due to the DEVELOPER shall be withheld until notice
is received by CITY that the required insurance has been restored to full force and effect
and that the premiums therefore have been paid for a period satisfactory to CITY. Any
failure to maintain the required insurance shall be sufficient cause for CITY to terminate the
HOME Agreement. No action taken by CITY hereunder shall in any way relieve the
DEVELOPER of its responsibilities under the HOME Agreement. The phrase "fail to
maintain any required insurance" shall include, without limitation, notification received by
CITY that an insurer has commenced proceedings, or has had proceedings commenced
against it, indicating that the insurer is insolvent.
32
The fact that insurance is obtained by the DEVELOPER shall not be deemed to release or
diminish the liability of the DEVELOPER, including, without limitation, liability under the
indemnity provisions of the HOME Agreement. The duty to indemnify the CITY shall apply
to all claims and liability regardless of whether any insurance policies are applicable. The
policy limits do not act as a limitation upon the amount of indemnification to be provided by
the DEVELOPER. Approval or purchase of any insurance contracts or policies shall in no
way relieve from liability nor limit the liability of the DEVELOPER, its principals, officers,
agents, employees, persons under the supervision of the DEVELOPER, vendors,
suppliers, invitees, consultants, sub-consultants, subcontractors, or anyone employed
directly or indirectly by any of them.
In the event of a partial or total destruction by the perils insured against of any or all of the
work and/or materials herein provided for at any time prior to the final completion of the
HOME Agreement and the final acceptance by the CITY of the work or materials to be
performed or supplied thereunder, the DEVELOPER shall promptly reconstruct, repair,
replace, or restore all work or materials so destroyed or injured at his/her sole cost and
expense. Nothing herein provided for shall in any way excuse the DEVELOPER or his/her
insurance company from the obligation of furnishing all the required materials and
completing the work in full compliance with the terms of the HOME Agreement.
lf the DEVELOPER should subcontract all or any portion of the services to be performed
under the HOME Agreement, the DEVELOPER shall require each subcontractor to provide
insurance protection in favor of CITY, its officers, officials, employees, agents and
volunteers in accordance with the terms of each of the preceding paragraphs, except that
the subcontractors' certificates and endorsements shall be on file with the DEVELOPER
and the CITY prior to the commencement of any work by the subcontractor.
A. The above described policies of insurance shall be endorsed to
provide an unrestricted thirty (30) day written notice in favor of the CITY, of policy
cancellation, change or reduction of coverage. ln the event any policy is due to expire
during the term of this Agreement, a new certificate evidencing renewal of such policy shall
be provided not less than fifteen (15) days prior to the expiration date of the expiring
policy(ies). Upon issuance by the insurer, broker, or agent of a notice of cancellation,
change or reduction in coverage, DEVELOPER or its contractors, as the case may be,
shall file with the CITY a certified copy of the new or renewal policy and certificates for such
policy.
B. DEVELOPER shall furnish the CITY with the certificate(s) and
applicable endorsements for ALL required insurance prior to the CITY's execution of this
Agreement. DEVELOPER shall furnish the CITY with copies of the actual policies upon the
request of the CITY at any time during the life of the Agreement or any extension.
At all times hereunder DEVELOPER shall maintain the required
insurance in fullforce and effect.
9.2 lndemnitv. DEVELOPER shall indemnify, hold harmless and defend the
CITY and each of its officers, officials, employees, agents and volunteers from any and all
loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or
strict liability, including but not limited to personal injury, death at any time and property
33
damage) incurred by the CITY, DEVELOPER or any other person, and from any and all
claims, demands and actions in law or equity (including attorney's fees and litigation
expenses), arising or alleged to have arisen directly or indirectly out of performance of this
Agreement. The DEVELOPER's obligations under the preceding sentence shall apply
regardless of whether the CITY or any of its officers, officials, employees, agents or
volunteers are passively negligent, but shall not apply to any loss, liability, fines, penalties,
forfeitures, costs or damages caused by the active negligence or by the willful misconduct
of the CITY or any of its officers, officials, employees, agents or volunteers.
A. This section shall survive termination or expiration of this Agreement.
9.3 Propertv lnsurance. Upon acquisition of the property, the DEVELOPER shall
pay for and maintain in full force and effect, throughout the remaining life of this
Agreement, a policy(ies) of property insurance acceptable to the CITY, covering the Project
premises, with limits reflective of the value of the Project premises upon issuance of the
Certificate of Completion, or substantial completion of the Project referenced in this
Agreement, including fire and Extended Comprehensive Exposure (ECE) coverage in an
amount, form, substance, and quality as acceptable to the CITY's Risk Manager. The
CITY shall be added by endorsement as a loss payee thereon.
9.4 Bond Oblioations. The DEVELOPER or its General Contractor shall obtain,
pay for and deliver good and sufficient payment and performance bonds along with a
Primary Obligee, Co-Obligee or Multiple Obligee Rider in a form acceptable to the CITY
from a corporate surety, admitted by the California lnsurance Commissioner to do business
in the State of California and Treasury-listed, in a form satisfactory to the CITY and naming
the CITY as Obligee.
A. The "Faithful Performance Bond" shall be at least equal to 100% of the
DEVELOPER's estimated construction costs as reflected in the DEVELOPER's pro forma
budget, attached hereto as EXHIBIT uC", to the guarantee faithful performance of the
Project, within the time prescribed, in a manner satisfactory to the CITY, consistent with
this Agreement, and that all material and workmanship will be free from original or
developed defects.
B. The "Payment Bond" shall be at least equal to 100% of construction
costs approved by the CITY to satisfy claims of material supplies and of mechanics and
laborers employed for thís Project. The bond shall be maintained by DEVELOPER in full
force and effect untilthe Project is completed and until all claims for materials and labor are
paid and as required by the applicable provisions of Chapter 7, Title 15, Part 4, Division 3
of the California Civil Code.
C. The "Material and Labor Bond" shall be at least equal to 100% of the
DEVELOPER's estimated construction costs as reflected in the DEVELOPER's pro forma
budget, attached hereto as EXHIBIT "C", to satisfy claims of material supplies and of
mechanics and laborers employed for this Project. The bond shall be maintained by the
DEVELOPER in full force and effect until the Project is completed, and until all claims for
materials and labor are paid, released, or time barred, and shall othenryise comply with any
applicable provision of the California Code.
34
D. In lieu of the bonds required above, the CITY, in its sole discretion,
may accept from the DEVELOPER an lrrevocable Standby Letter of Credit issued with the
CITY named as the sole beneficiary in the amounts(s) of the bonds required above. The
Standby Letter of Credit is to be issued by a bank, and in the form, acceptable to the CITY.
This lrrevocable Standby Letter of Credit shall be maintained by the DEVELOPER in full
force and effect until the CITY is provided with a recorded Notice of Completion for the
construction of the Project and shall be subject to and governed by the laws of the State of
California.
ARTICLE 10. DEFAULT AND REMEDIES
10.1 Events of Default. The parties agree that each of the following shall
constitute an "Event of Default" by the DEVELOPER for purposes of this Agreement after
the cure period in Section 10.2 has expired without a cure:
A. The DEVELOPER's use of HOME Funds for costs other than Eligible
Costs or for uses not permitted by the terms of this Agreement;
B. The DEVELOPER's Failure to obtain and maintain the insurance
coverage required under this Agreement;
C. Except as othenrise provided in this Agreement, the failure of the
DEVELOPER to punctually and properly perform any other covenant or agreement
contained in this Agreement including without limitation the following: (1) the
DEVELOPER's material deviation ín the Project work specified in the Project Description
as identified in this Agreement, without the CITY's prior written consent; (2) the
DEVELOPER's use of defective or unauthorized materials or defective workmanship in
pursuit of the Project; (3) the DEVELOPER's failure to commence or complete the Project,
as specified in this Agreement, unless delay is permítted under Section 7.18 of this
Agreement; (4) cessation of the Projectfora period of more than fifteen (15) consecutive
days (other than as provided at Section7.19 of this Agreement) prior to submitting to the
CITY certification that the Project is complete; (5) any material adverse change in the
condition of the DEVELOPER or its development team, or the Project that gives the CITY
reasonable cause to believe that the Project cannot be completed by the scheduled
completion date according to the terms of this Agreement; (6) the DEVELOPER's failure to
remedy any deficiencies in record keeping or failure to provide records to the CITY upon
the CITY's request; (7) the DEVELOPER's failure to comply with any federal, state or local
laws or applicable CITY restrictions governing the Project, including but not limited to
provisions of this Agreement pertaining to equal employment opportunity, nondiscrimination
and lead-based paint;
D. Any representation, warranty, or certificate given or furnishéd by or on
behalf of the DEVELOPER shall prove to be materially false as of the date of which the
representation, warranty, or certification was given, or that the DEVELOPER concealed or
failed to disclose a material fact to the CITY, provided, however, that if any representation,
warranty, or certification that proves to be materially false is due merely to the
DEVELOPER's inadvertence, the DEVELOPER shall have a thirty (30) day opportunity
after written notice thereof to cause such representation, warranty, or certification to be true
and complete in every respect;
35
E. The DEVELOPER shall file, or have filed against it, a petition of
bankruptcy, insolvency, or similar law, state or federal, or shall file any petition or answer
seeking, consenting to, or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been
vacated within ninety (90) days; or shall be adjudicated bankrupt or insolvent, under any
present or future statute, law, regulation, under state or federal law, and such judgment or
decree is not vacated or set aside within ninety (90) days;
F. The DEVELOPER's failure, inability or admission in writing of its
inability to pay its debts as they become due or the DEVELOPER assignment for the
benefit of creditors;
G. A receiver, trustee, or liquidator shall be appointed for the
DEVELOPER or any substantial part of the DEVELOPER's assets or properties, and not
be removed within ten (10) days;
H. The Failure of DEVELOPER to cause completion of the Project prior to
the completion date identified in EXH|BlT "B".
l. The DEVELOPER's breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not othenuise identified
within this Section.
J. Any substantial or continuous breach by the DEVELOPER of any
material obligation owned by the DEVELOPER imposed by any other agreement with
respect to the financing, of the Project, whether or not the CITY is a party to such
agreement after expiration of all notice and cure periods contained within such document.
10.2 Notice of Default and Opportunitv to Cure. The CITY shall give written notice
to the DEVELOPER of any Event of Default by specifying: (1) the nature of the event or
deficiency giving rise to the default; (2) the action required to cure the deficiency, if any
action to cure is possible, and (3) a date, which shall not be less than the lesser of any time
period provided in this Agreement, any time period provided for in the notice, or thirty (30)
calendar days from the date of the notice, by which such deficiency must be cured,
provided that if the specified deficiency or default cannot reasonably be cured within the
specified time, with the CITY's written consent, the DEVELOPER shall have an additional
reasonable period to cure so long as it commences cure within the specified time and
thereafter diligently pursues the cure in good faith. The CITY acknowledges and agrees
that the DEVELOPER shall have the right to cure any defaults hereunder and that notice
and cure rights hereunder shall extend to any and all partners of the DEVELOPER that are
previously identified in writing delivered to the CITY in the manner provided in this
Agreement.
10.3 Remedies Upon an Event of Default. Upon the happening of an Event of
Default and a failure to cure said Event of Default within the time specified, the CITY's
obligation to disburse HOME Funds shall terminate. The CITY may also at its option and
without notice institute any action, suit, or other proceeding in law, in equity or othenruise,
which it shall deem necessary or proper for the protection of its interests and may without
36
limitation proceed with any or all of the following remedies in any order or combination that
the CITY may choose in its sole discretion:
A. Terminate this Agreement immediately upon written notice;
B. Bring an action in equitable relief: (1)seeking specific performance of
the terms and conditions of this Agreement, and/or (2) enjoining, abating or preventing any
violation of said terms and conditions, and/or (3) seeking declaratory relief;C. Pursue any other remedy allowed by law or in equity or under this
Agreement; and
ARTICLE I1. GENERAL PROVISIONS.
Without waiver of lÍmitation, the parties agree that the following general provisions shall
apply in the performance hereof:
11.1 Amendments. No modification or amendment of any provision of this
Agreement shall be effective unless made in writing and signed by the parties hereto.
11.2 Attornev's Fees. lf either party is required to commence any proceeding or
legal action to enforce or interpret any term, covenant or condition of this Agreement, the
prevailing party will be entitled to recover from the other party its reasonable attorney's fees
and legal expenses.
11.3 Bindinq on All Successors and Assiqns. Unless otherwise expressly provided
in this Agreement, all the terms and provisions of this Agreement shall be binding on and
inure to the benefit of the parties hereto, and their respective heirs, successors, assigns,
and legal representatives.
11.4 Counterparts. This Agreement may be executed in counterparts, each of
which when executed and delivered will be deemed an original, and all of which together
will constitute one instrument. The execution of this Agreement by any party hereto will not
become effective until counterparts hereof have been executed by all parties hereto.
11.5 Disclaimer of Relationship. Nothing contained in this Agreement, nor any act
of the CITY or of the DEVELOPER, or of any other person, shall in and by itself be deemed
or construed by any person to create any relationship of third party beneficiary, or of
principal and agent, of limited or general partnership, or of joint venture.
11.6 Discretionary Governmental Actions. Certain planning, land use, zoning and
other permits and public actions required Ín connection with the Project including, without
limitation, the approval of this Agreement, the environmental review and analysis under
NEPA or any other statute, and other transactions contemplated by thÍs Agreement are
discretionary government actions. Nothing in this Agreement obligates the CITY or any
other governmental entity to grant final approval of any matter described herein. Such
actions are legislative, quasi-judicial, or otherwise discretionary in nature. The CITY cannot
take action with respect to such matters before completing the environmental assessment
of the Project under NEPA and any other applicable statutes. The CITY cannot and does
not commit in advance that it will give final approval to any matter. The CITY shall not be
37
liable, in contract, law or equity, to the DEVELOPER or any of its executors, administrators,
transferees, successors-in-interest or assigns for any failure of any governmental entity to
grant approval on any matter subject to discretionary approval.
11.7 Effective Date. This Agreement shall be effective upon the date first above
written, upon the CITY and the DEVELOPER's complete execution following City Council
approval.
11.8 Entire Aqreement. This Agreement represents the entire and integrated
agreement of the parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations, representations or agreements, either written or oral.
11.9 Exhibits. Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
11.10 Expenses Incurred Upon Event of Default. The DEVELOPER shall reimburse
the CITY for all reasonable expenses and costs of collection and enforcement, including
reasonable attorney's fees, incurred by the CITY as a result of one or more Events of
Default by the DEVELOPER under this Agreement.
11.11 Governino Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of California shall govern all aspects of this Agreement,
including execution, interpretation, performance, and enforcement. Venue for filing any
action to enforce or interpret this Agreement will be Fresno, California.
11.12 Headinos. The headings of the articles, sections, and paragraphs used in
this Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
11.13 lnterpretation. This Agreement in its final form is the result of the combined
efforts of the parties. Any ambiguity will not be construed in favor or against any party, but
rather by construing the terms in accordance with their generally accepted meaning.
11.14 No Assionment or Succession. The DEVELOPER shall not sell, transfer,
assign or otherwise dispose of all or a material part of any interest it might hold in the
Property without the prior written consent of the CITY, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, upon prior written notice
to the CITY, the DEVELOPER shall be permitted to assign its rights and obligation under
this Agreement with respond to the Project.
11.15 No Third-Partv Beneficiarv. No contractor, subcontractor, mechanic,
materialman, laborer, vendor, or other person hired or retained by the DEVELOPER shall
be, nor shall any of them be deemed to be, third-party beneficiaries of this Agreement, but
each such person shall be deemed to have agreed: (a) that they shall look to the
DEVELOPER as their sole source of recovery if not paid, and (b) except as othenuise
agreed to by the CITY and any such person in writing, they may not enter any claim or
bring any such action against the CITY under any circumstances. Except as provided by
law, or as othenruise agreed to in writing between the CITY and such person, each such
person shall be deemed to have waived in writing all right to seek redress from the CITY
under any circumstances whatsoever.
38
11.16 No Waiver. Neither failure nor delay on the part of the CITY in exercising any
right under this Agreement shall operate as a waiver of such right, nor shall any single or
partial exercíse of any such right preclude any further exercise thereof or the exercise of
any other right. No waiver of any provision of this Agreement or consent to any departure
by the DEVELOPER therefrom shall be effective unless the same shall be in writing, signed
on behalf of the CITY by a duly authorized officer thereof, and the same shall be effective
only in the specific instance for which it is given. No notice to or demand on the
DEVELOPER in any case shall entitle the DEVELOPER to any other or further notices or
demands in similar or other circumstances, or constitute a waiver of any of the CITY's right
to take other or further action in any circumstances without notice or demand.
11.17 Nonreliance. The DEVELOPER hereby acknowledges having obtained such
independent legal or other advice as it has deemed necessary and declares that in no
manner has it relied on the CITY, it agents, employees or attorneys in entering into this
Agreement.
11.18 Notice. Any notice to be given to either party under the terms of this
Agreement shall be given by certified United States mail, postage prepaid, return receipt
requested, at the addresses specified below, or at such other addresses as may be
specified in writing by the parties.
lf to the CITY: City of Fresno
Development and Resource Management Department
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
lf to DEVELOPER: TFS lnvestments, LLC
Attention: Terance Frazier, Managing Member
7643 N. lngram Avenue, #105
Fresno, CA 93711
11.19 Precedence of Documents. ln the event of any conflict between the body of
this Agreement and any exhibit or attachment hereto, the terms and conditions of the body
of this Agreement will control.
11.20 Recordinq of Documents. The DEVELOPER agrees to cooperate with the
CITY and execute any documents required, promptly upon the CITY's request, and to
promptly effectuate the recordation of this Agreement, the Declaration of Restrictions, the
Deed of Trust, and any other documents/instruments that the CITY requires to be recorded,
in the Official Records of Fresno County, California, consistent with this Agreement.
11.21 Remedies Cumulative. All powers and remedies given by this Agreement
shall be cumulative and in addition to those otherwise provided by law.
11.22 Severabilitv. The invalidity, illegality, or un-enforceability of any one or more
of the provisíons of this Agreement shall not affect the validity, legality, or enforceability of
the remaining provisions hereof or thereof.
ilt
ilt
39
lN WITNESS WHEREOF, the parties have executed this Agreement in Fresno
California, the day and year first above written.
CITY OF FRESNO, a Municipal Corporation
By:Date:
Bruce Rudd, City Manager
(Attach notary certificate of acknowledgment)
ATTEST:
WONNE SPENCE, CMC
City Clerk
APPROVED AS TO FORM:
DOUG T. SLOAN
City Attorney
By:
v
Date: Q- \"¿"-\3
Date:
TFS INVESTMENTS, LLC, a California limited liability company
(Attach notary certificate of acknowledgment)
PROPERTY DESCRIPTION
PROJECT DESCRIPTION AND SCHEDULE
PROJECT BUDGET AND CASH FLOW STATEMENT
EXEMPI-AR DECI.ARATION OF RESTRICTIONS
EXEMPTAR CERTIFICATE OF COMPLETION
EXEPLAR PROMISSORY NOTE
EXEMPLAR DEED OF TRUST
Attachments:
EXHIBIT A:
EXHIBIT B:
EXHIBIT C:
EXHIBIT D:
EXHIBIT E:
EXHIBIT F:
EXHIBIT G:
Date:
Name: T
CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT
State of California
County of FRESNO
On September 122013 before me, JAMES SWEETEN, Notary Public, personally
appeared TERANCE FRAZIER, who proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY ERJURY under the laws of the State of California that the
foregoing par nd correct. WITNESS my hand and official seal.
Signature (Seal)
)
)ss.
)
CALIFORNIA ATL.PURPOSE ACKNOWLEDGMENT
:::,i; Ì
Date Here lnsert Na
pefsonally appeared
Name(s) or s¡sner
Than Named Above:
Claimed by Signer(s)
n Corporate Officer - Title(s):
n lndividual
n Partner-n Limited n General
n Attorney in Fact
n Trustee
n Guardian or Conservator
tr Other:
Signer ls
who proved to me on the basis of satisfactory
evidence to be the person(sf whose nanæ(s) is/are
subscribed to the within instrument and acknowledged
to me that he executed the same in
perso or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and officialseal.
Signature:
Signature of Notary Public
Signer's Name;
Officer - Title(s):
n Partner-n Limited E General
n Attorney in Fact
n Trustee
n Guardian or Conseruator
tr Other:
Signer ls Representing:
CASTAT{EDA
Commlssion # 2008360
Î{otrry Public - Crllfornit
Fnsno CountY
Place Notary Seal Above
OPTIONAL
Though the information below is not required by law, it may prove valuabte to peßons retying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached
Title or Type of Document:
Document Date:Number of Pages:
Signer(s) Other
Capacity(ies)
Signer's Name:
OF SIGNER
@ 2009 Nat¡onal Notary Associat¡on . NationalNotary.org . 1 -800-US NOTARy (i -B00-876-6827)
EXHIBIT 'fA'' - LEGAL DESCR¡PTION
The Property is located at 541-545 N. Fulton Street, Fresno, CA 93728
THE LAND DESCRIBED HEREIN IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF FRESNO, CITY OF FRESNO, AND 15 DESCRIBED AS FOLLOWS:
PARCEL ONE:
LOTS 15, 16, 17, AND 18IN BLOCK 1 OF BLOOMINGTON ADDITION TO THE CIry OF
FRESNO, ACCORDING TO THE MAP THEREOF RECORDED IN BOOK 3, PAGE 6 OF
RECORD OF SURVEY, FRESNO COUNTY RECORDS.
APN: 452-274-05
PARCEL TWO:
THE NORTH 13 %FEET OF LOT 10 AND ALL OF LOTS 11,12,13, AND 14 IN BLOCK 1
OF BLOOMINGTON ADDITION TO THE CITY OF FRESNO, ACCORDING TO THE MAP
THEREOF RECORDED IN BOOK 3, PAGE 6 OF RECORD OF SURVEYS, FRESNO
COUNTY RECORDS.
A NOTICE OF VOLUTARY PARCEL MERGER, APPROVED BY THE CITY OF RESNO
WAS RECORDED MAY 31,2011, DOCUMENT NO. 2011.0072808, OFFICAL RECORDS.
APN: 452-274-16 (NEW ASSESSORS NUMBER)
452-274-06 AND 542-274-07 (OLD ASSESSORS NUMBERS)
EXHIBIT "8" . PROJECT DESCRIPTION AND SCHEDULE
I. PROJECT DESCRIPTION
The Project consists of on-site and off-site improvements, amenities, and construction of
thirty-two (32)-rental housing units of which thirteen (13) will be reserved for low-income
households earning no more than 80% of area median income. The project property
located at541-545 N. Fulton, Fresno, CA 93728.
HOME FUNDED UNITS
,P.qË,:ùil¿¡ian
50% or less 3
80% or less 10
Thirteen (13) of the units will be reserved as Low-lncome Affordable Units for a period of
thirty (30) years.
HOME Funds will be made available by the CITY for payment of HOME eligible
construction costs not to exceed the lesser of Two Million One Hundred Thousand dollars
and 00/100 ($2,100,000.00), the aggregate HOME Program per unit cap (24 C.F.R.
92.2501for the thirteen (13) HOME-assisted Units as determined by the CITY, as needed,
for HOME eligible project construction costs.
II. PROJECT SCHEDULE
A. Commencement of Construction: October 1,2013
B. Completion of Construction: August 1,2014
C. Rent Up: December 31 ,2014
EXHIBIT OG!'
.PROJEGT BUDGET
CASH FLOW STATEI'IENT
AMORTIZATION SCHEDULE
Acquisition Costs
Purchase Price
Liens
Title/Recordi nglEscrow/Lega I
Extension Payment
Other
SUBTOTAL
Construction
Bas¡c Construct¡on Contract
Bond Premium
Builder Risk lnsurance
Construction OH, P, GC
Site lm provements/Landscape
Construction Contingency
Demolition/Abatement
Other: Off Site lmprovements
SUBTOTAL
Development
Appraisal
Architecture
Environmental assessment
Geotechn¡cal Study
Survey/Engineering
Legal
Const Closing
Perm Closing
Organization of Partnership
Syndication
Lender Counsel
Bond Counsel
Syndicätion Consultant
Grant (Developer Fee)
Other Consultants: Market Study
Other: Planning Consultant
Other/Misc: Prevailing Wage Compliance
SUBTOTAL
Other Development
Real Estate Taxes During Acq/Const
lnsurance During Construction
Relocation
Bidding Costs
Permits, Fees, & Hookups
lmpact/Mit¡gation Fees
Soft Cost Contingency
Pre-Development lnterest
Residential Total
FUNDING SOURCES
City of
Fresno
Home
Fresno
Redevelopment
Asencv
Conventional
Loan
Developer
Funds
5242,928 Szqz,gza
s242,928 s242,928
s2,508,412 51,6so,ooo s217,500 5640,9t2
s2oo,ooo 520o,ooo
S18o,ooo s180.000
s30,000 s30,000
s2,9L8,472 Sl,6so,ooo s217,s00 s1.050.912
S134,600 s134,600
s48,398 S48,3s8
s20,000 s20,oo0
s450,000 s45o,ooo
s652,998 54s0,000 s202,998
s10,000 s10,000
ss,000 Ss,ooo
s65,0oo S6s,ooo
59o,ooo 59o,ooo
s4s,000 S4s,ooo
s10,000 slo,ooo
Closing, Title, & Recording Costs - Const
Closing, Title, & Recording Costs - Perm
Construction Loan lnterest
Construction lnspection Fees
Lender Expenses
Aud¡t/Cost Certification
Furnishings
Marketing/Leasing Expenses
Rent up Account
Capitalized Operating Reserve
SUBTOTAL
Total Development Costs s4,315,338 S2,1OO,0OO s870,000 $r,oso,grz 5294,426
S60,000 s60,000
s4o,ooo S4o,ooo
s65,ooo 56s,ooo
511,000 s11,000
s5,oo0 Ss,ooo
Slo,ooo slo,ooo
s10,0oo s10,000
s1o 000 s10,000
s65,000 s1,574 s63,426
5501,000 5o s206,574
Fultonia West - 30 Year Cash Flow Analysis
INCOME FROM HOUSING UNITS
Schedule Rental lncome
Vacancy Loss
Miscellaneous lncome
EFFECTIVE GROSS ¡NCOME
OPERAT¡NG EXPENSES & RESERVE DEPOSITS
Operating Expenses
Replacement Reserve
TOTAL EXPENSES & RESERVES
NET OPERATING INCOME
HARD DEBTSERVTCE (HDSI
Conventional Loan (8o/o, 20 yrsl
HOME Loan (I%,30 yr, 50/50 Residual Receipts Loan)
RDA Loan (0% Baloon Payment yr 2Ol
NET CASH FIOW AFTER HDS
lnflation
2.5o/o
-7.O%
3.s%
3.O%
Year 1
S291,168
:$2O,382
So
527o,786
S78,109
s10,o00
$88,109
$r82,F77
5L21,L92
S3o,742
5o
53o,742
Year 2
5299,447
-S20,891
so
5277,5s6
S80,8+3.t+
S1o,3oo
591.,L43
StB6,¿tE
5L2L,L92
532,6LO
So
s32,610
Year 3
S305,908
-$2L,414
so
s284,495
S83,573
S10,609
s94,282
s190,213
irzt,L92
S34,510
So
$34,510
Year 4
5313,556
-52!,949
so
SzgL,607
S86,601.19
5ro,927.27
s97,528
s1e4079
SLZL,tgz
536,443
so
s36,443
Year 5
s321,395
-522,498
So
$298,897
599,632
S11,255
$100,887
s198,010
5L2L,tgz
S38,409
So
s38,409
Year 6
s329,430
-S23,060
So
s306,370
592,769.36
5LL,s92.74
Sto4,g62
S2o2,ooB
512L,L92
S40,408
So
s4o,408
Year 7
5337,666
-523,637
So
53L4,o29
S96,016
iLt,94L
5Lo7,9s7
5206,o72
5t2L,r92
542,44O
So
542,44O
INCOME FROM HOUSING UNITS
Schedule Rental lncome
Vacancy Loss
Miscellaneous lncome
EFFECTIVE GROSS INCOME
OPERATING EXPENSES & RESERVE DEPOSITS
Operating Expenses
Replacement Reserve
TOTAL EXPENSES & RESERVES
NET OPERAT¡NG INCOME
HARD DEBT SERVTCE (HDS)
Conventional Loan
Home Loan
RDA Loan
NET CASH FLOW AFTER HDS
!nflation
2.5o/o
-7.0%
3.5o/o
3.Oo/o
Year 8
53q6,tol
-524,228
So
s321,880
599,377
itz,z99
SLLL,6t6
izto,2o4
SLZL,L92
S44,506
So
S¿4sos
Year 9
5354,760
-S24,833
So
$329,927
S102,855
iLz,66g
S115,s23
$2l4,4o4
5L2t,Lgz
$46,606
So
S46,606
Year 10
s363,629
-525,454
so
s338,175
S106,455
s13,048
s119,503
Sztg,olz
5t2L,L92
548,740
So
548,740
Year 11
5372,720
-S26,090
So
s346,629
s110,181
$13,439
SLz3,620
$223,009
5t2L,Lgz
Sso,gog
So
Sso,908
Year 12
s382,038
-526,743
so
s355,295
5tt4,o37
5L3,g4z
$t27,88O
s227,415
Stzt,tgz
S53,112
So
Ss3,112
Year 13
s391,589
-527,4!L
5o
s364,L77
Sug,o29
514,259
5L32,286
S231,991
5t2L,r9z
555,349
5o
Sss,g¿g
Year 14
s401,378
-s28,096
so
$llg,zaz
5rzz,L6o
514,685
S136,845
5236,497
5Lzt,tgz
s57,622
5o
5s7,622
INCOME FROM HOUSING UNITS
Schedule Rental lncome
Vacancy Loss
Miscellaneous lncome
EFFE TIVE GROSS INCOME
OPERATING EXPENSES & RESERVE DEPOSITS
Operating Expenses
Replacement Reserve
TOTAL EXPENSES & RESERVES
NET OPERATING INCOME
HARD DEBT SERVTCE (r{DS}
Conventional Loan
Home Loan
RDA Loan
NET CASH FTOW AFTER HDS
lnflation
2s%
-7.O%
3.5o/o
3.Oo/o
Year 15
54t1,4L3
-528,799
So
S382,614
s126,435
Sts,L26
$141,561
Sz4t,os3'
5L2t,L92
s59,930
So
Ss9,93o
Year 16
s42L,698
-S29,519
5o
5992,L79
S13o,85o
Si.5,5Bo
s146,440
524s,7t9
5L2t,L92
562,273
So
s62,273
Yea¡ L7
$qgz,zqt
-53O,257
5o
s401,984
S135,440
SL6,o+l
s151,488
S250,496
5L2L,L92
564,6s2
5o
s64,652
Year 18
5443,o47
-S31,013
So
s412,033
s140,181
s16,528
$156,709
s255,324
5t2L,t92
S67,oo6
SO
S6¿066
Year 19
Sqs+,t29
-S3t,z8g
5o
s422,334
St¿s,o8z
5r7,o24
Stoz,ttz
5260,229
5t2t,Lgz
S69,515
So
$69,515
Year 20
546s,476
-S32,583
So
5492,992
S150,165
S17,535
st67,7OO
526s,t92
5t2L,!92
s72,ooo
S87o,ooo
-S79g,ooo
Year 21
5477,LL3
-s33,398
So
S44g,7ts
irss,42t
S18,061
St73,4Bz
527o,2?g
5o
S135,116
5o
s135,116
INCOME FROM HOUSING UNITS
Schedule Rental lncome
Vacancy Loss
Miscellaneous lncome
EFFECTIVE GROSS INCOME
OPERATING EXPENSES & RESERVE DEPOSITS
Operating Expenses
Replacement Reserve
TOTAT EXPENSES & RESERVES
NET OPERATING INCOME
HARD DEBT SERVTCE (HDS)
Conventional Loan
Home Loan
RDA Loan
NET CASH FLOW AFTER HDS
lnflation
2.s%
-7.O%
3s%
3.O%
Year 22
s489,040
-534,233
so
s4s48o8
S160,861
518,603
5179,464
527s,gM
so
5L37,672
So
5L37,672
Year 23
isot,267
-s35,089
SO
s466,L78
5166,49L
S19,161
s185,652
s28O,526
So
S140,263
So
S140,263
Year 24
S513,798
-s35,966
$o
5477,992
S!72,3L8
5L9,736
5192,O54
s285,778
so
S142,889
so
S142,889
Year 25
$sza,o+z
-s36,865
so
5489,77a
sL78,349
Szo,32g
5L98,677
s29t,LOt
So
S145,550
5o
S145,550
Year 26
S539,809
-537,787
So
s502,023
s184,591
s20,938
s205,529
s296,493
so
5t48,247
so
5t48,247
Year 27
S553,304
-S38,731
So
Sstq,slg
Stgt,os2
52t,566
5zr2,6tg
S301,95s
5o
s106,338
So
S195,617
Year 28
5567,L37
-S39,zoo
so
s527,4t7
5L97,739
522,2L3
52t9,9s2
s307,486
S307,486
so
5o
so
INCOME FROM HOUSING UNITS
Schedule Rental lncome
Vacancy Loss
Miscellaneous Income
EFFECTIVE GROSS INCOME
OPERATING EXPENSES & RESERVE DEPOSITS
Operating Expenses
Replacement Reserve
TOTAL EXPENSES & RESERVES
NET OPERATING INCOME
HARD DEBT SERVICE (HDSI
Conventional Loan
Home Loan
RDA Loan
NET CASH FLOW AFTER I{DS
lnflation
2.5o/o
-7.0o/o
3s%
3.O%
Year 29
Ssgt,gts
-S40,692
So
$s¿o,ezr
s204660
522,879
s227,539
S313,084
Year 30
Ssgs,g¿g
-54L,709
So
$ss4rgg
Sztr,gz3
s23,566
s235,389
S318,750
SO
so
5o
so
So
so
s313,084 s318,750
Loan Amount
lnterest Rate
Payment Period
Payment Amount
Pavment #
1
2
3
4
5
t)
7
I
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
TOTALS
$1,650,000.00 i
1.00o/o,
Annually
$63,934.39 r
Pavment
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.39
63,934.27
1,918,031.59
Principal
47,434.39
47,908.73
48,387.82
48,871.70
49,360.42
49,854.02
50,352.56
50,856.09
51,364.65
51,878.29
52,397.08
52,921.05
53,450.26
53,984.76
sgi,¿sz.z6 't
59,042.34
59,632.76
60,229.09
60,831.38
61,439.69
62,054.09
62,674.63
63,301.26
1,650,000.00 268,031.58 |
15,546.57 i
16,025.66
16,500.00
i
lnterest
15,062.69
14,573.97
14,080.37
13,581.83 i
13,078.30
10,484.13 I
1 1,013.34
r
12,569.74
12,056.10
I 1,537.31
1,259.76 |
633.01
i
4,892.05 I
4,301.63 i
3,705.30 I
3,103.01 j
2,494.70 |
1,880.30 i
EXHIBIT 'ID'' - EXEMPLAR DECLARATION OF RESTRICTIONS
Recorded at the Request of
and When Recorded Return to:
City of Fresno
Development and Resource Management Dept.
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY)
The document is exempt from the payment of a recording fee in accordance with Govemment Code Secfions 6103 and 27383.
APN: 452-274-05 and 452-274-16
DECLARATION OF RESTRICTIONS
THIS DECTARATION OF RESTRICTIONS ("Declaration") is executed as of th¡s day
of , 2013, by TFS Investments, LLC, a California limited liability company
("DECLARANT"), in favor of the CITY OF FRESNO, a California municipal corporat¡on
('clrY").
WHEREAS, the DECLARANT is the owner of the real estate in the county of
Fresno, state of California located at 541-545 N. Fulton Street, Fresno, 93728 (A.P.N.: 452-
274-05 and 452-274-16), which is more particularly described in EXHIBIT '4" - Property
Description, attached hereto and made a part hereof, including the improvements thereon
(the "Property"); and
WHEREAS, pursuant to a certain City of Fresno HOME Investment Partnerships
Agreement dated 2013, incorporated herein by reference ("HOME Agreement")
and instruments referenced therein, DECLARANT agrees to utilize, the CITY agrees to
provide, certain HOME funds from the United States Department of Housing and Urban
Development ("HUD"), to DECLARANT and DECLARANT agrees to construct thirty-two
(32) rental housing units of which thirteen (13) will be HOME-assisted units and reserved
as Atfordable Housing units available as Low-lncome units, subject to the terms and
conditions set forth in the HOME Agreement for Low-lncome households earning eighty
percent (80%), or below, of the area median income for the Fresno Metropolitan Statistical
Area ("FMSA").
WHEREAS, the HOME regulations promulgated by HUD, including without limitation
24 C.F.R. 92.252;24 and the HOME Agreement impose certain affordability requirements
upon property owned by the DECLARANT, which affordability restrictions shall be
enforceable for a thirty (30) year period; and
WHEREAS, these restrictions are intended to bind the DECLARANT, and all
purchasers of the Property and their successors.
NOW THEREFORE, DECLARANT declares that the Property is held and will be
held, transferred, encumbered, used, sold, conveyed and occupied subject to the
covenants, restrictions, and limitations set forth in this Declaration, all of which are declared
and agreed to be in furtherance of the Project. All of the restrictions, covenants and
limitations will run with the land and will be binding on all parties having or acquiring any
right, title or interest in the Property or any part thereof, will inure to the benefit of the CITY,
and will be enforceable by it. Any purchaser under a contract of sale covering any right,
title or interest in any part of the Property, by accepting a deed or a contract of sale or
agreement of purchase, accepts the document subject to, and agrees to be bound by, any
and all restrictions, covenant, and limitations set forth in this Declaration commencing on
the date the DECLARANT is notified by the CITY that the Affordable Unit Household
information has been entered into HUD's Integrated Disbursement and lnformation System
(IDIS) as provided in the HOME Agreement, constituting the commencement of the thirty
(30) year Affordability Period.
1. Declarations. DECLARANT hereby declares that the Property is and shall be
subject to the covenants and restrictions hereinafter set forth, all of which are declared to
be in furtherance of the Project and the HOME Agreement, and are established and agreed
upon for the purpose of enhancing and protecting the value of the Property and in
consideration of the CITY entering into the HOME Agreement with the DECIARANT.
2. Restrictions. The following covenants and restrictions on the use and
enjoyment of the Property shall be in addition to any other covenants and restrictions
affecting the Property, and all such covenants and restrictions are for the benefit and
protection of the CITY and shall run with the Property and be binding on any future owner's
of the Property and inure to the benefit of and be enforceable by CITY. These covenants
and restrictions are as follows:
a. The DECLARANT for itself and its successor(s) on title covenants and
agrees that from the date the Project is entered into lDlS as complete, until the expiration
of the Affordability Period, it shall cause the Affordable housing units to be used as rental
affordable housing to Low-lncome Households with an income of eighty percent (80%), or
less, of area median income. The DECLARANT further agrees to file a recordable
document setting forth the Project Completion Date when determined by the CITY. Unless
otherwise provided in the Agreement, the term Affordable Housing shall include, without
limitation, compliance with the following requirements:
i. Nondiscrimination. There shall be no discrimination against nor
segregation of any persons or group of persons on account of race, color, creed, religion,
sex, marital status, national origin, ancestry, or handicap in the sale, transfer, use,
occupancy, tenure, or enjoyment of any of the Property, nor shall DECLARANT establish or
permit any practice of discrimination or segregation with reference to the selection
location, number, use or occupancy of owners or vendees of the Project and/or Property.
¡i. Principal Residence. The Housing Units constituting the
Affordable Units upon the Project Property shall be leased only to eligible natural persons,
who shall occupy the Affordable housing units as the tenants' principal place of residence.
The forgoing requirement that the tenant of unit occupy the unit as their principal residence
does not apply to (i) persons, other than natural persons, who acquire the Project Property
or port¡on thereof by foreclosure or deed in lieu of foreclosure; or HUD qualified entities that
acquire the Property or portion thereof with the consent of the CITY.
iii. Household lncome Requirements. The thirteen (13) Affordable
housing units constituting the Project Property may be conveyed only to a natural person(s)
whose annual Household income at the time of purchase is not greater than eighty percent
(80%) of the most recent annual median income calculated and published by HUD for the
FMSA applicable to such household's size.
Item (a) above is hereinafter referred to as the Covenant and Restriction.
3. Enforcement of Restrictions. Without waiver or limitation, the CITY shall be
entitled to injunctive or other equitable relief against any violation or attempted violation of
any Covenant and Restriction,
4. Acceptance and Ratification. All present and future owners of the Property
and other persons claiming by, through, or under them shall be subject to and shall comply
with the Covenant and Restriction. The acceptance of a deed of conveyance to the
Property shall constitute an agreement that the Covenant and Restriction, as may be
amended or supplemented from time to time, are accepted and ratified by future owners,
tenant or occupant, and such Covenant and Restriction shall be a covenant running with
the land and shall bind any person having at any time any interest or estate in the Property,
all as though such Covenant and Restriction was recited and stipulated at length in each
and every deed, conveyance, mortgage or lease thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other transfer in lieu
of foreclosure, or assignment of an FHA-insured mortgage to HUD, the Affordability Period
shall be terminated unless the foreclosure or other transfer in lieu of foreclosure or
assignment recognizes any contractual or legal rights of public agencies, nonprofit
sponsors, or others to take actions that would avoid the termination of low-income
affordability. However, the requirements with respect to Affordable Unit shall be revived
according to their original terms, if during the original Affordability Period, the owner of
record before the foreclosure or other transfer, or any entity that includes the former owner
of those with whom the former owner has or had formally, family or business ties, obtains
an ownership interest in the Project or the Property, the Affordability Period shall be revived
according to its original terms.
5. Benefit. This Declaration shall run with and bind the Property for a term
commencing on the date Project information is entered into lDlS as complete, until the
expiration of the thirty (30) year Affordability Period. The failure or delay at any time of
CITY and/or any other person entitled to enforce this Declaration shall in no event be
deemed a waiver of the same, or of the right to enforce the same at any time or from time
to time thereafter, or an estoppel against the enforcement thereof.
6. Costs and Attornev's Fees. ln any proceeding arising because of failure of
DECLARANT or any future owner of the Property to comply with the Covenant and
Restriction required by this Declaration, as may be amended from time to time, the CITY
shall be entitled to recover its respective costs and reasonable attorney's fees incurred in
connection with such default or failure.
7. Waiver. Neither DECLARANT nor any future owner of the Property may
exempt itself from liability for failure to comply with the Covenant and Restriction required in
this Declaration; provided however, that upon the transfer of the Property, the transferring
owner may be released from liability hereunder, upon the CITY's written consent of such
transfer, which consent shall not be unreasonably withheld, conditioned or delayed.
8. Severabilitv. The invalidity of the Covenant and Restriction or any other
covenant, restriction, condition, limitation, or other provision of this Declaration shall not
impair or affect in any manner the validity, enforceability, or effect of the rest of this
Declaration and each shall be enforceable to the greatest extent permitted by law.
L Pronouns. Any reference to the masculine, feminine, or neuter gender herein
shall, unless the context clearly requires the contrary, be deemed to refer to and include all
genders. Words in the singular shall include and refer to the plural, and vice versa, as
appropriate.
10. lnteroretation. The captions and titles of the various articles, sections,
subsections, paragraphs, and subparagraphs of this Declaration are inserted herein for
ease and convenience of reference only and shall not be used as an aid in interpreting or
construing this Declaration or any provision hereof.
11. Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of the CITY and DECI-ARANT.
12. Recordation. DECLARANT acknowledges that this Declaration will be filed of
record in the Office of the Recorder of County of Fresno, State of California.
13. Capitalized Terms. All capitalized terms used in this Declaration, unless
othenruise defined herein, shall have the meanings assigned to such terms in the HOME
Agreement.
14. Headinqs. The headings of the articles, sections, and paragraphs used in
this Declaration are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
15. DECLARANT LIABILITY. The DECI-ARANT shall not have any personal
liability for the obligations under this Declaration. The sole recourse of the CITY shall be
exercised by its rights against the Property pursuant to the Deed of Trust and Lender shall
have no right to seek or recover any deficiency amount from DECLARANT.
ill
lN WITNESS WHEREOF, DECI-ARANT has executed this Declaration of
Restrictions on the date first written above.
DECLARANT:
TFS INVESTMENTS, LLC, a California limited liability company
By:
Name: Terance Frazier
Title: Manaqinq Member
(Attach notary certificate of acknowledgment)
EXHIBIT ..A''
To Declaration of Restrictions
The Property is located at 541-545 N. Fulton Street, Fresno, CA 93728
THE I-AND DESCRIBED HEREIN IS SITUATED IN THE STATE OF CALIFORNIA
COUNTY OF FRESNO, CITY OF FRESNO, AND IS DESCRIBED AS FOLLOWS:
PARCEL ONE:
LOTS 15, 16, 17, AND 18IN BLOCK 1 OF BLOOMINGTON ADDIT]ON TO THE CITY OF
FRESNO, ACCORDING TO THE MAP THEREOF RECORDED IN BOOK 3, PAGE 6 OF
RECORD OF SURVEY, FRESNO COUNTY RECORDS.
APN: 452-274-05
PARCEL TWO:
THE NORTH 13 %FEET OF LOT 10 AND ALL OF LOTS 11,12,13, AND 14 IN BLOCK 1
OF BLOOMINGTON ADDITION TO THE CITY OF FRESNO, ACCORDING TO THE MAP
THEREOF RECORDED IN BOOK 3, PAGE 6 OF RECORD OF SURVEYS, FRESNO
COUNTY RECORDS.
A NOTICE OF VOLUTARY PARCEL MERGER, APPROVED BY THE CITY OF RESNO
WAS RECORDED MAY 31,2011, DOCUMENT NO.2011.0072808, OFFICAL RECORDS.
APN: 452-274-16 (NEW ASSESSORS NUMBER)
452-274-06 AND 542-274-07 (OLD ASSESSORS NUMBERS)
EXHIBIT "E". CERTIFICATE OF COMPLETION
Recorded at the Request of
and When Recorded Return to:
City of Fresno
Development and Resource Management Dept.
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno. CA 93721-3605
(SPACE ABOVE TH|S LtNE FOR RECORDER'S USE ONLY)
This Certificate of Completion is recorded at the request and for the benefit of the City of Fresno
and is exempt from the payment of a recording fee pursuant to Government Code Section 6103.
A.P.N.: 452-274-05 and 452-274-16
City of Fresno
Bruce Rudd, City Manager
Date:
By:
Gertificate of Completion
A.P.N.: 452-274-05 and 452-274-16
Recitals:
A. By a HOME Investment Partnerships Program Agreement dated ,
2013, ("HOME Agreement") between the City of Fresno, a municipal corporation ("C|TY"),
and TFS lnvestments, LLC, a California limited liability company, ("DEVELOPER"), the
DEVELOPER agreed to construct thirty-two (32) rental housing units of which thirteen (13)
are to be HOME-assisted units, and related on-site and off-site improvements upon the
Property described in EXHIBIT "A' attached to the HOME Agreement, and made part
hereof by this reference (the "Propêrty"), with assistance of HOME Funds while meeting the
affordable housing, income targeting and other requirements of 24 C.F.R. 92 according to
the terms and conditions of the HOME Agreement and Loan Documents and other
documents/instruments referenced therein.
B. The HOME Agreement or a memorandum of it was recorded on ,
as lnstrument No in the Official Records of Fresno County, California.
C. Under the terms of the HOME Agreement, after the DEVELOPER
completes the Project, the DEVELOPER may ask the CITY to record a Certificate of
Completion.
D. The DEVELOPER has asked the CITY to furnish the DEVELOPER
with a recordable Certificate of Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive
evidence that the DEVELOPER has completed the Project as set forth in the HOME
Agreement.
NOW THEREFORE:
1. The CITY certifies that the DEVELOPER commenced construction of the
and has done so in full compliance with the HOME Agreement.
2. This Certificate of Completion is not evidence of the DEVELOPER's
compliance with, or satisfaction of, any obligation to any mortgage or security interest
holder, or any mortgage or security interest insurer, securing money lent to finance work on
the Property or Project, or any part of the Property or Project.
3. This Certificate of Completion is not a notice of completion as referred to in
California Civil Code Section 3093.
4. Nothing contained herein modifies any provision of the HOME Agreement.
ilt
ilt
ilt
lN WITNESS WHEREOF, CITY has executed this Certificate of Completion as of this
day of 2
CITY OF FRESNO
By:Date:
Bruce Rudd, City Manager
(Attach notary certifìcate of acknowledgment)
ATTEST:
WONNE SPENCE, CMC
CITY CLERK
APPROVED AS TO FORM:
DOUG T. SLOAN
CITY ATTORNEY
By:By:
Deputy
Date:Date:
TFS INVESTMENTS, LLC, a California limited liability company
Dare:-
Name: Terance Frazier
Title: Manaqino Member
(Attach notary certifìcate of acknowledgment)
Tracy Parvanian, Deputy City Attorney
By:
EXHIB]T ¡'F'' . PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: When paid, this note, must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
Secured by Deed of Trust
Loan Amount: $2. 1 00.000.00
Fresno, California
Date:
For value received, the undersigned, TFS Investments, LLC, a California limited liability
company ("Borrower"), promises to pay to the order of the City of Fresno, a California municipal
corporation, ("Lender"), the sum of Two Million One Hundred Thousand dollars and 00/100
($2,100,000.00), to the extent that such funds are loaned to Borrower, with interest on the unpaid
principal balance running from the date of disbursement with simple interest at of 1%
annually in accordance with the HOME lnvestment Partnerships Agreement dated ,2013,
entered into between the Lender and BORROWER, ("Agreement"), with all $450,000 converting to a
grant upon completion of construction, with the balance of principal and interest due and payable on
or before the earlier of (i) Bonower's uncured default under the Agreement with respect to the Project,
and (ii) thirty (30) years from the date of this Note, ("Maturity Date"), on which date the unpaid
balance of principal with unpaid interest thereon shall be due and payable, along with attorney's fees
and costs of collection, and without relief from valuation and appraisement laws.
This is an amortized Residual Receipts Note. Principal and interest payments equal to 50%
of annual Residual Receipts, to the extent that Residual Receipts exist and are itemized in audited
financial statements supplied to Lender with each payment hereunder, shall be due one hundred
eighty (180) days following the end of the year in which the Project converts to its permanent phase
under the Financing, and said payment continues each successive year thereafter until the Maturity
Date, upon which all principal and interest shall be due and payable (prorated amounts to be paid for
the first and last year of the Note). Any failure to make a payment required hereunder within ten (10)
days after such payments are due shall constitute a default under the Agreement with respect to the
Project and this Note. lt shall not be a default hereunder if no payment was made because Project
Residual Receipts did not exist for any particular year. Additionally any failure to timely submit to
Lender audited financial statements within thirty (30) days after such financial statements are due
shall constitute a default under the Agreement with respect to the Project and Note.
Residual Receipts means in each operating year after the conversion of the Project financing to its
permanent phase, 50% of the sum of: (i) all cash received by the Project from (A) rents, lease
payments, and all sources generally considered in the apartment industry to be "other income" (which
does not include payments for optional services provided by Borrower), (B) payments from HUD
under a Housing Assistance Program Section I Contract to the Project, if any, and excluding (a)
tenant security or other deposits required by law to be segregated, and (b) interest on reserves not
available for distribution, and (ii) the net proceeds of any insurance (including rental interruption
insurance), other than fire and extended coverage and title insurance, to the extent not reinvested,
less the sum of: (i) all payments on account of any loans (including unpaid principal and accrued
reasonable interest) made for the benefit of the Project by the Borrowers, (ii) contributions to any
prudent and reasonable cash reserves for working capital, capital expenditures, repairs,
replacements and anticipated expenditures, in such amounts as may be reasonably required by the
lenders to the Project for the operation of the Project not to exceed the amount required by the
Project's permanent lender, annually adjusted in proportion to the average increase of the following
indices (a) the United States Bureau of Labor Statistics for Hourly Wage Rates of all workers in
manufacturing, and (b) of all Commodity Wholesale Prices, said indices shall be re-defined to the
mutual satisfaction of the parties in the event of change in form and basis of indices, all increases
shall use the indices for calendar year 2010 as their base; and (iii) the payment of principal and
interest, and any associated fees, expenses, and costs, with respect to the Financing.
Operatinq Expenses means actual, reasonable and customary (for comparable quality, newly
constructed rental housing developments in Fresno County) costs, fees and expenses directly
incurred, paid, and attributable to the operation, maintenance and management of the Affordable
Project in a calendar year, including, without limitation: painting, cleaning, repairs, alterations,
landscaping, utilities, refuse removal, certificates, permits and licenses, sewer charges, real and
personal property taxes, assessments, insurance, security, advertising and promotion, janitorial
services, cleaning and building supplies, purchase, repair, servicing and installation of appliances,
equipment, fixtures and furnishings which are not paid from the capital replacement reserve, fees and
expenses of property management and common area expenses, fees and expenses of accountants,
attorneys and other professionals, the cost of social services, repayment of any completion or
operating loans including any and all deferred contractor's fees per the Budget, made to Borrower, its
successors or assigns, and other actual operating costs and capital costs which are incurred and paid
by Borrower, but which are not paid from reserve accounts.
All capitalized terms used in this Note, unless otherwise defined, will have the respective meanings
specified in the Agreement. ln addition, as used in this Note, the following terms will have the
following meanings:
Business Dav means any day other than Saturday, Sunday, or public holiday or the
equivalent for banks generally under the laws of California. Whenever any payment to be
made under this Note is stated to be due on a day other than a Business Day, that payment
may be made on the next succeeding Business Day.
Note Maturity Date means thirty (30) years from the date the permanent loan converts.
This Note, and any extensions or renewals hereof, is secured by a Deed of Trust and
Assignment of Rents, on real estate in Fresno County, California, that provides for acceleration upon
stated events, dated as of the same date as this Note, and executed in favor of and delivered to the
Lender ("Deed of Trust"), insured as a 2nd position lien on the Property.
Time is of the essence. lt will be a default under this Note if Borrower defaults under the
Agreement, any other Loan Document with the Lender, or this Note and such default continues
beyond the notice and cure period as provided in such documents. ln the event of a default by
Borrower with respect to any sum payable under this Note and the failure to cure such default within
ten (10) days, the Borrower shall pay a late charge equal to the lesser of two percent (2o/o) of any
outstanding payment or the maximum amount allowed by law. All payments collected shall be
applied first to payment of any costs, fees or other charges due under this Note or any other Loan
Documents then to the interest and then to principal balance. On the occurrence of an uncured
default or on the occurrence of any other event that under the terms of the Loan Documents give rise
to the right to accelerate the balance of the indebtedness, then, at the option of Lender, this Note or
any notes or other instruments that may be taken in renewal or extension of all or any part of the
indebtedness will immediately become due without any further presentment, demand, protest, or
notice of any kind. Lender acknowledges and agrees that it shall send notice of any default
hereunder to the limited paftners of Borrower and shall accept any cure offered by such limited
partners on the same basis as it would accept a cure from Borrower.
The indebtedness evidenced by this Note may, at the option of the Borrower, be prepaid in
whole or in part without penalty. Lender will apply all the prepayments first to the payment of any
costs, fees, late charges, or other charges due under this Note or under any of the other Loan
Documents and then to the interest and then to the principal balance.
All Loan payments are payable in lavuful money of the United States of America at any place
that Lender or the legal holders of this Note may, from time to time, in writing designate.
Borrower agrees to pay all costs including, without limitation, reasonable attorney fees,
incurred by the holder of this Note in the successful enforcement of payment, whether or not suit is
filed, and including, without limitation, all costs, reasonable attorney fees, and expenses incurred by
the holder of this Note in connection with any bankruptcy, reorganization, arrangement, or other
similar proceedings involving the Borrower that in any way affects the exercise by the holder of this
Note of its rights and remedies under this Note. All costs incurred by the holder of this Note in any
action undertaken to obtain relief from the stay of bankruptcy statutes are specifically included in
those costs and expenses to be paid by Borrower.
Any notice, demand, or request relating to any matter set forth herein shall be in writing and
shall be given as provided in the Agreement.
No delay or omission of Lender in exercising any right or power arising in connection with
any default will be construed as a waiver or as acquiescence, nor will any single or partial exercise
preclude any further exercise. Lender may waive any of the conditions in this Note and no waiver will
be deemed to be a waiver of Lender's rights under this Note, but rather will be deemed to have been
made in pursuance of this Note and not in modification. No waiver of any default will be construed to
be a waiver of or acquiescence in or consent to any preceding or subsequent default.
The Deed of Trust provides as follows:
Except as provided herein or in the Agreement, if the Trustor/Grantor shall sell,
convey or alienate said property, or any part thereof, or any interest therein, or shall
be divested of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the Beneficiary being first
had and obtained, Beneficiary shall have the right, at its option, except as prohibited
by law, to declare any indebtedness or obligations secured hereby, irrespective of the
maturity date specified in any Note evidencing the same, immediately due and
payable.
Lender may transfer this Note and deliver to the transferee all or any part of the Property
then held by it as security under this Note, and the transferee will then become vested with all the
powers and rights given to Lender; and Lender will then be forever relieved from any liability or
responsibility in the matter, but Lender will retaín all rights and powers given by this Note with respect
to Property not transferred.
lf any one or more of the provisions in this Note is held to be invalid, illegal, or
unenforceable in any respect by a court of competent jurisdiction, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or impaired. This Note will
be binding on and inure to the benefit of Borrower, Lender, and their respective successors and
assigns.
Borrower and Lender agree that this Note will be deemed to have been made under and will
be governed by the laws of California in all respects, including matters of construction, validity, and
performance, and that none of its terms or provisions may be waived, altered, modified, or amended
except as Lender and Borrower may consent to in a writing duly signed by Borrower or Lender or its
authorized agents.
This Note shall be nonrecourse to Borrower and all its constituent members and may be
prepaid at any time without penalty. Neither Borrower nor any of its general and limited partners shall
have any personal liability for repayment of the Loan. The sole recourse of the Lender under the
Loan Documents for repayment of the Loan shall be the exercise of its rights against the Property
pursuant to the Deed of Trust and Lender shall have no right to seek or recover any deficiency
amount from Borrower or any partner of Borrower.
lN WITNESS WHEREOF, Borrower has caused this Promissory Note to be executed as of
the date and year first above written.
il
TFS INVESTMENTS, LLC, a California limited liability company
By:
Terance Frazier, Managing Member
(Attach notary certificate of acknowledgment)
Date:
EXHIBIT .fG'' . EXEMPLAR DEED OF TRUST
Recorded at the Request of
and When Recorded Return to:
City of Fresno
Development and Resource Management Dept.
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
TITLE ORDER NO ESCROW NO
A.P.N. : 452-274-05 and 452-274-16
DEED OF TRUST
lnvestments, LLC, a California limited liability company (herein "Borrower"), Chicago Title Company, a
California Corporation (herein "Trustee"), and the City of Fresno, a Municipal Corporation
organized and existing under the laws of the State of California whose address is 2600 Fresno Street, Fresno,
California 93721 (herein "Beneficiary" and "Lender").
Borrower, in consideration of the indebtedness herein recited and the trust herein created, does irrevocably
grant and convey to Trustee, in trust, with power of sale, all Borrower's right, title, and interest now owned or
hereafter acquired in the real property ("Land") known as 541-545 N. Fulton Street, located in Fresno County,
California and more particularly described in the Attached Exhibit A, incorporated by reference (Borrower
agrees that any greater to the Land later acquired during the term of this Deed of Trust will be subject to this
Deed of Trust), together with the rents, issues, and profits, subject however, to the right, power, and authority
granted and conferred on Borrower in this Deed of Trust to collect and apply the rents, issues, and profits; and
Borrower also irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale, all of
Borrower's right, title and interest now owned or later acquired to the following property (including the rights or
interests pertaining to the property) located at the Property:
(1) All buildings ("Buildings") and improvements now or later on the land and all easements, rights,
appurtenances, water and water rights, minerals and mineral rights; all machinery, equipment,
appliances, and fixtures for the generation or distribution of air, water, heat, electricity, light, fuel,
or refrigeration or for ventilating or sanitary purposes or for the exclusion of vermin or insects or
for the removal of dust, refuse, or garbage; all wall safes, built-in furniture, and installations,
window shades and blinds, light fixtures, fire hoses and brackets, screens, linoleum, carpets,
furniture, furnishings, fixtures, plumbing, laundry tubs and trays, refrigerators, heating units,
stoves, water heaters, incinerators, and communication systems and installations for which any
Building is specially designed; all of these item, whether now or later installed, being declared to
be for all purposes of this Deed of Trust a part of the Land, the specific enumerations in this
Deed of Trust not excluding the general;
(2) The rents, issues, profits, and proceeds relating to the foregoing; and
(3) The Property to the extent not included on clauses (1) and (2) above.
(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY)
TO SECURE, in order of priority that Beneficiary determines:
(1) Payment of the indebtedness evidenced by a note of Borrower of even date with this Deed of
Trust in the principal amount of Two Million One Hundred Thousand dollars and 00/100
($2,100,000.00) ("Note"), payable to Beneficiary or order, and all extensions, modifications, or
renewals of that note;
(2) Payment of the interest on that indebtedness according to the terms of the Note;
(3) Payment of all other sums (with interest as provided herein) becoming due and payable to
Beneficiary or Trustee pursuant to the terms of this Deed of Trust;
(4) Performance of every obligation contained in this Deed of Trust, the Note, the HOME
securing any indebtedness secured by this Deed of Trust, and any agreements, supplemental
agreements, or other instruments of security executed by Borrower as of the same date of this
Deed of Trust or at any time subsequent to the date of this Deed of Trust for the purpose of
further securing any indebtedness amending this Deed of Trust or any instrument secured by
this Deed of Trust (collectively the "Loan Documents"); and
(5) Payment of all other obligations owed by Borrower to Beneficiary that by their terms recite that
they are secured by this Deed of Trust, including those incurred as primary obligor or as
guarantor.
Borrower covenants that Borrower is lawfully seized of the estate hereby conveyed and has the right to grant
and convey the Property, and that the Property is unencumbered except for encumbrances of record.
Borrower covenants that Borrower will forever warrant and will defend the grant made in this Deed of
Trust against all claims and demands, subject to encumbrances of record. Borrower covenants that Borrower
will maintain and preserve the lien of this Deed of Trust until all the indebtedness under the Note is paid in full.
Borrower represents and warrants to Beneficiary that as of the date of this Deed of Trust Borrower is a validly
existing, and in good standing under the laws of the State of California and is qualified to do business in
California; that Borrower has the requisite power and authority to own, develop, and operate the property; and
that Borrower is in compliance with all laws, regulations, ordinances, and orders of public authorities applicable
to it.
Borrower represents and warrants to Beneficiary that as of the date of this Deed of Trust the execution,
delivery, and performance by the Borrower and the borrowings evidenced by the Note are within the power of
the Borrower; have been duly authorized by all requisite corporate or partnership actions, as appropriate; has
received all necessary governmental approvals; and will not violate any provision of law, any order of any court
or agency of government, the charter documents of Borrower, or any indenture, agreement, or any other
instrument to which Borrower is a party or by which Borrower or any of it property is bound, nor will they
conflict with, result in a breach of, or constitute (with due notice and lapse of time) a default under any
indenture, agreement, or other instrument, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature on any of the property or assets of Borrower, except as contemplated by the
provisions of the Loan Documents; and each of the Loan Documents, when executed and delivered to
Beneficiary, will constitute a valid obligation, enforceable in accordance with its terms.
2
Borrower represents and warrants to Beneficiary that as of the date of this Deed of Trust that the Property is
not used principally for agricultural or grazing purposes; that Borrower is engaged in the development and
operation of lmprovements to the Property; and that the principal purpose of the Loan is the construction,
development and/or the operation of the lmprovements to the Property.
UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:
1. Pavment of Principal. Borrower shall promptly pay when due the principal indebtedness evidenced by the
Note.
Hazard lnsurance. Borrower, at its sole cost and expense, for the mutual benefit of Borrower and
Beneficiary, shall keep the improvements now existing or hereafter erected on the Property insured against
loss by fire, hazards included within the term "extended coverage", and such other hazards as Lender may
require and in such amounts and for such periods as Lender may require as set forth in the HOME
Agreement referenced above.
The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender;
provided that such approval shall not be unreasonably withheld. All insurance policies and renewals
thereof shall be in a form acceptable to Lender and shall include a standard mortgage clause in favor of
and in a form acceptable to Lender. Lender shall have the right to hold the policies and renewals thereof,
subject to the terms of any mortgage, deed of trust or other security agreement with a lien which has
priority over this Deed of Trust.
ln the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may
make proof of loss if not made promptly by Borrower.
lf the Property is abandoned by Borrower, or if Borrower fails to respond to Lender within 30 days from the
date notice is mailed by Lender to Borrower that the insurance carrier offers to settle a claim for insurance
benefits, Lender is authorized to collect and apply the insurance proceeds at Lender's option either to
restoration or repair of the Property or to the sums secured by this Deed of Trust.
Borrower shall keep the Property in good repair and shall not commit waste or permit impairment or
deterloration of the Property and shall comply with the provisions of any lease if this Deed of Trust is on a
leasehold. lf this Deed of Trust is on a unit in a condominium or a planned unit development,
Borrower shall perform all of Borrower's obligations under the declaration or covenants creating or
governing the condominium or planned unit development, the by-laws and regulations of the condominium
or planned unit development, and constituent documents. Borrower shall not permit overcrowded
conditions to exist as defined by the U.S. Department of Housing and Urban Development.
Protection of Lender's Securitv, lf Borrower fails to perform the covenants and agreements contained in
this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's interest in
the Property, then Lender, at Lender's option, upon notice to Borrower, may make such appearances,
disburse such sums, including reasonable attorney's fees, and take such action as is necessary to protect
Lender's interest. lf Lender requires mortgage insurance as a condition of making the loan secured by this
Deed of Trust, Borrower shall pay the premiums required to maintain such insurance in effect until such
time as the requirement for such insurance terminates in accordance with Borrower's and Lender's written
agreement or applicable laws,
3
4.
5.
6.
7
Any amounts disbursed by Lender pursuant to this Paragraph 4 shall become additional
indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other
terms of payment, such amounts shall be payable upon notice from Lender to Borrower requesting
payment thereof. Nothing contained in this paragraph 4 shall require Lender to incur any expense or take
any action hereunder.
lnspection. Lender may make or cause to be made reasonable entries upon and inspections of the
Property, provided that Lender shall provide Borrower notice prior to any such inspection specifying
reasonable cause therefore related to Lender's interest in the Property.
Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection
with any condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of
condemnation, are hereby assigned and shall be paid to Lender, subject to the terms of any mortgage,
deed of trust or other security agreement with a lien which has priority over this Deed of Trust,
Borrower Not Released: Forbearance Bv Lender Not a Waiver. Extension of the time for payment or
modification of amortization of the sums secured by this Deed of Trust granted by Lender to any successor
in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and
Borrower's successors in interest. Lender shall not be required to commence
proceedings against such successor or refuse to extend time for payment or otherwise modify amortization
of the sums secured by this Deed of Trust be reason of any demand made by the original Borrower and
Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy hereunder,
or otherwise afforded by applicable law, shall not be waiver of or preclude the exercise of any such right of
remedy.
The covenants and
agreements herein contained shall bind, and the rights hereunder shall inure to the respective successors
and assignees of Lender and Borrower. All covenants and agreements of Borrower shall be joint and
several. Any borrower who co-signs this Deed of Trust, but does not execute the Note, (a) is co-signing
this Deed of Trust only to grant and convey that Borrower's interest in the Property of Trustee under the
terms of this Deed of Trust, (b) is not personally liable on the Note or under this Deed of Trust or the Note,
without that Borrower's consent and without releasing that Borrower or modifying this Deed of Trust as to
that Borrower's interest in the Property.
Transferabilitv. One of the inducements to Beneficiary for making the Loan is the identity of Borrower. The
existence of any interest in the Property other than the interests of Borrower and Beneficiary and any
encumbrance permitted in this Deed of Trust, even though subordinate to the security interest of
Beneficiary, and the existence of any interest in Borrower other than those of the present owners, would
impair the Property and the security interest of Beneficiary, and, therefore, except as provided herein or in
the Loan Documents, Borrower will not sell, convey, assign, transfer, alienate, or otherwise dispose of its
interest in the Property, either voluntarily or by operation of law, or agree to do so, without the prior written
consent of Beneficiary. Consent to one transaction by Beneficiary will not be deemed a waiver of the right
to require consent to further or successive transactions. lf Borrower is a corporation, any sale, transfer, or
disposition of fifty percent (50%) or more of the voting interest of Borrower or of any entity that directly or
indirectly owns or controls Borrower, including, without limitation, the parent company of Borrower, and the
parent company of the parent company of Borrower, will constitute a sale of the Property for purposes of
this article. lf Borrower is a partnership any change or addition of a general partner of Borrower, change of
a partnership interest of Borrower, or sale, transfer, or disposition of fifty percent (50%) or more of the
voting interest or partnership interest of any partner of Borrower or of any corporation, partnership or entity
8.
9.
that directly or indirectly owns or controls any partner of Borrower, including, without limitation, each parent
company of a partner of Borrower and each parent company of any parent company of a partner of
Borrower, will constitute a sale of the Property for purposes of this section. lf Borrower is a limited liability
company, any change of the manager or any sale, transfer or disposition of fifty percent (50%) or more of
the partnership interests of Borrower , or disposition of fifty percent (50%) or more of the voting interest of
Borrower or of any corporation, partnership or entity that directly or indirectly owns or controls any member
of Borrower, including without limitations, each parent company of Borrower and each parent company of
any parent company of a member of Borrower, will constitute a sale of the Property for purposes of this
section. Any transaction in violation of this section will cause all lndebtedness, irrespective of the maturity
dates, at the option of the Beneficiary and without demand or notice, immediately to become due, together
with any prepayment premium in accordance with the terms of the Note except as prohibited by law.
10. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice
to Borrower provided for in this Deed of Trust shall be given by delivering it or by mailing such notice by
certified mail addressed to Borrower at the Property Address or at such other address as Borrower may
designate by notice to Lender as provided herein, and (b) any notice to lender shall
be given by certified mail to Lender's address stated herein or to such other address as Lender may
designate by notice to Borrower as provided herein. Any notice provided for in this Deed of Trust shall be
deemed to have been given to Borrower or Lender when given in the manner designated herein.
1 1. Governinq Law: Severabilitv. The state and local laws applicable to this Deed of Trust shall be the laws of
the jurisdiction in which the Property is located. The foregoing sentence shall not limit the applicability of
Federal law to this Deed of Trust or if the Note conflicts with applicable law, such conflict shall not affect
other provisions of this Deed of Trust or the Note which can be given effect without
the conflicting provision, and to this end the provisions of this Deed of Trust and the Note are declared to
be severable. As used herein, "costs", "expenses", and "attorney's fees" include all sums to the extent not
prohibited by applicable law or limited herein.
12. Borrower's Copv. Borrower shall be furnished a conformed copy of the Note and of this Deed of Trust at
the time of execution or after recordation thereof.
NON-CONFORMING COVENANTS. Borrower and Lender further covenant and agree as follows:
13. Acceleration: Remedies. Upon Borrower's breach of any covenant or agreement of Borrower in this Deed
of Trust, including the covenants to pay when due any sums secured by this Deed of Trust, the Note or the
Program restrictions, Lender prior to acceleration shall give notice to Borrower as provided in paragraph 10
hereof specifying: (1) the breach; (2) the action required to cure such breach; (3) a date, not less than 10
days from the date notice is mailed to Borrower, by which such breach must be cured; and (4) that failure
to cure such breach on or before the date specified in the notice may result in acceleration of the sums
secured by this Deed of Trust and sale of the Property. The notice shall further inform Borrower of the right
to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a default or
any other defense of Borrower to acceleration and sale. lf the breach is not cured on or before the date
specified in the notice, Lender, at Lender's option may declare all of the sums secured by this Deed of
Trust to be immediately due and payable without further demand and may invoke the power of sale and
any other remedies permitted by applicable law. Lender shall be entitled to collect all reasonable costs and
expenses incurred in pursuing theremedies provided in this paragraph 13, including, but not limited to,
reasonable attorney's fees. lf Lender invokes the power of sale, Lender shall execute or cause Trustee to
execute a written notice of the occurrence of an event of default and of Lender's election to cause the
Property to be sold and shall cause such notice to be recorded in each county in which the Property or
some part thereof is located. Lender or Trustee shall mail copies of such notice in the manner prescribed
by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by
applicable law. After the lapse of such time as may be required by applicable law, Trustee, without
demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place
and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee
may determine.
Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and
place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any
sale.
Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant
or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the
truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order:
(a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and
attorney's fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess,
if any, to the person or persons legally entitled thereto.
14. Borrower's Rioht to Reinstate. Notwithstanding Lender's acceleration of the sums secured by this Deed of
Trust due to Borrower's breach, Borrower shall have the right to have any proceedings begun by Lender to
enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant
to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this
Deed of Trust if: (a) Borrower pays Lender all sums which would be then due under this Deed of Trust and
the Note had no acceleration occurred; (b) Borrower cures all breaches of any other covenants or
agreements of Borrower contained in this Deed of Trust; (c) Borrower pays all reasonable expenses
incurred by Lender and Trustee in enforcing the covenants and agreementsof Borrower in paragraph 13
hereof, including but not limited to, reasonable attorney's fees; and (d) Borrower takes such
action as Lender may reasonably require to assure that the lien of this Deed of Trust, Lende/s interest in
the Property and Borrower's obligation to pay the sums secured by this Deed of Trust shall continue
unimpaired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured
hereby shall remain in full force and effect as if no acceleration had occurred.
15. Nonrecourse. Borrowershall nothaveanypersonal liabilityforrepaymentof theloan, Thesolerecourse
of the Lender under the Loan Documents for repayment of the Loan shall be the exercise of its rights
against the Property.
16. Withdrawal, Removal and/or Replacement. General partner of the Borrower pursuant to the terms of a
partnership agreement due to violation by a general partner of the terms of a partnership agreement, or a
voluntary withdrawal from a partnership by a general partner, and any transfer of limited partnershíp
interest or interests in the same, shall not constitute a default under any of the Loan Documents, and any
such actions shall not accelerate the maturity of the loan.
17. Lien of Deed of Trust. Beneficiary agrees that the lien of this Deed of Trust shall be subordinated to any
extended low-income housing commitment (as such term is defined in Section (42(hXOXB) of the internal
Revenue Code) (the "Extended Use Agreement") recorded against the Property, provided that such
Extended Use Agreement, by its terms, must terminate upon foreclosure under this Deed of Trust or upon
a transfer of the Property by instrument of lieu of foreclosure, in accordance with Section 42(hX6XE) of the
lnternal Revenue Code, subject to the limitations upon evictions, terminations of tenancies and increases in
gross rents of tenants of low-income units as provided in that Section.
1g. As additional security hereunder,
Borrower hereby assigns to Lender the rents of the Property, provided that Borrower shall, prior to
acceleration under paragraph 13 hereof or abandonment of the Property, have the right to collect and
retain such rents as they become due and payable.
Upon acceleration under paragraph 13 hereunder or abandonment of the Property, Lender, in person, by
agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the
Property and to collect the rents of the Property including those past due. All rents collected by Lender or
the receiver shall be applied first to premiums on receiver's bonds and reasonable attorney's fees, and then
to the sums secured by this Deed of Trust. Lender and the receiver shall be liable to account only for those
rents actually received.
19. Reconvevance. Upon payment of all sums secured by this Deed of Trust, Lender shall request Trustee to
reconvey the Property and shall surrender this Deed of Trust, and all notes evidencing indebtedness
secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty and without
charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of
recordation, if any.
20. Substitute Trustee. Lender at lender's option, may from time to time, appoint a successor trustee to any
Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the
Fresno County Recorder's Office. The instrument shall contain the name of the original Lender, Trustee
and Borrower, the book and page where this lnstrument is recorded and the name and address of the
successor trustee. The successor trustee shall, without conveyance of the Property, succeed to all the
title, powers and duties conferred upon the Trustee herein and by applicable law. This procedure for
substitution of trustee shall govern to the exclusion of all other provisions for substitution.
21. Statement of Obliqation. Lender may collect a fee not to exceed $50 for furnishing the statement of
obligation as provided by Section 2943 of the Civil Code of California.
22. Event of Default. Prior to declaring or taking any remedy permitted under Loan Documents, (where
applicable) Borrower's limited partners shall have an additional period of not less than thirty (30) days to
cure such alleged default. Notwithstanding the foregoing, in the case of a default that cannot with
reasonable diligence be remedied or cured within thirty (30) days, Borrower's limited partners shall have
such additional time as reasonably necessary to remedy or cure such default, but in no event more than
ninety (90) days from the expiration of the initial thirty (30) day period above, and if the Borrower's limited
partners reasonably believe that in order to cure such default, Borrower's limited partners must remove one
or both of Borrower's general partners in order to cure such default, Borrower's limited partners shall have
an additional (30) days following the effective date of such removal to cure such default. To the extent that
there is a conflict between this paragraph 22 and any remedy permitted by the HOME Agreement, Loan
Documents, or Loan, the terms of this paragraph 22 shall control'
The following events are each an "Event of Default":
(a) Default in the payment of any sum of principal or interest when due under the Note or any other sum
due under the Loan Documents.
(b) Failure to maintain insurance as provided in Section 2 hereof.
(c) The failure (without cure during the applicable period, if any, for cure) of any Borrower to observe,
perform, or discharge any obligation, term, covenant, or condition of any of the Loan Documents, any
(d)
(e)
agreement relating to the Property, or any agreement or instrument between any Loan Party and
Beneficiary.
The assignment by Borrower, as lessor or sublessor, as the case may be, of the rents or the income of
the Property or any part of it (other than to Beneficiary) without first obtaining the written consent of
Beneficiary.
The following events:
(i) the filing of any claim or lien against the Property or any party of it, whether or not the lien is prior to
this Deed of Trust, and the continued maintenance of the claim or lien for a period of thirty (30) days
without discharge, satisfaction, or adequate bonding in accordance with the terms of this Deed of
Trust;
(ii) the existence of any interest in the Property other than those of Borrower, Beneficiary, any tenants
of Borrower, and any one listed in a title exception approved by Beneficiary in writing; or
(iii) the sale, hypothecation, conveyance, or other disposition of the Property except with the express
written approval of Beneficiary, any of which will be an Event of Default because Borrower's
obligation to own and operate the Property is one of the inducements to Beneficiary to make the
Loan;
(f) Default under any agreement to which Borrower is a party, which agreement relates to the borrowing of
money by Borrower from Beneficiary.
(g) Any presentation or warranty made by any Loan Party or any other Person under this Deed of Trust or
in, under, or pursuant to the Loan Documents, is false or misleading in any material respect as of the
date on which the representation or warranty was made.
(h) Any of the Loan Documents, at any time atter their respective execution and delivery and for any
reason, cease to be in full force or are declared null and void, or the validity or enforceability is
contested by Borrower or any stockholder or partner of Borrower, or Borrower denies that it has any or
further liability or obligation under any of the Loan Documents to which it is a party.
lf one or more Event of Default occurs and is continuing, then Beneficiary may declare all the lndebtedness
to be due and the lndebtedness will become due without any further presentment, demand, protest, or
notice of any kind, and Beneficiary may:
(i) in person, by agent, or by a receiver, and without regard to the adequacy of security, the solvency of
Borrower, or the existence of waste, enter on and take possession of the Property or any party of it in
its own name or in the name of Trustee, sue for or otherwise collect the rents, issues, and profits, and
apply them, less costs and expenses of operation and collection, including reasonable attorneys'fees,
upon the lndebtedness, all in any order that Beneficiary many determine. The entering on and taking
possession of the Property, the collection of rents, issues, and profits, and the application of them will
not cure or waive any default or notice of default or invalidate any act done pursuant to the notice;
(ii) commence an action to foreclose this Deed of Trust in the manner provided by law for the foreclosure
of mortgages of real property;
(iii) deliver to Trustee a written declaration of default and demand for sale, and a written notice of default
and election to cause the Property to be sold, which notice Trustee or Beneficiary will cause to be
filed for record;
(iv) with respect to any Personalty, proceed as to both the real and personal property in accordance with
Beneficiary's rights and remedies in respect of the Land, or proceed to sell the Personalty separately
and without regard to the Land in accordance with Beneficiary's rights and remedies; or
(v) exercise any of these remedies in combination or any other remedy at law or in equity.
24. Protection of Securitv.
lf an Event of Default occurs and is continuing, Beneficiary or Trustee, without notice to or demand upon
Borrower, and without releasing Borrower from any obligations or defaults may:
(a) enter on the Property in any manner and to any extent that either deems necessary to protect the
security of this Deed of Trust;
(b) appear in and defend any action or proceeding purporting to affect, in any manner, the Obligations or
the lndebtedness, the security of this Deed of Trust, or the rights or powers of Beneficiary or Trustee;
(c) pay, purchase, or compromise any encumbrance, charge, or lien that in the judgment of Beneficiary or
Trustee is prior or superior to this deed of Trust; and
(d) pay expenses relating to the Property and its sale, employ counsel, and pay reasonable attorneys'fees.
Borrower agrees to repay on demand all sums expended by Trustee or Beneficiary pursuant to this section
with interest at the Note Rate of lnterest, and those sums, with interest, will be secured by this Deed of
Trust.
25. Effect of Assiqnment.
The assignment rents as provided herein will not impose on Beneficiary any duty to produce rents, issues,
or profits from the Property, or cause Beneficiary to be:
(a) a "mortgage-in-possession" for any purpose;
(b) responsible for performing any of the obligations of the lessor under any of the Leases; or
(c) responsible for any waste committed by lessees or any other parties, any dangerous or defective
condition of the Property, or any negligence in the management, upkeep, repair, or control of the
Property.
Beneficiary will not be liable to Borrower or any other party as e consequence of the exercise of the rights
granted to Beneficiary under this assignment or the failure of Beneficiary to perform any obligation of
Borrower arising under Leases.
lN WITNESS WHEREOF, Borrower has executed this Deed of Trust on the day and year set forth
above. By signing below, Borrower agrees to the terms and conditions as set forth above.
BORROWER
TFS INVESTMENTS, LLC, a California limited liability company
Date:
Name: Terance Frazier
Title: Manaqinq Member
(Attach notary certificate of acknowledgment)
EXHIBIT ..A''
To Deed of Trust
The Property is located at 541-545 N. Fulton Street, Fresno, CA 93728
THE LAND DESCRIBED HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
FRESNO, CITY OF FRESNO, AND IS DESCRIBED AS FOLLOWS:
PARCEL ONE:
LOTS 15, 16, 17, AND 18 IN BLOCK 1 OF BLOOMINGTON ADDITION TO THE CITY OF FRESNO,
ACCORDING TO THE MAP THEREOF RECORDED IN BOOK 3, PAGE 6 OF RECORD OF
SURVEY, FRESNO COUNTY RECORDS.
APN: 452-274-05
PARCEL TWO:
THE NORTH 13 %FEET OF LOT 10 AND ALL OF LOTS 11, 12, 13, AND 14 IN BLOCK 1 OF
BLOOMINGTON ADDITION TO THE CITY OF FRESNO, ACCORDING TO THE MAP THEREOF
RECORDED IN BOOK 3, PAGE 6 OF RECORD OF SURVEYS, FRESNO COUNTY RECORDS.
A NOTICE OF VOLUTARY PARCEL MERGER, APPROVED BY THE CITY OF RESNO WAS
RECORDED MAY 31,2011, DOCUMENT NO.2011-0072808, OFFICAL RECORDS.
APN: 452-274-16 (NEW ASSESSORS NUMBER)
452-274-06 AND 542-274-07 (OLD ASSESSORS NUMBERS)
The following is a copy of provisions (1) to (14), inclusive, of the fictitious deed of trust, recorded in
each county in California, as stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length therein
To Protect the Security of This Deed of Trust, Trustor (herein "Borrower") Agrees:
(1) To keep said property in good condition and repair, not to remove or demolish any building
thereon, to complete or restore promptly and in good and workmanlike manner any building which
may be constructed, damaged or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws affecting said property or requiring
any alterations or improvements to be made thereon, not to commit or permit waste thereof, not to
commit, suffer or permit any act upon said property in violations of law to cultivate, irrigate, fertilize,
fumigate, prune and do all other acts which from the character or use of said property may be
reasonably necessary, the specific enumerations herein not excluding the general.
(2) To provide maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable
to Beneficiary. The amount collected under any fire or other insurance policy may be applied by
Beneficiary upon indebtedness secured hereby and in such order as Beneficiary may determine, or at
option of Beneficiary the entire amount so collected or any part thereof may be released to Borrower.
Such application or release shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the
ríghts or powers of Beneficiary or Trustee, and to pay all costs and expenses including cost of
evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which
Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of
Trust.
(4) To pay at least ten days before delinquency all taxes and assessments affecting said property,
including assessments on appurtenant water stock, when due, all encumbrances, charges and liens,
with interest, on said property or any part thereof, which appear to be prior or superior hereto, all
costs, fees and expenses of this Trust.
Should Borrower fail to make any payment or to do any act as herein provided, then Beneficiary or
Trustee, but without obligation so to do and without notice to or demand upon Borrower and without
releasing Borrower from any obligation hereof, may make or do the same in such manner and to such
extent as either may deem necessary to protect the security hereof Beneficiary or Trustee being
authorized to enter upon said property for such purposes; appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee,
pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of
either appears to be prior or superior hereto, and in exercising any such powers, pay necessary
expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with
interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay
for any statement provided for by law in effect at the date hereof regarding the obligation secured
hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the
time when said statement is demanded.
(6) That any award of damages in connection with any condemnation for public use of or injury to said
property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or
release such moneys received by him in the same manner and with the same effect as above
provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not
waive his rights either to require prompt payment when due of all other sums so secured or to declare
default for failure so to pay.
(8) That at any time or from time to time, without liability therefor and without notice, upon written
request of Beneficiary and presentation of this Deed and said Note for endorsement, and without
affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee
may reconvey any part of said property, consent to the making of any map or plot thereof; join in
granting any easement thereon; or join in any extension agreement or any agreement subordinating
the lien or charge hereof.
(9) That upon written request of Beneficiary state that all sums secured hereby have been paid, and
upon surrender of this Deed and said Note to Trustee for cancellation and retention and upon
payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The
recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness
thereof. The grantee in such reconveyance may be described as "The person or persons legally
entitled thereto "Five years after issuance of such full reconveyance, Trustee may destroy said note
and this Deed (unless directed in such request to retain them).
(10) That as additional security, Borrower hereby gives to and confers upon Beneficiary the right,
power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of
said property, reserving unto Borrower the right, prior to any default by Borrower in payment of any
indebtedness secured hereby or in performance of any agreement hereunder, to collect the rents,
issues and profits of said property, reserving unto Borrower the right, prior to any default by Borrower
in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to
collect and retain such rents, issues and profits as they become due and payable. Upon any such
default, Beneficiary may at any time without notice, either in person , by agent, or by a receiver to be
appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby
secured, enter upon and take possession of said property or any part thereof, in his own name sue
for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply
the same, less costs and expenses of operation and collection, including reasonable attorney's fees.
Upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking possession of said property, the collection of such rents, issues and profits
and the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(1 1) That upon default by Borrower in payment of any indebtedness secured hereby or in
performance of any agreement hereunder. Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand for
sale and of written notice of default and of election to cause to be sold said property which notice
Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said
note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of
default, and notice of sale having been given as then required by law, Trustee, without demand on
Borrower, shall sell said property at the time and place fixed by it in said notice of sale, either as a
whole or in separate parcels, and in such order as it may determine, at public auction to the highest
bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone
sale of all or any portion of said property by public announcement at such time and place of sale, and
from time to time thereafter may postpone such sale by public announcement at the time fixed by the
preceding postponement Trustee shall deliver to such purchaser its deed conveying the property so
sold, but without any covenant or warranty, express or implied. The recitals in such deed of any
matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Borrower,
Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of
title in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums
expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law
in effect at the date hereof, all other sums then secured hereby, and the remainder, if any, to the
person or persons legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time
to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and
recorded in the office of the recorder of the county or counties where saíd property is situated, shall
be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without
conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties.
Said instrument must contain the name of the original Borrower, Trustee and Beneficiary hereunder,
the book and page where this Deed is recorded and the name and address of the new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs,
legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall
mean the owner and holder, including pledgees, of the note secured hereby whether or not named as
Beneficiary herein in this Deed, whenever the context so requires ,the masculine gender includes the
femínine and/or neuter, and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a
public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale
under any other Deed of Trust or of any action or proceeding in which Borrower, Beneficiary or
Trustee shall be a party unless brought by Trustee.
DO NOT RECORD
REQUEST FOR FULL RECONVEYANCE
To be used only when note has been paid:
To Lawyers Title Company, Trustee:
The undersigned is the legal owner and holder of all indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you are hereby requested and directed, on payment to you
of any sums owing to you under the terms of said Deed of Trust, to cancel all evidences of indebtedness, secured by said
Deed of Trust, delivered to you herewith together with said Deed of Trust, and to reconvey, without warranty, to the
parties designated by the terms of said Deed of Trust, the estate now held by you under the same.
MAIL RECONVEYANCE TO:
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for
cancellation before reconveyance will be made.
September 12, 2013 RECEIVED
TO:MAYoR ASHLEY swEARELffi$f ll Al{ l0: 0lr
Council Adoption : 9 I l2l20l3
Mayor Approval:
Mayor Veto:
Override Request:
FROM: WONNE SPENCE, CMC tRK. FRESHI CA
City Clerk
SUBJECT: TRANSMITTAL OF COUNCIL ACTION FOR APPROVAL OR VETO
At the Council meeting of 9112113, Council approved a $2.1 million HOME lnvestment
Partnerships Program Agreement with TFS lnvestments, LLC, for construction of the
Fultonia West Apartments, ltem No. 2F, by the following vote:
Ayes : Baines, Brand, Brandau, Caprioglio, Olivier, Quintero, Xiong
Noes : None
Absent : NoneAbstain : None
Please indicate either your formal approval or veto by completing the following sections and
executing and dating your action. Please file the completed memo with the Clerk's office on
or before September 23,2013. ln computing the ten day period required by Charter, the first
day has been excluded and the tenth day has been included unless the 10"'day is a
Saturday, Sunday, or holiday, in which case it has also been excluded. Failure to file this
memo with the Clerk's office within the required time limit shall constitute approval of the
ordinance, resolution or action, and it shall take effect without the Mayor's signed approval.
Thank you'
r.*******rk**************x******:kr.******r(*********************
O RETURN:
VETOED for the following reasons: (Written objections are required by Charter; attach
additional sheets if necessary.)
Date:
Date:
Ayes
Noes
Absent
Abstain
COUNCIL OVERRIDE ACTION: