HomeMy WebLinkAboutUpside Enterprises - Stanislaus and L St. - DDA - 2016Ç4 /':1- 't '
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This Agreernent is recorded at the request and for the benefit of the City of Fresno and is exempt from the pa¡rment of a
recording fee pursuant to Government Code Section 6103.
CITY OF FRESNO, a municipal corporation
Bruce Rudd
Its: City Manager
Dated:
DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
THE CITY OF FRESNO
a municipal corporation
and
UPSIDE ENTERPRISES, LLC
a Nevada Limited Liability Company
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DISPOSITION AND DEVELOPMENT AGREEMENT
by and among
CITY OF FRESNO
a rrunicþal corporation
and
UPSIDE ENTERPRISES, LLC
a Nevada Limited Liability Company
Stanislaus and L Sheet
Mixed Use Residential Rental Project
Fresno, California 937 21
ATTACHMENTS
ExhibitA Site Map
Exhibit A-1 Legal Description
Exhibit B Scope of Development and Basic Design
Exhibit C Perforrnance Schedule
Exhibit D Certificate of Completion
Exhibit E Grant Deed
Exhibit F Promissory Note
Exhibit G Deed of Trust
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DISPOSITION AND DEVELOPMENT AGREEMENT
This Disposition and Development Agreement ("DDA" or "Agreement") is entered into as
of the Effective Date (defined below), between CITY OF FRESNO, a municipal corporation
("City") and UPSIDE ENTERPRISES, LLC, a Nevada Limited Liability Company (the
"Developer").
RECITALS
The parties enter this Agreement based on the following facts, understandings, and
intentions:
A. The City currently owns certain real property at Stanislaus and L Streets, Fresno,
California, more particularly described in Exhibits "4" (Site Map) and "A-1," (legal description)
attached (the "Property").
B. Developer proposes to purchase the Property from City at fair market value and
develop it privately with mixed uses consisting of approximately 60 to 70 multi-family residential
units, and approximately 20,000 square feet of commercial space, as more particularly described in
the Scope of Development, attached as Exhibit "B" (the "Project").
C. Developer agrees to undertake improvements in accordance with the combined
Performance Schedule described in Exhibit "C" altached hereto and incorporated herein (the
"Performance S chedule").
D. This project has been environmentally assessed under the California Environmental
Quality Act ("CEQA") and found to be categorically exempt pursuant to CEQA Guidelines section
15332 (Class 32).
AGREEMENT
In consideration of the mutual promises and covenants and upon the terms and conditions set
forth in this Agreement, the parties agree as follows:
1. Definitions. Besides definitions contained elsewhere in this Agreement, the
following definitions will govern the construction, meaning, application and interpretation of the
defined terms, as used in this Agreement.
1.1 ADA. "ADA" means the Americans with Disabilities Act of 1990.
1.2 Aereement. "Agreement" means this Disposition and Development
Agreement between City and Developer.
1.3 Certificate of Completion. "Certificate of Completion" means that
Certificate issued in the form attached as Exhibit D to Developer by City evidencing completion of
the Project for purposes of this Agreement.
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1.4 City. *Citf' means the City of Fresno, a municipal corporation,
having its offices at 2600 Fresno Street, Fresno, California 9372I-3605, and operating through its
Council and its various departments.
1.5 Closing. Close or Close of Escrow. "Closing," "Close" or "Close of
Escrow" means the closing of the escrow in which the City conveys a fee interest in the Property to
Developer.
I.6 Day. "Day," whether or not capitalized. means a calendar day, unless
otherwise stated.
1.7 Default. "Default" means a party's failure to timely perform any
action or covenant required by this Agreement following notice and opportunity to cure.
1.8 Developer. "Developer" means Upside Enterprises,LLC, a Nevada
Limited Liability Company.
I.9 Effective Date. "Effective Date" means the date that City signs this
Agreement, after Developer signs it.
1 . I 0 Environmental Laws. "Environmental Laws" means any federal, state,
or local law, statute, ordinance or regulation concerning environmental regulation, contamination or
cleanup of anyHazardous Materials or Waste including, without limitation, any state or federal lien
or "superlien" law, any environmental cleanup statute or regulation, or any governmentallyrequired
permit, approval, authonzation, license, variance or permission.
1.I 1 Escrow. "Escrow" means the escrow opened with Escrow Holder for
City to convey a fee interest in the Property to Developer.
I.I2 Escrow Holder. Escrow Holdet''means First American Title Company,
7625 N. Palm Avenue, Suite 101, Fresno, California 9371I, or anothertitle companymutually
satisfactory to both parties.
1.13 Hazardous Materials. "Hazardous Materials" means any substance,
material, or waste, which is or becomes regulated by any local governmental authority, the State of
Califomia, or the United States Government including, without limitation, anymaterial or substance,
which is: (a) defined as a"hazatdous waste," "extremelyhazardotts waste," or "restricted hazardous
waste" under Sections 25115,25117, or 25122.7, or listed pursuant to Section 25140 of the
California Health and Safety Code, (b) defined as a"hazardous substance" under Section 25316 of
the California Health and Safety Code, (c) defined as a"hazardous material," "hazardous substance,"
or "hazardous waste" under Section 25501 of the California Health and Safety Code, (d) defined as a
"hazardous substance" under Section 2528I of the Califomia Health and Safety Code, (e) petroleum,
(f) friable asbestos, (g) polychlorinated biphenyl, (h) listed underArticle 9 or defined as "hazardous"
or "extremely hazardous" under Article 11 of Tifle 22, California Administrative Code, (i)
designated as"hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
$ 1317), fi) defined as a"hazardous waste" pursuant to Section 1004 of the Resource Conservation
and Recovery Act (42 U.S.C. $6901 et seq., or (k) defined as"hazardous substances" pursuant to
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Section of the Comprehensive Environmental Response, Compensation, and LiabilityAct (42 U.S.C.
$9601, et seq.);provided, however, hazardous materials shall notinclude: (l) constructionmaterials,
gardening materials, household products, office supply products or janitorial supply products
customarily used in the construction, maintenance, rehabilitation, or management ofresidential rental
housing, mixed-use, or coÍrmercial developments or associated buildings or grounds, or tlpically
used in household activities in a manner typical of other residential, mixed-use or commercial
developments which are comparable to the Improvernents; and (2) certain substances which may
contain chemicals listed by the State of California pursuant to Health and Safety Code Section
25249 , et seq., which substances are coÍr.monly used by a significant portion of the population living
within the region of the Property, including, but not limited to, alcoholic beverages, aspirin, tobacco
products, NutraSweet, and saccharine.
l.l4 Improvements. "Improvements" means the construction of the Project
on the Property.
1.15 Outside Date. "Outside Date" means the date that is five (5) days
following the expiration of the Review Period or such earlier date as approved by the parties for the
Close of Escrow.
1.16 Performance Schedule. "Performance Schedule" means the schedule
attached as Exhibit C, setting forth the dates and times by which the parties must accomplish certain
obligations under this Agreement. The parties may revise the Schedule from time to time on mutual
written agreement of Developer and City, but any delay or extension of the completion date is
subject to the requirements in this Agreement.
LIl Phase. "Phase" means a stage or portion of the Project designated by
Developer for construction. A Phase may not consist of less than an entire residential, mixed-use, or
commercial structure.
1.18 Project. Project" means the development that Developer is to
complete on the Property and any off-site improvements, as generally described in the Scope of
Development, attached as Exhibit B. The Project includes, without limitation, mixed uses consisting
of residential units, ground-floor commercial space, and the associated landscaping, parking
improvements, on-site improvements, and any off-site improvements that the Citymayrequire as a
condition to approving the Project. The Project may be developed and constructed in one or more
Phases.
1 .19 Project Completion Date. "Project Completion Date" means the date
that City shall have determined the Project has reached completion in accordance with the plans and
specifications in the Development Schedule, as evidenced by City's issuance of a Certificate of
Completion.
1.20 Property. "Property''means the real property described in Exhibits A
and A-1.
|.21 Securit]¡ Financine Interest. "Security Financing Interest" means a
security interest, which Developer grants in its interest in the Property, before City issues and records
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a Release of Construction Covenants, to secure a debt, the proceeds of which Developer uses to
construct the Project.
2. CONVEYANCE OF THE PROPERTY. City will convey the Property to
Developer for the purchase price and on the conditions set forth herein.
2.1 Purchase Price. Developer will purchase the Property from City for a
purchasepriceof$147,000("PurchasePrice"). TheDevelopershallexecuteaPromissoryNotefor
the full amount of the Purchase Price in substantially the form attached hereto as Exhibit F, secured
as a lien in no worse than second position by a Deed of Trust on the Property naming City as
beneficiary, in substantially the form attached hereto as Exhibit G.
2.2 Escrow. Within 15 days after the Effective Date of this Agreement,
City and the Developer will open an Escrow with the Escrow Holder, and deposit a signed copy of
this Agreement as their initial joint escrow instructions. City and the Developer will sign any
supplemental escrow instructions, consistent with this Agreement, that the Escrow Holder or either
party hereto deems necessary or appropriate. This Agreement will control any inconsistency that
may exist between this Agreement and the supplemental escrow instructions. The parties authorize
the Escrow Holder to act under the escrow instructions and, after the Escrow Holder accepts the
instructions in writing, it will carry out its duties as Escrow Holder under this Agreement.
2.3 Conditions Precedent to Closing Escrow. The following are conditions
precedent to City's obligations to close the Escrow and convey the Property to the Developer and the
Developer's obligation to purchase and accept conveyance of the Property from City. These
conditions must be satisfied by the time stated or, if no time is stated, then by the Outside Date set
for the Closing.
2.3.I Cit]¡ Conditions. The Closing is subject to the fulfillment
of each of the conditions precedent described below, which are solely for the benefit of City and
which shall be fulfilled consistent with the Exhibit C Performance Schedule, or waived prior to close
of escrow:
A. Insurance. Developerhas delivered to City, and Cityhas approved the
form and content of, certificates of insurance for all insurance that this
Agreement requires Developer to obtain and maintain.
B. Notice of Accepting Property Condition. Developer has given written
notice to City that it has inspected the Property and accepts the Property in
AS IS condition. If the Developer, after its inspection of the Property and
review of any environmental reports, disapproves the Property's
environmental or other condition, and City is either unwilling or unable to
cure the condition to which the Developer objects, then the Developer or city
may terminate this Agreement by written notice to the other party and without
liability for breach or otherwise.
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C. No Default. Developer is not in default of this Agreement and all
representations and warranties of Developer contained herein are true and
correct in all material respects.
2.3.2 Developer Conditions. The Closing is subject to the
fulfillment or waiver by the Developer of each of the conditions precedent described below, which
are solely for the benefit of the Developer and which shall be fulfilled consistent with the Exhibit C
Performance Schedule, or waived prior to close of escrow.
A. Condition of Title. Developer has approved the condition of title to
the Property pursuant to this paragraph A. City shall obtain a preliminary
title report and transmit a copy to Developer not later than fifteen (15) days
following the Effective Date. Developer shall noti$z City in writing within
fifteen (15) days after receipt of a copy of the preliminary title report whether
it approves the condition of title. Developer's failure to give such notice
within fifteen (15) days will be deemed approval of the condition of title. If
Developer notifies City that it disapproves any title exception, City may, but
is not obligated to, remove that title exception within fifteen (15) days after
receipt of Developer's written notice. If City cannot or does not elect to
remove any disapproved title exception or give assurance of removal
satisfactory to Developer within that period, Developer will have ten (10)
business days after the expiration of such fifteen (15) day period to either
give City written notice that Developer elects to purchase the Property subject
to the disapproved title exceptions or to terminate this Agreement. Developer
hereby objects to all title defects, liens, encumbrances, and mortgages
evidencing a monetary obligation, other than non-defaulted real property
taxes and assessments. The exceptions to title approved by Developer as
provided herein shall be referred to as the "Condition of Title." The
Developer shall have the right to approve or disapprove any further
exceptions reported by the title company after the Developer has approved
the Condition of Title for the Property (which are not created by the
Developer). The City shall not voluntarily create any new exceptions to title
following the date of this Agreement and prior to the Closing.
B. Inspection. Because City will convey fee title of the Property to
Developer "AS IS," with all faults, except as specificallyprovidedherein, for
a period of 60 days after the Effective Date of this Agreement (the "Review
Period"), Developer or its designated representatives may conduct tests,
investigations and inspections of the Property in all matters relating to the
Property, including, but not limited to, the physical condition or state of the
Property and improvements thereon, environmental conditions, including
Phase I and Phase II environmental assessments, and all othermatters relating
to the Property or any improvements thereon or affecting Developer or the
feasibility of the Property for the Project ("Due Diligence Investigation"). Il
for any reason, Developer is dissatisfied, in Developer's sole and absolute
discretion, with the results of the Due Diligence Investigation, Developer
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shall provide written notice of disapproval ofthe Due Diligence Investigation
to the City and Escrow Holder. Such written notice of disapproval shall be
provided prior to the expiration of the Review Period, and will constitute
Developer's notice to terminate pursuant to Section 2.3.3, below. In
consideration of Developer's right to conduct the Due Diligence
Investigation, including the opportunity to review, inspect and examine the
Property in its sole and absolute discretion, Developer shall in all
circumstances pay to the City $100.00, which sum shall be applicable to the
Purchase Price.
Developer has the right to enter the Property to conduct the Due Diligence
Investigation on the following conditions: (a) the tests, investigations and
inspections are conducted without cost or expense to City, (b) the tests,
investigations and inspections do not unreasonably interfere with City's
possession or use of the Property, and (c) Developer will assume
responsibility for any loss or liability and for any damage to the Property to
the extent resulting from conducting the tests, investigations or inspections.
Within ten days from the Effective Date, City shall deliver to Developer any
and all then-existing plans, engineering reports, surveys, maps, soil or seismic
reports, grading plans, environmental reports and assessments, and other
studies, reports, correspondence or materials concerning the Property or any
improvements thereon (the "Materials"). The Materials may include, without
limitation, the following: (i) copies of any environmental reports or
environmental site assessments or any other report relating to toxic or
hazardous materials or the environmental condition of the Property or
improvements; (ii) engineering studies, maps and costreports (sewer, water,
hydrology, storm drain, flood control, FEMA, utilities, traffic and noise); (iii)
soils, geology and seismic reports; (iv) covenants, conditions and restrictions,
ifany, regarding the Property; (v) archaeological studies and reports; (vi) to
the extent not described above, grading, erosion control, water, sewer, storm
drain, street improvement,landscape andutilityimprovementplans; (vii) any
other documents or materials which City possesses or which are reasonably
available to City and which Developer requests in writing or City determines,
in its reasonable judgment, are significant to the evaluation or use of the
Property.
City makes no representation or warranty concerning, and will have no
liability or responsibility for, the Materials or the information contained
therein.
C. No Default. City shall not be in default of any provision of this
Agreement and all representations and warranties of City contained herein are
true and correct in all material aspects.
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D. No Litigation. There shall be no litigation pending with respect to
this Agreement, any land use, zoning, development or building permits or
entitlements for the development contemplated by this Agreement or
encumbering title to the Property, the outcome of which could materially
interfere with the development of the Property as set forth herein.
E. Title Policy. Issuance of the Title Policy (defined below) to
Developer insuring Developer (or its Permitted Assignee) that fee simple title
to the Property is vested in Developer subject only to the approved
Conditions of Title.
2.3.3 Termination for Failure of Condition. [n the event there is
a failure of one or more conditions described in Section 2.3.l or 2.3.2 that are not waived, the party
for whose benefit the condition is established may terminate this Agreement by written notice to the
other party prior to the Closing, in which event this Agreement shall terminate and no party shall
have any further rights or liability to the other under this Agreement.
2.4 Escrow and Title Costs. The Developer and City shall eachpay 50%o
of escrow fees, recording fees, and documentary stamp taxes, if any, to convey the Property to
Developer. City shall pay the portion of the premium for an ALTA standard owner's policy of title
insurance with coverage not exceeding the Purchase Price, insuring the title to the Property as
described herein (the "Title Policy''). The Developer shall pay the portion of the premium for an
ALTA extended owner's policy of title insurance or any special endorsements required by
Developer. Any other costs associated with the Escrow shall be paid by City or the Developer
according to the custom and practice in Fresno County, as declared by the Escrow Holder.
2.5 Prorations. The Escrow Holder will prorate all ad valorem taxes and
assessments, if any, as of the Closing, between City and the Developer. Ifthe then-current taxes and
assessments are not ascertainable, the Escrow Agent will apportion the taxes and assessments based
on the most recent statement of taxes and assessments. Escrow Holder will adjust the proration, if
necessary, within 30 days after the actual taxes and assessments are available. Developer will be
solely responsible for ad valorem taxes or assessments on the Property, or any taxes on this
Agreement or any rights hereunder, which may be levied, assessed or imposed for any period after
the Closing.
2.6 Form of Deed. City will convey the Property to the Developer by a
Grant Deed, substantially in the form attached hereto as Exhibit E. The conveyance and Developer's
title will be subject to all conditions, covenants, restrictions and requirements set forth in this
Agreement, and the Grant Deed.
2.1 Nonmerger. Prior to the issuance of a Certificate of Completion, the
provisions of this Agreement will not merge with the Grant Deed. The Grant Deed will not affect,
impair or limit the provisions, covenants, conditions or agreements of this Agreement.
2.8 Possession. City will deliver exclusive possession of the Property to
Developer at or immediately following the Closing.
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2.9 Sale"AS IS"-No Warranties. CitywillconveytheProperty"As IS"
with all faults, including, without limitation, the conditions disclosed in anytoxics reports delivered
to Developer, any conditions disclosed in the files of the regulators such as, but not limited to, the
Fresno County Health Department, and the Regional Water Quality Control Board, and any
environmental or other physical conditions on or under the Property, buried debris or structures, and
soil compaction, presence of Hazardous Materials or the condition of the soil, its geology, the
presence ofknown or unknown seismic faults, and the suitability of the Property for the development
purposes intended hereunder.
2.10 Close of Escrow. The Escrow will close within 30 days after the
parties satisfz all the conditions precedent to Closing as set forth in this Agreement, but not later than
the "Outside Date," unless the parties mutually agree to extend the time for Closing.
2.ll Authority of Escrow Holder. The parties authorize the Escrow Holder
to, and the Escrow Holder will do the following:
A. Title Polic)¡ Premium. Pay and charge City and Developer, respectively, for
the title insurance premiums described in Section 2.4 of this Agreement.
B. Pa]¡ Fees. Pay and charge the Developer and City equal 50% share of the
escrow fees and closing costs, excluding any costs to correct title exceptions or cure
property conditions. City and Developer must agree in separate writing or
instructions to the Escrow Holder to the allocation of costs to cure title exceptions or
property conditions.
C. Record Grant Deed and Disburse Funds. Disburse funds from the Purchase
Price, and record and deliver the Grant Deed to the appropriate party when the
conditions precedent to Closing are satisfied or waived.
D. Actions to Fulfill Obligations. Take any other action necessary to fulfill its
obligations under this Agreement.
E. FIRPTA. and More. Direct the parties to deliver any instrument, or to
perform any act, necessary to comply with FIRPTA or any similar state act and
regulation promulgated thereunder. City will sign a Certificate of Non-foreign
Status, or a Certification of Compliance with Real Estate Reporting Requirement of
the 1986 Tax Reform Act as the Escrow Holder may require.
F. Closing and Other Statements. Prepare and file with all appropriate
governmental or taxing authorities a uniform settlement statement, closing statement,
tax withholding forms including, without limitation, an IRS 1099-5 form, and be
responsible for withholding taxes, if the law so requires.
G. Closing Statements. Escrow Holder will forward to both Developer and City
a separate accounting of all funds received and disbursed for each party, and copies
of all signed and recorded documents deposited into Escrow, with the recording and
filing date and information endorsed thereon.
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H. Termination Without Close. If the Escrow is not in condition to close by the
Outside Date, then any party that is not in default of this Agreement, may demand the
return of money or property and terminate this Agreement and the Escrow. If either
party makes a written demand for return of documents or properties, this Agreement
will not terminate until five days after Escrow Holder has delivered copies of the
demand to the other party at the respective addresses shown in this Agreement. If the
other party objects within the five-day period, the parties authorize the Escrow
Holder to hold all papers and documents until instructed by a court of competent
jurisdiction or by mutual written instructions of the parties. Termination of this
Agreement will be without prejudice to whatever legal tights either party may have
against the other arising from this Agreement. If no party demands that the Escrow
terminate, the Escrow Holder will proceed to Closing as soon as possible.
2.I2 City's Authority to Sign Instructions and Documents. The City
Manager or his designee is authorized to execute any supplemental escrow instructions for City that
are not a material change hereto. The City Manager or his designee may make minor modifications,
not constituting a material change, to this Agreement, Exhibits and the documents referenced herein,
to effect the opening and Close of the Escrow.
2.I3 Access Prior to Conveyance. Prior to the conveyance of title from
City, representatives of Developer shall have the right of access to the Property at all reasonable
times for the purpose of obtaining data and making surveys and tests necessary to carry out this
Agreement. The Developer shall hold City harmless for any injury or damages arising out of any
activity pursuant to this Section. The Developer shall have access to all data and information on the
Property available to City, but without warranty or representation by City as to the completeness,
correctness or validity of such data and information. Any preliminary work, other than work in
connection with Developer's Due Diligence Investigation, undertaken on the Property by the
Developer prior to conveyance of title thereto shall be done only after written consent of City,
satisfaction of City imposed conditions including without limitation evidence ofreasonablyrequired
insurance coverage(s), all at the sole expense of the Developer. The Developer shall save and protect
City against any claims or liens resulting from such preliminary work, access or use of the Property.
Copies of the data, surveys and tests obtained or made by the Developer on the Property shall be
filed with City. Any preliminary work by the Developer shall be undertaken only after securing any
necessary permits from the appropriate governmental agencies.
3. PROJECT DEVELOPMENT
3.1 Private Development Project: Revision of Proiect. Developer will
complete the Project as described in the Scope of Development using contractors licensed to do
business in Califomia. Except as may be expressly provided herein, Developer shall not begin
construction or perform any other work on the Property until after Closing.
3.1.1 Design Approval. Developer shall obtain the City's
approval of the design development drawings. Within 15 business days after receiving the
design development drawings, the City, through its City Manager, will review the drawings, and
acting in a commercially reasonable manner, will approve or disapprove. If the City
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disapproves the drawings, it will speciSi the reason for disapproval and ask Developer to
provide any additional information the City may need to approve the drawings. If the City fails
to either approve or disapprove the design and development drawings within the I 5-day period,
the City shall be deemed to have approved the design and development drawings. The parties
intend this process shall be in addition to, but shall occur concurrently with, the approval
process by the Development and Resource Management Department of the City.
3.2 Time for Completion of the Project. City will convey the Property to
Developer for construction of the Project, and not for speculation in real estate. Therefore, the
Developer will begin construction by the date provided in the Performance Schedule, and will
diligently complete the Project according to the Performance Schedule, or by any other date as the
parties may agree in a written extension signed by the parties and subject to any extension of time
provided for in Section 3.3.
3.3 Extension of Time for Completion. In addition to the specific
provisions of this Agreement, performance by any party hereunder shall not be deemed to be in
default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental restrictions or priority;
litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of
any contractor, subcontractor or supplier; acts of another party; acts or the failure to act of anypublic
or govefitmental agency or entity or any other causes beyond the control or without the fault of the
party claiming an extension of time to perform. An extension of time for any such cause shall only
be for the period of the enforced delay, which period shall commence to run from the time of the
commencement of the cause. If, however, notice by the party claiming such extension is sent to the
other party more than thirty (30) days after the coÍìmencement of the cause, the period shall
commence to run only thirty (30) days prior to the giving of such notice. Times of performance
under this Agreement may also be extended in writing by City and the Developer. City Manager, on
behalf of City, may grant extension(s) which cumulatively do not exceed one hundred eighty (1S0)
days, any additional extension shall require City Council approval.
3.4 Certificate of Completion. After Developer has satisfactorily
completed a Phase of the Project according to this Agreement and after the completion of the final
Phase of the Project, Developer may ask Cityto record a Certificate of Completion indicating that a
Phase or that all Phases are complete, substantially in the form attached as Exhibit D. For purposes
of this section, Developer's submission of a "Safe to Occupy" Certificate or Certificate of
Occupancy for the Improvements within the subject Phase of the Project shall be conclusive
evidence that Developer has satisfactorily completed those Improvements. Subject to the satisfaction
of the conditions to its issuance (see next subsection) and within ten days of such request, City shall
provide an instrument certi$ring Developer's completion of the Project, or any Phase thereof, by
preparing and recording the Certifìcate of Completion. This release, when recorded, will evidence
City's conclusive determination that Developer has satisfied the construction covenants in this
Agreement as to the subject Phase of the Project. The release will not be evidence that Developer
has complied with or satisfied any obligation to any person holding a deed of trust or Security
Financing Interest. The release shall not terminate Developer's indemnification or other obligations,
which by their nature are intended to survive Project completion. After the release is recorded in the
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Offrcial Records of Fresno County, any party then owning or after that purchasing, leasing or
otherwise acquiring any interest in the applicable portion of the Property shall not (because of such
ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement
regarding the construction requirements or Project development of the completed Project.
3.5 Conditions to Issuing the Certificate of Completion. The following are
all conditions precedent to City issuing the Certificate of Completion for the Project, or any Phase
thereof, and each submission will be in a form and substance satisfactory to City:
A. Evidence that all mechanics' liens or material men's liens and claims
recorded against the Property, oÍ arty Phase thereof, and the Project Improvements
that are the subject of the Certificate of Completion have been unconditionally and
finally released or, if not released, suffrciently bonded against as required by law.
3.6 Liens and Stop Notices. If a claim of lien or bonded stop notice is
recorded against the Property or any Project improvements, the Developer, within 91 days after that,
or within five days after City's demand, whichever last occurs, will do the following:
A. Pay or discharge the same; or
B. Effect the release of it by recording and delivering to City a surety's release
bond in sufficient form and amount, or otherwise; or
C. Give City other assurance that City, in its sole discretion, deems satisfactory
to protect City from the effect of the lien, claim or bonded stop notice.
3.7 Annual Proof of Insurance. Annually, beginning with commencernent
of construction of the Project, and continuing until the issuance of a Certificate of Completion for the
Project, Developer shall submit proof of insurance as required by this Agreement.
3.8 Taxes and Assessments. The Developer will paybefore delinquency
all ad valorem real estate taxes and assessments on the Property, subject to the Developer's right to
contest any taxes or assessments in good faith. The Developer will remove any levy or attachment
on the Property or any part of it, or assure the satisfaction of the levy or attachment within a
reasonable time. Except as to property in public use and subject to the following sentence,
Developer and those tenants/others holding or using the Property under Developer by lease or
otherwise, shall not apply for or take advantage of or otherwise enable any exemption from
property/possessory taxes. The Developer shall not allow a use, transfer or sale of the
Property/portion thereof, whether prior to or following completion of the improvements hereunder,
to an entity that is exempt from property/possessory tax and/or which would allow a removal from
the tax roll, absent prior notice to and written consent of City.
3.9 Compliance with Laws. In performing its obligations hereunder,
Developer shall complywith all applicable laws, regulations, andrules ofthe governmental agencies
having jurisdiction, including, without limitation, applicable federal and state labor standards and
environmental laws and regulations. Developer, not City, is responsible for determining applicability
of and compliance with all local, state and federal laws including, without limitation, the Califomia
10s'74s/0000//439s89.DOC)
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Labor Code, Public Contract Code, Public Resources Code, Health & Safety Code, Government
Code, the City Charter, and Fresno Municipal Code. City makes no representations regarding the
applicability of any such laws to this Agreement, the Project, or the parties' respective rights or
obligations hereunder including, without limitation, payrnent of prevailing wages, competitive
bidding, subcontractor listing, or other matters. City shall not be liable or responsible, in law or
equity, to any person for Developer's failure to comply with any such laws, whether City knew or
should have known of the need for Developer to comply, or whether City failed to notifz Developer
of the need to comply.
3.10 Entitlements. Certain planning, land use, zoning, conditional use
permits, and public actions required in connection with the Project are discretionary government
actions. Nothing in this Agreement obligates 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. City shall not be liable, in law or equity, to 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. City agrees to
use best efforts to cooperate with Developer to timelyreview and consider all complete applications
for necessary entitlements; provided, however, City shall retain its full govemmental discretion to
consider any such applications on their merits and in accordance with applicable law.
4. INDEMNITY: INSURANCE.
4.1 hdemnilv. To the furthest extent allowed by law, Developer shall
indemni$r, hold harmless and defend, with qualified counsel of Developer's choice, the City, and
each of its officers, officials, employees and agents from any loss, liability, fines, penalties,
forfeitures, costs and damages (whether in contract, tort or strict liability including, without
limitation, personal injury, death at any time and property damage) incurred by the City, Developer
or any other person, and from any claims, demands and actions in law or equity (including
reasonable attorneys' fees, litigation and legal expenses incurred by the City or held to be the liability
of the City, including plaintiff s or petitioner's attorney's fees if awarded, in connection with City's
defense of its actions in any proceeding), arising or alleged to have arisen directly or indirectly out of
performance or in anyway connected with: (i) the making ofthis Agreement; (ii) theperformance of
this Agreement; (iii) the performance or installation of the work or Improvements by the Developer
and Developer's employees, offtcers, agents, contractors or subcontractors; or (iv) the design,
installation, operation and removal or maintenance of the work and Improvements; or (v) City's
granting, issuing or approving use of this Agreement.
Developer's obligations under the preceding sentence shall apply regardless of
whether City or any of its officers, officials, employees or agents are negligent, but shall not applyto
any loss, liability, fines, penalties, forfeitures, costs or damages caused solely by the gross
negligence, or caused by the willful misconduct, of City or any of its officers, officials, employees,
agents or authorized volunteers.
This indemnity shall also cover, without limitation the following: (i) any
act, error or omission of Developer as to the City or any of their officers, employees,
contractors, subcontractors, invitees, agents or representatives in connection with this
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Agreement, the Project, or the Property; (ü) any use of the Property, the Project by Developeror any of its officers, employees, contractors, subcontractors, invitees, agents or
representatives, successors or assigns; (üi) the design, construction, operation or maintenance
of the Project; or (iv) failure of Developer or any of its offìcers, employees, contractors,
subcontractors, invitees, agents or representatives to comply with any Federal, State or local
law, code, ordinance or regulation applicable to this Agreement or the Project, including, but
not limited to, claims based upon failure to comply fully with prevailing wage laws as may be
determined by any court or agency of the State of California or United States Government;
with respect to any and all claims related to prevailing wage, Developer, as provided herein
and otherwise in this Agreement, assumes all responsibility for payment of prevailing wage
and complying with prevailing wage laws, if required, and specifically waives any and all
rights against the City, as well as Cify agents, employees, agencies, and consultants, pursuant
to California Labor Code section 1726(c) and analogous federal law, if any, and agrees to
defend and fully indemnify the City, as well as City agents, employees, agencies, and
consultants, for any claims based upon failure to pay prevailing wage, including, without
limitation, claims for damages, fines, penaltiesr litigation expenses, costs, attorneys' fees, and
interest. Developer and/or City have the right to contest or challenge any finding that
prevailing \ryage applies.
This section shall survive termination or expiration ofthis Agreement and the
potential recordation of the Grant Deeds.
4.I.l Action Arising Out of Approval of This Agreement. The
Developer shall indemniflz, defend and hold the City and each of their respective officers, officials,
employees, agents, boards and volunteers harmless from anyjudicial action filed against the Cityby
any third party arising out of the City's approval of this Agreement or any permit, entitlement or
other action required to implement this Agreement, including without limitation approvals under the
Law, CEQA or the City's Municipal Code. The City will promptly notiır the Developer of the
action. Within fifteen (15) days after receipt of the notice, the Developer shall take all steps
necessary and appropriate to assume defense of the action. The City will cooperate with the
Developer in the defense of the action (at no cost to the City). Neither the Developer nor the City
will compromise the defense of such action or permit a default judgment to be taken against the City
without the prior written approval of the other party(ies).
4.1.2 Survival of Indemnification Provisions. Except as
otherwise specihcally stated herein, the indemnification provisions in this subsection and every other
indemnification in this Agreement will survive anytermination of this Agreement, will survive any
Closing, will survive the expiration of any covenant herein and will not merge with any other
document evidencing an interest in real property.
4.2 Insurance. Until Cityissues the Certificate of Completion and records
it in the Official Records of Fresno County, Developer shall pay for and maintain, or cause to be paid
and maintained, in effect all insurance policies required hereunder with insurance companies either
(i) admitted by the California Insurance Commissioner to do business in the State of California and
rated not less than "A-VII" in Best's Insurance Rating Guide; or (ii) authorized by the City's Risk
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Manager. The following policies of insurance are required, and Developer will deliver proof ofthese
policies before starting construction:
4.2.1 Commercial General Liabilitylnsurance. Commercial
general liability Insurance, which shall be at least as broad as the most current version of lnsurance
Services Office (ISO) Commercial General Liability Coverage Form CG 00 01 and shall 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, contractual liability (including indemnity obligations under this Agreement),
with limits of liability of not less than $5,000,000 per occurrence for bodily injury and property
damage, $ 1,000,000 per occurrence for personal and advertising injury and $5,000,000 aggregate for
products and completed operations, and $10,000,000 general aggregate.
4.2.2 CommercialAutomobileLiabilit)¡Insurance. Commercial
automobile liability insurance, which shall be at least as broad as the most current version of
Insurance Services Office (ISO) Business Auto Coverage Form CA 00 01 (Section 1, subsectionA.l
entitled "Any Auto"), with combined single limits of liability of not less than $5,000,000 per
accident for bodily injury and property damage.
4.2.3 Workers' Compensation Úrsurance. Workers'
compensation insurance, as required under the California Labor Code.
4.2.4 Emplo)¡er'sLiabilit]¡. Employer'sliabilitycoveragewith
minimum limits of liability of not less than $1,000,000 each accident, $1,000,000 disease policy
limit and $1,000,000 disease each employee.
4.2.5 Fire and Extended Coverage Úrsurance. Fire and extended
coverage insurance for at least the full replacement cost of the Developer Improvements on the
Property, excluding foundations, footings and excavations and tenant improvements, fixtures and
personal property.
4.2.6 Builders Risk Insurance. Builders risk insurance sufficient
to cover one hundred (100) percent of the replacement value of all improvements made on the
Property including, without limitation, terms of labor and materials in place or to be used as part of
the permanent construction (including, without limitation, surplus miscellaneous materials and
supplies incidental to the work, and scaffolding, staging, towers, forms and equipmentnot owned or
rented by Developer, the cost of which is not included in the cost of worþ.
Developer shall be responsible for pa5rment of any deductibles
contained in any insurance policies required hereunder and Developer shall also be responsible for
payrnent of any self-insured retentions.
The above-described policies of insurance shall be endorsed to provide
an unrestricted thirty-(3O) calendar day written notice in favor of the City, of policy cancellation,
change or reduction of coverage, except the Workers' Compensation policythat shall provide a ten
(1O)-calendar day written notice of such cancellation, change or reduction of coverage. If any policy
is due to expire during the term of this Agreement, Developer shall provide a new certificate
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evidencing policy renewal not less than fifteen (15) calendar days before the expiration date of the
policy. When an insurer, broker, or agent issues a notice of cancellation, change or reduction in
coverage, Developer shall immediately obtain and file a certified copy of a new or renewal policy
and certificates for such policy with the City.
The General Liability and Automobile Liability insurance policies
shall be written on an occuffence form and shall name the City and the offrcers, officials, agents and
employees as an additional insured. Each policy shall be endorsed so that Developer's insurance is
primary and no contribution is required of the City. AnyWorkers' Compensation insurance policy
shall contain a waiver of subrogation as to City, its officers, officials, agents, employees and
volunteers. Developer shall furnish the City with copies of the actual policies upon the request of
its designee, or the City's Risk Manager.
The fact that insurance is obtained by Developer or its subcontractors
shall not be deemed to release or diminish the liability of Developer or its subcontractors including
without limitation, liability under the indemnity provisions of this Agreement. The duty to
indemnifuthe City, and their officers, officials, agents, employees and volunteers, shall applyto 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 Developer or its
subcontractors. Approval or purchase of any insurance contracts or policies shall in no way relieve
from liability nor limit the liability of Developer, its principals, officers, agents, employees, persons
under the supervision of Developer, vendors, suppliers, invitees, subcontractors, consultants or
anyone employed directly or indirectly by any of them.
If Developer fails to maintain the required insurance in full force and
effect, Developer shall immediately discontinue all work under this Agreement, and take all
necessary actions to secure the work site to insure that public health and safety is protected, until the
City receive notice that the required insurance has been restored to full effect and that the premiums
for the insurance have been paid for a period satisfactory to City. Developer's failure to maintain
anyrequired insurance shall be suff,rcient cause for the Cityto terminate this Agreement after notice
and the right to cure as provided in Section 7.4.
If Developer subcontracts all or any portion of the work under this
Agreement, Developer shall require each subcontractor to provide insurance protection in favor of
Developer and the City, and their officers, officials, employees, agents and volunteers according to
the terms of each of the preceding paragraphs, except that the subcontractors' certificates and
endorsements shall be on file with Developer, and City before the subcontractor begins any work.
4.2.7 Insurance for Proiect Desien Work. Developer shall maintain
for its Project design work, or if Developer subcontracts any of the Project design work Developer
shall require each design subcontractor to maintain professional liability insurance (errors and
omissions) with a limit of not less than one million dollars ($1,000,000) per occurrence.
If claims made forms areused for anyProfessional LiabilityCovrage,
either (i) the policy shall be endorsed to provide not less than a five (5) year discovery period, or (ii)
the coverage shall be maintained for a minimum of fìve (5) years after the Release of Construction
{0s74st0000t439s89.Doc}
15
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Covenants/Certificate of Completion is recorded. The requirements of this section relating to such
coverage shall survive termination or expiration of this Agreement.
4.2.8 Performance and Pa)¡ment Bonds. Developerwill obtain and
deliver labor and material bonds, payrrent, and performance bonds, issued by an insurance company
meeting the criteria for Developer's other insurance under this Agreement. The bonds will each
contain a penal sum at least equal to forty (40) percent of Developer's estimated construction costs of
any particular Phase of the Project then under construction and shall remain in fulI force until the
issuance of a "Safe to Occupy'' Certificate or Certificate of Occupancy, or the recording of a
Certificate of Completion for that Phase, whichever is earlier. The bonds will name City as a co-
obligee. Instead ofrequiring performance and payrnent bonds, Citymay consider and accept other
evidence of Developer's ability to complete the Project.
5. SECURITY FINANCING INTERESTS AND RIGHTS OF HOLDERS.
5.1
Thereon and AssiÊrrment of Agreement. After conveyance of title and prior to the issuance by City
of a Certificate of Completion for the Project, the Developer shall not, except as expresslypermitted
by this Agreement, sell, transfer, convey, or assign the whole or any part of the Property or the
buildings or improvements thereon without the prior written approval of City. Notwithstanding the
foregoing, Developer may assign its rights and interest under this Agreement to a single-purpose
entity formed by Developer for the development of the Project (the "Permitted Assignee"). This
prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the
development of the Property or to prohibit or restrict the leasing of any part or parts of a building or
structure.
5.1.1 Permitted Transfers. Notwithstanding the foregoing, the
following events ("Permitted Transfers") shall not be deemed a transfer for the purposes of
requiring City's consent:
A. Creation of Security Financing Interests;
B. A sale, conveyance, or transfer of the Property at foreclosure (or a
deed in lieu of foreclosure) resulting from a security Financing Interest;
C. The conveyance or dedication of parts of the Property to the City or
the grant of easements or permits solely to facilitate the development of the
Property before the Certificate of Completion is recorded;
D. Sale or rental of Project units/space in accordance with this
Agreement;
E. Sale or assignment to an entity controlled by or in common control
with Developer;
F. Assignments resulting from the death ormental orphysical incapacity
of an individual;
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G. Assignments in trust for the benefit of a partner's spouse, children,
grandchildren or other family members;
H. Sale or assignment to an entity in which Developer is a partner, joint
venture member, member or associate (whether or not controlled by
Developer), provided City shall administratively approve, conditionally
approve or disapprove a request for such assignment within 15 days after
receiving Developer's request to assign this Agreement. Such approval shall
not be unreasonably withheld. Failure of the City to reject or conditionally
approve the request for assignment within said 15 days shall conclusively be
deemed to constitute City's unconditional approval of the assignment.
5.2 Approval or Consent of Cit)¡. When a request for transfer or
assignment is submitted to City for consideration, approval will be conditioned on the following:
A. Financial Strength and Business Experience. The proposed transferee will
demonstrate to City's reasonable satisfaction that the proposed transferee has
sufficient financial strength and the business experience in planning, financing,
development, ownership, and operation of similar projects to complete the Project, or
portion thereof, competently.
B. AssumptionAgreement. Anytransferee,byrecordableinstrumentacceptable
to City, shall expressly assume all the unfulfilled or ongoing obligations of the
Developer under this Agreement, and agree to be subject to all the conditions and
restrictions to which the Developer is subject with respect to the Property or
applicable portion thereof.
C. Transfer Documents. The Developer or its successors shall submit all
documents, proposed to effect any transfer or assignment, to City for review and
approval.
D. Other Information. Developer or its successors shall deliver all information
to City that City may reasonably request to enable it to evaluate the proposed transfer
or assignment. City shall approve, conditionally approve, or disapprove a request for
assignment within 15 days after receiving the request and all supporting
documentation.
E. Developer's Release. City's approval of anytransfer, assignment, or sale will
not relieve the Developer or any successor from any unfulfilled or ongoing
obligations of Developer under this Agreement with respect to any portion of the
Property not transferred. The provisions ofthis subsection are intended to discourage
land speculation, and these provisions shall be liberally interpreted to accomplish that
end.
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5.3 Security Financing; Rights of Holders
5.3.1 No Encumbrances Except Mortgages. Deeds ofTrust. Sales
and Lease-Back or Other Financine for Development. Notwithstanding Section 5.1 of this
Agreement, mortgages, deeds of trust, sales and leases-back or any other form of conveyance
required for any reasonable method of financing are permitted before issuance of a Certificate of
Completion but only for the pulpose of securing loans of funds to be used for financing the
acquisition of the Property, the construction of improvements on the Property and any other
expenditures necessary and appropriate to develop the Property under this Agreement. The
Developer shall promptly notiff City of any mortgage, deed of trust, sale and lease-back or other
financing conveyance, encumbrance or lien that has been created or attached thereto prior to
completion of the construction of the improvements on the Property whether by voluntary act of the
Developer or otherwise. The words "mortgage" and "deed oftrust," as used herein, include all other
appropriate modes of financingreal estate acquisition, construction and land development.
5.3.2 Holder Not Obligated To Construct Improvements. The
holder of anymortgage, deed of trust or other securityinterest authorized bythis Agreement shall in
no waybe obligated bythe provisions of this Agreement to construct or complete the improvements
or to guarantee such construction or completion, nor shall any covenant or any other provision in the
grant deed for the Property be construed so to obligate such holder. Nothing in this Agreement shall
be deemed to construe, permit or authorize any such holder to devote the Property to any uses or to
construct any improvements thereon other than those uses or improvements provided for or
authorized by this Agreement.
5.3.3 Notice of Default to Mortease. Deed of Trust. or Other
Securitl¿ Interest Holders: Rigtrt to Cure. Whenever City shall deliver any notice or demand to the
Developer with respect to any breach or default by the Developer in completion of construction of
the improvements, City shall at the same time deliver a copy of such notice or demand to each holder
of record of any mortgage, deed of trust, or other security interest authorized by this Agreement who
has previously made a written request to City therefor default of the Developer under this
Section 5.3.3. Nothing contained in this Agreement shall be deemed to permit or authorize such
holder to undertake or continue the construction or completion of the improvements (beyond the
extent necessary to conserve or protect the improvements or construction alreadymade) without first
having expressly assumed the Developer's obligations to City by written agreement reasonably
satisfactory to City. The holder in that event must agree to complete, in the manner provided in this
Agreement, the improvements to which the lien or title of such holder relates and submit evidence
reasonably satisfactoryto Citythat ithas the qualihcations and financial responsibilitynecessaryto
perform such obligations. Anysuchholderproperlycompleting suchimprovsments shallbe entitled,
upon written request made to City, to a Certificate of Completion from City.
5.3.4 FailureofHoldertoCompletelmprovernents. [nanycase
where, six (6) months after default by the Developer in completion of construction of improvements
under this Agreement, the holder of any mortgage, deed of trust, or other security interest creating a
lien or encumbrance upon the Property has not exercised the option to construct, or if it has exercised
the option and has not proceeded diligently with construction, Citymaypurchase the mortgage, deed
oftrust, or other security interest bypa¡anent to the holder of the amount ofthe unpaid debt, plus any
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accrued and unpaid interest, any prepayment fees or charges and related lender costs. If the
ownership of the Property has vested in the holder, City, if it so desires, shall be entitled to a
conveyance of the Property from the holder to City upon payment to the holder of an amount equal to
the sum of the following:
A. The unpaid mortgage, deed of trust, or other security interest debt at
the time title became vested in the holder (less all appropriate credits,
including those resulting from collection and application ofrentals and other
income received during foreclosure proceedings);
B. All expenses with respect to foreclosure;
C. The net expenses, if any (exclusive of general overhead), incurred by
the holder as a direct result of the subsequent management of the Property;
D. The costs of any authorized improvements made by such holder; and
E. An amount equivalent to the interest that would have accrued on the
aggregate of such amounts had all such amounts become part of the mortgage
or deed of trust debt and such debt had continued in existence to the date of
payment by City.
5.3.5 Rieht of City to Cure Mortgaee. Deed of Trust or Other
Securit]¡ Interest Default. In the event of a default or breach by the Developer on a mortgage, deed of
trust or other security interest with respect to the Property prior to the completion of the Project, and
the holder has not exercised its option to complete the Project, City may cure the default prior to
completion of any foreclosure. In any such event, City shall be entitled to reimbursement from
Developer of all costs and expenses incurred by City in curing the default. City shall also be entitled
to a lien upon the Property to the extent of such costs and disbursements. Any such lien shall be
subject to mortgages, deeds of trust or other security interests executed for the sole purpose of
obtaining funds to purchase and develop the Property as authorized herein.
6. REPRESENTATIONS AND WARRANTIES.
6.1 DevelopgrRepresentations and'Warranties.
A. Representations and rùy'arranties of Developer. Developer represents and
warrants that:
l. Developer is a Nevada limited liability company duly formed and
existing under the laws of the State ofNevada, and authorized to do business
in the State of Califomia, County of Fresno, and City of Fresno. Permitted
Assignee will be a Nevada or California limited liability company duly
formed under the laws of the State of Nevada or California.
t4ta
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2. Developer has all requisite power and authority to carry out
business as now and hereafter conducted and to enter and perform
obligations under this Agreement.
3. The person or persons signing this Agreement for Developer have
been duly authorized to execute and deliver this Agreement and to legally
bind Developer to its terms and conditions.
4. Developer's execution and performance of this Agreement does not
violate any provision of any other agreement to which Developer is a party.
5. Except as may be specifically set forth in this Agreement, no
approvals or consents not heretofore obtained by Developer are necessary to
Developer's execution of this Agreement.
6. Developer has or will have sufficient funds available to fund the
Project and to pay all costs assumed by Developer hereunder.
7 . This Agreement is valid, binding, and enforceable against Developer
in accordance with its terms, except as such enforceabilitymaybe limited by
principals of public policy and subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and rules of law
governing specific performance, injunctive relief or other equitable remedies.
8. Developer has made no contract or anangement of any kind the
performance of which by the other party thereto would give rise to a lien on
the Property.
6.2 Survival of Representations and Warranties. The parties are relying
upon the above representations and warranties in entering this Agreement. The foregoing
representations are and shall be continuing in nature and shall remain in fulI force and effect until all
obligations under this Agreement are met or this Agreement is terminated in a manner provided
herein.
7. DEFAULT. REMEDIES AND TERMINATION.
7 .l Default. Failure or delay by either party to perform any term of this
Agreement shall be a default under this Agreement if not cured within the time set forth herein. Any
failure or delay by aparty in asserting any right or remedy will not constitute a waiver, and will not
deprive the party of its right to institute and maintain any action or proceeding necessary to protect or
enforce any right or remedy.
L2 Legal Actions. A partymay institute a legal action to cure, correct or
remedy any default, to recover damages for any default, or to obtain any other remedy consistent
with the purposes of this Agreement. Such legal action shall be brought in the Fresno County
Courts, or the Fresno Division of the Federal District Court for the Eastern District of California.
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7.3 Rights and Remedies are Cumulative. Except as may be expressly
stated otherwise in this Agreement, the rights and remedies of the parties are cumulative. The
exercise by either party of one or more of its rights or remedies shall not preclude the exercise by it,
at the same or a different time, of any other rights or remedies for the same default or any other
default. In addition to the specific rights and remedies herein, the parties may resort to any other
rights or remedies available at law or in equity, including, without limitation, specific performance.
7 .4 Notice and Cure Periods. If either party fails to perform under any
provision of this Agreement including documents incorporated herein, the non-defaulting party shall
serve written notice of the default on the defaulting party, describing the default, and the actions
necessary to cure the default. A defaulting party will have 30 days from the date of the notice to cure
the breach or failure unless a different time period is provided in this Agreement in which case the
latter shall apply. If the default is not susceptible to cure within the 30 days, the defaulting party
shall begin to cure the default within the 30 days and after that diligently prosecute the cure to
completion. Failure of the defaulting party to cure within these times shall entitle the non-defaulting
party to enforce any right or remedy provided in this Agreement , atlaw, or in equity. This provision
is not intended to modiÛ' or extend any other notice or cure period specificallyprovided for in this
Agreement. Failure or delay in giving such notice shall not constitute a waiver of any default, nor
shall it change the time of default.
7 .5 Right of Re-entry (Power of Termination) and Reverter. City may
reenter and take possession of the Property, or part of it, and all improvements on it, terminate the
estate conveyed to Developer by the Grant Deed and revest the estate in City if, after the Closing, but
before recording a Certificate of Completion, any of the following occurs:
A. Developer does not begin and complete construction ofthe Project within the
time specified in the Performance Schedule or this Agreement; or
B. Developer abandons or substantially suspends construction ofthe Project for
30 days after City gives written notice of the abandonment or suspension; or
C. Developer assigns or transfers, or suffers an involuntary transfer of, any rights
or obligations under this Agreement, or in the Property, in violation of the assignment
provision of this Agreement.
7 .6 Effect on Securit)¡ Holders. City's right to reenter, repossess, terminate
and revest shall be secured by the provisions of the Grant Deed and Deed of Trust attached hereto as
Exhibits E and F. Such right to reenter, repossess, terminate and revest shall be subject to, limited
by, and shall not defeat, render invalid, or limit: (i) any Security Financing Interest permitted by this
Agreement; or (ii) any provision of this Agreement protecting the holder's Security Financing
Interest.
7 .7 Resale of the Property. When title to the Propertyrevests in City, City
may, but is not required to, use its best efforts to resell the Property to a qualified and responsible
party (as determined by City', who will assume the obligation of completing the Project or
constructing the improvements other than the Project, satisfactory to City. Upon any resale of the
Property, or part of it, the proceeds shall be applied as follows:
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A. First, to reimburse City for (a) all costs and expenses incurred (including,
without limitation, salaries of personnel) in connection with the recapture,
management, and resale of the Property, or part of it, less any income City derived
from the property in connection with the management; (b) all taxes, assessments, and
water and sewer charges respecting the Property (or, if any of the Property is exempt
from taxation or assessment or such charges during City's ownership, then such
taxes, assessments or charges as would have been payable if the Propertywere not so
exempt); (c) any paynents necessary to discharge or prevent any subsequent
encumbrances or liens due to obligations, defaults, or acts of Developer, its
successors or transferees from attaching or being made; (d) any expenditures made or
obligations incurred to complete the Project or other improvements on the Property;
and any amounts otherwise owing to City from Developer or by its successor or
transferee; and
B. Second, to reimburse Developer, its successor or transferee, up to the amount
equal to the sum of (a) the purchase price paid to City for the Property; and (b) the
out-of-pocket costs incurred to develop and improve the Property, less (c) any gains
or income to Developer from the Property, the Project or other improvements on it.
Notwithstanding the foregoing, the amount calculated pursuant to this Section shall
not exceed the price that Developer paid City for the Property, and the fair market
value of the improvements on it when the default or failure occuffed, which led to
City's exercise of the right of reverter.
C. Any balance remaining after such reimbursements shall be retained by City.
7 .8 No Speculation in Land. The rights established in this Section 7 shall
be interpreted considering City's intent to convey the Property to Developer for development of the
Project, and not for speculation in undeveloped land or any other purpose.
The provisions of Sections 7.5-7.8 shall automatically terminate on the recordation of
a Certificate of Completion for the Project (or applicable phase).
8. GENERAL PROVISIONS.
8.1 Notice.DemandsandCommunication. Allnotices,elections,requests,
acceptances, demands, instructions or other communications ("notice" or "notices") to be given to
any party under this Agreement shall be in writing and shall be deemed to have been duly given (i)
on the date of service if personally served on the party to whom notice is to be given; (ii) within
forty-eight (48) hours after mailing, if mailed to the party to whom notice is to be given, by first class
mail which is either registered or certified, postage prepaid, return receipt requested; (iii) within
twenty-four (24) hours after being deposited with a recognized private courier service (e.g. Federal
Express), if delivered by a private courier service to the party to whom notice is to be given, all
charges prepaid; or (iv) when sent, if given by electronic format that provides verification of
successful transmission. All notices shall be properly addressed to the party receiving notice as
follows:
10s74s/000011439s89.DOC)
22
CITY:
City of Fresno
Attention: City Manager
2600 Fresno Stree
Fresno, CA9372l
\ilITH COPIES TO:
City Attorney
2600 Fresno Stre
Fresno CA 93721-3602
Facsimile No.: (559) 498-1815
DEVELOPER:
Upside Enterprises, LLC
Attn: Mr. Mark Astone
1466YanNess Avenue
Fresno, Califomia 93721
A party may change its address by notice given according to this subsection.
8.2 Conflict of Interests. No member, offrcial, officer or employee ofthe
Developer or City shall have any direct or indirect interest in this Agreement, or shall participate in
any decision relating to this Agreement where such interest or participation is prohibited by law. No
officer, employee, or agent of City who exercises any function or responsibility concerning the
planning and carrying out of the Project, or any other person who exercises any function or
responsibility concerning any aspect of this Agreement or the Project, shall have any personal
financial interest, direct or indirect, in this Agreement or the Project.
8.2.1 Developer represents and warrants that it has not paid or
given, and will not pay or give, to any third party any money or other consideration for obtaining this
Agreement, other than normal costs of conductingbusiness and costs ofprofessional services such as
architects, consultants, engineers and attomeys.
8.2.2 No contractor, subcontractor, mechanic, material man,
laborer, vendor or other person hired or retained by Developer shall be, nor shall any of them be
deemed to be, third-party beneficiaries of this Agreement, rather each such person shall be deemed to
have agreed (a) that they shall look to Developer as their sole source of recovery if not paid; and (b)
except as otherwise agreed to by City and any such person in writing, theymay not enter any claim or
bring any such action against City under any circumstances. Except as provided by law, or as
otherwise agreed to in writing between City and any such person, each such person shall be deemed
to have waived in writing all right to seek redress from City under any circumstances whatsoever.
8.3 Nonliabilitv of Officials. Employees and Agents. No member, official,
officer, employee or agent of City shall be personally liable to the Developer, or any successor in
interest, for any default or breach by City.
{0s74st0000/t439s89.Doc}
23 .-t/t
8.4 Countemarts. This Agreement maybe executed in counterparts, and
together each executed counterpart shall constitute one Agreement.
8.5 Waiver. A party's waiver ofthe other's breach of anyprovision of this
Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of the same
or a different provision ofthis Agreement. No provision of this Agreement maybe waived except in
a writing signed by all the parties. Waiver of any one provision shall not be deemed to be a waiver
of any other provision herein.
8.6 Attomevs' Fees. If aparty initiates or defends litigation or any legal
proceeding regarding the enforcement of this Agreement, the prevailing party in such litigation or
proceeding, in addition to any other relief that may be granted, shall be entitled to reasonable
attomeys' fees. Attorneys' fees shall include attorneys' fees on any appeal. A party entitled to
attomeys' fees shall be entitled to all other reasonable costs for investigating the action, retaining
expert witnesses, taking depositions and discovery and all other necessary costs incurred with
respect to the action. All such fees shall be deemed to have accrued on coÍìmencement ofthe action
and shall be enforceable whether or not such action is prosecuted to judgment.
8.7 Governine Law. This Agreement shall be interpreted and enforced,
and the rights and duties ofthe parties under this Agreement (both procedural and substantive) shall
be determined according to California law.
8.8 Further Assuranceq. Each partywill take any further acts and will sign
and deliver any further instruments required to carry out the intent and purposes of this Agreement.
8.9 Entire Understanding of the Parties. The exhibits referenced as
attached are by such references incorporated into this Agreement. This Agreement, including
exhibits, is the entire understanding and agreement of the parties. All prior discussions,
understandings, and written agreements are superseded bythis Agreement. This Agreanent shall not
be modified except by written instrument duly approved as required by law and executed by
authorized representatives of the parties. Should the terms of any exhibit conflict with the body of
this Agreement, the body of this Agreement shall govern.
8.10 Consent. Reasonableness. Unless this Agreement specifically
authorizes a party to withhold its approval, consent or satisfaction in its sole discretion, any consent,
or approval, or satisfaction to be requested or required of a party, shall not be unreasonably withheld,
conditioned or delayed.
8 . 1 I Partial Invalidit)¡. If any part of this Agreement is held to be invalid,
void or unenforceable in any legal, equitable or arbitration proceeding, the remainder of the
Agreement shall continue in effect, unless not giving effect to the invalid or unenforceable part
would prevent effecting the purposes of the Project and this Agreement.
8.I2 Ambiguity. This Agreement is the result ofthe combined efforts ofthe
parties. Should any provision of this Agreement be found ambiguous, the ambiguity shall not be
resolved by construing this Agreement in favor of or against any parIy, but by construing the terms
according to their generally accepted meaning, considering the objective of the Agreement.
{0s'74s10000//439589.DOC}
24
,' '')''n
8. 1 3 Number and Gender. Masculine, feminine or neuter gender terms and
singular or plural numbers will include others when the context so indicates.
8.14 Headings. All headings are forconvenienceonly, arenotapartofthis
Agreement, and are not to be used in construing this Agreement.
8.15 Bindinq Upon Successors. This Agreement shall bind and inure to the
benefit ofthe successors in interest, personal representatives, and assigns ofeach party, subject to the
limitation on transfer and assignment contained in this Agreement. Anyreference inthis Agreement
to a specificallynamed party shall be deemed to applyto any successor, heir, administrator, executor,
representative, or assign of the party who has acquired an interest in compliance with the terms of
this Agreement, or under law.
8.16 Relationship of the Parties. Nothing in this Agreement, the Grant
Deed, or any other document executed in connection with this Agreement shall be construed as
creating a partnership, joint venture, agency, employment relationship, or similar relationship
between City and the Developer or any of the Developer's contractors, subcontractors, employees,
agents, representatives, transferees, successors-in-interest or assigns. Nothing in this Agreement
establishes a principal and agent relationship between the parties.
8.17 Nature of the Project. The Project is a private undertaking of the
Developer. After City conveys title or possession of the property to Developer, the Developer shall
have exclusive control over the Property, subject to the terms of this Agreement and all applicable
Federal, State and local laws, ordinances, codes, regulations, standards and policies.
8.18 Time of Essence. Time is ofthe essence of each term, condition, and
covenant contained in this Agreement.
8.19 Survival of Provisions. Those provisions expressly surviving
expiration or earlier termination, including each indemnification provision, shall survive the Closing
and expiration or earlier termination of this Agreement, and shall not merge with the Grant Deed or
other document evidencing any interest in real property.
.,Itl t
L/
{0 s'7 4 s I 0000 / I 4395 8 9. DOC }
25
IN WITNESS WHEREOF, City and Developer have executed this Agreement on the
dates set forth below.
DEVELOPER: CITY:
UPSIDE ENTERPRISES, LLC,
A Nevada Limited Liability Company
ark Astone, Managing Partner
ATTEST:
YVONNE SPENCE, CMC
City Clerk
Dated:
The øbove persons to execute this agreement
øcknowledgments.
CITY OF FRESNO,
A Municipal Corporation
Bruce Rudd, City Manager
'!3//L
Site Map
Legal Description
Scope of Development and Basic Design
Performance Schedule
Certifi cate of Completion
Grant Deed
PromissoryNote
Deed of Trust
Dated:
beþre ø Notøry Public and attach the notary
Attachments:Exhibit A
Exhibit A-1
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
APPROVED AS TO FORM:
DOUGLAS T. SLOAN
(Deputy/Assistant)
{0 s7 4s / 0000 t I 439s 89. Doc}
26 2q'
GALIFORI{IA ALL.PURPOSE ACK]IOWLEDGTE]IT clvrL coDE s 1r89
A notary public or other officer completing this ceftificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document,
State of California )
)County of Fresno
On January 13, 2016 beforeme, I(athervn CorneII, Notary Public ,
Date
personally appeared
Here lnsert Name and Title of the Officer
***r**Bruce Rudd******
who proved to me on the basis of satisfactory evidence to be the person(s) whose nameþ) is
subscribed to the within instrument and acknowledged to me {þ¿f þsþhe#þsy executed the same in
or the entity upon behalf of which the personþ| acted, executed the instrument.
KATHERYN CORNELL
Commlsslon # 2042847
Notary Public - Callfornia
Frosno County
I certify under PENALW OF PERJURY under the laws
of the State of California that the foregoing paragraph
is true and correct.
WITNESS my hand and officialseal.
Signature
Place Notary Seal Above
OPT'ONAL
Though fhn section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document City Of Upside Enterprises,LIC
or Type of Document: Stanislaus and Document Date:13
Pages: Signe(s) Other Than Named
Capacity(ies)Signer(s)
Signer's Name:Signer's Name:
-ìCorporate Officer - Title(s):
i I Partner - X Limited n General
:l - Title(s):
- Il Limited i l General
I lndividual X Attorney in Fact n Attorney in Fact
L-l Trustee
ll Other:
[] Guardian or n Guardian or Conservator
Signer ls
fTesno andL Street
i-r-l
¡Pì
¿./
@2014 National Notary Association . www.NationalNotary.org . 1-800-US NOTARY (1-800-876-6827) ltem #5907
CALIFOR]IIA ALL.PURPOSE ACKIIOWLEDGTEI{T crvrL coDE s 1189
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of FTesno
On January 13, 2016 beforeme, Katheryn CorneII' Notar}¡ Public ,
Date Here lnse¡t Name and Title of the Officer
personally appeared ******Ma¡k AStone******
Nameþ) of Signe
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) i
subscribed to the within instrument and acknowledged to me that h executed the same in
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
Place Notary SealAbove
OPTIONAL
Though tfiis section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of thís form to an unintended document.
Description of Attached Document City of Fresno and Upside Erterprises, IJÆ
or Type of Document: Stanislaus and L Street Document Date:
Pages: Signe(s) Other Than Named Above:
Capacity(ies)Signer(s)
Signer's Name:Signer's Name:
lCorporate Officer - Title(s):- Title(s):
i .l Partner - tr Limited n General
I lndividual tr Attorney in Fact
- fl Limited il General
n Attorney in Fact
f I Trustee D Guardian n Guardian or Conservator
[-] Other:
Signer ls
KATHERYN CORNELL
Commlssion # 2042847
Notary Publlc - Californla
Fresno County
Signer ls Representing:
@2014 National Notary Association . www.NationalNotary.org ' 1-800-US NOTARY (1-800-876-6827) ltem #5907
CLERK'S CERTIFICATION
State of California)
County of Fresno )
on January 13, 2016, before me, cindv Bruer, Deputv citv clerk, personaily
appeared Bruce Rudd. Citv Manaqer of the Citv of Fresno who proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to be 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), acted, executed the
instrument.
I certify under PENALTY OR PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
WONNE SPENCE. CMC
CITY CLERK, City of Fresno
Deputy
^ll ^ro
EXHIBIT A
SITE MAP
{0 s7 4s /0000 I I 439589. DOC}
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EXIIIBIT A..1
LEGAL DESCRIPTION
Parcel 1: (APN 466-142-15T)
Lots 14, 15 and 16 in Block 89 of the Town (Now City) of Fresno, in the City of Fresno, County
of Fresno, State of Califomia, according to the map thereof recorded June 8, 1876 in Book 1,
Page 2 of Plats, Fresno County Records.
Parcel 2: (APN: 466-142-14T)
Lots 12, 13, and Southerly 15 feet of Lot 11 in Block 89, of the Town (Now City) of Fresno, in
the City of Fresno, County of Fresno, State of Califomia, according to the map thereof recorded
June 8, 1876 in Book I, Page 2 of Plats, Fresno County Records.
?\{0 57 4s I 0000 / / 439s8 9. DOC }
EXHIBIT B
SCOPE OF DEVELOPMENT
The Project shall consist of approximately 60 to 70 multi-family residential units, and
approximately 20,000 square feet of commercial space.
Z>
{0 s7 45 / 0000 / / 439589.DOC }
EXHIBIT C
PERFORMANCE SCHEDULE
Items Completed Time for Performance Estimated Date
Developer prepares and submits to City
Concept Drawings and Site Plan,
including architectural theme and
treatment. Thereafter, final drawings and
specifications shall be prepared in
accordance with Concept Drawings and
Site Plan.
On or before
November 16,2015
Developer executes and delivers
Agreement to City
On or before
November 19,2015
City approves Disposition and
Development Agreement (DDA) with
Developer for Project.
November 19,2015
Submission and Aooroval - Certificates Within 15 days after approval
of this Agreement by City.
January 20,2016
of Insurance. The Developer furnishes to
City appropriate certificates of bodily
injury and property damage insurance
policies.
City executes Agreement.After receipt and approval of
insurance certifi cates and
receipt of executed documents
from Developer.
January 5,2016
Escrow opens.V/ithin 15 days of tully
executed agreement.
January 20,2076
Escrow closes.Within 60 days of escrow
opening.
March 20,2016
Commencement of Construction of
Developer's Improvements. Within 30
days after receipt of building permits by
the Developer, construction shall
coÍrmence on improvements to be
constructed on the Project Site.
Júy 22,2016
Completion of Construction of
Developer's Improvements. The
Developer shall complete construction of
Within the specified months
after commencement thereof
bv the Develoner. not to
July 20, 2018
){!
the improvements to be constructed on
the Project Site.
exceed 24 months after
commencement of
construction
Issuance - Certificate of Completion.
City shall furnish the Developer with a
Certificate of Completion on the Project.
Promptly after completion of
all construction and upon
written request thereof by the
Developer.
August 20,2018
Improvements shall be completed within 24 months of the start of construction.
Construction to commence by: 1u1y20,2016
Construction to be completed by: July 20,2078 ("Construction Completion Date")
j1
A.
EXHIBIT D
CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF
AND WHENRECORDED RETURN TO:
City of Fresno
Attention: City Manager
2600 Fresno Street
Fresno, CA9372I
No Fee-Govt. Code Sections 6103-27383
APNs: t I
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Release of Construction Covenants and Certificate of Completion is recorded at the request
and for the benefit of the City of Fresno.
As agreed in a Disposition and Development Agreement including covenants, conditions and
restrictions, ("DDA") dated l_,20_) entered by the CITY OF FRESNO, a municipal
corporation, ("CITY"), and UPSIDE ENTERPRISES, LLC, a Nevada limited liability
company ("DEVELOPER"), CITY conveyed certain real property to DEVELOPER under a
Grant Deed, dated I l, recorded in the Official Records of Fresno County on
[ ] as Document No. [ ] (the "DEED"), and the DEVELOPER agreed to complete/cause the
completion of the of construction of certain improvements described therein (the "Project")
upon the premises described therein as the "Property'' according to the terms and conditions
of the DDA and the documents and instruments referenced therein, incorporated herein.
The DDA or a memorandum of it was recorded | 20 I as úrstrument No.
t I in the Official Records of Fresno County, California.
Under the terms of the DDA, after DEVELOPER completes/causes completion of
construction of a Phase of the Project on the Property/portion thereof, DEVELOPER may
ask CITY to record an instrument certiffing that DEVELOPER has completed the required
improvements for such Phase of development in the form of a Release of Construction
Covenants and Certificate of Completion.
DEVELOPER has asked CITY to furnish DEVELOPER with a recordable Release of
Construction Covenants and Certificate of Completion for a Phase of development.
CITY'S issuance ofthis Release of Construction Covenants and Certifìcate of Completion is
conclusive evidence that DEVELOPER has completed the construction on a Phase of
development of the Property to terminate and release DEVELOPER from the
construction/improvement covenants in the DDA pertaining to such Phase.
NOV/ THEREFORE:
1. As provided in Section 3.4 of the DDA, the City does hereby certiff that construction of all
of the improvements required by the DDA on the portion of the Property described in
B.
c.
D.
E.
_-a
,'ì u{0 s7 4 s / 0000 / / 439s 89.Doc }
Attachment A, attached hereto and incorporated herein by this reference, has been
sati sfactorily completed.
2. The DDA is therefore of no further force and effect as to such Phase of Development of the
Property, and all rights, duties, obligations and liabilities of the City and the Developer
thereunder with respect to such Phase of Development shall cease to exist. Any continuing
and existing rights, duties, obligations and liabilities of the City and the Developer (and its
successors) pertaining such Phase of development are provided in the Grant Deed conveying
the Property from the City to the Developer.
3. This Release of Construction Covenants and Certificate of Completion shall notbe deemed
or construed to constitute evidence of compliance with or satisfaction of any obligation of
the Developer to any holder of a mortgage, or any insurer of a mortgage, securing money
loaned to f,tnance the construction of the improvements on the Property or permanent
financing of the Project. This Release of Construction Covenants and Certifìcate of
Completion, is not a notice of completion as referred to in Section 3093 of the California
Civil Code.
IN WITNESS WHEREOF, CITY has executed this Release of Construction Covenants and
Certificate of Completion as of this _ day of [ ,20_.f
CITY OF FRESNO,
A municipal corporation
Owner hereby consents to recording this Certificate of Completion against the Property
described herein.
Dated:
Upside Enterprises, LLC
a Nevada limited liability company
By:
Name:
Title:
THE ABOVE PARTIES ARE TO SIGN THIS INSTRUMENT BEFORE A NOTARY PUBLIC.
By:
Its:
201
ATTEST:
CITY CLERK
By:
Deputy Date
{05'7 4s /0000/ / 439s89 DOC}
APPROVED AS TO FORM:
CITY ATTORNEY
By:
t
rrri\
'1,t/
Deputy Date
EXHIBIT E
FREE RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:
City of Fresno
Attention: City Manager
2600 Fresno Street
Fresno, CA9372l
Attn: Bruce Rudd
(Space Above This Line For Recorder's Office Use Only)
GRA¡{T DEEI)
For valuable consideration, the receipt of which is hereby acknowledged,
CITY OF FRESNO, amunicipal corporation ("Grantor"), herebygrantstoUPSIDEENTERPRISES,
LLC, a Nevada limited liabilþ company ("Grantee"), the real property ("Property'') legally described in
Exhibit "4" attached hereto and incorporated herein by this reference.
Consistent with the Disposition and Development Agreement including covenants, conditions and
restrictions, ("DDA") dated | , 20 I entered by Grantor and Grantee, all incorporated herein by this
reference, the Grantee herein covenants by and for itself and its successors, transferees, vendees,
administrators, and assigns, and all persons claiming under or through it that:
l. There shall be no discrimination against or segregation of, anyperson or group of persons on
account of any bases listed in subdivision (a) or (d) of Section 12995 of the Government Code, as those bases
are defined in Section 12926,12926.1, subdivision (m) and paragraph (1) of subdivision þ) of Section 12955
and Section 12955 .2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property, nor shall Developer or any person claiming under or through him or her, establish
or permit any practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy oftenants, lessees, subtenants, sublessees, or vendees in the Property.
2. The Grantor may reenter pursuant to a reserved power of termination and take possession of
the Property, or part of it, and all improvements on it, terminate the estate conveyed to Grantee by this Grant
Deed, and revest the estate in the Grantor if, before recording a Certificate of Completion, as defined in the
DDA, any of the following occurs:
a. Grantee does not begin and complete construction on the Property, or part of it, within
the times specified and as provide in the DDA; or
b. Grantee abandons or substantially suspends construction on the Property, orpart of it,
for 30 days after the Grantor gives written notice of the abandonment or suspension; or
c. Grantee assigns or transfers, or suffers an involuntary transfer or any rights or
obligations under the DDA, or in the Property, or part of it, in violation of the DDA including assignment
provisions therein.
Such right to reenter, repossess, terminate and revest shall be subject to, limited by, and shall
not defeat, render invalid or limit: (i) any mortgage, deed of trust or other SecurityFinancing Interest
permitted by the DDA; or (ii) any provision of the DDA protecting the holder's Security Financing
Interest.
{o57 45 / OOOO /,/439 589.DOC}
i t.i
V/hen title to the Property revests in Grantor, Grantor may, but is not required to, use its best
efforts to resell the Property to a qualified and responsible party (as determined by the Grantor). The
transferee will assume the obligation of completing the development ofthe Property, satisfactoryto the
Grantor. Upon any resale of the Property, or part of it, the proceeds shall be applied as follows:
i. First, to reimburse the Grantor for (a) all commerciallyreasonable costs and expenses
incurred (including, without limitation, salaries ofpersonnel) in cormection with the recapture/reverter,
management and resale of the Property, or part of it, less any income Grantor derived from the
Property in connection with the management; (b) all taxes, assessments, and water and sewer charges
respecting the Property (or, if exempt due to Grantor's ownership, then such taxes, assessments or
charges as would have been payable if the Property were not so exempt); (c) any payments necessary
to discharge or prevent any subsequent encumbrances or liens due to obligations, defaults or acts of
Grantee, its successors or transferees from attaching or being made; (d) any expenditures made or
obligations incurred to complete development of the Property; and any amounts otherwise owing to
Grantor from Grantee or by its successor or transferee; and
ii. Second, to reimburse Grantee, its successors or transferee, up to the amount equal to
the sum of (a) the purchase price paid to Grantor for the Property; and (b) the out-of-pocket costs
incurred to develop and improve the Property, less (c) any gains or income to Grantee from the
Property or the improvements on it, Notwithstanding the foregoing, the amount calculated pursuant to
this paragraph shall not exceed the price that the Grantee paid the Grantor for the Property plus the fair
market value of the improvements on it when the default or failure to cure, which led to the Grantors
exercise ofthe right ofreverter.
iii. Any balance remaining after such reimbursement shall be retained by Grantor.
The rights established in this section 2 shall be interpreted considering Grantor's intent to convey the
Property to Grantee for development of the Property, and not for speculation in undeveloped land or any other
purpose. The rights established in this section 2 shall automatically terminate as to a particular Phase of the
Project (as dehned in the DDA) upon recording of a Certificate of Completion as to such phase or as to the
entire Project when all Certificates of Completion for all phases have been recorded, and, upon request by
Grantee, Grantor will promptly execute and record reasonable instruments evidencing the termination of the
rights described in section 2.
3. a. Grantee will take all commercially reasonable precautions to prevent the release into
the environment of any Hazardous Materials (as defined in the DDA) in, on or under the Property. Grantee
will comply with all governmental requirements with respect to Hazardous Materials.
b. Until a Certificate of Completion is recorded as to the Property/portion thereof,
Grantee will notiff Grantor and give Grantor a copy or copies of all environmental permits, disclosures,
applications, entitlements or inquiries relating to the Property including, without limitation, notices of
violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports
filed pursuant to self-reporting requirements, and reports fìled or applications made pursuant to any
governmental requirement relating to Hazardous Materials and underground tanks. Immediately after each
incident, Grantee will report any unusual or potentially important incidents respecting the environmental
condition of the Property to Grantor.
c. If a release of anyHazardous Materials into the environment occurs afterthe date of
recordation of this Grant Deed, Grantee will, as soon as possible after the release, furnish Grantor with a copy
of any reports relating thereto and copies of all correspondence with governmental agencies relating to the
release. Upon request, Grantee will furnish Grantor with a copy of any other environmental entitlements or
{o57 45 /OOOO /,/43 95 89. DOC}
,'1
inquiries relating to or affecting the Property, including, without limitation, all permit applications, permits and
reports, including reports and other matters, which may be characteized as confidential.
4. Grantor is the beneficiary of the covenants running with the land for itself and for protecting
the interest of the community and other parties, public or private, in whose favor and for whose benefit the
covenants are provided, without regard to whether Grantor has been, remains, or is in ownership of any land on
the Property/portion thereof. Grantor may exercise all rights and remedies, and maintain any actions or suits at
law or in equity or other proceedings to enforce the covenants for itself or any other beneficiaries. The
provisions of the DDA which by their terms or nature are intended to survive completion of the Project are
fully enforceable under and shall not merge with this Deed, but shall terminate on the recordation of a
Certificate of Completion for the Project.
5. If a conflict exists or arises between the provisions of this Deed and the DDA, the DDA shall
control.
The obligations of the Grantee hereunder are covenants or conditions running with the land enfo¡ceable by
Grantor through a reserved right to re-entry and reverter.
IN WITNESS WHEREOF, the Grantor has caused this instrument to be executed on its behalf by its
respective offrcers thereunto duly authorized, this day of ,201_.
..GRANTOR"
CITY OF FRESNO
a municipal corporation
By:
Its:
Date:
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ATTACIIMENT NO. 1 to GRANT DEED
TJPSIDE ENTERPRISES. LLC
Parcel 1: (APN 466-142-15T)
Lots 14, 15 and 16 in Block 89 of the Town (Now City) of Fresno, in the City of Fresno, County
of Fresno, State of California, according to the map thereof recorded June 8, 1876 in Book 1,
Page2 of Plats, Fresno CountyRecords.
Parcel 2: (APN: 466-142-l{l)
Lots 12,13, and Southerly 15 feet of Lot 11 in Block 89, ofthe Town (Now City) of Fresno, in
the City of Fresno, County of Fresno, State of California, according to the map thereof recorded
June 8, 1876 in Book 1, Page 2 of Plats, Fresno County Records.
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EXHIBIT E
EXHIBIT F
PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower
for Cancellation.
$147,000.00 Fresno, California
,2015
For value received, the undersigned, Upside Enterprises, LLC, a Nevada limited
liability company ("Borrower"), promises to pay to the order of the City of Fresno ("Lender"
or "Beneficiary"), the sum of One Hundred Forty Seven Thousand Dollars ($147,000.00)
togetherwith interest on unpaid principal at the rate of 3.5Yo per annum, with such interest
accruing as of the date this Promissory Note ("Note") is executed, all due and payable as
described herein and pursuant to the Disposition and Development Agreement. This Note
is made and entered into in accordance with the terms of the Disposition and Development
Agreement dated I I 2015, entered into between Borrower and Lender
("Agreement").
This Note is payable in full on the date with is thirty (30) years after its execution (the
"Maturity Date"). Lender is under no obligation to refinance the Note at that time. On the
Maturity Date, the entire remaining unpaid balance of principal together with interest and
unpaid penalties or late charges where applicable thereon shall be all due and payable,
along with attorney's fees and costs of collection, and without relief from valuation and
appraisement laws.
The Deed of Trust securing this Note contains subordination provisions.
Any failure to make a payment required hereunder shall constitute a default under
this Note.
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 Day" means any day other than Saturday, Sunday, or public holiday or
the equivalent for banks generally underthe 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. However, if the extension
would cause the payment to be made in a new calendar month, that payment will be made
on the preceding Business Day.
This Note, and any extensions or renewals hereof, is secured by a Deed of Trust
with Assignment of Rents on real estate in Fresno County, California, that provides for
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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 by First American Title
Company as no worse than an ALTA or CLTA second position lien.
Time is of the essence with respect to all terms of this Note. lt will be a default
under this Note if Borrower defaults under the Agreement, any other Loan Documents (as
defined in the Agreement), or if Borrower fails to pay when due any sum payable underthis
Note or under any other obligation secured by a deed of trust or other lien senior to the
deed of trust which secures this Note. Borrower shall promptly inform Lender of any new
or additional financing or funding, and Borrower shall provide Lender copies of all
agreements with any and all Funding Sources forthis Project. ln the event of a default by
Borrower, the Borrower shall pay a late charge equal to 2% of any outstanding payment.
All payments collected shall be applied first to payment of any costs, fees or other charges
due underthis Note or any other Loan Documents then to the interest and then to principal
balance. On the occurrence of a default or on the occurrence of any other event that under
the terms of the Agreement or Loan Documents gives 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 and payable without any further presentment,
demand, protest, or notice of any kind.
The indebtedness evidenced by this Note may, at the option of the Borrower, be
prepaid in whole or in part, at any time, 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, the Agreement, or other Loan Documents, and then to the interest and
then to the principal balance.
All payments are payable in lawful 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, and in the absence of that designation, then to Lender at its address of record
provided in the Agreement.
Borrower agrees to pay all costs including, without limitation, attorneyfees, incurred
by the holder of this Note in enforcing payment, whether or not suit is filed, and including,
without limitation, allcosts, attorneyfees, and expenses incurred bythe holderof this Note
in connection with any bankruptcy, reorganization, arrangement, or other similar
proceedings involving the undersigned that in anyway affects the exercise bythe holderof
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. Borrower will
pay to Lender all attorney fees and other costs referred to in this paragraph on demand.
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.
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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 an 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:
DUE ON SALE-CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare
immediately due and payable all sums secured by this Deed of Trust upon the sale or
transfer, without the Beneficiary's prior written consent, of all or any part of the Property, or
any interest in the Property except as permitted underthe Agreement. A "sale ortransfer"
means the conveyance of the Property or any right, title or interest therein; whether legal,
beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed,
installment sale contract, land contract, contract for deed, lease-option contract, or by sale,
assignment, or transfer of any beneficial interest in or to any land trust holding title to the
Property, or by any other method of conveyance of Property interest. However, this option
shall not be exercised by Beneficiary if such exercise is prohibited by applicable law.
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 Lenderwill retain 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 agrees 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 may consent to in a writing duly signed by Lender
or its authorized agents.
The Note shall be nonrecourse to the Borrower and all constituent members of the
Borrower.
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The parties will execute such other and further documents, and will take any other
steps, necessary, helpful, or appropriate to carry out the provisions of this Note.
lN WITNESS WHEREOF, Borrower has executed this Note on the date first written
above.
Borrower
Upside Enterprises LLC, a Nevada limited liability company
*** Attach Notary Acknowledgement ***
By:
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EXHIBIT "G''
DEED OF TRUST
Recording requested by,
and when recorded mail to:
City of Fresno
2600 Fresno Street
Fresno, Ca.93727
Attention: City Manager
INSTRUCTIONS TO COUNTY RECORDER:
Index this instrument as
(i) a Deed of Trust, and
(ii) a Fixture Filing
Space above for Recorder's Use
DEED OF TRUST AND ASSIGNMENT OF RENTS
This DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of Trust") is entered
into between Upside Enterprises, LLC, a Nevada limited liability companywhose principal
executive office is at , Fresno, CA 93711 (the "Trustor"), in favor of
FIRSTAMERICAN TITLE COMPANY, whose address is7625 N. Palm Avenue, Suite 101,
Fresno, California 93711 (the "Trustee"), for the benefit of the CITY OF FRESNO (the
"Beneficiary"), with offices at 2600 Fresno Street, Fresno, California 93721.
THE TRUSTOR IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO THE
TRUSTEE, in trust, with the power of sale, the real property in the City of Fresno, Fresno
County, California, more particularly described in Exhibit A attached hereto and made part
hereof by reference (the "Property"), together with:
(i) All tenements, hereditaments and appurtenances of or to the Property,
including without limitation all easements and rights used in connection therewith or as a
means of access thereto, all right, title and interest of the Trustor, now owned or hereafter
acquired, in any land lying within the right-of-way of any street, open or proposed, adjoining
the Property, and any and all sidewalks, alleys, strips and other areas of land adjacent to or
used in connection with the Property;
(ii) All oil and gas or other mineral rights in or pertaining to the Property and all
royalty, leasehold and other rights of the Trustor pertaining thereto;
(iii) All water rights pertaining to the Property and shares of stock evidencing the
same, and all deposits made with or other security given to utility companies bythe Trustor
with respect to the Property;
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(iv) The rents, issues and profits thereof, subject, however, to the right, power
and authority of Trustor to collect and apply such rents, issues and profits and set forth in
this Deed of Trust;
(v) All buildings and improvements of every kind and description nowor hereafter
erected or placed on the Property, and allfixtures thereon, including, but not limited to, all
gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating
equipment, laundry equipment, steam and hot water boilers, stoves, ranges, elevators and
motors, bath tubs, sinks, water closets, basins, pipes, faucets and other plumbing and
heating fixtures, mantels, cabinets, refrigeration plant and refrigerators, whether
mechanicalorotherwise, cooking apparatus and appurtenances, and allshades, awnings,
screens, blinds and other furnishings, it being hereby agreed that all such fixtures and
furnishings shall to the extent permitted by law be deemed permanently affixed to and a
part of the realty;
(vi) All building materials and equipment now or hereafter delivered to the
Property and intended to be installed thereon; and
(vii) All articles of personal property owned by the Trustor and now or hereafter
attached to or used in and about the building or buildings now erected or hereafter to be
erected on the Property which are necessary to the complete and comfortable use and
occupancy of such building or buildings for the purposes for which they were or are to be
erected, and all other goods, chattels and personal property as are ever used or furnished
in operating a building, or the activities conducted therein, similar to the ones herein
described and referred to, and all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are or shall be attached to the building or
buildings in any manner; subject, however, to (and only to) any purchase money security
interests in such personal property.
Said real property and personal property described above, together with appurtenances,
are referred to collectively in this Deed of Trust as the "Collateral."
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS:
(a) Payment to the Beneficiary of an indebtedness in the principal amount of One
Hundred Forty Seven Thousand Dollars ($147,000.00), evidenced by a promissory note
executed by the Trustor and payable to the order of the Beneficiary, bearing the same date
as this Deed of Trust, and any and all modifications, extensions or renewals thereof or
substitutions therefor (the "Note"), and performance and satisfaction of each and all other
obligations of the Trustor under the Note;
(b) Performance of every obligation of Trustor in this Deed of Trust and the Note;
and
(c) Payment of all sums, if any, and interest thereon that may hereafter be
loaned or advanced by the Beneficiary to or for the benefit of the Trustor or to its
successors, transferees and assigns, made to the Trustorwhile the Trustor is the ownerof
{0 5'7 45 / 0000 I I 4395 8 9. DOC }n
record of fee title to the Property, or any portion thereof, or to the successors, transferees
or assigns of the Trustor while they are the owners of record of such fee title, and
evidenced by one or more notes or written instruments which recite that they are secured
by this Deed of Trust.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, THE TRUSTOR
COVENANTS AND AGREES AS FOLLOWS:
1. The Trustor shall not use or permit the use of any of the Collateral for any
purpose other than the use for which it was intended at the time this Deed of Trust was
executed.
2. Upon default under this Deed of Trust orthe Note (following delivery of notice
and expiration of the cure period, if any, provided therein), the Beneficiary, at its option,
may declare the whole of the obligations and sums secured hereby to be immediately due
and payable.
3. The person(s) or entity(ies) who have executed this Deed of Trust are fully
authorized, and have obtained any and all written authorizations, approvals or consents
necessary, to bind the Trustor to this Deed of Trust.
4. All rents, profits and income from the Collateralcovered bythis Deed of Trust
are hereby assigned to the Beneficiary for the purpose of discharging the obligations
hereby secured. However, the Trustor shall be permitted, so long as no default exists
hereunder or under the Note, to collect such rents, profits and income.
5. Upon default hereunder or under the Note (following delivery of notice and
expiration of the cure period, if any, provided herein or therein), for the purpose of
protecting its interests hereunder, the Beneficiary will be entitled to the appointment by a
court having jurisdiction, without further notice and without regard to adequacy of any
security for the indebtedness secured hereby, of a receiver to take possession of and
protect the Collateral described herein and operate same and collect the rents, profits and
income therefrom. The entering upon and taking possession of the Property or other
Collateral by such receiver, the collection of such rents, profits and income and the
application thereof shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
6. The Trustor, at its sole cost and expense, shall provide and maintain on the
entire Property, including all buildings and improvements thereon: (i) untilthe completion
of construction as contemplated by that certain Disposition and Development Agreement
between Lender and Borrower ("Disposition and Development Agreement"), a Builders
Risk (Course of Construction) insurance in an amount equalto the completed value of the
improvements to be constructed with no coinsurance penalty provisions; and (ii) following
the completion of construction, Commercial Property insurance which shall be at least as
broad as the most current version of lnsurance Seryice Office (lSO)Commercial Property
Form CP 10 30 (Cause of Loss - Special Form), with limits of insurance in an amount
equal to the full (100%) replacement cost (without deduction for depreciation) of the
l0 s7 4 s t 0000 / / 439s 89. Doc )
improvements with no coinsurance penalty provisions. Such insurance shall include
coverage for business income, including "rental value," in an amount equal to the two (2)
years of annual rent generated by the improvements. Coverage for business income,
including "rental value," shall be at least as broad as the most current version of lnsurance
Service Office (lSO) Commercial Property Form CP 00 30. Trustor shall also maintain such
other insurance as may be reasonably required by the Beneficiary, in each case in such
amounts, in such manner and with such companies as the Beneficiary and Trustor may
reasonably approve. The foregoing minimum insurance coverage limits shall be subjectto
reasonable adjustment from time to time by the Beneficiary. Each such policy shall be
endorsed with a standard mortgage clause with loss payable to the Beneficiary and the
Trustor, and shall provide that the policy shall not be canceled or materially changed
without at least thirty (30) days' prior notice to the Beneficiary. Upon request by the
Beneficiary, the Trustor immediately shall deposit with the Beneficiary certificates
evidencing such policies.
7. The Trustor shall pay: (i) at least ten days before delinquency, alltaxes and
assessments affecting the Collateral, including assessments on appurtenant water stock;
(ii) when due, all encumbrances, charges and liens, with interest, on the Collateral or any
part thereof which appear to be prior or superior hereto; and (iii) all costs, fees and
expenses of the Trustee or the Beneficiary reasonably incurred in connection with the
trusts created under this Deed of Trust.
8. The Trustor shall: (i) keep the Collateral in good condition and repair and not
remove or demolish any buildings on the Property; (ii) to the extent insurance or
condemnation proceeds are available complete or restore promptly and in good and
workmanlike manner the buildings and improvements and any other building or
improvement which may be constructed, damaged or destroyed thereon; (iii) pay when due
all claims for labor performed and materials furnished therefore; (iv) comply in all material
respects with all laws affecting the Collateral or requiring any alterations or improvements
to be made thereon; (v) not commit or permit waste of or on the Collateral; and (vi) not
commit, suffer or permit any act upon the Property in violation of law and/or any covenants,
conditions or restrictions affecting the Collateral.
9. The Trustor shall appear in and defend any action or proceeding purporting to
affect the security hereof orthe rights or powers of the Beneficiaryorthe Trustee, and shall
pay all costs and expenses, including cost of evidence of title and reasonable attorneys'
fees, in any such action or proceeding in which the Beneficiary orthe Trustee may appear,
or in any suit brought by the Beneficiary to foreclose this Deed of Trust.
10. Should the Trustor fail to make any payment or do any act as herein
provided, then the Beneficiary or the Trustee, without obligation to do so, and following
notice to or demand on the Trustor, and without releasing the Trustor from any obligation
hereof: (i) may make or do the same in such manner and to such extent as either may
deem necessary to protect the security hereof, the Beneficiary or the Trustee being
authorized to enter on the Property for such purposes; (ii) may commence, appear in
and/or defend any action or proceeding purporting to affect the security hereof or the rights
or powers of the Beneficiary or the Trustee; (iii) may pay, purchase, contest or compromise
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any encumbrance, charge or lien which in the judgment of either appears to be prior or
superior hereto (except for the deeds of trust, encumbrances and liens securing the
Construction/Permanent Financing Loan(s), as such terms are defined below); and (iv) in
exercising any such powers, may pay necessary expenses, employ legal counsel and pay
such counsel's reasonable fees. All such amounts paid by the Beneficiary orthe Trustee
hereunder shall be added to the obligations secured by this Deed of Trust.
The term "Construction/Permanent Financing Loan" means, collectively, the
construction financing and take-out financing, and any refinancing or replacement of that
financing from time to time, to be provided by a commercial or other lender(s); provided,
however, that (i) before entering into any Construction/Permanent Financing Loan, the
Trustor shall give the Beneficiary notice of the Construction/Permanent Financing Loan and
copies of the loan agreement and all other loan documents evidencing the
Construction/Permanent Financing Loan; (ii) the funds disbursed from each
ConstructioniPermanent Financing Loan shall be used only for costs and charges
associated with the loan and for the operation, maintenance and/or improvement of the
Project or the Property as provided in the Disposition and Development Agreement or to
refinance existing indebtedness up to the fair market value of the Property as improved by
the Project; (iii) the interest on each Construction/Permanent Financing Loan shall be at a
reasonable rate based on allthe facts and circumstances; and (iv)the combined amounts
of all Construction/Permanent Financing Loans or any re-financing thereof and the Note
secured by this Deed of Trust shall not exceed one hundred percent (100%) of the fair
market value of the Property as improved by the Project under the Disposition and
Development Agreement (such value to be determined by a qualified appraiser reasonably
acceptable to Trustor and Beneficiary). For purposes of this Deed of Trust, the term "Loan"
includes mortgages, deeds of trust, sale and lease back or any other financing,
conveyance, encumbrance or lien and includes all appropriate means of financing real
estate acquisition, land development or long-term financing.
11. The Beneficiary shall have the right, but not the obligation, to pay when due
fire or other insurance premiums required hereunder if the Trustor fails to make such
payments. All such amounts paid by the Beneficiary hereunder shall be added to the
obligations secured by this Deed of Trust.
12. The Trustorshall pay immediately upon demand allsums so expended bythe
Beneficiary or the Trustee under this Deed of Trust, with interest from date of expenditure
at the legal rate.
13. lf the Trustor fails to pay any amount required by the Note or this Deed of
Trust when due and payable, or fails to perform all other covenants, conditions and
agreements of the Note or this Deed of Trust (following delivery of notice and expiration of
the cure period, if any, provided therein), the amount of the Note, including unpaid principal
and late charges, and all other charges and amounts required by the Note and this Deed of
Trust shall, at the option of the Beneficiary, become immediately due and payable. This
shall be in addition to and without limitation on any other remedy or right available to the
Beneficiary for such failure.
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14. The Trustor shall not voluntarily create or permit to be created against the
Collateral any lien or liens except as specifically permitted by this Deed of Trust or
othenruise authorized by the Beneficiary. The Trustor shall keep and maintain the
Collateral free from the claims of all persons supplying labor or materials who will enter into
the construction, rehabilitation, renovation or repair of any and all buildings or
improvements now existing or to be erected on the Property.
15. By accepting payment of any sum secured bythis Deed of Trust after its due
date or by accepting partial payment of any such sum, the Beneficiary does not waive its
right either to require prompt payment when due of all other sums so secured or to declare
default for the Trustor's failure to pay.
1 6. lf the Trustor, without the prior written consent of the Beneficiary: (i) agrees
to or actually sells, conveys, transfers or disposes of the Collateral or any interest therein
or portion thereof, or (ii) assigns or delegates any right or obligation under the Disposition
and Development Agreement (except as permitted therein), the Note orthis Deed of Trust,
then all amounts secured by this Deed of Trust may be declared immediately due and
payable, at the option of the Beneficiary. The Beneficiary shall not unreasonably withhold
its consent to any such transaction. The Beneficiary's consent to one transaction of this
type shall not be a waiver of the right to require consent to future or successive
transactions.
DUE ON SALE-CONSENT BY BENEFICIARY. Beneficiary may, at its
option, declare immediately due and payable all sums secured by this Deed
of Trust upon the sale or transfer, without the Beneficiary's prior written
consent, of all or any part of the Property, or any interest in the Property,
except as permitted in the Disposition and Development Agreement. A "sale
or transfer" means the conveyance of the Property or any right, title or
interest therein; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, Iand
contract, contract for deed, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Property, or by
any other method of conveyance of Property interest. However, this option
shall not be exercised by Beneficiary if such exercise is prohibited by
applicable law.
17. As further security for the full and complete performance of each and every
obligation, covenant, agreement and duty of the Trustor contained herein or in the Note,
the Trustor hereby grants and conveys to the Beneficiary a security interest in and lien on
all of the Collateral. This Deed of Trust shall serve as a security agreement and financing
statement created pursuant to the California Commercial Code, and the Beneficiary will
have and may exercise all rights, remedies and powers of a secured party under the
California Commercial Code. Further, this Deed of Trust is filed as a fixture filing pursuant
to the California Commercial Code and other applicable law, and covers goods which are
or are to become fixtures.
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18. Should the Property, the buildings or improvements thereon, or any part of
any of them be taken or damaged by reason of any public improvement or condemnation
proceeding, or damaged by fire or earthquake or in any other manner, the Beneficiary will
be entitled, subject to the rights of the holder of any senior deed of trust securing a
Construction/Permanent Financing Loan, to all of the Trustor's interest in compensation,
awards and other payments or relief therefor; and, following the occurrence of a default as
defined in the Note, the Beneficiary shall be entitled, jointly with the Trustor, at the
Beneficiary's option, to commence, appear in and prosecute in its own name, any action or
proceeding, or to make any compromise or settlement, in connection with such taking or
damage. All such compensation, awards, damages, rights of action and proceeds,
including the proceeds of any fire and other insurance affecting the Property or the
buildings or improvements thereon, are hereby assigned to the Beneficiary, subject to the
rights of the holder of any senior deed of trust securing a Construction/Permanent
Financing Loan. After deducting therefrom all its expenses, including reasonable
attorneys' fees, and if there has not occurred a default underthe Note, the Beneficiary shall
apply all such proceeds to restoring the Property orthe buildings or improvements thereon,
or if there has been such default, or if the Trustor determines not to rebuild, the Beneficiary
shall retain the proceeds to the extent of the amount due underthe Note and any amounts
due under this Deed of Trust. Any balance of such proceeds still remaining shall be
disbursed by the Beneficiary to the Trustor.
1 9. lf the Trustor fails to perform any covenant or agreement in this Deed of Trust
or if a default occurs under the Note, the Beneficiary may declare all obligations and sums
secured hereby immediately due and payable by delivery to the Trustee of written
declaration of default and demand for sale and written notice of default and of election to
cause the Collateral to be sold, which notice the Trustee shall cause to be duly filed for
record, and the Beneficiary may foreclose this Deed of Trust; provided, however that the
Trustor shall not be deemed to be in default hereunder for failure to make any payment
when due or for failure to perform any other covenant or agreement contained herein until
thirty (30) days after written notice of such failure is given to the Trustor and Trustor is
afforded a reasonable opportunity to cure the default. The Beneficiary shall also deposit
with the Trustee this Deed of Trust, the Note and all other documents evidencing the
obligations or sums secured hereby.
20. After the lapse of such time as may then be required by law following the
recordation of the notice of default, and notice of sale having been given as then required
by law, the Trustee, without demand on the Trustor, shall sellthe Property at the time and
place fixed by the Trustee in the notice of sale, either as a whole or in separate parcels,
and in such order as it may determine, at public auction to the highest bidder for cash in
lawful money of the United States, payable at time of sale. The Trustee may postpone
sale of all or any portion of the Property by public announcement at the time and place of
sale, and from time to time thereafter may further postpone the sale by public
announcement at the time fixed by the preceding postponement. The Trustee shall deliver
to the purchaser its deed conveying fee title to the Property or portion thereof so sold, but
without any covenant orwarranty, express or implied. The recitals in the Trustee's deed of
any matters or facts shall be conclusive proof of the truthfulness thereof. Any person,
including the Trustor, the Trustee and the Beneficiary, may purchase at the sale. The
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Trustee shall apply the proceeds of the sale to payment of: (i) the expenses of the sale,
together with the reasonable expenses of the trust created by this Deed of Trust, including
reasonable Trustee's fees and attorneys' fees for conducting the sale, and the actual cost
of publishing, recording, mailing and posting notice of the sale; (ii) the cost of any search
and/or other evidence of title procedure in connection with the sale and of revenue stamps
on the Trustee's deed; (iii) all sums expended underthe terms hereof not then repaid, with
accrued interest at the legal rate; (iv) all other sums then secured hereby; and (v) the
remainder, if any, to the person or persons legally entitled thereto.
21 . The Beneficiary may from time to time substitute a successor or successors
to the Trustee named herein or acting hereunder to execute the trusts under this Deed of
Trust. Upon such appointment, and without conveyance to the successortrustee, the latter
shall be vested with all title, powers and duties conferred upon any Trustee herein named
or acting hereunder. Each such appointment and substitution shall be made by written
instrument executed by the Beneficiary, containing reference to this Deed of Trust and its
place of record, which instrument, when duly recorded in Fresno County, California, shall
be conclusive proof of proper appointment of the successor trustee.
22. Upon written request of the Beneficiary stating that all obligations secured
hereby have been satisfied and all sums secured hereby have been paid, and upon
surrender of this Deed of Trust and the Note to the Trustee for cancellation and retention,
and upon payment of its fees, the Trustee shall reconvey, without warranty, the Collateral
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."
23. The trusts created by this Deed of Trust are irrevocable by the Trustor.
24. This Deed of Trust applies to, inures to the benefit of, and binds of the
Trustor, the Beneficiary and the Trustee and their respective administrators, executors,
officers, directors, transferees, successors and assigns. The term "Beneficiary" shall
include not only the original Beneficiary hereunder but also any future owner and holder,
including pledges, of the Note secured hereby. ln this Deed of Trust, wheneverthe context
so requires, the masculine gender includes the feminine and/or neuter, and the singular
includes the plural.
25. In addition to and without limitation on any other rights or remedies of the
Trustee orthe Beneficiary, if the Trustee orthe Beneficiary commences any legalaction or
proceeding to enforce or interpret any provision of this Deed of Trust or the Note, the
Trustor shall pay all costs and expenses incurred by the Trustee or the Beneficiary in
connection with such action or proceeding, including legal expenses and reasonable
attorneys'fees and court costs.
26. The Trustee accepts the trusts hereunder when this Deed of Trust, duly
executed and acknowledged, is made public record as provided by law. Except as
othenruise provided by law, the Trustee is not obligated to notify any party hereto of pending
{0s7 4 s I 0000 / / 4395 89 DOC }(
¿)
sale under this Deed of Trust or of any action or proceeding in which the Trustor, the
Beneficiary or the Trustee is a party, unless brought by the Trustee.
27 . The Trustor requests that a copy of any notice of default and of any notice of
sale hereunder be mailed to it at 1466 Van Ness Avenue, Fresno, CA 93721 .
28. The Trustor shall cause a copy of each deed of trust securing a Construction/
Permanent Financing Loan to be provided to the Beneficiary immediately upon its
recordation, so that the Beneficiary may prepare and record a request for notice of default
and notice of sale thereunder pursuant to California Civil Code Section 2924b.
29. PROVIDED THAT NO NOTICE OF DEFAULT HEREUNDER THEN
APPEARS OF RECORD AND SUBJECT TO THE CONDITIONS IN SECTION 1O ABOVE,
THIS DEED OF TRUST SHALL BE SUBORDINATE AND SUBJECT TO ANY DEED OR
DEEDS OF TRUST SECURING A CONSTRUCTION/PERMANENT FINANCING LOAN.
BENEFICIARY SHALL, UPON REQUEST OF TRUSTOR, EXECUTE SUCH
SUBORDINATION AGREEMENT OR OTHER DOCUMENTATION REASONABLY
NECESSARY TO SUBORIDINATE THE LIEN AND CHARGE OF THIS DEED OF TRUST
TO LIEN OF ANY DEED OR DEEDS OF TRUST SECURING A
CONSTRUCTION/PERMANENT FINANCING LOAN.
30. This Deed of Trust shall be interpreted and enforced, and the rights and
duties (both procedural and substantive) of the parties hereunder shall be determined,
according to California law.
31. Capitalized terms not otherwise defined herein shall have the meanings given
them in the Disposition and Development Agreement or the Note.
lN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date
set forth above.
TRUSTOR:
Upside Enterprises, LLC,
a Nevada limited liability company
Mark Astone, Managing Partner
By:
Name:
Its:
""* Attach Notary Acknowledgement ""*
Attachment:
Exhibit A: Legal Description of Property
{0 5'7 4s / 0000 I I 4395 89.DOC }
By:
ì.-' ¡
{-r tP
Exhibit A to Deed of Trust
Parcel 1: (APN 466-142-15T)
Lots 14, 15 and 16 in Block 89 of the Town (Now City) of Fresno, in the City of Fresno, County
of Fresno, State of Califomia, according to the map thereof recorded June 8, 1876 in Book l,
Page2 of Plats, Fresno CountyRecords.
Parcel 2: (APN: 466-142-14T)
Lots 12, 13, and Southerly 15 feet of Lot 11 in Block 89, of the Town (Now City) of Fresno, in
the City of Fresno, County of Fresno, State of California, according to the map thereof recorded
June 8, 1876 in Book 1, Page 2 of Plats, Fresno County Records.
10s' t 4s / 0000 / / 439s89. DOC )
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