HomeMy WebLinkAboutCC Resolution 9084 (1 H Street Loan)CITY OF SAN RAFAEL
RESOLUTION NO. 9084
RESOLUTION OF THE CITY OF SAN RAFAEL APPROVING AND AUTHORIZING
EXECUTION OF A LOAN AGREEMENT PROVIDING FOR A CITY LOAN OF $100,000
TO 1 "H" STREET ASSOCIATES IN CONNECTION WITH AFFORDABLE HOUSING
PROJECT LOCATED AT 1 "H" STREET IN SAN RAFAEL, CA
WHEREAS:
1. The City of San Rafael, hereinafter referred to as
"the City" has approved a mixed use development project
at 1 "H" Street in San Rafael (the "Development"), to be
developed by 1 "H" Street Associates (the "Developer"),
a California General Partnership; and
2. Developer intends to acquire that certain real property
located within the City of San Rafael, which is more parti-
cularly described as "Exhibit A" in the attached Loan Agree-
ment and is incorporated herein (the "Property") along with
the improvements on the Property (the "Improvements"); and
3. Developer desires to rehabilitate the Improvements to create
a mixed unit development containing retail space and thirty-
eight (38) housing units, of which twenty (20) units will be
made available at affordable housing cost to low income house-
holds in accordance with the land use approvals issued by the
City for the rehabilitation of the Improvements; and
4. The City and the Developer have entered into a Below Market
Rate Rental Unit Agreement dated July 25, 1993 which places
restrictions on rents charged for occupancy of the Property;
and
5. The City has funds available in the Low Income Housing In
Lieu fund for the development of low income housing; and
6. The City desires to provide financial assistance in the
form of a loan to the Developer for rehabilitation costs not
exceeding One Hundred Thousand Dollars ($100,000).
NOW, THEREFORE, the City of San Rafael resolves as follows:
Section 1. The City hereby approves a loan of $100,000 to the
Developer on the terms and conditions set forth in the proposed
Loan Agreement submitted to the City in connection with this
matter and authorizes the City Manager to execute the Loan
Agreement on behalf of the City, subject to such minor changes
to the Loan Agreement as the City Manager deems necessary.
Section 2. The City hereby allocates funds from the City's
Low Income Housing In Lieu Fund to provide the Loan under
the terms of the Loan Agreement and finds that the housing
that the loan will assist will be of benefit to the City of
San Rafael in that the housing will, under the terms of the
Loan Agreement, remain affordable for 40 years.
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ORIG9N A I
Section 3. The City Manager is hereby authorized to act on
behalf of the City of San Rafael to subordinate the afford-
ability restrictions set forth in the Loan Agreement to
other financing the Developer obtains for the project if
the City Manager is convinced that no other economically
feasible method of financing is available absent such
subordination.
I, JEANNE M. LEONCINI, City Clerk of the City of San Rafael,
hereby certify that the foregoing resolution was duly and
regularly introduced and adopted at a regular meeting of
said City Council held on Tu_s. y , the 18th day of
January , 1994, by the following vote, to wit:
AYES: COUNCILMEMBERS: Heller, Thayer, Zappetini & Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAINED: COUNCILMEMBERS: Cohen
J NNE M. tOITNIr. City Clerk
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LOAN AGREEMENT
BY AND AMONG
THE CITY OF SAN RAFAEL
and
1H STREET ASSOCIATES,
a California General Partnership
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
LOAN . . . . . . . . . . . . . . . . . . . . . 3
2.1
Amount . . . . . . . . . . . . . . • . . . . . . . 3
2.2
Interest . . . . . . . . . . . . . . . . . . . . . 3
2.3
Repayment . . . . . . . . . . . . . . . . . . . . . 3
2.4
Prepayment . . . . . . . . . . . . . . . . . . . . 3
2.5
Assumption . . . . . . . . . . . . . . . . . . . . 3
2.6
Loan Disbursement .. . . . . . . . . . . . . . . . . 4
2.7
Security for Loan . . . . . . . . . . . . . . . . . 4
ARTICLE III DISBURSEMENT OF LOAN AND RECORDATION OF DEED OF
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TRUST . . . . . . . . . . . . . .
. 4
3.1
Conditions Precedent to Disbursement of Loan
Proceeds . . . . . . . . . . .4
3.2
Procedure for Disbursement of Loan Proceeds . . .
. 6
3.3
Termination . . . . . . . . . . . . . . . . . . .
. 6
ARTICLE IV DEVELOPMENT OF THE IMPROVEMENTS . . . . . . . .
. 7
4.1
Commencement of Construction . . . . . . . . . .
. 7
4.2
Completion of Construction . . . . . . . . . . .
. 7
4.3
Construction Pursuant to Plans . . . . . . . . .
. 7
4.4
Change in Rehabilitation . . . . . . . . . . . .
. 7
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF DEVELOPER . .
. 7
5.1
Representations and Warranties . . . . . . . . .
. 7
ARTICLE VI
CONTINUING OBLIGATIONS . . . . . . . . . . . .
. 9
6.1
Applicability . . . . . . . . . . . . . . . . . .
. 9
6.2
Compliance with Loan Documents . . . . . . . . .
. 9
6.3
Taxes and Assessments . . . . . . . . . . . . .
. . 9
6.4
Indemnity . . . . . . . . . . . . . . . . .
9
6.5
Entry by the City . . . . . . . . . . . . . . .
. . 9
6.6
Hazardous Materials . . . . . . . . . . . . . .
. . 10
6.7
Transfers . . . . . . . . . . . . . . . . . . .
. . 10
ARTICLE VII DEFAULT AND REMEDIES . . . . . . . . . . . .
. . 11
7.1
Events of Default . . . . . . . . . . . . . . .
. . 11
7.2
Remedies . . . . . . . . . . . . . . . . . . .
. . 13
7.3
Right of Contest . . . . . . . . . . . . . . .
. . 13
7.4
Remedies Cumulative . . . . . . . . . . . .
. . 14
7.5
Waiver of Terms and Conditions . . . . . . . .
. . 14
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . .
. . 14
8.1
Approvals Under Agreement . . . . . . . . . . .
. . 14
8.2
Time . . . . . . . . . . . . . . . . . . . . .
. . 15
8.3
Notices . . . . . . . . . . . . . . . . . . . .
. . 15
8.4
Attorneys' Fees . . . . . . . . . . . .
. . 15
8.5
No Third Parties Benefitted . . . . . . . . . .
. . 15
8.6
Actions . . . . . . . . . . . . . . . . . .
. . 15
8.7
Successors and Assigns . . . . . . . . . . . .
. . 15
8.8
Construction of Words . . . . . . . . . . . . .
. . 16
8.9
Partial Invalidity . . . . . . . . . . . . . .
. . 16
8.10
Governing Law . . . . . . . . . . . . . . . . .
. . 16
8.11
Amendment . . . . . . . . . . . . . . . . . . .
. . 16
8.12
Approvals . . . . . . . . . . . . . . . . . . .
. . 16
8.13
Captions and Headings . . . . . . . . . . . . .
. . 16
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LOAN AGREEMENT
This Loan Agreement ("the Agreement") is entered into as of
this day of , 1993 by and among the City of
San Rafael, a municipal corporation, ("City") and 1H Street
Associates, a California general partnership, ("Developer"), in
which the general partners are H. James Schafer, Jack D.
Samuelson, Robert Samuelson and Thomas Hornaday.
RECITALS
WHEREAS:
1. Developer intends to acquire that certain real property
located within the City of San Rafael, which is more
particularly described in Exhibit A attached to this
Agreement and incorporated herein (the "Property") along
with the improvements on the Property (the "Improvements")
2. Developer desires to rehabilitate the Improvements to create
a mixed unit development containing retail space and thirty-
eight (38) housing units, of which twenty (20) units will be
made available at affordable housing cost to low income
households in accordance with the land use approvals issued
by the City for the rehabilitation of the Improvements.
3. The City desires to provide financial assistance in the form
of a loan to Developer for rehabilitation costs not
exceeding One Hundred Thousand Dollars ($100,000).
NOW THEREFORE the Parties agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the following meanings in
this Agreement:
(a) "Agreement" shall mean this Loan Agreement.
(b) "BMR Agreement" shall mean the executed Below Market
Rate Rental Unit Agreement dated July 25, 1993 between the City
and Developer attached as Exhibit E to this Agreement and
incorporated herein, which agreement places restrictions on rents
charged for occupancy of the Property.
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(c) "Certificate of Occupancy" shall mean the certificate
of occupancy to be issued by the City of San Rafael upon the
completion of the Rehabilitation.
(d) "Construction Plans" shall mean final architectural
drawings, landscaping plans and specifications, final elevations,
building plans and specifications (also known as "working
drawings") for the Rehabilitation.
(e) "Contractor" shall mean Tishman Construction who will
be performing the construction work for the Rehabilitation.
(f) "Deed of Trust" shall mean the deed of trust to be
placed on the Property, in substantially the form shown in
Exhibit C attached to this Agreement and incorporated herein,
securing the Note and with the City as beneficiary.
(g) "Financing Statement" shall mean the UCC -1 form to be
executed by Developer, the filing of which will give the City a
perfected security interest in Developer's tangible personal
property and fixtures located on or about the Property.
(h) "Loan" shall mean the loan for an amount not to exceed
One Hundred Thousand Dollars ($100,000) by the City to Developer,
which loan is the subject of this Agreement.
(i)" Loan Documents" shall mean the following documents
evidencing the Loan: (i) the Note; (ii) the Deed of Trust;
(iii) the Financing Statement; (iv) the BMR Agreement;
(v) Request for Notice of Default; and (vi) this Loan Agreement.
(j) "Note" shall mean the promissory note evidencing the
Loan, in substantially the form shown in Exhibit B attached to
this Agreement and incorporated herein in the principal amount of
One Hundred Thousand Dollars ($100,000).
(k) "Parties" shall mean the City and the Developer.
(1) "Rehabilitation" shall mean the work of rehabilitation
and construction on the Property and Improvements carried out by
Developer.
(m) "Request for Notice of Default" shall mean a request
for notice of default to be recorded against the Property in a
form.approved by the City.
(n) "Term" shall mean the period beginning with the date of
this Agreement and ending on the date which is forty the earlier
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of (40) years following the date the Certificate of Occupancy is
issued or the date the Loan is repaid.
ARTICLE II
LOAN
2.1 Amount. The City hereby agrees to lend and the Developer
hereby agrees to borrow, an amount not to exceed One Hundred
Thousand Dollars ($100,000), subject to the terms and conditions
set forth in this Agreement, and subject further to the terms and
conditions set forth within the documents and instruments
executed by the Developer in connection with this transaction,
including:
(a) The Note, in substantially the form shown in Exhibit B
attached to this Agreement and incorporated herein;
(b) The Deed of Trust, in substantially the form shown in
Exhibit C attached to this Agreement and incorporated herein;
(c) The Financing Statement; and
(d) The Request for Notice of Default.
2.2 Interest. The Loan shall not bear interest, provided,
however, if any payment of principal is not paid on or before the
date it is due, the amount of the payment shall bear interest at
the rate of ten percent (10%) per year beginning on the date ten
(10) days following written notice from the City that a payment
has not been made.
2.3 Reoavment. The principal shall be repaid in thirty-five
(35) annual installments commencing on the fifth anniversary of
the execution of the Note and continuing for the subsequent
thirty-four (34) anniversaries. The first payment shall be
$2,857.24 and the subsequent payments shall be $2,857.14.
2.4 Prepavment. Developer may pay the principal and any
interest due the City under the Note prior to or in advance of
the time for payment thereof as provided in the Note, without
penalty; provided, however, that Developer acknowledges that the
provisions of the BMR Agreement will remain applicable to the
Property even though Developer may have prepaid the Note.
2.5 Assumntion. The Note shall not be assumable by successors
and assigns of Developer without the prior written consent of the
City.
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2.6 Loan Disbursement. Upon satisfaction of the preconditions
to disbursement set forth in Sections 3.1 below and pursuant to
the disbursement procedures set forth in Section 3.2 below, the
City will disburse to Developer the amount of the Loan.
2.7 Securitv for Loan. The Loan shall be secured by the Deed of
Trust on the Property, the Financing Statement, and the Request
for Notice of Default.
ARTICLE III
DISBURSEMENT OF LOAN AND RECORDATION OF DEED OF TRUST
3.1 Conditions Precedent to Disbursement of Loan Proceeds.. The
City shall disburse Loan proceeds to the Developer in the amounts
set forth in this Article III. Disbursement shall be made when
all of the following conditions precedent are satisfied.
(a) Execution and Delivery of Documents. Developer shall
have executed and delivered to the City the Note, the Deed of
Trust, the Financing Statement, and any other documents and
instruments required to be executed and delivered, all in form
and substance satisfactory to the City and as required by Loan
Documents and the Deed of Trust shall have been recorded.
(b) Insurance. Developer shall have furnished the City
with evidence of the following forms of insurance coverage:
(i) Worker's Compensation insurance, including
Employer's Liability coverage, with limits not less than
$1,000,000 each accident, provided, however, that this subsection
(i) shall not apply to Developer to the extent Developer has no
employees.
(ii) Comprehensive General Liability insurance with
limits not less than $1,000,000 each occurrence combined single
limit for bodily injury and property damage, including coverage
for contractual liability, personal injury, broadform property
damage, products and completed operations.
(iii) Property insurance covering all real and personal
(non -expendable) property leased or purchased in whole or in part
with Loan proceeds, in form appropriate for the nature of such
property, covering all risks of loss, excluding earthquake and
flood, for 100% of the replacement value, with deductible, if
any, naming the City as loss payee, as its interest may appear.
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(iv) Developer shall cause the Contractor or any
general contractor or agent working on the Rehabilitation under
direct contract with Developer to maintain insurance of the types
and in at least the minimum amounts described in subsections
(b)(i), and (b)(ii) above, and shall require that such insurance
shall meet all of the general requirements of subsection (b)(v),
and (b)(vii) below. Subcontractors working on the Rehabilitation
under indirect contract with Developer shall be required to
maintain the insurance described in subsections b(i), and b(ii)
above; however, such insurance need not name the City or its
officers, agents, employees or members as additional insureds.
(v) Liability insurance policies shall be endorsed to
name as additional insured the City and its officers, agents,
employees and members and shall contain a waiver of subrogation
rights as to the additional insureds except as to matters
excluded from the indemnities under Section 6.4 and Section 6.6
below.
(vi) All policies shall be endorsed to provide that
thirty (30) days prior written notice of cancellation, reduction
in coverage, or intent not to renew be sent to the City at the
address established for notices to the City pursuant to Section
8.3 below.
(vii) Upon the City's request at any time during the
term of this Agreement, Developer shall provide certificates of
insurance, in form and with insurers reasonably acceptable to the
City, evidencing compliance with the requirements of this
Section, and shall provide complete copies of such insurance
policies, including a separate endorsement naming the City as
additional insured.
(c) Title to Land. The Developer shall have provided to
the City satisfactory evidence that Developer has good and
marketable fee title to the Property and there will exist on the
Property or with respect to the Property no mortgage, lien,
pledge or other encumbrance of any character whatsoever other
than liens for current real property taxes and assessments not
yet due and payable, or any other encumbrances approved in
writing by the City pursuant to this Agreement. The City shall
subordinate the Deed of Trust to deeds of trusts securing loans
made to Developer to pay or reimburse the costs of acquisition of
the Property or the Rehabilitation or to refinance such loans,
provided that the total amount of such loans does not exceed $3.3
million. The City shall execute any documents reasonably
requested by lenders to accommodate this subordination.
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(d) Prioritv of Deed of Trust. A title insurer acceptable
to the Agency is prepared, upon recordation of the Deed of Trust,
to issue or cause the issuance of an American Land Title
Association policy of lender's title insurance to the City
insuring the Deed of Trust as a first lien upon the Property
subject only to the items specified in Section 3.1(c) above.
(e) Permits and Approvals. The Developer shall have
completed the Construction Plans and submitted them to the City
as part of its application for building permit and the Developer
shall have obtained any and all permits and approvals required by
the City or other governmental agency for the Rehabilitation,
pursuant to the Construction Plans, including permits for the
operation of multifamily residential housing units.
(f) No Default. At the time of the disbursement of the
Loan, there shall exist no condition, event or act which would
constitute an Event of Default under this Agreement or which,
would, upon the giving of notice or the passage of time, or both,
constitute an Event of Default.
(g) Representations and Warranties. All representations
and warranties made by Developer in this Agreement shall be true
and correct.
(h) Availabilitv of Funds. The Developer shall have
submitted to the City, and the City shall have approved evidence
that either loan or equity funds in an amount sufficient to pay
the costs of the Rehabilitation have been committed to Developer
and are available for paying the costs of the Rehabilitation.
Such evidence shall include an estimate of the cost of the
Rehabilitation.
(i) Construction Contracts. Developer shall have submitted
to the City a construction contract or contracts with the
Contractor providing for the Rehabilitation to be carried out at
a cost consistent with the cost estimate provided under
subsection (g) above.
3.2 Procedure for Disbursement of Loan Proceeds. When all the
conditions to disbursement have been satisfied, the City shall
disburse the loan proceeds to Developer. The loan proceeds shall
be used only to pay the costs of the Rehabilitation.
3.3 Termination. If any of the conditions to disbursement of
the Loan are not satisfied within two hundred seventy (270) days
following the date of this Agreement, City may terminate this
Agreement by giving written notice to the Developer. Upon such
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termination, the Parties shall have no further rights or
obligations under this Agreement.
ARTICLE IV
DEVELOPMENT OF THE IMPROVEMENTS
4.1 Commencement of Construction. The Developer hereby
covenants and agrees to commence the Rehabilitation within thirty
(30) days after the conditions to disbursement of the Loan have
been satisfied.
4.2 Comuletion of Construction. The Developer hereby covenants
and agrees to diligently prosecute the Rehabilitation to
completion within one (1) year following the commencement of
construction.
4.3 Construction Pursuant to Plans. Unless modified by
operation of Section 4.4, the Rehabilitation shall be
substantially in accordance with the Construction Plans approved
by the City in connection with issuance of the building permit
for the Rehabilitation and the terms and conditions of the
permits and approvals for the Property and Rehabilitation.
4.4 Chanae in Rehabilitation. If the Developer desires to make
any material change in the Rehabilitation which is not
substantially consistent with the Construction Plans and permits
and approvals approved by the City, the Developer shall submit
the proposed change to the City for its approval. The City's
approval of any such changes shall not be considered an approval
of any additional funding or financing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF DEVELOPER
5.1 Renresentations and Warranties. Developer hereby represents
and warrants to the City as follows:
(a) Oraanization. Developer is duly organized, validly
existing and in good standing under the laws of the State of
California and has the power and authority to own its property
and carry on its business as now being conducted. The copies of
the documents evidencing the organization of Developer delivered
to the City are true and correct copies of the originals, as
amended to the date of this Agreement.
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{b) Authoritv of Develoter. Developer has full power and
authority to execute and deliver this Agreement and to make and
accept the Loan contemplated under this Agreement, to execute and
deliver the Loan Documents and all other documents or instruments
executed and delivered, or to be executed and delivered, pursuant
to this Agreement, and to perform and observe the terms and
provisions of all of the above.
(c) Authoritv of Persons Executinq Documents. This
Agreement and the Loan Documents and all other documents or
instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement have been executed and
delivered by persons who are duly authorized to execute and
deliver the same for and on behalf of Developer, and all actions
required under Developer's organizational documents and
applicable governing law for the authorization, execution,
delivery and performance of this Agreement and the Loan Documents
and all other documents or instruments executed and delivered, or
to be executed and delivered, pursuant to this Agreement, have
been duly taken.
(d) Valid Bindinq Agreements. This Agreement and the Loan
Documents and all other documents or instruments which have been
executed and delivered pursuant to or in connection with this
Agreement constitute or, if not yet. executed or delivered, will
when so executed and delivered constitute, legal, valid and
binding obligations of Developer enforceable against it in
accordance with their respective terms.
(e) No Breach of Law or Aqreement. Neither the execution
nor delivery of this Agreement and the Loan Documents or of any
other documents or instruments executed and delivered, or to be
executed or delivered, pursuant to this Agreement, nor the
performance of any provision, condition, covenant or other term
hereof or thereof, will conflict with or result in a breach of
any statute, rule or regulation, or any judgment, decree or order
of any court, board, commission or agency whatsoever binding on
Developer, or any provision of the organizational documents of
Developer, or will conflict with or constitute a breach of or a
default under any agreement to which Developer is a party, or
will result in the creation or imposition of any lien upon any
assets or property of Developer, other than liens established
pursuant to this Agreement.
(f) Pendinq Proceedinqs. Developer is not in default under
any law or regulation or under any order of any court, board,
commission or agency whatsoever, and there are no claims,
actions, suits or proceedings pending or, to the knowledge of
Developer, threatened against or affecting Developer or the
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Rehabilitation, at law or in equity, before or by any court,
board, commission or agency whatsoever which might, if determined
adversely to Developer, materially affect Developer's ability to
repay the Loan or impair the security to be given to the City
pursuant to this Agreement.
ARTICLE VI
CONTINUING OBLIGATIONS
6.1 Applicability. For the longer of the entire Term, or so
long as the Note remains outstanding, the Developer shall comply
with the provisions of this Article VI.
6.2 Compliance with Loan Documents,. Developer shall comply with
all the terms and provisions of the Loan Documents and the
Federal Requirements.
6.3 Taxes and Assessments. So long as Developer owns the
Property, Developer shall pay all real and personal property
taxes, assessments and charges assessed against it, or payable by
it, at such times and in such manner as to prevent any penalty
from accruing, or any lien or charge from attaching to the
Property; provided, however, that Developer shall have the right
to contest in good faith any such taxes, assessments, or charges.
In the event Developer exercises its right to contest any tax,
assessment, or charge against it, Developer, on final
determination of the proceeding or contest, shall immediately pay
or discharge any decision or judgment rendered against it,
together with all costs, charges, and interest.
6.4 Indemnity. Developer shall, at Developer's expense, defend,
indemnify, save and hold the City and its officers, agents,
employees and members harmless from any and all losses, damages,
liabilities, claims, causes of action, judgments, settlements,
court costs, attorneys' fees, and other legal expenses, cost of
evidence of title, cost of evidence of value, and other expenses
which they may suffer or incur arising from Developer's
performance of its obligations under this Agreement, Developer's
ownership or operation of the Property or the Rehabilitation,
provided, however, this indemnity shall not extend to any claims
to the extent such claims arise from negligent acts or omissions
or from intentional acts (whether or not wrongful) of the City or
its officers, agents, employees or members.
6.5 Entry by the Citv. Developer shall permit the City, through
its officers, agents, or employees, at all reasonable times to
enter into the Property and inspect the work of construction to
determine that the same is in conformity with the Construction
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Plans and all the requirements hereof. Developer acknowledges
that the City is under no obligation to supervise, inspect, or
inform Developer of the progress of construction, and Developer
shall not rely upon the City therefor. Any inspection by the
City is entirely for its purposes in determining whether
Developer is in default under this Agreement and is not for the
purpose of determining or informing Developer of the quality or
suitability of construction. Developer shall rely entirely upon
its own supervision and inspection in determining the quality and
suitability of the materials and work, and the performance of
architects, subcontractors, and material suppliers.
6.6 Hazardous Materials. Developer shall indemnify and hold
harmless the City and its members, directors, officers,
employees, agents, successors and assigns from and against any
loss, damage, cost, expense or liability directly or indirectly
arising out of or attributable to the use, generation, storage,
release, threatened release, discharge, disposal, or presence of
hazardous materials on, under, or about the Property including
without limitation: (a) all foreseeable consequential damages;
(b) the costs of any required or necessary repair, cleanup or
detoxification of the Property and the preparation and
implementation of any closure, remedial or other required plans;
and (c) all reasonable costs and expenses incurred by the City in
connection with clauses (a) and (b), including but not limited to
reasonable attorneys' fees; provided, however, that this
indemnity shall not extend to any claims to the extent such
claims arise from negligent acts or omissions or from intentional
acts (whether or not wrongful) of the City, its members,
directors, officers, employees or agents.
6.7 Transfers. During the Term, Developer shall not sell or
otherwise transfer the Property, Improvements or any portion
thereof, and none of the Developer's general partners shall sell
or otherwise transfer their interests in Developer without first
obtaining the approval of the City, which approval shall not be
unreasonably withheld if the proposed transferee assumes and
agrees to be bound by the terms of all Loan Documents, has the
financial and management capability to operate the Property and
Improvements in accordance with the Loan Documents.
Notwithstanding the above, City consent for a transfer shall not
be required so long as the transferee entity is a partnership in
which the one or more of the general partners of Developer as of
the date of this Agreement are general partners in that
transference entity and control a majority of the interests in
that entity. The City shall not approve any transfer proposed by
Developer if the Developer is in default under any of the Loan
Documents.
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ARTICLE VII
DEFAULT AND REMEDIES
7.1 Events of Default. Each of the following shall constitute
an "Event of Default" by Developer under this Agreement:
(a) Failure to Construct. Failure of Developer to commence
or complete the Rehabilitation within the time set forth in
Article IV above and pursuant to the Construction Plans approved
by the City;
(b) Failure to Make Pavment. Failure to make prompt
payments of the principal and interest on the Note when due;
(c) Breach of Covenants. Failure by Developer to duly
perform, comply with, or observe any of the conditions, terms, or
covenants of any of the Loan Documents, and such failure having
continued uncured or without Developer commencing to diligently
cure for thirty (30) days after notice thereof in writing is
mailed by the City to Developer; provided, however, that if a
different period or notice requirement is specified under any
other section of this Article VII, the specific provisions shall
control; and provided further, that if a lesser period or notice
requirement is allowed before default occurs under the Loan
Documents such periods shall control in this Agreement as well.
(d) Material Misstatement or omissions. Any representation
or warranty contained in this Agreement or in any application,
financial statement, certificate or report submitted to the City
with the Loan proves to have been incorrect in any material
respect known by Developer when made.
(e) Insolvencv. A court having jurisdiction shall have
made or entered any decree or order (i) adjudging Developer to be
bankrupt or insolvent, (ii) approving as properly filed a
petition seeking reorganization of Developer or seeking any
arrangement for Developer under the bankruptcy law or any other
applicable debtor's relief law or statute of the United States or
any state or other jurisdiction, (iii) appointing a receiver,
trustee, liquidator, or assignee of Developer in bankruptcy or
insolvency or for any of their properties, or (iv) directing the
winding up or liquidation of Developer, if any such decree or
order described in clauses (i), to (iv), inclusive, shall have
continued unstayed or undischarged for a period of forty-five
(45) days unless a lesser time period is permitted for cure under
any other mortgage on the Property, in which event such lesser
time period will apply under this subsection 7.1(e) as well; or
Developer shall have admitted in writing its inability to pay its
141097.P50
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debts as they fall due or shall have voluntarily submitted to or
filed a petition seeking any decree or order of the nature
described in clauses (i) to (iv), inclusive. The occurrence of
any of the events of default in this paragraph shall act to
accelerate automatically, without the need for any action by the
City, the indebtedness evidenced by the Note.
(f) Assianment; Attachment. Developer shall have assigned
its assets for the benefit of its creditors or suffered a
sequestration or attachment of or execution on any substantial
part of its property, unless the property so assigned,
sequestered, attached or executed upon shall have been returned
or released within forty-five (45) days after such event (unless
a lesser time period is permitted for cure under any other
mortgage on the Property, in which event such lesser time period
shall apply under this subsection 7.1(f) as well) or prior to
sooner sale pursuant to such sequestration, attachment, or
execution. The occurrence of any of the events of default in
this paragraph shall act to accelerate automatically, without the
need for any action by the City, the indebtedness evidenced by
the Note representing the Loan contemplated hereunder. In the
event that Developer is diligently working to obtain a return or
release of the property and the City's interests under the Loan
Documents are not imminently threatened, the Agency shall not
declare a default under this subsection.
(g) Liens on Development and Land,. There shall be filed
any claim of lien (other than liens approved in writing by the
City) against the Property or any part thereof, or any interest
or right made appurtenant thereto, or the service of any notice
to withhold proceeds of the Loan and the continued maintenance of
said claim of lien or notices to withhold for a period of thirty
(30) days without discharge or satisfaction thereof or provision
therefore satisfactory to the City.
(h) Defaults Under Other Loans. Any default declared by
any lender under any loan document related to any loans, other
than the Loan, secured by a deed of trust on the Property shall
act to accelerate automatically, without the need for any action
by the City, the indebtedness evidenced by the Note.
(i) Prohibited Transfer. There is a sale or other transfer
in violation of Section 6.7 above.
(j) General. There is a breach of any condition, covenant,
warranty, promise or representation contained in this Agreement
and that breach continues for a period of thirty (30) days after
written notice to Developer of the breach; provided, however,
that if a different period or notice requirement is specified for
141097.P50
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any particular breach under any other Section of this Article
VII, the specific provision shall control.
7.2 Remedies. The occurrence of any Event of Default will
either at the option of the City or automatically where so
specified, relieve the City of any obligation to make or continue
the Loan and shall give the City the right to proceed with any
and all remedies set forth in this Agreement and the Loan
Documents, including but not limited to the following:
(a) Acceleration of Note. The City shall have the right to
cause all indebtedness of the Developer to the City under this
Agreement and the Note, together with any accrued interest
thereon, to become immediately due and payable. The Developer
waives all right to presentment, demand, protest or notice of
protest or dishonor. The City may proceed to enforce payment of
the indebtedness and to exercise any or all rights afforded to
the City as a creditor and secured party under the law including
the Uniform Commercial Code, including foreclosure under the Deed
of Trust. The Developer shall be liable to pay the City on
demand all expenses, costs and fees (including, without
limitation, attorney's fees and expenses) paid or incurred by the
City in connection with the collection of.the Loan and the
preservation, maintenance, protection, sale, or other disposition
of the security given for the Loan.,
(b) Specific Performance. The City shall have the right to
mandamus or other suit, action or proceeding at law or in equity
to require Developer to perform its obligations and covenants
under the Loan Documents or to enjoin acts on things which may be
unlawful or in violation of the provisions of the Loan Documents.
(c) Ri4ht to Cure at Developer's Expense,. The City shall
have the right to cure any monetary default by Developer under a
loan other than the Loan; provided, however, that if the
Developer is in good faith contesting a claim of default under a
loan and the City's interest under the Loan Documents are not
imminently threatened by such default, the City shall not have
the right to cure such default. The Developer agrees to
reimburse the City for any funds advanced by the City to cure a
monetary default by Developer upon demand therefore, together
with interest thereon at the rate of ten percent (10%) per annum
from the date of expenditure until the date of reimbursement.
7.3 .Right of Contest. Developer shall have the right to contest
in good faith any claim, demand, levy, or assessment the
assertion of which would constitute an Event of Default
hereunder. Any such contest shall be prosecuted diligently and
] 4] 097.P50
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-13-
in a manner unprejudicial to the City or the rights of the City
hereunder.
7.4 Remedies Cumulative. No right, power, or remedy given to
the City by the terms of this Agreement or the Loan Documents is
intended to be exclusive of any other right, power, or remedy;
and each and every such right, power, or remedy shall be
cumulative and in addition to every other right, power, or remedy
given to the City by the terms of any such instrument, or by any
statute or otherwise against Developer and any other person.
Neither the failure nor any delay on the part of the City to
exercise any such rights and remedies shall operate as a waiver
thereof, nor shall any single or partial exercise by the City of
any such right or remedy preclude any other or further exercise
of such right or remedy, or any other right or remedy.
7.5 Waiver of Terms and Conditions,. The City may, in its sole
discretion, waive in writing any of the terms and conditions of
this Agreement, without the Developer completing an amendment to
this Agreement. No waiver of any default or breach by Developer
hereunder shall be implied from any omission by the City to take
action on account of such default if such default persists or is
repeated, and no express waiver shall affect any default other
than the default specified in the waiver, and such waiver shall
be operative only for the time and to the extent therein stated.
Waivers of any covenant, term, or condition contained herein
shall not be construed as a waiver of any subsequent breach of
the same covenant, term, or condition. The consent or approval
by the City to or of any act by Developer requiring further
consent or approval shall not be deemed to waive or render
unnecessary the consent or approval to or of any subsequent
similar act. The exercise of any right, power, or remedy shall
in no event constitute a cure or a waiver of any default under
this Agreement or the Loan Documents, nor shall it invalidate any
act done pursuant to notice of default, or prejudice the City in
the exercise of any right, power, or remedy hereunder or under
the Loan Documents, unless in the exercise of any such right,
power, or remedy all obligations of Developer to City are paid
and discharged in full.
ARTICLE VIII
MISCELLANEOUS
8.1 ADDrovals Under Aareement. Where this Agreement requires an
approval or consent of the City, such approval or consent may be
given on behalf of the City by the City Manager of the City or
his or her designee.
141097.P50
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8.2 Time. Time is of the essence in this Agreement.
8.3 Notices. Any notice requirement set forth herein shall be
deemed to be satisfied three (3) days after mailing of the notice
first-class United States certified mail, postage prepaid,
addressed to the appropriate party as follows:
Developer: 1H Associates
100 California, Suite 756
San Francisco, California 94111
Attention: Jim Schafer
City: City of San Rafael
1400 Fifth Avenue
San Rafael, California 94901
Attention: Pam Nicolai, City Manager
Such addresses may be changed by notice to the other party given
in the same manner as provided above.
8.4 Attornevs' Fees. If either party brings an action or
proceeding to enforce, protect or establish any right or remedy
under this Agreement or any other of the Loan Documents, the
prevailing party shall be entitled to recover from the other
party its costs of suit and reasonable attorneys' fees as they
are fixed by the court.
8.5 No Third Parties Benefitted. This Agreement is made and
entered into for the sole protection and benefit of the City, its
successors and assigns, and the Developer, its permitted
successors and assigns, and no other person or persons shall have
any right of action under this Agreement.
8.6 Actions. The City shall have the right to commence, appear
in, or defend any action or proceeding which may affect the
rights, duties, or liabilities of the Parties under this
Agreement, or which may affect the disbursement of any proceeds
of the Loan.
8.7 Successors and Assians. This Agreement shall be binding
upon and inure to the benefit of Parties and their successors and
assigns; however, no assignment of Developer's rights under this
Agreement shall be made, voluntarily or by operation of law,
without the prior written consent of the City as specified in
Section 6.7 above. Any assignment of this Agreement by Developer
in violation of this Section and Section 6.7 shall be void.
141097.P50
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8.8 Construction of Words. Except where the context otherwise
requires, words imparting the singular number shall include the
plural number and vice versa, words imparting persons shall
include firms, associations, partnerships and corporations, and
words of either gender shall include the other gender.
8.9 Partial Invaliditv. If any provision of this Agreement
shall be declared invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired.
8.10 Governina Law. This Agreement and the Loan Documents and
other instruments given pursuant to this Agreement shall be
construed in accordance with and be governed by the laws of the
State of California.
8.11 Amendment. This Agreement may not be changed orally, but
only by a writing signed by Developer and the City.
8.12 Approvals. Where an approval or submission is required
under this Agreement, such approval or submission shall be valid
for purposes of this Agreement only if made in writing.
8.13 Cantions and Headings. Captions and headings in this
Agreement are for convenience of reference only, and are not to
be considered in construing the Agreement. -
141 097.P50
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IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date and year first above written.
ATTEST
City Clerk
APPBOOjV�EDD AS
Goldfarb/& p an
City Special Counsel
141097.P50
01/04/94
DEVELOPER:
1H ASSOCIATES, a
California general partnership
By its General Partners:
Thomas Hornaday j 1
City:
CITY OF SAN RAFAEL, a California
municipal corporation
By.,
Its: City Manage
-17-
EXHIBIT A
PROPERTY DESCRIPTION
141097.PS0
01/04/94 -18 -
EXHIBIT B
PROMISSORY NOTE
Secured by Deed of Trust
$100,000 San Rafael, California , 199
FOR VALUE RECEIVED, the undersigned 1H Street Associates
("Developer") promises to pay to the City of San Rafael ("City")
or order at San Rafael, California or such other place as the
City may designate in writing, the principal sum of One Hundred
Thousand Dollars ($100,000) plus interest on the terms specified
below.
1. Aareement. This Note is given in accordance with that
certain Loan Agreement executed by the City, and the Developer,
dated as of , 1994 (the "Loan Agreement"). The
rights and obligations of the City and Developer under this Note
shall be governed by the Loan Agreement and by the additional
terms set forth in this Note.
2. Interest and Repayment. The principal shall be repaid
in thirty-five (35) annual installments with the first
installment due on or before the fifth (5th) anniversary of the
date of this Note and the subsequent thirty-four (34)
installments due on or before each subsequent anniversary of the
date of this Note. The first installment shall be $2,857.24 and
each subsequent installment shall be $2,857.14. This Note shall
not bear interest, provided, however, that if any in of
principal is not paid on the date it is due, the amount of the
installment shall bear interest at the rate of ten percent (10%)
per year beginning on the date that is ten (10) days after the
date City has provided written notice to Developer that an
installment is due and continuing until the installment is paid.
All payments made under the Note shall be credited
first to reduce interest owing on the Note and then to reduce the
principal amount owing on the Note.
Notwithstanding any other provision of this Note, the
total amount of the principal and interest owing under this Note
shall become immediately due and payable upon the earlier to
occur of the following:
141 098.P50
01 /04/94 -1-
(i) in the event of a default by the Developer under
the BMR Agreement (as defined in the Loan
Agreement); or
(ii) in the event of a default by the Developer under
the Loan Agreement, any Deed of Trust securing
this Note, or this Note.
Failure to declare such amounts due shall not constitute a waiver
on the part of the City to declare them due subsequently.
3. Terms of Payment. Any payment under this Note shall
be paid in currency of the United States of America, which at the
time of payment is lawful for the payment of public and private
debts.
4. Prepavments. Developer may prepay all or part of the
principal balance and accrued interest due under this Note
without penalty.
5. Securitv. This Note is unsecured at the time of
execution but may become secured as set forth in Section 3.4 of
the Loan Agreement.
6. Waivers
a. Developer expressly agrees that this Note or any
payment hereunder may be extended from time to time at the City's
sole discretion and that the City may accept security in
consideration for any such extension or release any security for
this Note at its sole discretion all without in any way affecting
the liability of Developer.
b. No extension of time for payment of this Note or
any installment hereof made by agreement by the City with any
person now or hereafter liable for the payment of this Note shall
operate to release, discharge, modify, change or affect the
original liability of Developer under this Note, either in whole
or in part.
C. The obligations of Developer under this Note shall
be absolute and Developer waives any and all rights to offset,
deduct or withhold any payments or charges due under this Note
for any reasons whatsoever.
7. Late Charges. If any payment due under this Note is
not paid within ten (10) days following receipt of a notice or
billing that such payment is due, Developer shall pay, in
addition to all other payments required under this Note, a late
141098.P50
01/04/94 -2-
charge equal to six percent (6%) of the amount of the late
payment.
8. Attornev Fees and Costs. Developer agrees that if any
amounts due under this Note are not paid when due, to pay in
addition, all costs and expenses of collection and reasonable
attorney fees paid or incurred in connection with the collection
or enforcement of this Note, whether or not suit is filed. If
suit is filed under or regarding this Note, the prevailing party
shall be entitled to recover its attorneys fees from the other
party.
9. Joint and Several Obliaations. This Note is the joint
and several obligation of all makers, sureties, guarantors and
endorser, and shall be binding upon them and their successors and
assigns.
10. Deed of Trust Acceleration. This Note is secured by a
Deed of Trust on the Property (as defined in the Loan Agreement).
The Deed of Trust and Loan Agreement provide for acceleration of
the payments due under this Note in the event of default under
this Note, the Deed of Trust, Loan Agreement or Regulatory
Agreement.
11. Amendments and Modifications. This Note may not be
changed orally, but only by an amendment in writing signed by
Developer and by the City.
1H STREET ASSOCIATES
By its general partners:
I�. Shafer
�ack D. Samu n
Ro ert ale' Kon"
i
Thomas
141098.P50
01/04/94 -3-
)0r?,
DEED OF TRUST
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Rafael
1400 Fifth Avenue
San Rafael, CA 94901
Attention: City Clerk
DEED OF TRUST AND
94-0499001 Rec Fee 64.00
1 Check 64.00
Recorded I
Official Records I
County of I
MARIN I
JAMES DAL BON I
Recorder I
9:50am 20 -Jun -94 I PG 20
SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust")
is made as of this 25th day of May , 1994, by and among 1H
Street Associates ("Trustor"), Pal
a if;r rnast T' 1 Cn of Marin,
("Trustee"), and the City of San afael ( Beneficiary" .
FOR GOOD AND VALUABLE CONSIDERATION, including the
indebtedness herein recited and the trust herein created, the
receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN
TRUST, WITH POWER OF SALE, for the benefit and security of
Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property
located in Marin County, State of California, that is described
in Exhibit A, attached hereto and incorporated herein by this
reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in
law and in equity which Trustor now has or may hereafter acquire
in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used
in connection therewith or as a means of access thereto,
including without limiting the generality of the foregoing, all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of
every kind and description now or hereafter erected thereon, and
all property of the Trustor now or hereafter affixed to or placed
upon the Property;
TOGETHER WITH all building materials and equipment now or
hereafter delivered to said property and intended to be installed
therein;
141099.P50
01/04/94
-1-
TOGETHER WITH all right, title and interest of Trustor, now
owned or hereafter acquired, in and to any land lying within the
right-of-way of any street, open or proposed, adjoining the
Property, and any and all sidewalks, alleys and strips and areas
of land adjacent to or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other
claim or demand, of every nature, in and to such property,
including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by
Trustor to utility companies, the proceeds from any or all of
such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect
thereto, which Trustor now has or may hereafter acquire, any and
all awards made for the taking by eminent domain or by and
proceeding or purchase in lieu thereof of the whole or any part
of such property, including without limitation, any awards
resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in
such awards for taking as provided in Paragraph 4.1 herein; and
TOGETHER WITH all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or
buildings now erected or hereafter to be erected on the Property
which are necessary to the complete and comfortable use and
occupancy of such building or buildings for the purposes for
which they were or are to be erected, including all other goods
and chattels and personal property as are ever used or furnished
in operating a building, or the activities conducted therein,
similar to the one herein described and referred to, and all
renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or shall be attached to
said building or buildings in any manner.
All of the foregoing, together with the Property, is herein
referred to as the "Security." To have and to hold the Security
together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING:
(a) Payment of a just indebtedness of Trustor to Beneficiary
as set forth in the Loan Agreement (defined in Section 1.2 below)
and the Note (defined in Section 1.3 below) in the original
principal amount of One Hundred Thousand Dollars ($100,000) until
paid or cancelled. Said principal and other payments shall be
due and payable as provided in the Loan Agreement and the Note.
The Loan Agreement and the Note and all their terms are
incorporated herein by reference, and this conveyance shall
secure any and all extensions thereof, however evidenced; and
141099.P50
01/04/94 -2-
(b) Payment of any sums advanced by Beneficiary to protect
the Security pursuant to the terms and provisions of this Deed of
Trust following a breach of Trustor's obligation to advance said
sums and the expiration of any applicable cure period, with
interest thereon as provided herein; and
(c) Performance of every obligation, covenant or agreement
of Trustor contained herein and in the BMR Agreement (defined in
Section 1.5 below).
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE I
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of
Trust, the following terms shall have the following meanings in
this Deed of Trust:
Section 1.1 The Term "Debt Instruments" means any other
debt, loan, regulatory agreement or security instruments relating
to the Property.
Section 1.2. The term "Loan Agreement" means that certain
Loan Agreement by and between Trustor and the Beneficiary, dated
as of 1994. The terms and provisions of the
Loan Agreement are incorporated herein by reference.
Section 1.3. The term "Note" means that certain promissory
note of even date herewith executed by the Trustor, the payment
of which is secured by this Deed of Trust. (Copies of the Note
are on file with the Beneficiary and terms and provisions of the
Note are incorporated herein by reference.)
Section 1.4. The term "Principal" means the aggregate of
all principal and interest due under the Note.
Section 1.5. The term "BMR Agreement" means that Below
Market Rate Rental Unit Agreement dated July 25, 1993 between
Trustor and Beneficiary.
l 4l 099.P50
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ARTICLE II
MAINTENANCE AND MODIFICATION OF
THE PROJECT AND SECURITY
Section 2.1. Maintenance and Modification of the Project
by Trustor.
The Trustor agrees that at all times prior to full payment
of the sum owed under the Note, the Trustor will, at the
Trustor's own expense, maintain, preserve and keep the Security
or cause the Security to be maintained and preserved in good
condition. The Trustor will from time to time make or cause to
be made all repairs, replacements and renewals deemed proper and
necessary by it. The Beneficiary shall have no responsibility in
any of these matters or for the making of improvements or
additions to the Security.
Trustor agrees to pay fully and discharge (or cause to be
paid fully and discharged) all claims for labor done and for
material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of
cessation upon the event of a cessation of labor on the work or
construction on the Security for a continuous period of thirty
(30) days or more, and to take all other reasonable steps to
forestall the assertion of claims of lien against the Security of
any part thereof. Trustor irrevocably appoints, designates and
authorizes Beneficiary as its agent (said agency being coupled
with an interest) with the authority, but without any obligation,
to file for record any notices of completion or cessation of
labor or any other notice that Beneficiary deems necessary or
desirable to protect its interest in and to the Security or the
Loan Agreement; provided, however, that Beneficiary shall
exercise its rights as agent of Trustor only in the event that
Trustor shall fail to take, or shall fail to diligently continue
to take, those actions as hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to
be made such demands or claims as Beneficiary shall specify upon
laborers, materialmen, subcontractors or other persons who have
furnished or claim to have furnished labor, services or materials
in connection with the Security. Nothing herein contained shall
require Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently
contesting provided that Trustor shall, within thirty (30) days
after the request of the Beneficiary, record in the Office of the
Recorder of Marin County, a surety bond in an amount 1-1/2 times
the amount of such claim item to protect against a claim of lien.
141099.P50
01/04/94 -4-
Section 2.2. Granting of Easements.
Trustor may not grant easements, licenses, rights-of-way or
other rights or privileges in the nature of easements with
respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of
public utilities including, without limitation, water, gas,
electricity, sewer, telephone and telegraph, or those required by
law. As to these exceptions, Beneficiary will grant and/or
direct the Trustee to grant such easements.
ARTICLE III
TAXES AND.INSURANCE; ADVANCES
Section 3.1. Taxes, Other Governmental Charges and Utility
Charges.
Trustor shall pay, or cause to be paid, when due, all taxes,
assessments, charges and levies imposed by any public authority
or utility company which are or may become a lien affecting the
Security or any part thereof; provided, however, that Trustor
shall not be required to pay and discharge any such tax,
assessment, charge or levy so long as (a) the legality thereof
shall be promptly and actively contested in good faith and by
appropriate proceedings, and (b) Trustor maintains reserves
adequate to pay any liabilities contested pursuant to this
Section 3.1. With respect to taxes, special assessments or other
similar governmental charges, Trustor shall pay such amount in
full prior to the attachment of any lien therefor on any part of
the Security; provided, however, if such taxes, assessments or
charges may be paid in installments, Trustor may pay in such.
installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this section shall
not be construed to require that Trustor maintain a reserve
account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
In the event that Trustor shall fail to pay any of the
foregoing items required by this Section to be paid by Trustor,
Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor of such
failure to pay and the Trustor fails to fully pay such items
within seven (7) business days after receipt of such notice. Any
amount so advanced therefor by Beneficiary, together with
interest thereon from the date of such advance at the lesser of
ten percent (10%) per annum or the maximum rate permitted by law,
shall become an additional obligation of Trustor to the
Beneficiary and shall be secured hereby, and Trustor agrees to
pay all such amounts.
141099.P50
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Section 3.2. Provisions Respecting Insurance.
Trustor agrees to provide insurance as may reasonably be
required by Beneficiary to insure the Property and improvements
thereon against fires and other perils. Such insurance shall be
maintained at all times until all amounts secured by this Deed of
Trust have been paid and all other obligations secured hereunder
fulfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall be
maintained at Trustor's sole cost and expense. Certificates of
insurance for all of the above insurance policies, showing the
same to be in full force and effect, shall be delivered to the
Beneficiary upon demand therefor at any time prior to the
Beneficiary's receipt of the entire Principal and all amounts
secured by this Deed of Trust. All such insurance policies shall
name the Beneficiary as the loss payee.
Section 3.3. Advances.
In the event the Trustor shall fail to maintain the full
insurance coverage required by this Deed of Trust or shall fail
to keep the Security in accordance with the Loan Agreement, the
Beneficiary, after at least twenty (20) days prior notice to
Trustor, may (but shall be under no obligation to) take out the
required policies of insurance and pay the premiums on the same
or may make such repairs or replacements as are necessary and
provide for payment thereof; and all amounts so advanced therefor
by the Beneficiary shall become an additional obligation of the
Trustor to the Beneficiary (together with interest as set forth
below) and shall be secured hereby, which amounts the Trustor
agrees to pay on the demand of the Beneficiary, and if not so
paid, shall bear interest from the date of the advance at the
lesser of ten percent (10%) per annum or the maximum rate
permitted by law.
ARTICLE IV
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1. Awards and Damages.
All judgments, awards of damages, settlements and
compensation made in connection with or in lieu of (1) taking of
all or any part of or any interest in the Property by or under
assertion of the power of eminent domain, (2) any damage to or
destruction of the Property or in any part thereof by insured
casualty, and (3) any other injury or damage to all or any part
of the Property ("Funds") are hereby assigned to and shall be
paid to the Beneficiary by a check made payable to the
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Beneficiary to the extent of the indebtedness secured hereby.
The Beneficiary is authorized and empowered (but not required) to
collect and receive any funds and is authorized to apply them in
whole or in part upon any indebtedness or obligation secured
hereby, in such order and manner as the Beneficiary shall
determine at its sole option.
ARTICLE V
AGREEMENTS AFFECTING THE DEVELOPMENT; FURTHER ASSURANCES;
PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1. Other Agreements Affecting Development.
The Trustor shall duly -and punctually perform all terms,
covenants, conditions and agreements binding upon it under the
Debt Instruments, the Loan Agreement, the BMR Agreement, the Note
and any other agreement of any nature whatsoever now or hereafter
involving or affecting the Security or any part thereof.
Section 5.2. Agreement to Pay Attorneys' Fees and
Expenses.
In the event of any Event of Default (as defined below)
hereunder, and if the Beneficiary should employ attorneys or
incur other expenses for the collection of amounts due or the
enforcement of performance or observance of an obligation or
agreement on the part of the Trustor in this Deed of Trust, the
Trustor agrees that it will, on demand therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other
reasonable expenses so paid by the Beneficiary; and any such
amounts paid by the Beneficiary shall be added to the
indebtedness secured by the lien of this Deed of Trust, and shall
bear interest from the date such expenses are paid at the lesser
of ten percent (10%) per annum or the maximum rate permitted by
law.
Section 5.3. Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and
any other payments as set forth in the Note in the amounts and by
the times set out therein.
Section 5.4. Personal Property.
To the maximum extent permitted by law, the personal
property subject to this Deed of Trust shall be deemed to be
fixtures and part of the real property and this Deed of Trust
shall constitute a fixtures filing under the California
Commercial Code. As to any personal property not deemed or
permitted to be fixtures, this Deed of Trust shall constitute a
security agreement under the California Commercial Code.
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Section 5.5. Financing Statement and Subordination.
The Trustor shall execute and deliver to the Beneficiary
such financing statements pursuant to the appropriate statutes,
and any other documents or instruments as are required to convey
to the Beneficiary a valid perfected security interest in the
Security. The Trustor agrees to perform all acts which the
Beneficiary may reasonably request so as to enable the
Beneficiary to maintain such valid perfected security interest in
the Security in order to secure the payment of the Note in
accordance with its terms. The Beneficiary is authorized to file
a copy of any such financing statement in any jurisdiction(s) as
it shall deem appropriate from time to time in order to protect
the security interest established pursuant to this instrument.
Section 5.6. Operation of the Security.
The Trustor agrees and covenants to operate the Security in
full compliance with the Loan Agreement, the BMR Agreement and
the Debt Instruments.
Section 5.7. Inspection of the Security.
The Trustor covenants and agrees that at any and all
reasonable times upon seventy-two (72) hours' notice, the
Beneficiary and its duly authorized agents, attorneys, experts,
engineers, accountants and representatives, shall have the right,
without payment of charges or fees, to inspect the Security.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default.
The following shall constitute Events of Default: (1)
failure to make any payment to be paid by Trustor under the Note
or the Loan Agreement; (2) failure to observe or perform any of
Trustor's other covenants, agreements or obligations under the
Loan Agreement or this Deed of Trust, including, without
limitation, the provisions concerning nondiscrimination; or (3)
failure to make any payment or perform any of Trustor's other
covenants, agreements, or obligations under any other Debt
Instruments or the Restrictive Covenant; which default shall not
be cured within the times and in the manner provided therein.
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Section 6.2. Acceleration of Maturity.
If an Event of Default shall have occurred and be
continuing, then at the option of the Beneficiary, the amount of
any payment related to the Event of Default and the unpaid
Principal of the Note shall immediately become due and payable
without notice or demand which are hereby expressly waived, upon
written notice by the Beneficiary to the Trustor and no omission
on the part of the Beneficiary to exercise such option when
entitled to do so shall be construed as a waiver of such right.
Section 6.3. The Beneficiary's Right to Enter and Take
Possession.
If an Event of Default shall have occurred and be
continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing
any action or proceeding, or by a receiver appointed by a court,
and without regard to the adequacy of its security, enter upon
the Security and take possession thereof (or any part thereof)
and of any of the Security, in its own name or in the name of
Trustee, and do any acts which it deems necessary or desirable to
preserve the value or marketability of the Property, or part
thereof or interest therein, increase the income therefrom or
protect the security thereof. The entering upon and taking
possession of the Security shall not cure or waive any Event of
Default or Notice of Default hereunder or invalidate any act done
in response to such Event of Default or pursuant to such Notice
of Default and, notwithstanding the continuance in possession of
the Security, Beneficiary shall be entitled to exercise every
right provided for in this Deed of Trust, or by law upon
occurrence of any Event of Default, including the right to
exercise the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a
mortgage, appoint a receiver, or specifically enforce any of the
covenants hereof;
(c) Deliver to Trustee a written declaration of default and
demand for sale, and a written Notice of Default and election to
cause Trustor's interest in the Security to be sold, which notice
Trustee or Beneficiary shall cause to be duly filed for record in
the official Records of Marin County; or
(d) Exercise all other rights and remedies provided herein,
in the instruments by which the Trustor acquires title to any
Security, or in any other document or agreement now or hereafter
evidencing, creating or securing all or any portion of the
obligations secured hereby, or provided by law.
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Section 6.4. Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the
power of sale herein contained, the Beneficiary shall notify
Trustee and shall deposit with Trustee this Deed of Trust which
is secured hereby (and the deposit of which shall be deemed to
constitute evidence that the unpaid principal amount of the Note
is immediately due and payable), and such receipts and evidence
of any expenditures made that are additionally secured hereby as
Trustee may require.
(a) Upon receipt of such notice from the Beneficiary,
Trustee shall cause to be recorded, published and delivered to
Trustor such Notice of Default and Election to Sell as then
required by law and by this Deed of Trust. Trustee shall,
without demand on Trustor, after lapse of such time as may then
be required by law and after recordation of such Notice of
Default and after Notice of Sale having been given as required by
law, sell the Security, at the time and place of sale fixed by it
in said Notice of Sale, whether as a whole or in separate lots or
parcels or items as Trustee shall deem expedient and in such
order as it may determine unless specified otherwise by the
Trustor according to California Civil Code Section 2924g(b), at
public auction to the highest bidder, for cash in lawful money of
the United States payable at the time of sale. Trustee shall
deliver to such purchaser or purchasers thereof its good and
sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The
recitals in such deed or any matters of facts shall be conclusive
proof of the truthfulness thereof. Any person, including,
without limitation, Trustor, Trustee or Beneficiary, may purchase
at such sale, and Trustor hereby covenants to warrant and defend
the title of such purchaser or purchasers.
(b) After deducting all reasonable costs, fees and expenses
of Trustee, including costs of evidence of title in connection
with such sale, Trustee shall apply the proceeds of sale to
payment of: (1) the unpaid Principal amount of the Note; (2) all
other sums then secured hereby; and (3) the remainder, if any, to
Trustor.
(c) Trustee may postpone sale of all or any portion of the
Property by public announcement at such time and place of sale,
and from time to time thereafter, and without further notice make
such sale at the time fixed by the last postponement, or may, in
its discretion, give a new Notice of Sale.
] 4] 099.P50
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Section 6.5. Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the
Beneficiary by this Deed of Trust is intended to be exclusive of
any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative and concurrent and shall be
in addition to any other right, power and remedy given hereunder
or now or hereafter existing at law or in equity.
Section 6.6. No Waiver.
(a) No delay or omission of the Beneficiary to exercise any
right, power or remedy accruing upon any Event of Default shall
exhaust or impair any such right, power or remedy, or shall be
construed to be a waiver of any such Event of Default or
acquiescence therein; and every right, power and remedy given by
this Deed of Trust to the Beneficiary may be exercised from time
to time and as often as may be deemed expeditious by the
Beneficiary. No consent or waiver, expressed or implied, by the
Beneficiary to or any breach by the Trustor in the performance of
the obligations hereunder shall be deemed or construed to be a
consent to or waiver of obligations of the Trustor hereunder.
Failure on the part of the Beneficiary to complain of any act or
failure to act or to declare an Event of Default, irrespective of
how long such failure continues, shall not constitute a waiver by
the Beneficiary of its right hereunder or impair any rights,
power or remedies consequent on any Event of Default by the
Trustor.
(b) If the Beneficiary (1) grants forbearance or an
extension of time for the payment of any sums secured hereby, (2)
takes other or additional security or the payment ofany sums
secured hereby, (3) waives or does not exercise any right granted
in the Loan Agreement, (4) releases any part of the Security from
the lien of this Deed of Trust, or otherwise changes any of the
terms, covenants, conditions or agreements in the Loan Agreement,
(5) consents to the granting of any easement or other right
affecting the Security, or (6) makes or consents to any agreement
subordinating the lien hereof, any such act or omission shall not
release, discharge, modify, change or affect the original
liability under this Deed of Trust, or any other obligation of
the Trustor or any subsequent purchaser of the Security or any
part thereof, or any maker, co-signer, endorser, surety or
guarantor (unless expressly released); nor shall any such act or
omission preclude the Beneficiary from exercising any right,
power or privilege herein granted or intended to be granted in
any Event of Default then made or of any subsequent Event of
Default, nor, except as otherwise expressly provided in an
instrument or instruments executed by the Beneficiary shall the
lien of this Deed of Trust be altered thereby.
141099-PSO
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Section 6.7. Suits to Protect the Security.
The Beneficiary shall have power to (1) institute and
maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of
Trust, (2) preserve or protect its interest (as described in this
Deed of Trust) in the Security, and (3) restrain the enforcement
of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or
otherwise invalid, if the enforcement for compliance with such
enactment, rule or order would impair the Security thereunder or
be prejudicial to the interest of the Beneficiary.
Section 6.8. Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition or other
proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, shall be
entitled to file such proofs of claim and other documents as may
be necessary or advisable in order to have the claims of the
Beneficiary allowed in such proceedings and for any additional
amount which may become due and payable by the Trustor hereunder
after such date.
Section 6.9. Waiver.
The Trustor waives presentment, demand for payment, notice
of dishonor, notice of protest and nonpayment, protest, and all
other notices or demands under the. California Commercial Code,
notice of costs, expenses, or losses and interest thereon, notice
of interest on interest and late charges, and diligence in taking
any action to collect any sums owing under the Note or in
proceedings against the Security, in connection with the
delivery, acceptance, performance, default, endorsement or
guaranty of this Deed of Trust.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Amendments.
This instrument cannot be waived, changed, discharged or
terminated orally, but only by an instrument in writing signed by
Beneficiary and Trustor.
Section 7.2. Reconveyance by Trustee.
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Upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed of
Trust to Trustee for cancellation and retention, and upon payment
by Trustor of Trustee's reasonable fees, Trustee shall reconvey
the Security to Trustor, or to the person or persons legally
entitled thereto.
Section 7.3. Notices.
If at any time after the execution of this Deed of Trust it
shall become necessary or convenient for one of the parties
hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication shall be in
writing and shall be served personally or by depositing the same
in the registered United States mail, return receipt requested,
postage prepaid and (1) if intended for Beneficiary shall be
addressed to:
City of San Rafael
1400 Fifth Avenue
San Rafael, CA 94901
Attn: City Clerk
and (2) if intended for Trustor shall be addressed to:
1H Street Associates
100 California Street, Suite 756
San Francisco, CA 94111
Attn: Jim Schafer
Any notice, demand or communication shall be deemed given,
received, made or communicated on the date personal delivery is
effected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as
shown on the return receipt. Either party may change its address
at any time by giving written notice of such change to
Beneficiary or Trustor as the case may be, in the manner provided
herein, at least ten (10) days prior to the date such change is
desired to be effective.
Section 7.4. Successors and Joint Trustors.
Where an obligation is created herein binding upon Trustor,
the obligation shall also apply to and bind any transferee or
successors in interest. Where the terms of the Deed of Trust
have the effect of creating an obligation of the Trustor and a
transferee, such obligation shall be deemed to be a joint and
several obligation of the Trustor and such transferee. Where
Trustor is more than one entity or person, all obligations of
Trustor shall be deemed to be a joint and several obligation of
each and every entity and person comprising Trustor.
141099.P50
01/04/94 -13-
r
Section 7.5. Captions.
The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not a part
of this Deed of Trust.
Section 7.6. Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be
severable. In the event any term or provision hereof is declared
to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or
invalidity shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain
binding and enforceable. If the lien of this Deed of Trust is
invalid or unenforceable as to any part of the debt, or if the
lien is invalid or unenforceable as to any part of the Security,
the unsecured or partially secured portion of the debt, and all
payments made on the debt, whether voluntary or under foreclosure
or other enforcement action or procedure, shall be considered to
have been first paid or applied to the full payment of that
portion of the debt which is not secured or partially secured by
the lien of this Deed of Trust.
Section 7.7. Governing Law.
This Deed of Trust shall be governed by and construed in
accordance with the laws of the State of California.
Section 7.8. Gender and Number.
In this Deed of Trust the singular shall include the plural
and the masculine shall include the feminine and neuter and vice
versa, if the context so requires.
Section 7.9. Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage shall also
refer to a deed of trust and any reference to a deed of trust
shall also refer to a mortgage.
Section 7.10. Actions.
Trustor agrees to appear in and defend any action or
proceeding purporting to affect the Security.
Section 7.11. Substitution of Trustee.
Beneficiary may from time to time substitute a successor or
successors to any Trustee named herein or acting hereunder to
141099-PSO
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execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested
with all title, powers, and duties conferred upon any Trustee
herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by
Beneficiary, containing reference to this Deed of Trust and its
place of record, which, when duly recorded in the proper office
of the county or counties in which the Property is situated,
shall be conclusive proof of proper appointment of the successor
trustee.
Section 7.12. Statute of Limitations.
The pleading of any statute of limitations as a defense to
any and all obligations secured by this Deed of Trust is hereby
waived to the full extent permissible by law.
Section 7.13. Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made public record as provided by
law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this
Deed of Trust or of any action of proceeding in which Trustor,
Beneficiary, or Trustee shall be a party unless brought by
Trustee.
Section 7.14 Conflicts.
If any term or provision of this
with any term of provision of the Loan
provision of the Loan Agreement shall
such conflict.
141099.P50
01/04/94 -15-
Deed of Trust conflicts
Agreement, the term or
control to the. extent of
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust
as of the day and year first above written.
TRUSTOR:
1H STREET ASSOCIATES
Byits general partners:
kS
ack D. `Samuj2'l.son
eIsoh I
Thomas Hornaday %/
141099-PSO
01/04/94
STATE OF )
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or she executed the same in his/her authorized capacity, and that
by his/her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
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subscribed to the within instrument and acknowledged to me that he
or she executed the same in his/her authorized capacity, and that
by his/her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
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by his/her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
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or she executed the same in his/her authorized capacity, and that
by his/her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
JOAN! PRZYBYLA
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EXHIBIT A
DESCRIPTION OF PROPERTY
The Property that is the subject of this Deed of Trust is
situated in the State of California, Marin County, and is
described as follows:
141099.PS0
01/04/94 -17-
EXHIBIT D
BMR AGREEMENT
141097.P50
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