2007/11/13 City Council Resolution 2007-192RESOLUTION NO. 2007-192
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING AND APPROVING AN AFFORDABLE HOUSING AND LOAN
AGREEMENT BY AND AMONG THE CITY COUNCIL OF THE CITY OF ROHNERT
PARK, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF ROHNERT PARK AND RAINBOW- COPELAND CREEK, LLC
WHEREAS, Pursuant to section 33334.2 of the California Health and Safety Code, the
Community Development Commission of the City of Rohnert Park has. set aside 20% of tax
increment revenues allocated to the CDC for the purposes of increasing, improving and
preserving the community's supply of low -and moderate - income housing available at affordable
housing costs ( "20% Set -Aside Funds "); and
WHEREAS, Rainbow - Copeland Creek, LLC ( "Developer ") desires to properly renovate
the Copeland Creek Apartments (the "Project ") utilizing sustainable energy efficient
rehabilitation measures; and
WHEREAS, the CDC and Developer have cooperated to prepare an Affordable Housing
and Loan Agreement ( "Agreement ") pursuant to which the CDC will provide $1.2 million
toward the rehabilitation of the Project and the Developer will provide the CDC with
affordability covenants for 55 -years on all 171.units and extend the City's senior age restriction
agreement, which currently goes out to 2035, to 2062; and
WHEREAS, the Commission desires to use $1.2 million of the 2007H Series Tax
Allocation bonds to provide to the Developer for this above mentioned purpose.
NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Rohnert
Park approves the Affordable Housing and Loan Agreement and authorizes its execution by the
City Manager in substantially the form currently on file with the City Clerk, subject to any minor,
clarify and conforming changes as may be approved by the City Attorney.
BE IT FURTHER RESOLVED that the City Council of the City of Rohnert Park
hereby authorizes the City Manager to negotiate future changes to the Agreement and execute
any future Amendments necessitated by those changes.
DULY AND REGULARLY ADOPTED this 13th day of November, 2007.
CITY OF ROHNER
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AFFORDABLE HOUSING AND LOAN AGREEMENT
by and between
COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF ROHNERT PARK,
a public body corporate and politic
"M
THE CITY OF ROHNERT PARK,
a California municipal corporation
and
RAINBOW — COPELAND CREEK, LLC,
a California limited liability company
COPELAND CREEK APARTMENTS SENIOR HOUSING PROJECT
1004906v4D 80018/0022
AFFORDABLE HOUSING AND LOAN AGREEMENT
THIS AFFORDABLE HOUSING AND LOAN AGREEMENT including all
Attachments hereto ( "Agreement ") is entered into by and between The COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF ROHNERT PARK, a public body,
corporate and politic ( "Commission "), the CITY OF ROHNERT PARK ( "City "), a municipal
corporation, and RAINBOW — COPELAND CREEK, LLC, a California limited liability company
( "Developer "), dated as of this day of , 2007, the date of execution of this
Agreement by Commission indicated on the signature page hereof ( "Date of Agreement ").
RECITALS
The following recitals are a substantive part of this Agreement:
A. The purpose of this Agreement is to effectuate the Redevelopment Plan for the
Redevelopment Project by providing funds to assist in the substantial rehabilitation of a project
consisting of a 26- building, 171 -unit permanent affordable senior housing rental complex as set
forth in Section 301 hereof and in the Covenant ( "Project').
B. Commission desires to enter into this Agreement because, pursuant to the .
Community Redevelopment Law and the Redevelopment Plan, it will provide affordable housing
in the community, help to eliminate blight in the Redevelopment Project area, increase the
employment opportunities within the Redevelopment Project area, and assist in providing an
environment for the social, psychological and economic growth and welt -being of the citizens of
the City.
C. Commission is authorized and empowered under the Community Redevelopment
Law and the Redevelopment Plan to enter into agreements to assist in the redevelopment of real
property within the Redevelopment Project area in conformity with the Redevelopment Plan; to
receive consideration for the provision by Commission of redevelopment assistance; to make and
execute contracts and other instruments necessary or convenient to the exercise of its powers;
and to incur indebtedness to finance or refinance the Redevelopment Project.
D. Pursuant to California Health and Safety Code section 33334.2, Commission has
set aside 20% of tax increment revenues allocated to it to improve and increase the supply of
affordable housing in the City. Commission desires to use a portion of these monies to -make a
loan to Developer for use in order to perform the. Commission Work (as defined below).
E. Developer is the managing general partner of TRG- Copeland Creek, LP, a
California limited partnership ( "Owner ") that owns the Project.
F. The City, Commission and Developer desire to enter into this Agreement in order
to set forth the terms and conditions relating to:.(i) the substantial rehabilitation of the Project by
performance of the Commission Work; (ii) the Path Improvements work; (iii) the amendment of
Section E of Exhibit D of the Development Agreement to ensure that the Affordable Units are
rented to Qualifying Residents and extend the term of the Development Agreement; (iv) the
provision of the Commission Assistance. to Developer for performance of the Commission Work;
and (v) the provision of covenants to ensure the Affordable Units on the Site shall. remain
1004906AD 80078/0022
affordable to seniors (at the levels set forth in the Covenant, or such other more restrictive terms
as may apply) for the longest feasible time. Revisions affecting the Development Agreement
shall also be contained in the Covenant.
G. The fulfillment of this Agreement is in the vital and best interests of the City and
the health, safety and welfare of its residents and in accord with the provisions of all Applicable
Laws.
AGREEMENT
NOW, THEREFORE, the parties hereby agree that the Recitals above are incorporated
by reference and further agree as follows:
100. DEFINITIONS; REPRESENTATIONS AND WARRANTIES
101. Definitions.
"Affordable Housing Fund" means the low and moderate income housing fund
established by Commission pursuant to section 33334.3 of the Community Redevelopment Law.
"Affordable Unit or Affordable Units" is defined in Section 301.1.
"Applicable Laws" means all applicable laws, ordinances, statutes, codes, orders,
decrees, rules, regulations, official policies, standards and specifications (including any
ordinance, resolution, rule, regulation, standard, official policy, condition, or other measure) of
the United States, the State of California, the County of Sonoma, the City, or any other political
subdivision in which the Project is located, and of any other political subdivision, agency or
instrumentality exercising jurisdiction over Commission, City, Developer, Owner, the Site or the
Project, including without limitation all applicable Public Contracts Code requirements, City
zoning and development standards, building, plumbing, mechanical and electrical codes, all
other provisions of the City of Rohnert Park Municipal Code, Prevailing Wage Law,
Environmental Laws, all applicable disabled and handicapped access requirements, including the
Americans With Disabilities Act, 42 U.S.C. section 12101, et seq., Government Code section
4450, et seq., Government Code section 11135, et seq., and the Unruh Civil Rights Act, Civil
Code section 51, et seq.
or any amendments of any of the foregoing.
"Area Median Income" is defined in Section 301.2.
"City" means the City of Rohnert Park, a California municipal corporation.
"Commission" means the Community Development Commission of the City of Rohnert
Park, a public body, corporate and politic, exercising governmental functions and powers and
organized and existing under Chapter 2 of the Community Redevelopment Law of the State of
California, and any assignee of or successor to its rights, powers and responsibilities.
"Commission Assistance" is defined in Section 401
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"Commission Documents" means this Agreement (including the Attachments), the
executed Commission Note, the executed Covenant, and the executed Commission Deed of Trust
(including the addendum thereto).
"Commission Work" is defined in Section 201.
"Community Redevelopment Law" means the Community Redevelopment Law of the
State of California (Health and Safety Code section 33000, et seq.).
"Completion Date" is defined in Section 203.
"Covenant" means the Affordable Housing and Maintenance Covenant to be recorded
against the Site, as provided in Section 301.2 in the form.attached hereto as Attachment No. 2.
"Developer" means Rainbow — Copeland Creek, LLC; a California limited liability
company, or its permitted assignees or transferees.
"Development Agreement" means, collectively, that certain. Development Agreement by
and between the City of Rohnert Park and Glenn H. Larson and Jack Yanoff, Owner's
predecessors -in- interest, dated December 11, 1985, as.amended by that certain Compliance
Agreement dated October 26, 1996, that certain Second Compliance Agreement dated April 26,
1999, and that certain Third Compliance Agreement dated April 22, 2003, all by and between the
City and Owner's predecessors -in- interest.
"Escrow" means escrow number
with First American Title Company.
opened by Developer and Owner
"Final Certificate of Completion" means the document which evidences Owner's
satisfactory completion of all of the Improvements, as set forth in Section 209 hereof; in the form
attached hereto as Attachment No. 6 and incorporated herein.
"Hazardous Materials" means any substance, material, or waste which is or becomes
regulated by any local governmental authority, the State of California, or the United States.
Government, including any material or substance which is: (i) defined as a "hazardous waste,"
"extremely hazardous waste," or "restricted hazardous waste" under sections 25117, 25115 or
25122.7 of the California Health and Safety Code, or listed pursuant to California Health and
Safety Code section 25140, Division 20, Chapter 6.5 ( "Hazardous Waste Control Law ");
(ii) defined as a "hazardous substance" under California Health and Safety Code section 25316,
Division 20, Chapter 6.8 (Carpenter - Presley: Tanner Hazardous Substance Account Act);
(iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under
California Health and Safety Code section 25501, Division 20, Chapter 6.95 (Hazardous
Materials Release Response Plans and Inventory); (iv) defined as a "hazardous substance" under
California Health and Safety Code section 25281, Division 20, Chapter 6.7 (Underground
Storage of Hazardous Substances); (v) petroleum; (vi) friable asbestos; (vii) polychlorinated
biphenyls; (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous"
pursuant to Article 1 l of Title 22 of the California Administrative Code, Division 4, Chapter 20;
(ix) designated as "toxic pollutants" pursuant to section 311 of the Clean Water Act (33 U.S.C.
§ 1317); (x) defined as a "hazardous waste" pursuant to section 1004 of the Resource.
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Conservation and Recovery Act, 42 U.S.C. section 6901, et seq. (42 U.S.C. §6903); or
(xi) defined as "hazardous substances" pursuant to section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. section 9601, et seq., as
the foregoing statutes and regulations now exist or may hereafter be amended.
"Improvements" means the Commission Work together with the Path Improvements.
"Indemnitees" is defined in Section 103.1.
"Low and Moderate Income Housing Fund" means Commission's low and moderate
income housing fund, as established pursuant to Health and Safety Code section 33334.3.
"Lower Income Person" and "Lower Income Household" means a person or household
whose gross income is 80% or less of Area Median Income or such other standard as set from
time to time pursuant to California Health and Safety Code section 50079.5, as amended, or any
successor statute thereto.
"Owner" means TRG- Copeland Creek, LP, a California limited partnership.
"Owner's Obligations" means all of Owner's obligations under the Commission
Documents.
"Partnership Agreement" means the Partnership Agreement of Owner, which has been
approved by Commission, as the same may be amended from time to time. In the event of an
approved transfer or assignment, the term "Partnership Agreement" shall be deemed to refer to
the bylaws, operating agreement, partnership agreement or other organizational documents, as
applicable, of the approved successor in interest.
"Partial Certificate of Completion "means the document'which evidences Owner's
satisfactory completion of the Commission Work, asset forth in Section 209 hereof, in the form
attached hereto as Attachment No. 6 and incorporated herein.
"Path Improvements" is defined in Section 212.
"Redevelopment Plan "means the Redevelopment Plan for the Redevelopment Project,
adopted by Ordinance No. 479 of the City Council of the City on July 14, 1987, as amended, and
incorporated herein by reference.
"Redevelopment Project" means the Rohnert Park Community Development Project,
adopted by the City pursuant to the Redevelopment Plan.
"Site" means that certain real property as legally described in Attachment No. 3 currently
owned by Owner at 101 Enterprise Drive, Rohnert Park, California.
"Very Low Income Person" or "Very Low Income Household" means a person or
household whose gross income is 50% or less of Area Median Income or such other standard as
set from time to time pursuant to California.Health and Safety Code section 50105, as amended,
or any successor statute thereto.
1004906v4D 80078/0022 4
102. Representations and Warranties. The following representations and warranties
are made to the best knowledge of the representing and warranting party.
102.1 Commission Representations. Commission represents and warrants to
Developer as follows:
a. Authority. Commission is a public body, corporate and politic,
existing pursuant to the California Community Redevelopment Law (California Health & Safety
Code section 33000, et seq.), which has been authorized to transact business pursuant to.action of
the City. Commission has full right, power and lawful authority to perform its obligations
hereunder and the execution, performance and delivery of this Agreement by Commission has
been fully authorized by all requisite actions on the part of Commission.
b. No Conflict. Commission's execution, delivery and performance
of its obligations under this Agreement will not constitute a default or a breach under any
contract, agreement or order to which Commission is a party or by which it is bound.
102.2 Developer's Representations. Developer represents and warrants to
Commission as follows:
a. Authority.
i. Developer is a duly organized limited liability company
organized within and in good standing under the laws of the State of California. The copies of
the documents evidencing the organization of Developer that have been delivered to Commission
are true and complete copies of the originals, as amended to the Date of Agreement. Developer
has full right, power and lawful authority to undertake all obligations as provided herein and the
execution, performance and delivery of this Agreement by Developer has been fully authorized
by all requisite actions on the part of Developer.
ii. Owner consists of Developer as the managing general
partner, Gung Ho- Copeland Creek, LLC as the co- general partner, and CharterMac Credit
Enhanced Partners LP -Series G ( "Investor Limited Partner ") as the investor limited partner, and
CharterMac Credit Enhanced SLP LLC- Series G ( "Special Limited Partner ") as the special
limited partner. The sole member of the Developer is a non - profit organization pursuant to
Internal Revenue Code section 501(c)(3). True and complete copies of the originals of the
documents evidencing the organization of Owner have been delivered to Commission the date of
this Agreement.
b. No Conflict. Developer's execution, delivery and performance of
its obligations under this Agreement will not constitute a default or a breach under any contract,
agreement or order to which Developer is a party or by which it is bound.
c. No Developer Bankruptcy. Developer is not the subject of a
bankruptcy proceeding.
d. No Litigation. There are no present or future liabilities, rights,
obligations, orders, claims, damages, fines, penalties, deficiencies, costs, expenses, causes of
1004906AD 80078/0022 5
action, suits, litigation or proceedings (including attorneys' fees and costs), whether in law or
equity (collectively, "Claims ") pending, or to Developer's actual knowledge, threatened against
Developer, or any affiliate thereof, that would affect Developer's ability to undertake and satisfy
all of its obligations pursuant to this Agreement (including the Commission Deed of Trust), the
Owner Note, or the Note Pledge Agreement.
e. Developer Sophistication. Developer and Owner are
sophisticated owners, builders, and developers of real property (including affordable housing),
familiar and experienced with requirements for the development, rehabilitation, and operation
the Project, the Improvements, and all portions thereof.
L Project Status. The improvement and rehabilitation work Owner
has undertaken in connection with the Project ( "Owner Work ") is complete, the Project is
habitable, fully leased, and is being operated as.an ongoing concern as set forth in this
Agreement, and the Improvements represent the balance of work required on the Project.
g. Financial Status. Developer and/or Owner have secured
necessary and sufficient funding to complete the Improvements and operate and maintain the
Project in accordance with this Agreement, can meet all of their debt service, and are able to
perform all of their obligations thereunder and under this Agreement. Developer's financial
information provided to Commission, and Developer's proforma dated =
attached hereto and incorporated by reference as Attachment No. 7 ( "Proforma "), are complete,
updated, and accurate. The Project is "in balance" and there are no defaults in connection with
any debt or loans, including that certain loan from Wells Fargo Bank, as Trustee in the original
principal amount of Fifteen Million Dollars ($15,000,000) ( "Senior Financing "), or under the
Senior Financing Documents (as that term is defined in the draft subordination agreement
attached hereto as Attachment No. 8 ( "Subordination Agreement ")).
103. Prevailing Wages. Developer shall comply and cause its and Owner and
Owner's contractors and subcontractors to comply with Labor Code section 1720, et seq., and
implementing regulations regarding the payment of prevailing wages ( "Prevailing Wage Law ").
with regard to the Commission Work, to the extent such sections are applicable to the
Commission Work. Although Developer believes that the Prevailing Wage Law is not
applicable herein, Developer and Owner shall be solely responsible for determining and
effectuating compliance with the Prevailing Wage Law, and the Commission makes no
representation as to the non- applicability of the Prevailing Wage Law to the Commission Work,
or any part thereof. Nothing in this Agreement shall be construed as imposing any independent
prevailing wage requirements that are different from those imposed by applicable federal or state
law. Notwithstanding anything to the contrary contained herein, the Path Improvements are
subject to the Prevailing Wage Law as provided in Section 212.1 below.
103.1 Developer shall defend, indemnify and hold harmless each of
Commission, the City and its and their respective officers, officials, employees, volunteers,
agents and representatives (collectively, "Indemnitees ") from and against any and all Claims,
arising out of or in any way connected with Developer's or Owner's obligation to comply with all
laws with respect to the Commission Work and Prevailing. Wage Law, including all Claims that
may be made by contractors, subcontractors or other third -party claimants pursuant to the
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California Labor Code, including sections 1726 and 1781, as amended and added by Senate
Bill 966.
103.2 Developer hereby waives, releases and discharges forever the
Indemnitees from any and all present and future Claims arising out of or in any way connected
with Developer's or Owner's obligation to comply with all laws with respect to the Commission
Work. Developer is aware of and familiar with the provisions, of California Civil Code
section 1542, which provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
As such relates to this Section 103.2, Developer hereby waives and relinquishes
all rights and benefits which it may have under California Civil Code section .1542. The
obligations of Developer under this Section 103.2 shall survive the expiration or other
termination of this Agreement.
104. Relocation Waiver.
104.1 Developer on behalf of itself, and its officers, directors, agents,
contractors, employees, parents, affiliates, subsidiaries, successors, assigns, tenants, grantees,
and licensees (collectively, "Developer Parties ") hereby fully releases and discharges
Indemnitees from all Claims, of whatever kind or nature, whether known or unknown, whether
now existing or hereinafter arising, which arise from or relate in any manner to the relocation of
Developer's or Developer Parties' business operations or the relocation of any person or persons,
business or businesses, or other occupant or occupants located at the Project, including the
specific waiver and release of any right to any relocation benefits, assistance and/or payments
under Government Code sections 7260, et seq. or other _applicable state or federal law
(collectively, "Relocation Assistance Law "), notwithstanding that such relocation benefits,
assistance and/or payments may be otherwise required under the Relocation Assistance Law. It
is hereby intended that the above release relates to both known and unknown Claims that either
Developer or Developer Parties may have, or claim to have, against Indemnitees with respect to
the_ subject matter contained herein or the events relating thereto. By releasing and forever
discharging Claims both known and unknown which are related to or which arise under or in
connection with the items set out above, Developer on behalf of itself and all Developer Parties
expressly waives any rights under California Civil Code section 1542, which provides:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
As such relates to this Section 104, Developer hereby waives and relinquishes all rights
and benefits which it may have under California Civil Code section 1542. The obligations of
Developer under this Section 104 shall survive the expiration or other termination of this
Agreement.
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104.2 Indemnity for Relocation Claims. Developer shall indemnify, defend
and hold Indemnitees harmless from any Claims asserted by or payable to any tenant or
subtenant of the Project or any other person or entity claiming a right to use or occupy the
Project pursuant to a written or oral agreement with Developer or any Developer Parties,
including any claims for leasehold bonus value, furniture fixtures and equipment, loss of
business goodwill or assistance or benefits provided for under Relocation Assistance Law.
105. Title Insurance. Concurrent with Closing, there shall be issued to Commission a
CLTA lender's policy of title insurance (or, if requested by Commission, an ALTA Lender's
policy of Title Insurance) ( "Title Policy "), together with such endorsements as are requested by
Commission, issued by First American Title ( "Title Company ") insuring that the title to the
Project is vested in Owner in the condition required in this Agreement. The Title Policy shall be
in the amount of the Commission Assistance. Developer shall bear all costs associated with the
Title Policy.
106. Review of Title. Developer has caused Title Company to deliver to Developer
and to Commission a standard preliminary title report dated March 26, 2007 ( "Report") with
respect to the title to the Project, together with legible copies of the documents underlying the
exceptions set forth in the Report.
107. Environmental Indemnification. Developer shall indemnify, defend and hold
the Indemnitees harmless from and against any and all Claims resulting from, arising out of, or
based upon the release, use, generation, discharge, storage or disposal of any Hazardous
Materials on, under, in or about, or the transportation of any such Hazardous Materials to or
from, the Project or any portion thereof in violation, or alleged violation, of any Applicable
Laws, no matter when occurred, except to the extent caused by Indemnitees. This indemnity
shall include any damage, liability, fine, penalty, parallel indemnity, cost or expense arising from
or out of any claim, action, suit or proceeding for bodily injury (including sickness, disease or
death), tangible or intangible property damage, compensation for lost wages, business income,
profits or other economic loss, damage to the natural resource or the environment, nuisance,
trespass, contamination, leak, spill, release or other adverse effect on the environment. The
obligations under this Section 107 shall survive the issuance of the Certificate of Completion.
The parties each acknowledge and agree that the defense, indemnification, protection and hold
harmless obligations of the parties under this Section 107 are material elements of the
consideration to the respective parties for the performance of their obligations under this
Agreement, and that the parties would not have entered this Agreement unless such obligations
were as provided for herein.
200. SUBSTANTIAL REHABILITATION
201. Scope of Work. Developer shall complete the substantial rehabilitation work
outlined in the "Scope of Work" attached hereto as Attachment No. 9 ( "Commission Work "). As
set forth on Attachment No. 9, the Commission Work consists of (i) items that are required to be
completed ( "Required Items "); and (ii) items that Developer may elect to complete if the
Commission Assistance has not been fully spent on the Required Items of the Commission
Work. The Commission Work shall be performed by a licensed contractor(s). If Developer
desires to propose any material revisions to the Commission Work, Developer shall submit such
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proposed changes to Commission, and shall also proceed in accordance with any and all federal,
state and local laws and regulations regarding such revisions. Developer shall include any and
all changes or revisions required by the City and its inspectors which are required under the
Municipal Code and all other applicable Uniform Codes (e.g. Building; Plumbing, Fire,
Electrical, etc.) and under other Applicable Laws in the Commission Work.
202. Permits and Approvals. Developer shall secure or cause to be secured any and
all land use and other entitlements, permits and approvals timely which may be required by the
City (including all approvals required by the Planning Commission and Commission, and any
other governmental agency affected by the Improvements). Commission staff will work
cooperatively with Developer and Owner to assist in coordinating the expeditious processing and
consideration of all necessary permits, entitlements and approvals. However, the execution of
this Agreement does not constitute the granting of, or a commitment to obtain, any required land
use permits, entitlements or approvals required by Commission or the City.
203. Schedule of Performance. Developer shall commence and complete the
Commission Work and satisfy all other applicable obligations and conditions of this Agreement
by April 1, 2008 ( "Completion Date "). Specific reference is made to Section 102.2(f).
203.1 Consultation and Coordination. Staff of Commission and Developer
or Owner shall hold progress meetings on an as- needed basis to coordinate the preparation,
submission, and review of the Commission Work. The staff of Commission and Developer or
Owner shall communicate and consult informally as frequently as is necessary to ensure that the
formal submittal of any documents to Commission can receive timely and thorough
consideration.
203.2 Defects in Plans. Neither City nor Commission shall be responsible
either to Developer, Owner or to any third parties in any way for any defects in the Commission
Work, for any structural or other defects in any work done according.to the approved
Commission Work, the Path Improvements, for any defects in the Improvements, nor for any
delays caused by review and approval processes. Developer shall hold harmless, indemnify, pay
for and defend Indemnitees from and against any and all present and future Claims together with
any damage to property or injury to or death of any persons, arising out of or in any way relating
to defects in any of the Improvements, including the violation of any Applicable Laws, or for
defects in any work done according to the approved Commission Work or the Path
Improvements.
203.3 Quality; Applicable Codes. The Improvements shall be of high
quality, and shall be effectively and aesthetically designed and shall be constructed in accordance
with the Uniform Building Code (with the City's modifications) and the City's Municipal Code
and any other Applicable Laws.
203.4 . Cost of Construction. All the costs of Site preparation, and of
planning, designing and constructing the Improvements and the Project shall be borne solely by
Owner, except as otherwise expressly set forth herein.
1004906v4D 80078/0022 9
204. Insurance Requirements.. Developer shall, or shall cause Owner or its or their
contractor to, take out and maintain throughout the term of this Agreement, insurance coverage
as follows:
204.1 Comprehensive or Commercial General Liability Insurance.
Comprehensive or Commercial General Liability Insurance, at least as broad as Insurance
Services Office Commercial General Liability coverage (occurrence form CG 0001), in an
amount of One Million Dollars ($1,000,000.00) per occurrence, or such other policy limit as
Commission may approve at its discretion, including contractual liability, as shall protect
Developer, the City and Commission from claims for such damages. Such policy or policies
shall be written on an occurrence form, and shall include a vandalism and malicious mischief
endorsement and such other endorsements as Commission may reasonably require. If work
involves explosive, underground or collapse risks, XCU must be included. If a general aggregate
limit is used, either the general aggregate limit shall apply separately to this Project or the
general aggregate shall be twice the required occurrence limit. Said policy shall contain, or be
endorsed with, the following provisions:
a. The City, Commission, and their respective officers, agents,
employees, volunteers, and representatives, are covered as additional insureds, to the extent of
Developer's or Owner's negligence, for liability arising out of the operations performed by or on
behalf of Developer or Owner. The coverage shall contain no special limitations on the scope of
protection afforded to the City, Commission, and their respective officers, agents, employees,
volunteers, and representatives.
b. The policy shall not be canceled or materially reduced in coverage
without 30 days' prior written notice (10 days for non - payment of premium) to Commission and
the City by certified mail.
C. The inclusion of more than one insured shall not operate to impair
the rights of one insured against another insured, and the coverage afforded shall apply as though
separate policies had been issued to each insured, but the inclusion of more than one insured
shall not operate to increase the limits of the insurer's liability.
d. For Claims related to the Project, Developer's or Owner's
insurance, as the case may be, is primary coverage to Commission and the City, and any
insurance or self - insurance programs maintained by Commission or the City is excess to
Developer's or Owner's insurance, as the case may be, and will not be called upon to contribute
with it.
e. Any failure to comply with reporting or other provisions of the
parties, including breach of warranties, shall not affect coverage provided to the City,.
Commission, and their respective officers, agents, employees, volunteers, and representatives.
204.2 Comprehensive Automobile Liability Insurance. Comprehensive
automobile liability insurance with coverage at least as broad as ISO Form numbers CA 000106
92, Code I (any auto), for vehicles used in the performance of this Agreement with minimum
coverage of not less than One Million Dollars ($1,000,000.00) per accident combined single
1004906AD 80078/0022 10
limit (CSL). Such policy shall contain or be endorsed with the provision that coverage shall not
be canceled or materially reduced in coverage without 30 days' prior written notice (10 days for
non - payment of premium) to Commission and the City by certified mail.
204.3 Combined Single- Limit, Building's All -Risk Insurance. Combined
single - limit, and builder's all -risk insurance in an amount not less than the full insurable value of
the Improvements on a replacement cost basis together with vandalism and malicious mischief
endorsements and such other endorsements as Commission, may reasonably require, and shall
furnish, or cause to be furnished to Commission evidence satisfactory to Commission that
Developer or Owner (as the case may be) and any contractor with whom Developer or Owner
has contracted for the performance of work contemplated under this Agreement, whether on or
off the Site, the Path Improvements, or otherwise pursuant to this Agreement, carries Workers'
Compensation insurance as required by law.
204.4 Workers' Compensation Insurance. Workers' Compensation insurance
meeting statutory limits of applicable Labor Code provisions, which policy shall contain or be
endorsed to contain a waiver of subrogation against the City, Commission, and their respective
officers, agents, employees, volunteers, and representatives, and provide for 30 days' prior
written notice to Commission and the City by certified mail in the event of cancellation. If
Developer or Owner (as the case may be), or its or their contractor, has no employees, then
Developer or Owner (as the case may be), or its or their contractor, shall sign and file the
following certification in lieu of insurance:
1 am aware of the provisions of California Labor Code section 3700
which requires every employer to be insured against liability for
workers' compensation or to undertake self - insurance in accordance
with the provisions of that code, and 1 will comply with the
provisions of that code before commencing with and during the
performance of the work of this contract.
204.5 Certificate of Insurance. Companies writing the insurance required
hereunder shall be licensed to do business in the State of California. Insurance is to be placed
with insurers with a current A.M. Best's rating of no less than A -. Developer shall, or shall cause
Owner to, furnish a notarized certificate of insurance countersigned by an authorized agent of the
insurance carrier on a form reasonably approved by Commission setting forth the general
provisions of the insurance coverage. This countersigned certificate shall name the City,
Commission, and their respective officers, agents, employees, volunteers, and representatives as
additionally insured parties under the policies required hereunder, and any certificates shall be
accompanied by a duly executed endorsement evidencing such additional insured status. The
certificate and endorsements by the insurance carrier shall contain a statement of obligation on
the part of the carrier to notify the City and Commission of any material change, cancellation or
termination of the coverage at least 30 days in advance of the effective date of any such material
change, cancellation or termination (10 days for non - payment of premium). Coverage provided
hereunder by Developer or Owner shall be primary insurance and shall not be contributing with
any insurance, self - insurance or joint self - insurance, if any, maintained by Commission or the
City in each of their sole discretion, and the policy shall contain such an endorsement. The
insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the
1004906v4D 80078/0022 11
City and Commission. Developer shall, or shall cause Owner, or its or their contractor to,
furnish the required certificate to Commission before commencing performance of the
Improvements.
205. Compliance With Laws; Indemnity; Waiver.
205.1 Compliance with Laws. Developer shall construct the Improvements
in conformity with all Applicable Laws. Developer, for itself, for Owner and its and their
successors and assigns, agrees that in the construction of the Improvements, Developer and
Owner will not discriminate against any employee or applicant for employment because of race,
color, creed, religion, sex, marital status, ancestry or national origin.
205.2 Indemnity. Developer shall defend, indemnify and hold harmless the
Indemnitees from and against any and all present and future Claims arising out of or in any way
connected with Developer's obligation to comply with all laws with respect to the Improvements
including all applicable federal and state labor laws and standards and Public Contracts Code
requirements.
205.3 Waiver. Developer hereby waives, releases and discharges forever
Indemnitees, from any and all present and future Claims arising out of or in any way connected
with Developer's obligation to comply with all laws with respect to the Improvements including
Public Contracts Code requirements. Developer is aware of and familiar with the provisions of
California Civil Code section 1542, which provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
As such relates to this Section 205, Developer hereby waives and relinquishes all rights
and benefits that it may have under California Civil Code section 1542. All indemnity
obligations of Developer under this Section 205 (and all similar waiver provisions contained in
this Agreement) shall survive the expiration or other termination of this Agreement.
206. Taxes and Assessments. Developer shall, or shall cause Owner to, pay prior to
delinquency all ad valorem real estate taxes and assessments on the Project or any portion
thereof, subject to Developer's or Owner's right to contest in good faith any such taxes.
Developer or Owner shall remove or have removed any such levy or attachment, or assure the
satisfaction thereof within 30 days following the date of attachment or levy.
207. Project Sign. At Commission's sole discretion, Commission may require
Developer to place and maintain on the Site, during construction, a sign indicating the respective
roles of Developer, Owner, the City and Commission in the Project.
208. Liens and Stop Notices. If a claim of a lien or stop notice is given or recorded
affecting the Project, Developer shall, or shall cause Owner to, within 30 days of such recording
or service: (a) pay and discharge the same; or (b) affect the release thereof by recording a surety
bond in sufficient form and amount. After Developer or Owner has had written notice and has
1004906v4D 80078/0022 12
failed after a reasonable time, but in any event not after more than 60 days, to challenge, cure,
adequately bond against, or satisfy any liens or encumbrances which are not otherwise permitted
under this Agreement, Commission shall have the right, but not the obligation, to satisfy any
such liens or encumbrances without further notice to Developer or Owner. In such event
Developer and Owner shall be liable for and Commission shall be entitled to reimbursement by
Developer and Owner for such paid lien or encumbrance.
209. Certificate of Completion.
209.1 Partial Certificate of Completion. Following completion of the
Commission Work in accordance with this Agreement by the Completion Date, Commission
shall furnish Developer and Owner with a "Partial Certificate of Completion" substantially in the
form of Attachment No. 6 attached hereto. Commission shall not unreasonably withhold, .
condition or delay such Partial Certificate of Completion. The Partial Certificate of Completion
shall be issued so long as Owner has completed the Commission Work even if Developer or
Owner have not completed the Path Improvements. The Partial Certificate of Completion shall
be, and shall state that it is conclusive determination of satisfactory completion of the
Commission Work required by this Agreement. The Partial Certificate of Completion shall not
constitute evidence of compliance with or satisfaction of any obligation of Developer or Owner
to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance
Improvements, the Project, or any part thereof. The Partial Certificate of Completion is not a
notice of completion as referred to in California Civil Code section 3093.
209.2 Final Certificate of Completion. Following completion of all of the
Improvements (i.e.. both the Commission Work and Path Improvements) in accordance with this
Agreement by the Completion Date, Commission shall furnish Developer and Owner with a
"Final Certificate of Completion" substantially in the form of Attachment No. 6 attached hereto.
Commission shall not unreasonably withhold, condition or delay such Final Certificate of
Completion. The Final Certificate of Completion shall be, and shall state that it is conclusive
determination of satisfactory completion of all of the Improvements required by this Agreement.
The Final Certificate of Completion shall not constitute evidence of compliance with or
satisfaction of any obligation of Developer or Owner to any holder.of any mortgage, or any
insurer of a mortgage securing money loaned to finance Improvements, the Project, or any part
thereof. The Final Certificate of Completion is not a notice of completion as referred to in
California Civil Code section 3093.
210. Mortgage, Deed of Trust, Sale and Lease -Back Financing.
210.1 No Encumbrances Except Senior Financing. Mortgages and deeds of
trust are permitted, but only for the purpose of securing the Senior Financing. Developer
covenants and agrees, on behalf of itself, Owner and its successors and assigns, that it shall not
enter into any conveyance or other financing arrangement, increase the principal amount of the
Senior Financing, or allow other liens or encumbrances against the Project or any portion
thereof, without the prior written approval of Commission's Executive Director, which approval
shall not be unreasonably withheld, conditioned or delayed. Developer shall notify Commission
in advance of any proposed mortgage or deed of trust. The words "mortgage" and "deed of trust"
as used hereinafter shall include sale and lease -back financing.
1004906v4D 80078/0022 13
210.2 Notice of Default to Mortgagee or Deed of Trust Holders; Right to
Cure. With respect to any mortgage or deed of trust granted by Developer or Owner as provided
herein; whenever Commission shall deliver any notice or demand to Developer with respect to
any breach or default by Developer hereunder, Commission shall at the same time deliver to each
holder of record of any mortgage or deed of trust authorized by this Agreement and superior to
the Commission Deed of Trust or the Covenant ( "Mortgagee "), a copy of such notice or demand,
provided that Developer has given Commission prior written notice of the name and notice
address of such holders of record. No notice of default shall be effective as to the holder unless
such notice is given. Each such holder shall (insofar as the rights of Commission are concerned)
have the right, at its option, within 60 days after the receipt of the notice, to cure or remedy or
commence to cure or remedy any such default and to add the cost thereof to the mortgage debt
and the lien of its mortgage. Nothing 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 already
made) without first having expressly assumed Developer's obligations to Commission by written
agreement satisfactory to Commission.
210.3 Right of Commission to Cure Mortgage or Deed of Trust Default.
Commission shall have the right to record a request for notice of default in a form satisfactory to
Commission in its sole discretion. If a mortgage or deed of trust default or breach by Developer
prior to the completion of the Improvements occurs, and the holder of any mortgage or deed of
trust has not exercised its option to cure the default, Commission may cure the default, without
acceleration of the sub jectloan, following prior notice thereof to Developer. In such event,
Developer shall be liable for, and Commission shall be entitled to reimbursement from
Developer of, all costs and expenses associated with and attributable to the curing of the
mortgage or deed of trust default or breach of this Agreement by Developer and incurred by
Commission in curing such default. Commission shall also be entitled to record a lien against
the Site and/or Project to the extent of such incurred costs and disbursements. If the ownership
of the Project or any portion thereof has vested in the holder, Commission, if it so desires, may
elect to purchase the Project from the holder upon such terms as are mutually acceptable to
Commission and the holder. Developer shall, or shall cause Owner to, ensure that any mortgage
or deed of trust granted by Developer or Owner contains provisions reflecting the terms and
conditions of this Section 210.3.
211. Records and Reporting Obligations. Developer covenants and agrees, on
behalf of itself, Owner, and its and their successors and assigns, that, in connection with the
construction, ownership and operation of the Project, it shall, or shall cause Owner to, keep full
and accurate books of account and records, and comply with reporting requirements, as required
by and described in the Covenant.
212. Path Improvements. No later than 60 days after completion of the Commission
Work, Developer shall demolish, reconstruct and/or repair, as applicable, a walking path segment
on City property adjacent to the Project together with access thereto through the Project for use
by the. Project residents (collectively, "Path Improvements ") provided that such Path
Improvements will not cost more than $5,000. The Path Improvements are set forth in the Scope
of Work. All or a portion of such Path Improvements are in addition to the Commission Work,
and any other improvements, whether required through conditions of approval or otherwise,
1004906v4D 80078/0022 14
imposed by the City or other agencies or authorities having jurisdiction over the Site and /or
Project. Commission may agree (but is not obligated) to reimburse Owner up to $5,000 for
improvements to public property out of Commission general (not housing) funds. The Path
Improvements shall be completed within 270 days after commencement of such work, but no
later than 365 days after the Date of Agreement.
212.1 Prevailing Wages. The Path Improvements are subject to Prevailing
Wage Law. As such, Developer shall comply and cause Owner and Owner's contractors and
subcontractors to comply Prevailing Wage Law with regard to the Path Improvements.
Notwithstanding anything to the contrary contained herein, nothing in this Agreement shall. be
construed as imposing any independent prevailing wage requirements that are different from
those imposed by applicable federal or state law.
a. Developer shall defend, indemnify and hold harmless Indemnitees
from and against any and all Claims, arising out of or in any way connected with Developer's or
Owner's obligation to comply with Applicable Laws with respect to the Path Improvements and
Prevailing Wage Law, including -all Claims that may be made by contractors, subcontractors or
other third -party claimants pursuant to the California Labor Code, including sections 1726 and
1781, as amended and added by Senate Bill 966.
b. Developer hereby waives, releases and discharges forever the
Indemnitees from any and all present and future Claims arising out of or in any way connected
with Developer's or Owner's obligation to comply with Applicable Laws with respect to the Path
Improvements. Developer is aware of and familiar with.the provisions of California Civil Code
section 1542, which provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
As such relates to this Section 2I2, Developer hereby waives and
relinquishes all rights and benefits which it may have under California Civil Code section 1542.
The obligations of Developer under this Section 212 shall survive the expiration or other
termination of this Agreement.
213. Greenhouse Gas Credits. Any and all emissions credits, greenhouse gas credits,
carbon credits, pollution credits, green tags, environmental credits, renewable energy certificates,.
and other similar credits and allowances (including but not limited to those governed by
California's AB -32, the Regional Greenhouse Gas Initiative, the Kyoto Protocol, the Montreal
Protocol, and similar programs) generated or receivable by or allocable to the Commission Work
or Project (individually and collectively, "Credits ") shall belong to the City. As such, Developer
for itself and on behalf of its partners, parents, subsidiaries, affiliates, managers, successors and
assigns (individually and collectively, "Developer Parties ") hereby assigns the Credits to the
City, and the City accepts each such assignment. Developer Parties shall cooperate with the City
in the licensing, sale, trading and/or other transfer or use of such Credits, at no cost to the City,
and in accordance with Section 617.
1004906AD 80078/0022 15
300. COVENANTS, RESTRICTIONS AND AGREEMENTS
301. Use Covenants. Developer covenants and agrees for itself, Owner, its
successors, its assigns and every successor in interest, that the Site shall be used for
development, maintenance, and operation thereof of a 171 -unit permanent affordable senior
housing rental complex, as more specifically set forth in the Covenant. The Covenant shall run
with the land and shall be, recorded against the Site at Closing. The "Closing" shall mean the
time and day the Covenant and the Commission Deed of Trust are recorded with the Sonoma
County Recorder.
301.1 Age Restrictions. Developer, on behalf of itself and on behalf of
Owner, acknowledges and agrees that the terms and conditions of the Development Agreement
remain in full force and effect. Developer, on behalf of itself and on behalf of Owner, and the
City hereby agree to extend the duration of the Development Agreement as set forth in Section
23 thereof, to be coterminous with the 55 -year period as set forth in Covenant Section 7, and
further agree that Commission shall be a third -parry beneficiary of the Development Agreement.
Developer, on behalf of Owner and itself, and the City agree that Section E of Exhibit D of the
Development Agreement is amended to state that if there are eight units or more vacant on the
Project, Owner may immediately rent such units to tenants that are not Qualifying Residents (as
defined in the Development Agreement) until the vacancy at the Project is reduced to Iess than
eight units. When the vacancy at the Project is less than eight units, any vacated units shall be
made`available to Qualifying Residents (as defined in the Development Agreement) for a period
of 120 days, rather than a period of 30 days, before Owner shall be permitted to rent the vacant
units to tenants that are not Qualifying Residents (as defined in the Development Agreement).
301.2 Rent and Income Restrictions. All. of the residential units (other than
the Manager's Unit, if any) of the Project shall be rent restricted ( "Affordable Unit" or
"Affordable Units "); 17 of the Affordable Units shall be occupied by Very Low Income
Households at an affordable rent level pursuant to California Health and Safety Code section
50053, as amended, or any successor statute thereto; and 153 of the Affordable Units shall be
occupied by Lower Income Households at an affordable rent level pursuant to California Health
and Safety Code section 50053, as amended, or any successor statute thereto. Rent for the
Affordable Units shall be no greater than that considered as "Affordable Rent" for Very Low
Income Households or Lower Income Households, as applicable, adjusted for family size
appropriate to the unit, pursuant to California Health and Safety Code section 50053, as
amended, or any successor statute thereto ( "Affordable Rent "). "Area Median Income" means
the median. household income (adjusted for family size appropriate to the unit) of the
Metropolitan Statistical Area in which Sonoma County is located, as established by California
Health and Safety Code section 50093, as amended or any successor statute thereto. "Adjusted
for family size appropriate to the unit" shall have the meaning set forth in California Health and
Safety Code section 50053, as amended, or any successor statute thereto. As permitted by
Community Redevelopment Law, the income and rent requirements of the California Tax Credit
Allocation Committee procedures shall control while such are in place as to the Project. The use,
maintenance, and operation of the Project shall all be in accordance with the terms and in
substantially the form of the Covenant, attached hereto as Attachment No. 2, the uses specified in
the Redevelopment Plan, and this Agreement for the periods of time specified therein.
1004906v4D 80078/0022 16
302. Subordination of Covenant. Upon written request by Developer or Owner, and
upon terms and conditions reasonably approved by Commission, Commission will agree to
subordinate Section 300 of the Commission Agreement, the Covenant, the Commission Deed of
Trust (as defined below) and all other agreements contemplated therein or evidencing or securing
the Affordability Requirements (as defined below), but expressly excluding the Development
Agreement (as provided below) and Owner's or Developer's other non - financial obligations to
Commission or City (hereinafter referred to as "Performance Documents ") to those regulatory
agreements or other covenants and restrictions expressly identified as superior pursuant to a
Subordination Agreement in the form attached hereto as Attachment No. 8. "Affordability
Restrictions" means those affordability restrictions in the Agreement and in the Covenant
( "Affordability Restrictions "). Notwithstanding anything to the contrary in the Commission
Documents, the Performance Documents, the Subordinate Indebtedness, the Subordination
Agreement, or in any other subordination agreements, the terms and conditions of the
Development Agreement shall remain superior to any Senior Financing and Senior Financing
Documents (as defined in the Subordination Agreement), and only the modifications thereof
pursuant to this Agreement can be construed to be junior obligations, liens or encumbrances.
400. FINANCIAL PROVISIONS
401. Commission Assistance. Subject to the conditions set forth in the Agreement,
Commission agrees to loan to Developer such "Commission Assistance" in the maximum
amount of One Million Two Hundred Thousand Dollars ($1,200,000) for purposes of
performance and completion of the Commission Work. One half of the amount of the
Commission Assistance shall be distributed to Developer at Closing. Developer shall be
permitted to loan the proceeds of the Commission Assistance to Owner in order to perform the
Commission Work; provided, however, that no portion of the Commission Assistance shall be
utilized for ineligible costs as set forth in California Health & Safety Code section 33334.2(e).
All disbursements shall be held by Developer in trust and applied by Developer solely for the
purposes for which the funds have been disbursed. Commission is not obligated to monitor or
determine Developer's use or application of the disbursements. Developer shall execute a non -
recourse promissory note reflecting the amount of the Commission Assistance ( "Commission
Note "). The Commission Note shall be executed and delivered by Developer to Commission in
substantially the form attached hereto as Attachment No. 4. As set forth in the Commission
Note, the amount of the Commission Assistance shall be forgiven on the 55th anniversary of the
date of the Commission Note in the event that the maker of the Commission Note is not then in
default under the Affordable Housing and Loan Agreement, the Covenant, the Commission
Note, the Owner Note (as defined below), or any other Commission Documents. Owner shall in
turn execute a non - recourse promissory note reflecting the amount of the Commission Assistance
that will be loaned to Owner ( "Owner Note ") in substantially the form attached hereto as
Attachment No. 11. As security for the Commission Note and for Developer's Obligations,
Owner shall grant to Developer a deed of trust (including an addendum thereto) creating a valid
lien against the Site ( "Commission Deed of Trust ") in substantially the form attached hereto as
Attachment No. 5. As additional security for the Commission Note, Developer shall pledge the
Owner Note and Commission Deed of Trust to the Commission via the Note Pledge Agreement
in the form attached hereto as Attachment No. 10.
1004906AD 80078/0022 17
401.1 Conditions Precedent to Commission Assistance. Commission's
obligation to provide any component of the Commission Assistance is conditioned upon the
satisfaction or waiver by Commission of each and all of the conditions precedent described
below ( "Conditions Precedent "), which are solely for the benefit of Commission, and which shall
be fulfilled or waived by the time periods provided for herein. If the Conditions Precedent (other
than the condition set forth in Section 401.1(k)) or Applicable Laws (whether applicable to
Developer, Owner, Commission, or the City) are not satisfied or expressly waived by December
1, 2007 ( "Outside Date ") this Agreement shall automatically terminate with no liability to or
remaining obligations of either Commission or the City.
a. No Default. Subject to the expiration of any applicable cure
period, Developer shall not (a) be in Default of any of its obligations under the terms of this
Agreement; nor (b) be in_default under any of the Commission Documents; and (c) all
representations and warranties of Developer contained in each of this Agreement and the
Commission Documents shall be true and correct in all material respects.
b. Execution of Documents. Developer shall have executed, or
cause to be executed by Owner, and acknowledged in recordable farm the Memorandum of
Agreement, the Covenant, the Commission Note, the Commission Deed of Trust, the Owner
Note, the Note Pledge Agreement, and any other documents required hereunder or thereunder,
and delivered such documents into Escrow.
C. Insurance. Developer and Owner shall have, or shall have caused
Owner to have, provided proof of insurance to the extent required by this Agreement and the
Covenant. .
d. Financial Statements and Reports. Developer shall have
delivered to Commission the financial statements and written annual statements required under
this Agreement with respect to the Project and Developer's financial condition, together with
such other information as reasonably requested by Commission, and Commission shall have
approved the same.
e. Partnership Agreement. Developer shall have, or shall caused
Owner to have, delivered to Commission, Owner's Partnership Agreement, together with all
amendments thereto.
f. Payment of Property Taxes. No ad valorem property taxes or
assessments assessed with respect to the Project shall be delinquent.
g. Evidence of Financing and Loan Closings. To the extent not
previously delivered, Developer shall deliver to Commission evidence that Developer or Owner
has obtained all approvals necessary for land acquisition and construction financing and
commitments necessary and sufficient for the Project and Improvements, and all applicable
funding shall have been granted, closed or be ready to close concurrent with Closing and
Commission shall have approved the same.
h. Permits. Developer shall have obtained all City and other
governmental permits required for the applicable portions of the Commission Work, and the City
10049060D 80078/0022 18
shall be ready to issue building permits for the construction of the Commission Work upon the
payment of the applicable fees by Developer.
i. Construction Contract(s). Developer and/or Owner shall have
secured and delivered to Commission and City a construction contract for the Improvements (or
separate contracts for the Commission Work and the Path Improvements), in a form reasonably
acceptable to the Executive Director and the City Manager; provided, however that if either the
Executive Director or the City Manager shall not have delivered notice to Developer of any
objections to the applicable construction contract within 5 business days after receipt, then the
applicable construction contract shall be deemed approved.
j. Escrow Instructions. The parties will execute Joint Escrow
Instructions in substantially the form attached hereto as Attachment No. 1 and incorporated by
reference. The parties may execute supplemental escrow instructions as set forth therein. In no
event shall Commission be required to disburse any Commission Assistance before Closing.
k. Disbursement Requests, Documentation. After the initial
disbursement of the Commission Assistance at Closing, additional disbursements of the
Commission Assistance shall only be made upon prior written request by Developer to
Commission specifying the amount of the requested disbursement and the eligible use therefor,
together with supporting invoices and other documentation as Commission may require.
Commission shall have a period of five business days in which to either request additional
documentation or release the requested. disbursement as an advance of the Commission
Assistance. Commission shall have the right, upon written notice to Developer, and during
normal business hours, to inspect and examine Developer's and Owner's books and records
related to the Improvements.
I. CEQA Compliance. Developer shall have complied, or caused
Owner to comply, with the following: (a) all applicable requirements of the California
Environmental Quality Act, California Public Resources Code sections 21000, et seq. ( "CEQA "),
CEQA guidelines, and implementing regulations (all as amended from time to time); (b) any
necessary properly- noticed public hearings shall have taken place; (c) the City Council and
Planning Commission shall have adopted resolutions certifying the CEQA documents; and
(d) applicable statutes of limitations have expired.
m. Agreement Public Review and Approval. A properly- noticed
public hearing on this Agreement shall have taken place and the Commission and the City
Council shall have adopted resolutions approving this Agreement, subject to non - substantive
modifications and amendments hereof. Commission is not, and shall not be considered to be,
obligated by this Agreement until it has executed this Agreement, or otherwise, to approve this
Agreement or any other agreement until it has executed this Agreement:
402. Subordination of Deed of Trust. Upon written request by Developer, and upon
terms and conditions reasonably approved by Commission, Commission will agree to
subordinate Section 400 of this Agreement, the Commission Note, the Commission Deed of
Trust (as defined below), the Memorandum of Affordable Housing and Loan Agreement, the
Owner Note, the Note Pledge Agreement, and all other agreements contemplated therein or
1004906AD 80078/0022 19
evidencing or securing Developer's or Owner's financial obligations to City or Commission.
Commission shall have the right to review and approve the terms and conditions of any Senior
Financing and related subordination agreements, which approval shall not be unreasonably
withheld. To implement any such subordination, Commission has agreed to cooperate with
Developer and execute a Subordination Agreement in a form attached hereto as Attachment No.
8. Notwithstanding anything to the contrary in the Commission Documents, the Performance
Documents, the Subordinate Indebtedness, the Subordination Agreement, or in any other
subordination agreements, the terms and conditions of the Development .Agreement shall remain
superior to any Senior Financing and Senior Financing Documents (as defined in the
Subordination Agreement), and only the modifications thereof pursuant to this Agreement can be
construed to be junior obligations, liens or encumbrances.
500. DEFAULTS AND REMEDIES
501, Default. Subject to the permitted extensions of time as provided in Section 602
of this Agreement, the failure by either party to perform any action or covenant required by this
Agreement within the time periods provided herein following notice and expiration of any
applicable cure period, shall constitute a "Default" under this Agreement and the Commission
Deed of Trust. A party claiming a Default under this Agreement shall give written notice of
default to the other party specifying the Default complained of ( "Notice of Default "). A party
claiming a Default shall give notice as provided therein.
501.1 General Remedies. Except as otherwise expressly provided in this
Agreement, the claimant shall not institute any proceeding against any other party, and the other
party shall not be in Default if such party within 30 days following receipt of such Notice of
Default immediately, with due diligence, commences to cure, correct or remedy such failure or
delay and completes such cure, correction or remedy with diligence. If a Default occurs, then
Commission may exercise any right or remedy which it has under this Agreement, or which is
otherwise available at law or in equity or by statute, and all of Commission's rights and remedies
shall be cumulative.
501.2 Specific Performance; Disbursement Cessation. Upon the occurrence
of a Default specified in this Agreement, Commission may, at its option, require specific
performance of Developer's obligations and/or cease disbursement of the Commission
Assistance.
502. Institution of Legal Actions. Except as otherwise specifically provided herein,
upon the occurrence of a Default, the non - defaulting parry shall have the right, in addition to any
other rights or remedies, to institute any action at law or in equity to cure, correct, prevent or
remedy any Default, or to recover damages for any Default, or to obtain any other remedy
consistent with the purpose of this Agreement. Such legal actions must be instituted in the
Superior Court of the County of Sonoma, State of California. Notwithstanding anything herein
to the contrary, neither party shall have the right to recover consequential damages from the
other party.
503. Termination. This Agreement may be terminated: (i) if there is an uncured
Default, by written notice from the party not in Default; (ii) if there is a failure of a condition
1004906v4D 80078/0022 20
(which is not waived by the party whom the condition benefits) by notice from the parry whom
the condition benefits; or (iii) in accordance with applicable provisions hereof. In the event of
termination due to a failure by Developer under such sections, neither Commission nor
Developer shall have any further rights against or liability to the other under this Agreement and,
specifically, Commission shall have no obligation to make any further disbursements of the
Commission Assistance.
504. Acceptance of Service of Process. In the event that any legal action is
commenced by Developer against Commission, service of process on Commission shall be made
by personal service upon the Executive Director of Commission or in such other manner as may
be provided by law. In the event that any legal action is commenced by Commission against
Developer, service of process on Developer shall be made by personal service upon Flynann
Janisse or in such other manner as may be provided by law.
505. Rights and Remedies Are Cumulative.. The rights and remedies of the parties
are cumulative, and the exercise by either party of one or more of such rights or remedies shall
not preclude the exercise by it, at. the same or different times, of any other rights or remedies for
the same Default or any other Default by the other party, except as otherwise expressly provided
herein.
506. Inaction Not a Waiver of Default. Any failures or delays by either party in
asserting any of its rights and remedies as to any Default shall not operate as a waiver of any
Default or of any such rights or remedies, or deprive either such party of its right to institute and
maintain any actions or proceedings which it may deem necessary to protect, assert or enforce
any such rights or remedies.
600. GENERAL PROVISIONS
601. Notices, Demands and Communications Between the Parties. Any approval,
disapproval, demand, document or other notice to be provided under this Agreement shall be
given in writing and shall be sent: (a) for personal delivery by a delivery service that provides a
record of the date of delivery, the individual to whom delivery was made, and the address where
delivery was made; (b) by first -class certified United States mail, postage prepaid, return receipt
requested; (c) by a nationally recognized overnight courier service, marked for next day business
delivery; or (d) sent by.facsimile (immediately followed by one of the preceding methods). All
notices shall be addressed to the party to whom such notice is to be given at the property address
stated in this Section or to such other address as a party may designate by written notice to the
other. All notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of
delivery; (c) if sent by certified mail, the third day on which regular United States mail delivery
service is provided after the day of mailing or, if sent by overnight delivery service, on the next
day on which such service makes next- business -day deliveries after the day of sending.
1004906v4D 80018/0022 21
To Commission: Community Development Commission
of the City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: Executive Director
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
To City: City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: City Manager
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
With a copy to: City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: City Attorney
Telephone: (70.7) 588 -2227
Facsimile: (707) 588 -2274
With a copy to: McDonough Holland & Allen PC
1901 Harrison Street, 91h Floor
Oakland, CA 94612
Attention: Susanne Meyer Brown, Esq.
Telephone: (510) 273 -8780
Facsimile: (510) 839 -9104
To Developer . Rainbow — Copeland Creek, LLC
34975 N. North Valley Parkway, Suite 152
Phoenix, AZ 85086
Attention: Flynann Janisse
Telephone: (623) 889 -339I
Facsimile: (623) 687 -9472
With a copy to: TRG- Copeland Creek, LP
556 Commercial Street, Suite 300
San Francisco, California 94111
Attention: Executive Director
Telephone: (415) 788 -0700
Facsimile: (415) 788 -0435
10049064D 80078/0022 22
With a copy to: Cox, Castle & Nicholson LLP
555 California Street, Tenth Floor
San Francisco, California 94104
Attention: Stephen Ryan, Esq.
Telephone: (415) 262 -5150 .
Facsimile: (415) 392 -4250
And a copy to: Centerline Capital Group Inc.
625 Madison Avenue
New York, New York 10022
Attention: Andrew J. Weil
Telephone: (212) 3.17 -5700
Facsimile: (212) 751 -3550
602. Term of Agreement; Enforced Delay; Extension of Times of Performance.
Subject to the limitations set forth below, performance by either party hereunder shall not be
deemed to be in Default, and all performance and other dates specified in this Agreement shall
be extended, where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots;
floods; earthquakes; fires; casualties; force majeure; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; governmental restrictions or priority; litigation;
unusually severe weather; acts or omissions of the other party; or acts or failures to act of the
City or any other public or governmental agency or entity (other than the acts or failures to act of
Commission which shall not excuse performance by Commission). An extension of time for any
such cause shall be for the period of the enforced delay and shall commence to run from the time
of the commencement of the cause (but in any event shall not exceed a cumulative total of 120
days, if notice by the party claiming such extension is sent to the other party within 30 days of
the commencement of the cause. Times of performance under this Agreement may also be
extended in writing by the mutual agreement of the Executive Director of Commission and
Developer. Developer expressly agrees that adverse changes in economic conditions, either of
Developer specifically or the economy generally, changes in market conditions or demand,
and/or Developer's inability to obtain financing or other lack of funding to complete the
Improvements or any portion thereof shall not constitute grounds of enforced delay pursuant to
this Section 602. Developer expressly assumes the risk of such adverse economic or market
changes and/or inability to obtain financing, whether or not foreseeable as of the Date of
Agreement.
603. Successors and Assigns. Subject to the prohibitions against changes'in the
ownership, management and control of Developer set forth in the Covenant, all of the terms,
covenants and conditions of this Agreement shall be binding upon Developer and its permitted
successors and assigns. Whenever the term "Developer" is used in this Agreement, such term
shall include any other permitted successors and assigns as herein provided. Any assignee
pursuant to an assignment consented to by Commission shall deliver to Commission, before the
assignment shall be effective, a written original of the assignment of this Agreement and the
party's agreement to be bound by and to perform and observe all terms, covenants and conditions
of Developer under this Agreement and to assume all obligations of Developer thereunder, which
instrument must be satisfactory in form and content to Commission.
1004906v4D 8007810022 23
604. Memorandum of Agreement. A "Memorandum of Affordable Housing and
Loan Agreement" in the form of Attachment No. 3 attached hereto shall be recorded against the
Site immediately following execution of the Agreement by the parties.
605. Relationship Between Commission and Developer, the City and Developer. It
is hereby acknowledged that the relationship between Commission and Developer, or the City
and Developer, is not that of a partnership or joint venture and that Commission and Developer,
or the City and Developer, shall not be deemed or construed for any purpose to be the agent of
the other. Accordingly, except as expressly provided in this Agreement, the Covenant, or the
Development Agreement, neither Commission nor the City shall have any rights, powers, duties
or obligations with respect to the development, operation, maintenance or management of the
Site or the Project.
606. Commission and City Approvals and Actions. Whenever a reference is made
herein to an action or approval to be undertaken by Commission, the Executive Director of
Commission or his or her designee is authorized to act on behalf of Commission unless
specifically provided otherwise or the context should require otherwise. Whenever a reference is
made herein to an action or approval to be undertaken by the City, the City Manager of the City
or his or her designee is authorized to act on behalf of the City unless specifically provided
otherwise or the context should.require otherwise. The City Manager and Executive Director
shall have the authority to issue waivers and /or enter into amendments to this Agreement on
behalf of the Commission and the City so long as such actions do not materially or substantially
change the terms of this Agreement and such waivers and/or amendments may include
extensions of time to perform obligations hereunder. Any other material or substantive waivers
of or amendments to this Agreement shall require the consideration, action and written consent
of the City and Commission.
607. Counterparts. This Agreement may be signed in multiple counterparts which,
when signed by all parties, shall constitute a binding agreement. This Agreement is executed in
three (3) originals, each of which is deemed to be an original.
608. Integration. -Attachment Nos. I through 10 (individually and collectively,
"Attachments ") are incorporated by reference as though fully restated herein. The Attachments
constitute a part of the Agreement. This Agreement, along with the Development Agreement,
constitutes the entire understanding and agreement of the parties, notwithstanding any previous
negotiations or agreements between the parties or their predecessors in interest with respect to all
or any part of the subject matter hereof. All prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged in this Agreement
and shall be of no further force or effect. Nothing in this Agreement is intended to alter the
priority of the Development Agreement which the parties acknowledge is superior to this
Agreement and the Commission Documents. Each party is entering this Agreement based solely
upon,the representations set forth herein and upon each party's own independent investigation of
any and all facts such party deems material.
609. Titles and Captions. Titles and captions are for convenience of reference only
and do not define, describe or limit the scope or the intent of this Agreement or of any of its
10049060D 80078/0022 24
terms. Reference to section numbers are to sections in this Agreement, unless expressly stated
otherwise.
610. Interpretation. As used in this Agreement, masculine, feminine or neuter gender
and the singular or plural number shall each be deemed to include the others where and when the
context so dictates. The word "including" shall be construed as if followed by the words
"without limitation." All exhibits and Attachments to. this Agreement are incorporated by.
reference as though fully restated herein. This Agreement shall be interpreted as though
prepared jointly by both parties.
611. - No Waiver. A waiver by either party of a breach of any of the covenants,
conditions or agreements under this Agreement to be performed by the'other party shall not be
construed as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Agreement. No waiver by the City or Commission of any of the
Conditions Precedent or Applicable Laws shall be effective unless in a writing expressly
identifying the scope of the waiver and signed by the waiving entity.
612. Modifications. Any alteration, change or modification of or to this Agreement,
in order to become effective, shall be made in writing and in each instance signed on behalf of
each party.
613. Severability. If any term, provision, condition or covenant of this Agreement or
its application to any party or circumstances shall be held, to any extent, invalid or
unenforceable, the remainder of this Agreement, or the application of the term, provision,
condition or covenant to persons or circumstances other than those as to whom or which it is
held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the
fullest extent permitted by law.
614. Computation of Time. The time in which any act is to be done under this
Agreement is computed by excluding the first day, and including the last day, unless the last day
is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall
mean all holidays as specified in California Government Code sections 6700 and 6701. If any
act is to be done by a particular time during a day, that time shall be Pacific Time Zone time.
615. Legal Advice. Each party represents and warrants to the other the following: they
have carefully read this Agreement, and in signing this Agreement, they do so with full
knowledge of any right which they may have; they have received independent legal advice from
their respective legal counsel as to the matters set forth in this Agreement, or have knowingly
chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have
freely'signed this Agreement without any reliance upon any agreement, promise, statement or
representation by or on behalf of the other party, or their respective officers, agents, employees,
volunteers, and representatives, or attorneys, except as specifically set forth in this Agreement,
and without duress or coercion, whether economic or otherwise.
616. Time of Essence. Time is of the essence with respect to the performance by each
party hereto of each and every obligation and condition of this Agreement:
1004906AD 80078/0022 25
617. Cooperation. Each party agrees to cooperate with the other in this transaction
and, in that regard, shall execute any and all documents which may be reasonably necessary,
helpful, or appropriate to carry out the purposes and intent of this Agreement including releases
or additional agreements.
618. Conflicts of Interest. No member, official or employee of Commission or the
City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such
member, official or employee participate in any decision relating to the Agreement which affects
his, her or its personal interests or the interests of any corporation, partnership or association in
which he, she or it is directly or indirectly interested.
619. Time for Acceptance of Agreement by Commission. This Agreement, when
executed by Developer and delivered to Commission and City, must be authorized, executed and
delivered by each Commission and City on or before 45 days after signing and delivery of this
Agreement by Developer or this Agreement shall be void, except to the extent that Developer
shall consent in writing to a further extension of time for the authorization, execution and
delivery of this Agreement_
620. Indemnity. Except as otherwise provided in this Agreement, Developer shall, or
shall cause Owner to, defend (with counsel reasonably acceptable to Commission and the City,
as applicable), indemnify, assume all responsibility. for, and hold Indemnitees harmless from and
against any and all present and future Claims arising out of or in any way connected with subject
matter of this Agreement, including the development, operating, maintenance or management of
the Site or Project, or the implementation hereof and for any damages to property or injuries to
persons, including accidental death (including attorneys' fees and costs), which may be caused by
any of Developer's or Owner's activities under this Agreement, whether such activities or
performance thereof be by Developer or Owner or by anyone directly or indirectly employed or
contracted with by Developer or Owner. All waivers by and indemnity obligations of Developer
(including if on behalf of Owner) contained in this Agreement shall survive the expiration or
other termination of this Agreement. All indemnity obligations contained in this Agreement
expressly exclude Claims to the extent caused by City's or Commission's sole or active
negligence or willful misconduct.
621. Non - liability of Officials and Employees of Commission and Developer. No
member, official or employee of Commission or the City shall be personally liable to Developer,
or any successor in interest, in the event of any Default or breach by Commission (or the City) or
for any amount which may become due to Developer or its successors, or on any obligations
under the terms of this Agreement. Developer hereby waives and releases any claim it may have
against Indemnitees with respect to any Default or breach by Commission (or the City) or for any
amount which may become due to Developer or its successors, or on any obligations under the
terms of this Agreement. Developer makes such release with full knowledge of California Civil
Code section 1542 and hereby waives any and all rights thereunder to the extent of this release.
California Civil Code section 1542 provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
1004906v4D 80078/0022 26
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
As such relates to this Section 621, Developer hereby waives and relinquishes all rights
and benefits that it may have under California Civil Code section 1542.
622. Nonliability of Developer. No member, partner, officer, director, employee,
agent or contractor of Developer or any of its partners shall be personally liable to the
Commission or the City, or any successor in interest, in the event of any Default or breach by
Developer or for any amount which may become due to Commission or the City or its
successors, or on any indemnities or obligations under the terms of this Agreement. The
obligations of the Developer hereunder shall be without recourse to any partner, member, officer,
employee, agent or manager of the Developer and no partner, member, officer, employee, agent
or manager of the Developer shall be personally liable for the payment of any obligation of the
Developer hereunder. Commission and the City hereby waive and release any claim it may have
against member, partner, officer, director, employee, agent or contractor of Developer or any of
its partners with respect to any Default or breach by Developer or for any amount which may
become due to the City or Commission or its successors, or on any obligations under the terms of
this Agreement.
623. Assignment
623.1 By Commission. Commission may assign or transfer any of its rights or
obligations under this Agreement with the approval of Developer, which approval shall not be
unreasonably withheld; provided, however, that Commission may assign or transfer any of its
interests hereunder to the City or any public or private entity controlled by the City at any time
without the consent of Developer.
623.2 By Developer. The expertise and experience of Developer and its
partners, are of extreme importance to Commission, and are a material inducement for.
Commission to enter into this Agreement. As such, Developer may not assign or transfer any of
its rights or obligations under this Agreement other than to make a loan of the Commission
Assistance to the Owner in accordance with the terms hereof, without the express written
approval of Commission, which approval may be withheld in Commission's sole discretion;
provided, however, that Developer may make those transfers as permitted under the Covenant.
624. California Laws. The laws of the State of California, without regard to conflict
of laws principles, shall govern the interpretation and enforcement of this Agreement.
625. Authorization. Each individual or entity executing this Agreement on behalf of
Developer represents and warrants that he or she or it is duly authorized to execute and deliver
this Agreement on behalf of Developer and that such execution is binding upon Developer.
626. Attorneys' Fees. In any action or proceeding which either party brings against
the other to enforce its rights hereunder, the unsuccessful party shall pay all costs incurred by the
prevailing party, including reasonable attorneys' fees, which amounts shall be a part of the
judgment in said action or proceeding.
1004906v4D 80078/0022 27
627. Discretionary Approvals. The City and Commission each shall act
independently, reserving full and complete discretion with respect to any approvals without
reference to this Agreement. As such, Developer acknowledges that: (a) the execution of this
Agreement does not constitute a commitment of either Commission or the City to approve this
Agreement, the 33433 Report, any general plan amendment, property rezoning, or any. other
agreement, satisfy Applicable Laws, or make any findings, recommendations or issue approvals
in favor of Developer; (b) no such action shall be effective unless and until approved by
Commission, the Planning Commission, and the City Council in each of their sole discretion, as
applicable; (c) neither Commission nor the City will consider approval of the Project unless and
until Commission or the City (as applicable) has fully reviewed and considered the
environmental impacts of the proposed Project in accordance with Environmental Laws as.
defined above; and (d) regardless of Environmental Compliance review, neither Commission nor
the City is obligated, by this Agreement or otherwise, to fulfill any Environmental Compliance
obligations or to adopt findings of overriding considerations for the approval of the Project or
take any other action in support of the proposed Project, nor are they precluded, by this
Agreement or otherwise, from rejecting the Projector from imposing mitigation measures as a
condition of Project approval, which measures mitigate or avoid direct or indirect environmental
effects of the Project. Developer further acknowledges that nothing in this Agreement is
intended to or shall prejudge or commit to the City or Commission regarding the findings and
determinations to be made with respect to the subject matter of this Agreement, nor shall either
Commission or the City be liable, in any respect, to Developer or any third -party beneficiary of
this Agreement for their action or inaction in approving this Agreement, granting or denying any
discretionary approvals.
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below.
Dated: RAINBOW— COPELAND CREEK, LLC, a
California limited liability company
By: Rainbow Housing Assistance
Corporation, a California nonprofit
public benefit corporation, its Sole
Member
go
Flynann Janisse,
Executive Director
"DEVELOPER"
COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OFROHNERT PARK, a public
body corporate and politic
1004906v4D 80078/0022 28
Dated: By:
"Date of Agreement" Stephen R. Donley
Executive Director
ATTEST:
Judy Hauff
Commission Secretary
APPROVED AS TO FORM:
Commission General Counsel
Dated:
ATTEST:.
Judy Hauff
City Clerk
APPROVED AS TO FORM:
City Attorney
1004906v4D 80078/0022 29
"COMMISSION"
THE CITY OF ROHNERT PARK, a California
municipal corporation
I'M
Stephen R. Donley
City Manager
[Signature must be notarized]
"CITY"
Attachment No. 1
JOINT ESCROW INSTRUCTIONS
These escrow instructions issued by the COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF ROHNERT PARK, a public body corporate and politic ( "Commission "), the CITY OF ROHNERT
PARK, a California municipal corporation, RAINBOW - COPELAND CREEK, LLC, a California limited
liability company ( "Developer "), and TRG- COPELAND CREEK, LP, a California limited partnership
( "Owner "), shall constitute joint escrow instructions ( "Instructions ") of Developer, the City, Owner, and
Commission (each a "party", collectively the "parties ") for the transaction contemplated under the that
certain Affordable Housing and Loan Agreement dated .,,.,..,.,. : , ..., : -; 2007, between the City,
Developer and Commission including all Attachments thereto ( "Agreement "). All capitalized terms not
defined herein shall have the meaning as defined in the Agreement.
1. Escrow Instructions. The parties have opened escrow no. ( "Escrow ") with Title
Company ( "Escrow Agent ").
a. These Instructions and the Agreement constitute joint escrow instructions of the
parties. Escrow Agent to whom these Instructions are delivered is hereby empowered to act thereunder. The
parties hereto agree to do all acts reasonably necessary to close Escrow in the shortest possible time. All
funds received in Escrow shall be deposited with other escrow funds in an interest - bearing account with a
state or national bank doing business in the State of California. All disbursements shall be made by check or
wire transfer from such account. All interest on the escrow funds shall belong, and be disbursed to,
Commission:
b. If, in the opinion of either party, it is necessary or convenient in order to accomplish
the Closing of this transaction, such party may execute supplemental escrow instructions and /or require that
the parties sign supplemental joint escrow instructions; provided that if there is any inconsistency between
this document, the Agreement, and the supplemental escrow instructions, then the provisions of the
Agreement shall control. The parties agree to execute such other and further documents as may be
reasonably necessary, helpful or appropriate to effectuate the provisions of the Agreement. Escrow Agent is
instructed to release each party escrow closing statements to the respective parties.
Authority of Escrow Agent. Escrow Agent is authorized to, and shall:
a. Pay and charge Developer for the premium of the Title Policy as set forth in
Agreement Section 105.
Site.
b. Pay and charge Developer for all escrow fees, charges, and costs payable.
C. Record the Memorandum of Agreement against the Site.
Record the Affordable Housing and Maintenance Covenant against the Site.
e. Record the Commission Deed of Trust (including the Addendum thereto) against the
Record the Subordination Agreement against the Site.
g. Deliver the fully executed Commission Note to Commission.
h Deliver the fully executed Owner Note to the Commission.
1005028v4C 80078/0022
i. Deliver the fully executed Note Pledge Agreement to the Commission.
j. Disburse the Commission Assistance as set forth in the Agreement.
k. Do such other actions as necessary, including obtaining the Title Policy to fulfill
Escrow Agent's obligations under the Agreement.
1. Within the discretion of Escrow Agent, direct each party to execute and deliver any
instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the
provisions of FIRPTA and any similar state act and regulations promulgated thereunder. Each party, as
appropriate, agrees to execute a Certificate of Non- Foreign Status by individual transferor and /or a
Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be
required by Escrow Agent, on the form to be supplied by Escrow Agent.
m. Prepare and file with all appropriate governmental or taxing authorities a uniform
settlement statement, closing statement, tax withholding forms including an IRS 1099 -S form, and be
responsible for withholding taxes, if any such forms are provided for or required by law.
n. Verify that all documents were properly dated and executed personally, not under
power of attorney, by the party named as the signator as set forth therein, initialed, and where applicable,
witnessed and acknowledged, and that all exhibits (including correct property descriptions) were appended.
3. Closin . Except as otherwise agreed by the parties in writing, the Closing shall take place
after the parties' satisfaction of all of the Conditions Precedent as set forth in Agreement, but in no event later
than 30 days after the Date of Agreement. The "Closing" shall mean the time and day the Covenant and the
Commission Deed of Trust are recorded with the Sonoma County Recorder. The "Closing Date" shall mean
the day on which the Closing occurs.
4. Closing Procedure. Escrow Agent shall close Escrow as follows:
a. Record the Memorandum of Agreement with instructions for the Recorder of
Sonoma County, California to deliver the recorded Memorandum of Agreement to Developer;
b. Record the Covenant with instructions for the Recorder of Sonoma County,
California to deliver the recorded Covenant to Commission;
C. Record the Commission Deed of Trust with instructions for the Recorder of Sonoma
County, California to deliver the recorded Commission Deed of Trust to Commission;
d. Record the Subordination Agreement with instructions for the Recorder of Sonoma
County, California to deliver a copy of the recorded Subordination Agreement to Commission;
e. Deliver the fully executed Commission Note to Commission;
f. Deliver the fully executed Owner Note to the Commission.
g. Deliver the fully executed Note Pledge Agreement to the Commission.
h. Instruct the Title Company to deliver the Title Policy to Commission;
L File any informational reports required by Internal Revenue Code section 6045(e),
as amended, and any other applicable requirements;
Deliver the FIRPTA Certificate, if any, to Developer; and
1005028v4C 80078/0022 2
k. Forward to each party a separate accounting of all funds received from and
disbursed to such party and conformed copies of all executed and recorded or filed documents deposited into
Escrow, with such recording and filing date and information endorsed thereon.
5. ' Miscellaneous. These Instructions shall be construed in accordance with and be governed by
the laws of the State of California. If any provision of these Instructions shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed these Instructions on the respective
dates set forth below.
1005028AC 80078/0022
TRG- COPELAND CREEK, LP, a California limited
Dated: partnership
By: Rainbow — Copeland Creek, LLC, a California
limited liability company, its Managing General
Partner
Dated:
By: Rainbow Housing Assistance Corporation, a
California nonprofit public benefit
corporation, its Sole Member
C
Flynann Janisse,
Executive Director
By: Gung Ho- Copeland Creek, LLC, a California
limited liability company, its Co-General Partner
By: Gung Ho Partners, LLC, a Delaware limited
liability company, acting with respect to its
series 13, its Sole Member.
By: Fidelity Partners, Inc., a California
corporation, its Managing Member
By:
Joseph L. Sherman,
President
"DEVELOPER"
RAINBOW — COPELAND CREEK, LLC, a California
limited liability company,
By: Rainbow Housing Assistance Corporation, a
California nonprofit public benefit
corporation, its. Sole Member
By:
Flynann.Janisse,
Executive Director
"OWNER"
[Signatures continue on following page]
1005028AC 80078/0022 4
Dated:
"Date of Instructions"
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
Commission General Counsel
Dated:
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
Commission General Counsel
1005028v4C 80078/0022 5
COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF ROHNERT PARK, a public body
corporate and politic
By:
"COMMISSION"
THE CITY OF ROHNERT PARK, a California
municipal corporation
By:
"COMMISSION"
ACKNOWLEDGEMENT AND CONSENT
Receipt of the foregoing Instructions and original documents is hereby acknowledged. We agree, for
ourselves and on behalf of I to proceed in strict accordance with these Instructions,
and represent and warrant to the parties that we, and each of us, is and are authorized to execute this
Acknowledgement and Consent for ourselves, and each of us, and on behalf of
Date:
Date:
go
Name
Title: Escrow Officer
Title: Title Officer
10050290C 80078/0022 6
Attachment No. 2
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Community Development Commission
of the City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: Executive Director
This document is exempt from the payment of a recording
fee pursuant to Government Code § 27383.
AFFORDABLE HOUSING AND MAINTENANCE COVENANT
For valuable consideration, the receipt of which is hereby acknowledged, TRG- COPELAND
CREEK, LP, a California limited partnership ( "Owner "), the COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF ROHNERT PARK ( "Commission "), and the CITY OF ROHNERT
PARK ( "City") agree as follows with reference to the following facts,:
A. Owner owns that certain real property legally described on Exhibit A ( "Site "). Owner owns and has
undertaken substantial rehabilitation of a 171 -unit permanent senior housing rental complex together
with common facilities on the Site ( "Project "). Such substantial rehabilitation of the Project is to be
completed by Owner as set forth in the Agreement. As described below, all of the units (other than
the Manager's Unit, if any) within the Project shall be restricted to senior households of Lower and
Very Low Income.
B. The City and Commission in acting to carry out the obligations under the Community
Redevelopment Law of the State of California (Health and Safety Code section 33000, et seq.) with
respect to affordable housing has entered into.that certain Affordable Housing and Loan Agreement
dated 2007, between Rainbow — Copeland Creek, LLC, a California limited
liability company ( "Developer "), the City and Commission including all Attachments thereto
( "Agreement ") with respect to the Project. All capitalized terms not defined herein shall have the
meaning as defined in the Agreement.
C. Owner, the City and Commission agree that this Affordable. Housing and Maintenance Covenant
( "Covenant ") is a condition of Commission to approving the Agreement, that certain provision(s) of
the Development Agreement shall be revised to extend the duration of the Development Agreement
as set forth in Section 23 thereof, to be coterminous with the 55 -year period as set forth in Covenant
Section 7, to ensure that the Affordable Units are rented to Qualifying Residents (as defined in the
Development Agreement), and to ensure that that the Project shall be subject to the conditions and
restrictions, and the rights of Commission and City under this Covenant, all as specified below.
I . - USE OF THE SITE. The foregoing recitals are incorporated by reference into this Covenant. In
addition, Owner hereby covenants and agrees that during the term of this Covenant, Owner shall use the Site
and the Project in compliance with all of the following.
A. Age Restrictions. Owner acknowledges and agrees that the terms and conditions of the
Development Agreement by and between the City of Rohnert Park and Glenn H. Larson and Jack Yanoff,
Owner's predecessors -in- interest, dated December 11, 1985, as amended by that certain Compliance
Agreement dated October 26, 1996, that certain Second Compliance Agreement dated April 26, 1999, and
1005028v4C 80078/0022
that certain Third Compliance Agreement dated April 22, 2003 all by and between the City and Owner's
predecessors -in- interest (collectively, "Development Agreement ") remain in full force and effect. Owner and
the City hereby agree to extend the duration of the Development Agreement as set forth in Section 23
thereof, to be coterminous with the 55 -year period as set forth in Covenant Section 7, and further agree that
Commission shall be a third -party beneficiary of the Development Agreement. Notwithstanding anything in
the Commission Documents, the Performance Documents, the Subordinate Indebtedness, the Subordination
Agreement, or in any other subordination agreements, to the contrary, the terms and conditions of the
Development Agreement are and shall remain superior to the Senior Financing and Senior Financing
Documents (as identified and defined in the Subordination Agreement), and only the modifications thereof
pursuant to the Agreement can be construed to be junior obligations, liens, or encumbrances. Owner and the
City hereby agree that Section E of Exhibit D of the Development Agreement is amended to state that if there
are eight (8) units or more vacant on the Project, Owner may immediately rent such units to tenants that are
not Qualifying Residents (as defined in the Development Agreement) until the vacancy at the Project is
reduced to less than eight (8) units. When the vacancy at the Project is less than eight (8) units, any vacated
units shall be made available to Qualifying Residents for a period of 120 days, rather than a period of 30 days
before Owner shall be permitted to rent the vacant units to tenants that are not Qualifying Residents.,
B. Rent and Income Restrictions.
(1) All of the residential units (other than the Manager's Unit, if any) of the Project shall
be rent restricted ( "Affordable Unit" or "Affordable Units "); 17 of the Affordable Units shall be occupied by
persons or households whose gross income is 50% or less of Area Median Income ( "Very Low Income
Households ") at an affordable rent level pursuant to California Health and Safety Code section 50053, as
amended, or any successor statute thereto; and 153 of the Affordable Units shall be occupied by persons or
households whose gross income is 80% or less of Area Median Income ( "Lower Income Households ") at an
affordable rent level pursuant to California Health and Safety Code section 50053, as amended, or any
successor statute thereto. Rent for the Affordable Units shall be no greater than that considered as
"Affordable Rent" for Very Low Income Households or Lower Income Households, as applicable, adjusted
for family size appropriate to the unit, pursuant to California Health and Safety Code section 50053, as
amended, or any successor statute thereto ("Affordable Rent "). "Area Median Income" means the median
household income (adjusted for family size appropriate to the unit) of the Metropolitan Statistical Area in
which Sonoma County is located, as established by California Health and Safety Code section.50093, as
amended or any successor statute thereto. "Adjusted for family size appropriate to the unit" shall have the
meaning set forth in California Health and Safety Code section 50053, as amended, or any successor statute
thereto. As permitted by Community Redevelopment Law, the income and rent requirements of California
Tax Credit Allocation Committee procedures shall control-while such are in place as to the Project.
(2) The determination of status as a Very Low Income Household or Lower Income
Household shall be made by Owner prior to initial occupancy of the Affordable Unit by such household. If a
household occupying an Affordable Unit no longer qualifies as a Very Low Income Household or Lower
Income Household, as applicable, such, household shall be deemed to continue. to be a Very Low Income
Household or Lower Income Household, as applicable, for the purposes of the income requirements of
covenant subsection' 1.13(l). However, if the gross income of such household exceeds 140% of the
applicable income limit for a Very Low Income or Lower Income Unit occupied by the same number of
tenants, the next available unit of comparable or smaller size must be rented to (or held vacant and available
for immediate occupancy by) Lower Income Tenant(s). The unit occupied by such tenants whose aggregate
gross income exceeds such applicable income limit shall continue to be treated as a Very Low or Lower
Income Unit for purposes of this Covenant unless and until an available unit of comparable or smaller size is
rented to persons other than Very Low or Lower Income Tenants, as applicable.
(3) No less than one (1) person per bedroom shall be allowed. No more than one (1)
person shall be -permitted to occupy a studio Affordable Unit, no more than two (2) persons shall be
permitted to occupy a one (1) bedroom Affordable Unit, no more than three (3) persons shall be permitted to
I005028v4C 80078/0022 - 2
occupy a two (2) bedroom Affordable Unit, no more than four (4) persons shall be permitted to occupy a
three (3) bedroom Affordable Unit, and no more than five (5) persons shall be permitted to occupy a four (4)
bedroom Affordable Unit.
C. Marketing and Leasing Program; Management Plan Owner shall work with Commission to
design a marketing and leasing program, which program shall be subject to the approval of Commission prior
to lease -up and related activities, including but not limited to advertising. To the extent permitted by law,
such program shall give preference in renting the Affordable Units to eligible persons and eligible
households who live or work in the City of Rohnert Park. Owner shall comply with the provisions of such
management plan in leasing the Affordable Units to the extent permitted by law, including but not limited to
refusing to place a household on the list or remove such household from such list if the agent determines that
such. household has provided false information in its application has a history of poor performance in
meeting financial obligations, especially rent, disturbance of neighbors, destruction of property, poor
housekeeping habits such as damage to the unit or the existence of health and sanitation hazards, poor
landlord references, history of criminal activity involving crimes of physical violence to persons or property,
unlawful drug activity, or other acts which would adversely affect the health, safety or welfare of other
residents, or has, in the five years preceding the application, been evicted by a court of law. Examples of
poor financial performance shall include but not be limited to the existence of accounts sent to collection for
non - payment, credit accounts of status "3" or more, unpaid judgments, repossessions, outstanding liens,
bankruptcy, more than two late rent payments within 12 months (consideration will be given in instances
where tenant's rent was unusually high in proportion to household income) and where the total amount of
outstanding credit payments plus the projected rent exceeds 60% of gross income. Owner may not use
marital status in determining eligibility. A potential tenant refused a rental unit or a place on a waiting list
shall be notified in writing stating the reasons for such determination and the procedure for appeal of such
decision.
D. Reporting Requirements. Annual reports and annual income certifications or recertifications
must be submitted to Commission in the format and containing the information of the Project Status report,
attached hereto as Exhibit B, that Owner is required to submit to the California Tax Credit Allocation
Committee; provided however that the City shall have the right to, from time to time during the term of this
Covenant, request such additional or different information necessary to meet reporting requirements imposed
on the City or Commission by the Health and Safety Code and other Applicable Laws. The annual reports
and annual income. certification shall be submitted to Commission on or before'January 315` of each year or,
provided Owner provides Commission with notice, such other date as Owner may be required to submit its
required reports to the California Debt Limit Allocation Committee and /or the California Tax Credit
Allocation Committee. In the event that Commission requests additional or different information, Owner
shall promptly supply such information in the reports required hereunder. Owner shall maintain all
necessary books and records, including property, personal and financial records, in accordance with
requirements prescribed by Commission with respect to all matters covered by this Covenant. Owner, at
such time and in such forms as Commission may require, shall furnish to Commission, statements, records,
reports, data and information pertaining to matters covered by this Covenant. Upon request for examination
by Commission, Owner, at any time during normal business hours, shall make available all of its records .
with respect to all matters covered by this Covenant. Owner shall permit Commission to audit, examine and
make excerpts or transcripts from such records.
E. Marketing Reports. Within 10 business days of Commission's request, which shall be sent
pursuant to Section 19 below, Owner shall deliver to Commission marketing and leasing information,
schedules and reports for the Affordable Units in form and substance reasonably acceptable to Commission.
2. TRANSFER.
A. Limitations. The qualifications and identity of Owner and its managing member or partner
is of particular concern to Commission and City. It is because of the demonstrated qualifications and identity
1005028v4C 80078/0022
that Commission and City have each entered into the Covenant with Owner, and Owner expressly agrees to
the following limitations on transfer:
(1) Owner shall not assign or transfer the Agreement, the Project or any portion(s)
thereof, or interest(s) therein, or any right(s) hereunder without the prior written approval of Commission's
Executive Director, which approval shall not be unreasonably withheld or delayed, and shall be granted upon
each Commission's and City's receipt of evidence acceptable to them that the following conditions have been
satisfied:
(2) Owner is not in Default under the Covenant or Agreement or otherwise in violation
of the Covenant, or the purchaser or assignee agrees to undertake to cure any such Defaults and violations to
the reasonable satisfaction of each City and Commission;
(3) The continued operation of the Project shall comply with the provisions of the
Agreement and the Covenant;
. (4) Either (i) the purchaser or assignee or its property manager has at least three year's
experience in the ownership, operation and management of similar size rental housing projects, and at least
one year's experience in the ownership, operation and management of rental housing projects containing
below- market -rate units, without any record of material violations of discrimination restrictions or other
Applicable Laws applicable to such projects, or (ii) the purchaser or assignee agrees to retain a property
management firm with the experience and record described in subclause (i) above, or (iii) Owner or its
management company will continue to manage the Project for at least one year following such transfer and
during such period will provide training to the transferee and its manager in the responsibilities relating to the
Affordable Units. "Applicable Laws" means all applicable laws, ordinances, statutes, codes, orders, decrees,
rules, regulations, official policies, standards and specifications (including any ordinance, resolution, rule,
regulation, standard, official policy, condition, or other measure) of the United States, the State of California,
the County of Sonoma, the City, or any other political subdivision in which the Project is located, and of any
other political subdivision, agency or instrumentality exercising jurisdiction over Commission, City,
Developer, Owner, the Site or the Project, including without limitation all applicable Public Contracts Code
requirements, City zoning and development standards, building, plumbing, mechanical and electrical codes,
all other provisions of the City of Rohnert Park Municipal Code, Prevailing Wage Law, Environmental
Laws, all applicable disabled and handicapped access requirements, including the Americans With
Disabilities Act, 42 U.S.C. section 12101, et seq., Government Code section 4450, et seq., Government Code
section 11135, et seq., and the Unruh Civil Rights Act, Civil Code section 51, et seq. .
(5) The person or entity which is to acquire the Project does not have pending against it,
and does not have a history of, significant and material building code violations or complaints concerning the
maintenance, upkeep, operation and regulatory agreement compliance of any of its projects as identified by
any local, state or federal regulatory agencies; and
(6) The proposed purchaser or assignee enters into a written assignment and assumption
agreement in form and content reasonably satisfactory to Commission's legal counsel, and, if requested by
Commission, an opinion of such purchaser or assignee's counsel to the effect that the Agreement and this
Covenant are valid, binding and enforceable obligations of such purchaser or assignee, subject to bankruptcy
and other standard limitations affecting creditor's rights. Upon such an approved transfer., Owner shall be
released of all of its obligations under this Covenant, the Agreement and the other Commission Documents
(but not the Development Agreement) arising from and after the date of such approved transfer.
B. Pre - Approved Transfers. Notwithstanding any other provision of the Covenant or
Agreement to the contrary, Commission approval of a transfer or assignment of the Covenant or Agreement,
the Project, or the Site or any interest therein shall not be required in connection with any of the following:
1005028v4C 80078/0022 4
(1) Subject to Owner submitting the assignment and assumption agreement referred to
above and the approval of such agreement by Commission, which approval shall not be unreasonably
withheld, any transfer or assignment of the Project or any interest therein to an entity or entities in which
Owner, retains more than 50% in the aggregate, directly or indirectly, of the ownership or beneficial interest
and retains full management and control of the transferee entity or entities, either directly or indirectly
through another entity, subject only to certain major events requiring the consent or approval of the other
owners of such entity ( "Affiliate" or "Affiliate of Owner "). The term "control" as used herein shall mean the
ability to direct the operation and management of such corporation, partnership, limited liability or other
entity.
(2) Transfers resulting from the death or mental or physical incapacity of any member
or partner of Owner;
(3) The granting of temporary or permanent easements or permits to facilitate
development of the Project;
(4) Any assignment for financing purposes (subject to such financing being considered
and approved by Commission pursuant to Agreement Section 401), including the Senior Financing
Documents securing the Senior Financing;
(5) The transfer of any stock, partnership interest, membership or other beneficial
interest of Owner provided such transfer does not cause a material change in the rights to manage and control
Owner;
(6) The transfer of any stock, partnership interest, membership or other beneficial
interest in any non - managing member or limited partner of Owner or any direct or indirect beneficial owner
of any non - managing member or limited partner of Owner;
(7) The admission of any new non - managing member or limited partner to Owner;
(8) The admission of any new co- managing member or limited partner to Owner, so
long as the initial managing member limited partner or an Affiliate of Owner remains a co- managing
member of Owner and maintains control over the operation and management of Owner;
(9) The transfer of any managing member interest, non - managing member interest,
general partner or limited partner interest in Owner to an Affiliate of Owner so long as the initial managing
member or general partner (as applicable) or Affiliate of Owner remains a managing or co-managing
member or general partner (as applicable) of Owner and maintains control over the operation and
management of Owner;
(10) The rental, in the ordinary course of business of the Affordable Units in accordance
with the terms of this Covenant;
(11) The transfer of the Project to a limited partnership in which Owner or its wholly -
controlled Affiliate is the sole general partner, and any transfer of the Project back to Owner or its Affiliate at
the end of the 15 -year tax credit compliance period;
(12) The transfer of any limited partnership interests in Owner;
(13) The removal of the general partner of Owner, provided that any successor general
partner has been approved by Commission in its reasonable discretion, unless such successor general partner
is the Limited Partner or an Affiliate of the CharterMac Credit Enhanced Partners LP- Series G ( "Investor
Limited Partner ") or CharterMac Credit Enhanced SLP LLC- Series G ( "Special Limited Partner ").
1005028v4C 80078/0022
C. In the event of an assignment or transfer by Owner under the above Subsections B(1)
through (13), inclusive, not requiring Commission's prior approval, Owner nevertheless agrees that it shall
give at least 15 days' prior written notice to Commission of such assignment or transfer. In addition, .
Commission shall be entitled to review such documentation as may be reasonably required by Commission's
Executive Director for the purpose of determining compliance of such assignment or transfer with the
requirements of Subsections B(1) through B(13) inclusive.
D. Nothing in this Covenant shall prohibit (i) sale or transfer of all or any portion of the Site
through foreclosure of a mortgage or deed of trust permitted pursuant to Agreement Section 401, (ii) transfer
to the holder of such permitted mortgage or deed of trust by deed in lieu of foreclosure or (iii) transfer of the
Site by any such holder subsequent to acquisition by foreclosure or deed in lieu, so long as such transfer
complies with the Agreement and this Covenant. Commission shall not be obligated to pay Commission
Assistance to any transferee of the Site after foreclosure or transfer in lieu of foreclosure unless such
transferee assumes all of Developer's and Owner's obligations under the Agreement and this Covenant
(excluding repayment of any portion of the Commission Assistance not actually disbursed to such
transferee).
3. NO DISCRIMINATION.
A. Owner covenants by and for itself and any successors in interest that there shall be no
discrimination against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of section 12955 of the Government Code, as those bases are defined in Sections
12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of section 12955, and section 12955.2
of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
premises herein conveyed, nor shall the grantee 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 of tenants, lessees, subtenants, sublessees, or vendees in the premises herein
conveyed.
B. All deeds, leases or contracts made relative to the Project, the Site, the improvements
thereon, or any part thereof, shall contain or be subject to substantially the following nondiscrimination
clauses:
(1) In deeds the following language shall appear: "The grantee herein covenants by and
for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under
or through them, that there will be no discrimination against or segregation of, any person or group of
persons on account of any basis listed in subdivision (a) or (d) of section 12955 of the Government Code, as
those bases are defined in sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of
section 12955, and section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee 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 of tenants, lessees,
subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with
the land."
(2) In leases the following language shall appear: "The lessee herein covenants by and
for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under
or through him or her, and this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of persons, on account of
any basis listed in subdivision (a) or (d) of section I2955 of the Government Code, as those bases are defined
in sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of section 12955, and
section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under
1005028v4C 80078/0022 6
or through him or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location; number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or
vendees in the premises herein leased."
C. All deeds, leases or contracts made relative to the Project, the Site, the improvements
thereon, or any part thereof, shall contain or be subject to substantially the nondiscrimination clauses as set
forth in California Health and Safety Code section 33436, as amended, and successor statutes thereto,
provided, however, this provision shall not prevent Owner from establishing preferences in accordance with
all applicable fair housing laws. The provisions of this Section 3 shall run with the land and shall be
contained in each subsequent grant deed conveying title to the Project, the Site, the improvements thereon, or
any portion thereof, to any subsequent owner.
4. MAINTENANCE AND MANAGEMENT. Owner shall maintain the Project (such maintenance to
include but not be limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping,
architectural elements identifying the Project and any and all other improvements on the Site and in the
public right -of -way to the nearest curbline(s) abutting the Site) in accordance with the Maintenance
Standards (as hereinafter defined). To accomplish the maintenance, Owner shall either staff or contract with
and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor,
equipment, materials, support facilities, and any and all other items necessary to comply with the
requirements of this Covenant. The maintenance covenants and obligations set forth in this Section 4 shall
remain in effect fo'r the period of time specified in Section 7, below.
A. The following standards (collectively, "Maintenance Standards ") shall be complied with by
Owner and its maintenance staff, contractors and subcontractors:
(l) Landscape maintenance shall include: watering /irrigation; fertilization; mowing;
edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a
healthy, natural appearance, safe road conditions and visibility, and irrigation coverage; replacement, as
needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted
areas; and staking for support of trees.
(2) Clean -up maintenance shall include: maintenance of all sidewalks, paths and other
paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris
or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements
and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day
on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris
are properly disposed of by maintenance workers.
(3) All maintenance work shall conform to all applicable federal and state Occupation
Safety and Health Act standards and regulations for the performance of maintenance.
(4) Any and all chemicals, unhealthful substances, and pesticides used in and during
maintenance shall be applied in strict accordance with all Applicable Laws. Precautionary measures shall be
employed recognizing that all areas are open to public access.
(5) The Project shall be maintained in conformance with the Agreement and this.
Covenant and in accordance with the custom and practice generally applicable to comparable multi- family
residential projects located within Sonoma County, California. Public right -of -way improvements to the
curbline(s) on and abutting the Site shall be maintained as required by this Subsection 4.A in good condition
and in accordance with the custom and practice generally applicable to public rights -of -way within the City
of Rohnert Park.
1005028v4C 80078/0022 7
B. If Owner does not maintain the private and public improvements on the Site to the
curbline(s) on and abutting the Site in the manner set forth herein and in accordance with the Maintenance
Standards, Commission and /or the City shall have the right to maintain such private and /or public
improvements, or to contract for the correction of such deficiencies, after written notice to Owner. However,
prior to taking any such action, Commission agrees to notify Owner in writing if the condition of said
improvements does not conform to the Maintenance Standards and to specify the deficiencies and the actions
required to be taken by Owner to cure the deficiencies. Upon notification of any maintenance deficiency,
Owner shall have 30 days within which to correct, remedy or cure the deficiency. If the written notification
states that the problem is urgent and relates to the public health and safety, then Owner shall have 24 hours to
rectify the problem. In the event Owner fails to correct, remedy, or cure or has not commenced correcting,
remedying or curing such maintenance deficiency after notification and after expiration of any applicable
cure period, including the notice and cure provisions for any holder of record of any mortgage or deed of
trust pursuant to Agreement Section 401, then the City and /or Commission shall have the right to maintain
such improvements. Owner agrees to pay Commission upon demand all charges and costs incurred by
Commission or the City for such maintenance. Until so paid, Commission shall have a lien on the Site for
the amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice of Claim of
Lien" against the Site. Any lien in favor of Commission created or claimed under this Section 4.13 is
expressly made subject and subordinate to any mortgage or deed of trust made in good faith and for value,
recorded as of the date of the recordation of the Notice of Claim of Lien, and no such lien shall in any way
defeat, invalidate, or impair the obligation or priority of any such mortgage or deed of trust, unless the
mortgagee or beneficiary thereunder expressly subordinates his interest, of record, to such lien.
5. REPLACEMENT RESERVE REQUIREMENT. Owner covenants and agrees that in each
Operating Year, Owner shall deposit not less than Two Hundred Fifty Dollars ($250) per residential unit into
a special capital replacement and repair reserve account required by the Senior Lender. The capital
replacement reserve account shall be used exclusively.for payment of Project capital replacement expenses to
the extent provided in the agreement(s) with the Senior Lender governing such reserves.
6. NO IMPAIRMENT OF LIEN. No violation or breach of the covenants, conditions, restrictions,
provisions or limitations contained in this Covenant shall defeat or render invalid or in any way impair the
lien or charge of any mortgage, deed of trust or other financing or security instrument; provided, however,
that any successor in interest to the Site, the Project, or any portion thereof shall be bound by such covenants,
conditions, restrictions, limitations and provisions, whether such successor's title was acquired by
foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.
7. DURATION. The covenants and restrictions set forth at Sections 1, 2, 4 and 5 shall remain in effect
until the date which is 55 years following the date of recording of the Covenant or the Certificate of
Completion, whichever occurs later. The non - discrimination covenants set forth at Section 3 shall remain in
effect in perpetuity.
8. SUCCESSORS AND ASSIGNS. The provisions of and covenants contained in this Covenant shall
inure to the benefit of Commission and its successors and assigns and shall be binding upon Owner and any
successor in interest to the Site, the Project, or any portion thereof. The covenants shall run in favor of
Commission-and' the City and its and their successors and assigns for the entire period during which such
covenants shall be in force and effect, without regard to whether Commission or the City are owners of any
land or interest therein to which such covenants relate. Commission, the City, and its and their successors
and assigns, in the event of any breach of any such covenants, or breach of any of Owner's obligations under
the Agreement and this Covenant, shall have the right to exercise all of the rights and remedies and to
maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such
breach.
9. DEFAULT.
1005028AC 80078/0022
A. Any failure by Owner to perfonn any term or provision of this Covenant shall constitute a
"Default" under this Covenant (1) if Owner does not cure such failure within 30 days following written
notice of default from Commission or City, as applicable, including notice and opportunity to cure pursuant
to Agreement Section 210 or (2) if such failure is not of a nature which can be cured within such 30 -day
period, Owner does not within such 30 -day period commence substantial efforts to cure such failure, or
thereafter does not within a reasonable time prosecute to completion with diligence and continuity the curing
of such failure. Commission shall not enforce any of its rights and remedies under this Covenant for breach
by -Owner except upon the occurrence of a Default. So Iong as (a) the Investor Limited Partner or Special
Limited Partner (or their successors or assigns) remains a limited partner of Owner and (b) Commission is
duly informed in writing of the name and notice address of the Investor Limited Partner or Special Limited
Partner, prior to declaring a Default or taking any remedy permitted hereunder or under the Agreement or
Applicable Laws based upon an alleged default by the Owner or its general partners, Investor Limited
Partner and Special Limited Partner shall have a period of up to 60 days from the date of such written notice
of default, which shall be sent pursuant to Section 19 below, from Commission to cure such alleged default,
and if the Investor Limited Partner or Special Limited Partner reasonably believes that in order to cure such
Default, the Investor Limited Partner or Special Limited Partner must remove one or both general partners in
order to cure such default, the Special Limited Partner shall have an additional 30 days after expiration of
such 60 -day period; but in no event shall the additional cure period for the Investor Limited Partner or
Special Limited Partner exceed 90 days from the date of delivery of written notice of default from
Commission.
B. Any notice of default given hereunder shall specify in detail the nature of the failure in
perfonmance which Commission claims constitutes the Default and the manner in which such Default may be
satisfactorily cured in accordance with the terms and conditions of this Covenant. During the time periods
herein specified for cure of a failure to perform, including the opportunities to cure for the Senior Lender,
Owner shall not be considered to be in Default of this Covenant for any purposes.
C. Any failure or delay by Commission or City in asserting any-of its rights or remedies,
including but not limited to specific performance, as to any Default shall not operate as a waiver of any
Default or of any such rights or remedies or deprive Commission of its right to institute and maintain any
actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.
The provisions of this Covenant section 9 are in addition to any default provisions in favor of the City under
the Development Agreement.
10. ESTOPPEL CERTIFICATE. Either party may, at any time, and from time to time, deliver written
notice to the other party requesting such party to certify in writing that, to the current, actual knowledge of
the certifying party, (a) this Covenant is in full force and effect and a binding obligation of the parties;
(b) this Covenant has not been amended or modified or, if so amended or modified, identifying the
amendments or modifications; and (c) the requesting party is not in Default in the performance of its
obligations under this Covenant, or if in Default, to describe therein the nature and extent of any such
defaults. The party receiving a request hereunder shall execute and return a certificate in reasonable form, or
give a written, detailed response explaining why it will not do so, within 30 business days following the
receipt of the request. The Executive Director shall be authorized to execute any certificate requested by
Owner hereunder. Owner and Commission acknowledge that a certificate hereunder may be relied upon by
those tenants, transferees, investors, partners, bond counsel, underwriters, bond holders and Mortgagees
identified therein. The request shall clearly indicate that failure of the receiving party to respond within the
30 -day period will lead to a second and final request and failure to respond to the second and final request
within 15 days of receipt thereof shall be deemed approval of the estoppel certificate. Failure of either party
to execute an estoppel certificate shall not be deemed a default, provided that in the event such does not
respond within the required 30 day period, the requesting party may send a second and final request to the
non- responding party and failure of such non- responding party to respond within 15 days from receipt
thereof (but only if the applicable request contains a clear statement that failure of such non - responding party
to respond within this 15 day period shall constitute an approval) shall be deemed approval by such non-
1005028AC 80078/0022
responding of the estoppel certificate and may be relied upon as such by the requesting party, and those
tenants, transferees, investors, partners, bond counsel, underwriters, bond holders and Mortgagees identified .
therein.
IL . CONVERSION TO FOR SALE PROJECT. If, following the date of this Covenant, Owner desires
to operate the Project, or any part thereof, as a "for- sale" rather than a "rental" project, Owner must request
that each City and Commission consider amending this Covenant to address the requirements applicable to
for -sale affordable units. The parties acknowledge and agree that neither City nor Commission are under any
obligation to modify or amend this Covenant, or any other documents related to the Site or Project, to
accommodate any conversion of the Project to a for -sale project. Should Commission and City both together
opt to do so, it will require such amendment and modification to comply with all Applicable Laws, and.
ensure that the Covenant remains enforceable against purchasers and superior to any liens or encumbrances.
Commission, City and Owner acknowledge that no modifications that may affect the rights or interests of
any Senior Lender may be made without prior approval by the holder of record of the mortgage or deed of
trust approved pursuant to Agreement Section 401.
12. OWNER'S REPRESENTATIONS. Owner represents and warrants to Commission and the City as
follows:
A. Authori .
(1) Owner is a duly organized limited partnership organized within and in good standing
under the laws of the State of California. The copies of the documents evidencing the organization of Owner
that have been delivered to Commission are true and complete copies of the originals, as amended to the
Date of Agreement. Owner has full right, power and lawful authority to undertake all obligations as
provided herein and the execution, performance and delivery of this Covenant by Owner has been fully
authorized by all requisite actions on the part of Owner.
(2) Owner consists of Rainbow — Copeland Creek, LLC, as the managing general partner,
Gung Ho-CopeIand Creek, LLC as the co- general partner, Investor Limited Partner, and Special Limited
Partner. The sole member of the managing general partner is a non -profit organization pursuant to Internal
Revenue Code section 501(c)(3).
B. No Conflict. Owner's execution, delivery and performance of its obligations under this
Covenant will not constitute a default or a breach under any contract, agreement or order to which Owner is a
party or by which it is bound.
C. No Bankruptcy. Owner is not the subject of a bankruptcy proceeding.
D. No Litigation. There are no present or future liabilities, rights, obligations, orders, claims,
damages, fines, penalties, deficiencies, costs, expenses, causes of action, suits, litigation or proceedings
(including attorneys' fees and costs), whether in law or equity (collectively, "Claims ") pending, or to
Owner's actual knowledge, threatened against Owner, or any affiliate thereof, that would affect Owner's
ability to undertake and satisfy all of its obligations pursuant to this Covenant, the Owner Note, the
Commission Deed of Trust, or the Note Pledge Agreement. There are no present and future liabilities,
obligations, orders, claims, damages, fines, penalties, deficiencies, costs, expenses, causes of action or other
litigation or proceedings (including attorneys' fees and costs) (collectively, "Claims ") pending, or to Owner's
actual knowledge, threatened against Owner, or any affiliate'thereof, that would affect Owner's ability to
undertake and satisfy all of its obligations pursuant to this Agreement.
E. Owner Sophistication. Owner is a sophisticated owner, builder, and developer of real
property (including affordable housing), familiar and experienced with requirements for the development,
rehabilitation, and operation of the Project, the Improvements, and all portions thereof.
1005028v4C 80078/0022 10
F. Project Status. The improvement and rehabilitation work Owner has undertaken in
connection with the Project ( "Owner Work ") is complete, the Project is habitable, fully leased, and is being
operated as an ongoing concern as set forth in this Covenant, and the Improvements represent the balance of
work required on the Project.
G. Financial Status. Owner has secured necessary and sufficient funding to complete the
Improvements and operate and maintain the Project in accordance with this Covenant, the Owner Note, the
Commission Deed of Trust, and the Note Pledge Agreement, can meet all of its debt service, and are able to
perform all of its obligations thereunder and under this Covenant. Owner's financial information provided to
Commission, and the proforma attached to the Agreement as Attachment No. 7 ( "Proforma "), are complete,
updated, and accurate. The Project is "in balance" and there are no defaults in connection with any debt or
loans, including that certain loan from Wells Fargo Bank, as Trustee in the original principal amount of
Fifteen Million Dollars ($15,000,000) ( "Senior Financing "), or under the Senior Financing Documents (as
that term is defined in the draft subordination agreement attached to the Agreement as Attachment No. 8
( "Subordination Agreement ")).
H. Construction Contract(s). Owner shall have secured and delivered to Commission and City
a construction contract for the Improvements (or separate contracts for the Commission Work and the Path
Improvements), in a form reasonably acceptable to the Executive Director and the City Manager; provided,
however that if either the Executive Director or the City Manager shall not have delivered notice to Owner of
any objections to the applicable construction contract within 5 business days after receipt, then the applicable
construction contract shall be deemed approved.
13. PREVAILING WAGES. Owner and its contractors and subcontractors shall comply with Labor
Code section 1720, et seq., and its implementing regulations, regarding the payment of prevailing wages
( "Prevailing Wage Law ") with regard to the Commission Work, to the extent such sections are applicable to
the Commission Work. Although Owner believes that the Prevailing Wage Law is not applicable herein,
Owner shall be solely responsible for determining and effectuating compliance with the Prevailing Wage
Law, and the Commission makes no representation as to the non - applicability of the Prevailing Wage Law to
the Commission Work, or any part thereof. Nothing in this Covenant shall be construed as imposing any
independent prevailing wage requirements that are different from those imposed by applicable federal or
state law. Notwithstanding anything to the contrary contained herein, the Path Improvements are subject to
the Prevailing Wage Law as provided in Section L(I) below.
A. Owner shall defend, indemnify and hold harmless each of Commission, the City and its and
their respective officers, officials, employees, volunteers, agents and representatives (collectively,
"Indemnitees ") from and against any and all Claims, arising out of or in any way connected with Owner's
obligation to comply with all laws with respect to the Commission Work and Prevailing Wage Law,
including all Claims that may be made by contractors, subcontractors or other third party claimants pursuant
to the California Labor Code, including sections 1726 and 178I, as amended and added by Senate Bill 966.
. B. Owner hereby waives, releases and discharges forever the Indemnitees from any and all
present and future Claims arising out of or in any way connected with Owner's obligation to comply with all
laws with respect to the Commission Work and Prevailing Wage Law. Owner is aware of and familiar with
the provisions of California Civil Code section 1542, which provides as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.
As such relates to this Section 13, Owner hereby waives and relinquishes all rights and benefits which it may
have under California Civil Code. section 1542. The obligations of Owner. under this Section 13 shall survive
the expiration or other termination of this Covenant.
1005028v4C 800'78/0022 I ]
14. RELOCATION WAIVER.
A. Owner and its officers, directors, agents, contractors, employees, parents, affiliates,
subsidiaries, successors, assigns, tenants, grantees, and licensees (collectively, "Owner Parties ") hereby fully
releases and discharges Indemnitees from all Claims, whether known or unknown, whether now existing or
hereinafter arising, which arise from or relate in any manner to the relocation of Owner's or Owner Parties'
business operations or the relocation of any person or persons, business or businesses, or other occupant or
occupants located at the Project, including the specific waiver and release of any right to any relocation
benefits, assistance and/or payments under Government Code sections 7260 et seq. or other applicable state
or federal law (collectively, "Relocation Assistance Law "), notwithstanding that such relocation benefits,
assistance and/or payments may be otherwise required under the Relocation Assistance Law. It is hereby
intended that the above release relates to both known and unknown Claims that either Owner or Owner
Parties may have, or claim to have, against Indemnitees with respect to the subject matter contained herein or
the events relating thereto. By releasing and forever discharging Claims both known and unknown which are
related to or which arise under or in connection with the items set out above, Owner on behalf of itself and
all Owner Parties expressly waives any rights under California Civil Code section 1542, which provides:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.
As such relates to this Section 14, .Owner hereby waives and relinquishes all rights and benefits which it may
have under California Civil Code section 1542. The obligations of Owner under this Section 14 shall survive
the expiration or other termination of this Covenant.
B. Indemnity for Relocation Claims. Owner shall indemnify, defend and hold Indemnitees
harmless from any Claims asserted by or payable to any tenant or subtenant of the Project or any other
person or entity claiming a right to use or occupy the Project pursuant to a written or oral agreement with
Owner or any Owner Parties, including any claims for leasehold bonus value, furniture fixtures and
equipment, loss of business goodwill or assistance or benefits provided for under Relocation Assistance Law.
15. ENVIRONMENTAL INDEMNIFICATION. Owner shall indemnify, defend and hold the
Indemnitees harmless from and against any and all Claims resulting from, arising out of, or based upon the
release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or
the transportation of any such Hazardous Materials to or from, the Project or any portion thereof in violation,
or alleged violation, of Applicable Laws, no matter when occurred, except to the extent caused by
Indemnitees. This indemnity shall in any damage, liability, fine, penalty, parallel indemnity, cost or
expense arising from or out of any claim, action, suit or proceeding for bodily injury (including sickness,
disease or death), tangible or intangible property damage, compensation for lost wages, business income,
profits or other economic loss, damage to the natural resource or the environment, nuisance, trespass,
contamination, leak, spill, release or other adverse effect on the environment. "Hazardous Materials" means
any substance, material, or waste which is or becomes regulated by any local governmental authority, the
State of California, or the United States Government, including any material or substance which is: (i)
defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under sections
25117, 25115 or 25122.7 of the California Health and Safety Code, or listed pursuant to California Health
and Safety Code section 25140, Division 20, Chapter 6.5 ( "Hazardous Waste Control Law "); (ii) defined as a
"hazardous substance" under California Health and Safety Code section 25316, Division 20, Chapter 6.8
(Carpenter- Presley- Tanner Hazardous Substance Account Act); (iii) defined as a "hazardous material,"
"hazardous substance," or "hazardous waste" under California Health and Safety Code section 25501,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a
"hazardous substance" under California Health and Safety Code section 25281, Division 20, Chapter 6.7
1005028v4C 80078/0022 12
(Underground Storage of Hazardous Substances); (v) petroleum; (vi) friable asbestos; (vii) polychlorinated
biphenyls; (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20; (ix) designated as "toxic
pollutants" pursuant to section 311 of the Clean Water Act (33 U.S.C. § 1317); (x) defined as a "hazardous
waste" pursuant to section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. section 6901, et
seq. (42 U.S.C. §6903); or (xi) defined as "hazardous substances" pursuant to section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. section 9601, et seq.,
as the foregoing statutes and regulations now exist or may hereafter be amended. The obligations under this
Section 15 shall survive the issuance of the Certificate of Completion.
16. SUBSTANTIAL REHABILITATION
A. Scope of Work. Owner shall complete the substantial rehabilitation work outlined in the
Scope of Work attached hereto as Exhibit C ( "Commission Work "). As set forth on Exhibit C, the
Commission Work consists of (i) items that are required to be completed ( "Required Items "), and (ii) items
that Owner may elect to complete if the Commission Assistance has not been fully spent on the Required
Items of the Commission Work. The Commission Work shall be performed by a licensed contractor(s). If
Owner desires to propose any material revisions to the Commission Work, Owner shall submit such
proposed changes to Commission, and shall also proceed in accordance with any and all federal, state and
local laws and regulations regarding such revisions. Owner shall include any and all changes or revisions
required by the City and its inspectors which are required under the Municipal Code and all other applicable
Uniform Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other Applicable Laws in the
Commission Work.
B. Permits and Approvals. Owner shall secure or cause to be secured any and all land use and
other entitlements, permits and approvals timely which may be required by the City (including all approvals
required by the Planning Commission of the City and Commission, and any other governmental agency
affected by the Improvements). Commission staff will work cooperatively with Owner to assist in
coordinating the expeditious processing and consideration of all necessary permits, entitlements and
approvals. However, the execution of this Covenant does not constitute the granting of, or a commitment to
obtain, any required land use permits, entitlements or approvals required by Commission or the City.
C. Construction Contract. Owner shall have delivered to Commission a construction contract
for the Improvements, in a form reasonably acceptable to the Executive Director; provided, however that if
the Executive Director shall not have delivered notice to Owner of any objections to the construction contract
within 5 business days after receipt, then the construction contract shall be deemed approved.
D. Schedule of Performance. Owner shall commence and complete the Commission Work and
satisfy all other applicable obligations and conditions of this Covenant by April 1, 2008 ( "Completion
Date ").
(1) Consultation and Coordination. The staff of Commission and Owner shall hold
progress meetings on an as- needed basis to coordinate the preparation, submission, and review of the
Commission Work. The staff of Commission and Owner shall communicate and consult informally as
frequently as is necessary to ensure that the formal submittal of any documents to Commission can receive
timely and thorough consideration.
(2) Defects in Plans. Commission shall not be responsible either to Owner or to any
third parties in any way for any defects in the Commission Work; for any structural or other defects in any
1005028v4C 80078/0022 13
work done according to the approved Commission Work, for any defects in the Improvements, nor for any
delays caused by review and approval processes. Owner shall hold harmless, indemnify, pay for and defend
Indemnitees from and against any and all present and future Claims together with any damage to property or
injury to or death of any persons, arising out of or in any way relating to defects in the Commission Work or
the Improvements, including the violation of any Applicable Laws, or for defects in any work done
according to the approved Commission Work.
(3) Quality; Applicable Codes. The Improvements shall be of high quality, and shall be
effectively and.aesthetically designed and shall be constructed in accordance with the Uniform Building
Code (with the City's modifications) and the City's Municipal Code and any other Applicable Laws.
(4) Cost of Construction. All the costs of Site preparation, planning, designing and
constructing the Improvements and the Project shall be borne solely by Owner, except as otherwise expressly
set forth herein.
E. Compliance With Laws; Indemnity; Waiver.
(1) Compliance with Laws. Owner shall construct the Improvements in conformity
with all Applicable Laws. Owner for itself, and for its successors and assigns, agrees that in the construction
of the Improvements, Owner will not discriminate against any employee or applicant for employment
because of race, color, creed, religion, sex, marital status, ancestry or national origin.
(2) Indemnity. Owner shall defend, indemnify and hold harmless the Indemnitees from
and against any and all present and future Claims arising out of or in any way connected with Owner's
obligation to comply with Applicable Laws with respect to the Improvements
(3) Waiver. Owner hereby waives, releases and discharges forever Indemnitees from
any and all present and future Claims arising out of or in any way connected with Owner's obligation to
comply with Applicable Laws with respect to the Improvements including Public Contracts Code
requirements. Owner is aware of and familiar with the provisions of California Civil Code section 1542,
which provides as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.
As such relates to this Section E, Owner hereby waives and relinquishes all rights and benefits that it
may have under California Civil Code section 1542. The obligations of Owner under this Section E shall
survive the expiration or other termination of this Covenant.
F. Taxes and Assessments. Owner shall pay prior to delinquency all ad valorem real estate
taxes and assessments on the Project or any portion thereof, subject to Owner's right to contest in good faith
any such taxes. Owner shall remove or have removed any such levy or attachment, or assure the satisfaction
thereof within 30 days following the date of attachment or levy.
G. Project Sign. At Commission's sole discretion, Commission may require Owner to place and
maintain on the Site, during construction, a sign indicating the respective roles of Developer, Owner, the City
and Commission in the Project.
1005028v4C 80078/0022 14
H. Liens and Stop Notices. If a claim of a lien or stop notice is given or recorded affecting the
Project, Owner shall, within 30 days of such recording or service: (a) pay and discharge the same, or (b)
affect the release thereof by recording a surety bond in sufficient form and amount. After Owner has had
written notice and has failed after a reasonable time, but in any event not after more than 60 days, to
challenge, cure, adequately bond against, or satisfy any liens or encumbrances which are not otherwise
permitted under the Agreement or this Covenant, Commission shall have the right, but not the obligation, to
satisfy any such liens or encumbrances without further notice to Developer or Owner. In such event
Developer and Owner shall be liable for, and Commission shall be entitled to, reimbursement by Developer
and /or Owner for such paid lien or encumbrance.
Certificate of Completion.
(1) Partial Certificate of Completion. Following completion of the Commission Work
in accordance with the Agreement or this Covenant by the Completion Date, Commission shall furnish
Developer and Owner with a "Partial Certificate of Completion" substantially in the form of Exhibit D
attached hereto. Commission shall not unreasonably withhold, condition or delay such Partial Certificate of
Completion. The Partial Certificate of Completion shall be issued so long as Owner has completed the
Commission Work, even if Owner has not completed the Path Improvements. The Partial Certificate of
Completion shall be, and shall state that it is conclusive determination of satisfactory completion of the
Commission Work required by the Agreement and this Covenant. The Partial Certificate of Completion
shall not constitute evidence of compliance with or satisfaction of any obligation of Developer or Owner to
any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance Improvements,
the Project, or any part thereof. The Partial Certificate of Completion is not a notice of completion as
referred to in California Civil Code section 3093.
(2) Final Certificate of Completion. Following completion of all of the Improvements
(i.e. both the Commission Work and Path Improvements) in accordance with the Agreement and this
Covenant by the Completion Date, Commission shall furnish Developer and Owner with a "Final Certificate
of Completion" substantially'in the form of Exhibit D attached hereto. Commission shall not unreasonably
withhold, condition or delay such Final Certificate of Completion. The Final Certificate of Completion shall
be, and shall state that it is, conclusive determination of satisfactory completion of all of the Improvements
required by the Agreement and this Covenant. The Final Certificate of Completion shall not constitute
evidence of compliance with or satisfaction of any obligation of Developer or Owner to any holder of any
mortgage, or any insurer of a mortgage securing money loaned to finance Improvements, the Project, or any
part thereof. The Final Certificate of Completion is not a notice of completion as referred to in California
Civil Code section 3093.
J. Mortgage, Deed of Trust, Sale and Lease -Back Financing.
(1) No Encumbrances Except Senior Financing. Mortgages and deeds of trust are
permitted, but only for the purpose of securing the Senior Financing. Owner covenants and agrees, on behalf
of itself, and its successors and assigns, that it shall not enter into any conveyance or other financing
arrangement, increase the principal amount of the Senior Financing, or allow other liens or encumbrances
against the Project or any portion thereof, without the prior written approval of Commission's Executive
Director, which approval shall not be unreasonably withheld, conditioned or delayed. Owner shall notify
Commission in advance of any proposed mortgage or deed of trust. The words "mortgage" and "deed of
trust" as used hereinafter shall include sale and lease -back financing.
(2) Notice of Default to Mortgagee or Deed of Trust Holders, Right to Cure. With
respect to any mortgage or deed of trust granted by Developer or Owner as provided herein, whenever
1005028v4C 80078/0022 15
Commission shall deliver any notice or demand to Owner with respect to any breach or default by Owner or
Developer hereunder, Commission shall at the same time deliver to each holder of record of any mortgage or
deed of trust authorized by this Agreement and superior to the Commission Deed of Trust or the Covenant
( "Mortgagee "), a copy of such notice or demand, provided that Owner has given Commission prior written
notice of the name and notice address of such holders of record. No notice of default shall be effective as to
the holder unless such notice is given. Each such holder shall (insofar as the rights of Commission are
concerned) have the right, at its option, within 60 days after the receipt of the notice, to cure or remedy or
commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of
its mortgage. Nothing in this Covenant 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 already made) without first having expressly assumed Developer's
obligations to Commission by written agreement satisfactory to Commission.
(3) Right to Cure Mortgage or Deed 6f Trust Default. Each City and Commission shall
have the right to record a request for notice of default in a form satisfactory to them in each of their sole
discretion. If a mortgage or deed of trust default or breach by Owner prior to the completion of the
Improvements occurs, and the holder of any mortgage or deed of trust has not exercised its option to cure the
default, Commission or City may cure the default, without acceleration of the subject loan, following prior
notice thereof to Owner. In such event, Owner shall be liable for, and Commission or City, as applicable,
hall be entitled to reimbursement from Owner of, all costs and expenses associated with and attributable to
the curing of the mortgage or deed of trust default or breach of this Covenant by Owner and incurred by
Commission or City in curing such default. Each Commission and City shall also be entitled to record a lien
against the Site and /or Project to the extent of such incurred costs and disbursements. If the ownership of the
Project or any portion thereof has vested in the holder, Commission, or City, if either so desires, may elect to
purchase the Project from the holder upon mutually acceptable terms. Owner shall ensure that any mortgage
or deed of trust granted by any holder, Developer or Owner contains provisions reflecting the terms and
conditions of this Section J.
K. Records and Reporting Obligations. Owner covenants and agrees, on behalf of itself and its
successors and assigns, that, in connection with the construction, ownership and operation of the Project, it
shall keep full and accurate books of accounts and records, and comply with reporting requirements, as
required by and described in this Covenant.
L. Path Improvements. No later than 60 days after completion of the Commission Work,
Owner shall demolish, reconstruct and /or repair, as applicable, a walking path segment on City property
adjacent to the Project together with access thereto through the Project for use by the Project residents
(collectively, "Path Improvements ") provided that such Path Improvements will not cost more than $5,000.
The Path Improvements are set forth in the Scope of Work. All or a portion of such Path Improvements are
in addition to the Commission Work, whether required through conditions of approval or otherwise, imposed
by the City or other agencies or authorities having jurisdiction over the Site and /or Project. Commission may
agree (but is not obligated) to reimburse Owner up to $5,000 for improvements to public property out of
Commission general (not housing) funds. The Path Improvements shall be completed within 270 days after
commencement of such work, but no later than 365 days after the Date of Agreement.
(1) Prevailing Wages. The Path Improvements are subject to Prevailing Wage Law. As
such, Owner shall comply and cause its Owner's contractors and subcontractors to comply Prevailing Wage
Law with regard to the Path Improvements. Notwithstanding anything to the contrary contained herein,
nothing in this Agreement shall be construed as imposing any independent prevailing wage requirements that
are different from those imposed by applicable federal or state law.
1005028v4C 80078/0022 16
(a) Owner shall defend, indemnify and hold harmless Indemnitees from and
against any and all Claims, arising out of or in any way connected with Developer's or Owner's obligation to
comply with Applicable Laws with respect to the Path Improvements and Prevailing Wage Law, including
all Claims that may be made by contractors, subcontractors or other third -party claimants pursuant to the
California Labor Code, including sections 1726 and 1781, as amended and added by Senate Bill 966.
(b) Owner hereby waives, releases and discharges forever the Indemnitees from
any and all present and future Claims arising out of or in any way connected with Developer's or Owner's
obligation to comply with Applicable Laws with respect to the Path Improvements. Owner is aware of and
familiar with the provisions of California Civil Code section 1542, which provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
As such relates to this Section L, Owner hereby waives and relinquishes all rights and
benefits which it may have under California Civil Code section 1542. The obligations of Owner under this
Section L shall survive the expiration or other termination of this Agreement.
M. Greenhouse Gas Credits. Any and all emissions credits, greenhouse gas credits, carbon
credits, pollution credits, green tags, environmental credits, renewable energy certificates, and other similar
credits and allowances (including but not limited to those governed by California's AB 32, the Regional
Greenhouse Gas Initiative, the Kyoto Protocol, the Montreal Protocol, and similar programs) generated or
receivable by or allocable to the Commission Work or Project (individually and collectively, "Credits ") shall
belong to the City. As such, Owner for itself and on behalf of its partners, parents, subsidiaries, affiliates,
managers, successors and assigns (individually and collectively, "Owner Parties "), hereby assigns the Credits
to the City, and the City accepts each such assignment. Owner Parties shall cooperate with the City in the
licensing, sale, trading and /or other transferor use of such Credits, at no cost to the City, and in accordance
w. ith Section 21 below.
17. INSURANCE. Owner shall take out and maintain or shall cause its contractor to take out and
maintain throughout the term of this Covenant, insurance coverage as follows:
A. Comprehensive or Commercial General Liability Insurance. Comprehensive or Commercial
General Liability Insurance, at least as broad as Insurance Services Office Commercial General Liability
coverage (occurrence form CG 0001), in an amount of One Million Dollars ($1,000,000.00) per occurrence,
or such• other policy limit as Commission may approve at its discretion, including contractual liability, as
shall protect Owner, the City and Commission from claims for such damages. Such policy or policies shall
be written on an occurrence form, and shall include a vandalism and malicious mischief endorsement and
such other endorsements as Commission may reasonably require. If work involves explosive, underground
or collapse risks, XCU must be included. If a general aggregate limit is used, either the general aggregate
limit shall apply separately to this Project or the general aggregate shall be twice the required occurrence
limit. Said policy shall contain, or be endorsed with, the following provisions:
(1) The City, Commission, and their respective officers, agents, employees, volunteers,
and representatives, are covered as additional insureds, to the extent of Owner's negligence, for liability
arising out of the operations performed by or on behalf of Owner. The coverage shall contain no special
limitations on the scope of protection afforded to the City, Commission, and their respective officers, agents,
employees, volunteers, and representatives..
1005028v4C 80078/0022 17
(2) The policy shall not be canceled or materially reduced in coverage without 30 days'
prior written notice (10 days for non - payment of premium) to Commission and the City by certified mail.
(3) The inclusion of more than one insured shall not operate to impair the rights of one
insured against another insured, and the coverage afforded shall apply as though separate policies had been
issued to each insured, but the inclusion of more than one insured shall not operate to increase the limits of
the insurer's liability.
(4) For Claims related to the Project, Owner's insurance is primary coverage to
Commission and the City, and any insurance or self - insurance programs maintained by Commission or the
City is excess to Owner's insurance and will not be called upon to contribute with it.
(5) Any failure to comply with reporting or other provisions of the parties, including
breach of warranties, shall not affect coverage provided to the City, Commission, and their respective
officers, agents, employees, volunteers, and representatives.
B. Comprehensive Automobile Liability Insurance. Comprehensive automobile liability
insurance with coverage at least as broad as ISO Form numbers CA 0001 06 92, Code 1 (any auto), for
vehicles used in the performance of this Agreement with minimum coverage of not less than One Million
Dollars ($1,000,000.00) per accident combined single limit (CSL). Such policy shall contain or be endorsed
with the provision that coverage shall not be canceled or materially reduced in coverage without 30 days'
prior written notice (10 days for non - payment of premium) to Commission and the City by certified mail.
C_ Combined Single -Limit Building's All -Risk Insurance. Combined single limit, and
building's all -risk insurance in an amount not less than the full insurable value of the Improvements on a
replacement cost basis together with vandalism and malicious mischief endorsement and such other
endorsements as Commission may reasonably require, and shall furnish or cause to be furnished to
Commission evidence satisfactory to Commission that Owner and any contractor with whom it has
contracted for the performance of work contemplated under this Covenant, whether on or off the Site, the
Path Improvements, or otherwise pursuant to this Covenant, carries Workers' Compensation insurance as
required by law.
D. Workers' Compensation Insurance. Workers' Compensation insurance meeting statutory
limits of applicable Labor Code provisions, which policy shall contain or be endorsed to contain a waiver of
subrogation against the City, Commission, and their respective officers, agents, employees, volunteers, and
representatives, and provide for 30 days' prior written notice to Commission and the City by certified mail in
the event of cancellation. If Owner has no employees, Owner may sign and file the following certification in
lieu of insurance:
1 am aware of the provisions of California Labor Code section 3700 which
requiress every employer to be insured against Iiabilityfor workers'
compensation or to undertake self-insurance in accordance with the
provisions of that code, and I will comply with the provisions of that code
before commencing with and during the performance of the work of this
contract.
E. Certificate of Insurance. Companies writing the insurance required hereunder shall be
licensed to do business in the State of California. Insurance is to be placed with insurers with a current A.M.
Best's rating of no less than A -. Owner shall furnish a notarized certificate of insurance countersigned by an
authorized agent of the insurance carrier on a form reasonably approved by Commission setting forth the
.general provisions of the insurance coverage. This countersigned certificate shall name the City,
Commission, and their respective officers, agents, employees, volunteers, and representatives as additionally
insured parties under the policies required hereunder, and any certificates shall be accompanied by a duly
10050280C 80078/0022 18
executed endorsement evidencing such additional insured status. The certificate and endorsements by the
insurance carrier shall contain a statement of obligation on the part of the carrier to notify the City and
Commission of any material change, cancellation or termination of the coverage at least 30 days in advance
of the effective date of any such material change, cancellation or termination (10 days for non - payment of
premium). Coverage provided hereunder by Owner shall be primary insurance and shall not be contributing
with any insurance, self - insurance or joint self - insurance maintained by Commission or the City, and the
policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of
subrogation for the benefit of the City and Commission: Owner or its contractor shall furnish the required
cert ificate to Commission before commencing performance of the Commission Work.
18. NOTICE. Any notice required to be provided in this Covenant shall be given in writing and shall be
sent: (a) for personal delivery by a delivery service that provides a record of the date of delivery, the
individual to whom delivery was made, and the address where delivery was made; (b) by first -class certified
United States mail, postage prepaid, return receipt requested; (c) by a nationally recognized overnight courier
service, marked for next day business deliveryy; or (d) sent by facsimile (immediately followed by one of the
preceding methods). All notices shall be addressed to the party to whom such notice is to be given at the
property address stated in this Covenant onto such other address as a party may designate by written notice
to the other. All notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of
delivery; (c) if sent by certified mail, the third day on which regular United States mail delivery service is
provided after the day of mailing; or (d) if sent by overnight delivery service, on the next day on which such
service makes next - business -day deliveries after the day of sending.
To Commission: Community Development Commission of
the City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: Executive Director
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
To the City: City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: City Manager
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
With a copy to: City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: City Attorney
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
To Owner: TRG- Copeland, LP
556 Commercial Street, Suite 300
San Francisco, California 94111
Attention: Joseph Sherman
Telephone: (415) 788 -0700
Facsimile: (415) 788 -0435
1005028v4C 80078/0022 19
With a copy to: Cox, Castle & Nicholson LLP
555 California Street, Tenth Floor
San Francisco, California 94I04
Attention: Stephen Ryan, Esq.
Telephone: (415) 262 -5150
Facsimile: (415) 392 -4250
And a copy to: Centerline Capital Group Inc.
625 Madison Avenue
New York, New York 10022
Attention: Andrew J. Weil
Telephone: (212)
Facsimile: (212) _-
19. ATTORNEYS' FEES. In any action or proceeding which either party brings against the other to
enforce its rights hereunder, the unsuccessful party shall pay all costs incurred by the prevailing party,
including reasonable attorneys' fees, which amounts shall be a part of the judgment in said action or
proceeding.
20. RELATIONSHIP BETWEEN COMMISSION AND OWNER THE CITY AND OWNER. It is
hereby acknowledged that the relationship between Commission and Owner, or the City and Owner, is not
that of a partnership or joint venture and that Commission and Owner, or the City and Owner, shall not be
deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided
in the Agreement, this Covenant, or the Development Agreement, neither Commission nor the City shall
have any rights, powers, duties or obligations with respect to the development, operation, maintenance or
management of the Site or the Project.
21. COMMISSION AND CITY APPROVALS AND ACTIONS. Whenever a reference is made herein
to an action or approval to be undertaken by Commission, the Executive Director of Commission or his or
her designee is authorized to act on behalf of Commission unless specifically provided otherwise or the
context should require otherwise. Whenever a reference is made herein to-an action or approval to be
undertaken by the City, the City Manager of the City or his or her designee is authorized to act on behalf of
the City unless specifically provided otherwise or the context should require otherwise. The City Manager
and Executive Director shall have the authority to issue waivers and/or enter into amendments to this
Covenant on behalf of the Commission and the City so long as such actions do not materially or substantially
change the terms of this Covenant and such waivers and /or amendments may include extensions of time to
perform obligations hereunder. Any other material or substantive waivers of or amendments to this
Covenant shall require the consideration, action and written consent of the City and Commission.
22. MISCELLANEOUS. Each party agrees to cooperate with the other in this transaction and, in that
regard, shall execute any and all documents which may be reasonably necessary, helpful, or appropriate to
carry out the purposes and intent of this Covenant including releases or additional agreements. This
Covenant may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding
agreement. The word "including" shall be construed as if followed by the words "without limitation." All
exhibits and attachments hereto are incorporated by reference as though fully restated herein. This Covenant
shall be interpreted as though prepared jointly by both parties. This Covenant shall be construed in
accordance with and be governed by the laws of the State of California. If any provision of this Covenant
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
hereof shall,not in any way be affected or impaired thereby. Capitalized .terms not otherwise defined herein
shall have the meaning ascribed to such terms in the Agreement. All waivers by and indemnity obligations
of Owner contained in this Covenant shall survive the expiration or other termination of this Agreement. All
indemnity obligations contained in this Covenant expressly exclude Claims to the extent caused by City's or
Commission's sole or active negligence or willful misconduct. A waiver by either party of a breach of any of
1005028v4C 80078/0022 20
the covenants, conditions or agreements hereunder to be performed by the other party shall not be construed
as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions
hereof. No waiver by the City or Commission of any of the condition hereof s shall be effective unless in a
writing expressly identifying the scope of the waiver and signed by the waiving entity. Any alteration,
change or modification of or to this Covenant, in order to become effective, shall be made in writing and in
each instance signed on behalf of each party hereto.
1005028v4C 80078/0022 21
IN WITNESS WHEREOF, Commission, the City and Owner have caused this Covenant to be
executed on their behalf by their respective officers thereunto duly authorized.
Dated for reference purposes only as of.,:. ,. 200
TRG- COPELAND CREEK, LP, a California limited
partnership
By: Rainbow- Copeland Creek, LLC, a California
limited liability company, its Managing General
Partner
Dated:
By: Rainbow Housing Assistance Corporation, a
California nonprofit public benefit
corporation, its Sole Member
Flynann Janisse,
Executive Director
By: Gung Ho- Copeland Creek, LLC, a California
limited liability company, its Co- General Partner
By: Gung Ho Partners, LLC, a Delaware limited
liability company, acting with respect to its
series 13, its Sole Member
By: Fidelity Partners, Inc., a California
corporation, its Managing Member
By:
Joseph L. Sherman,
President
• IN t
[Signatures must be notarized]
[Signatures continue on next page]
1005028AC 80078/0022 22
COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF ROHNERT PARK, a public body
corporate and politic
Dated: By:
Its:
"COMMISSION"
[Signature must be notarized]
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
Commission General Counsel
Dated:
THE CITY OF ROHNERT PARK, a California
municipal corporation
By:
[Signature must be notarized]
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
1005028v4C 80078/0022 23
"CITY"
Exhibit A
LEGAL DESCRIPTION OF SITE
1005028AC 80078/0022
Exhibit B
PROJECT STATUS REPORT
1005028v4C 80078/0022
C C
No An
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1005028v4C 80078/0022
Exhibit C
SCOPE OF WORK
1005028v4C 80078/0022
Exhibit D
CERTIFICATE OF COMPLETION
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
}
Community Development Commission }
of the City of Rohnert Park )
6750 Commerce Boulevard )
Rohnert Park, California 94928 }
Attention: Executive Director )
This document is exempt from the payment of a recording fee
pursuant to Government Code § 27383.
[PARTiAL/FINALj CERTIFICATE OF COMPLETION
OF CONSTRUCTION AND IMPROVEMENTS
THIS jPARTIALIHWAW. CERTIFICATE OF COMPLETION OF CONSTRUCTION AND
IMPROVEMENTS ("[P: 11 If Certificate of Completion ") is made by the COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF ROHNERT PARK, a public body corporate and
politic ( "Commission "), in favor of TRG- COPELAND CREEK, LP, a California limited partnership
( "Owner "), as of the date set forth below.
RECITALS
A. Commission and Rainbow — Copeland Creek, LLC ( "Developer ") have entered into that
certain Affordable Housing and Loan Agreement dated ' , 2007, including all Attachments
thereto ( "Agreement ") concerning that certain real property and improvements thereon situated in the City of
Rohnert Park, California, as more fully described in Exhibit "A" attached hereto and made a part hereof
( "Site ").
B. As referenced in Section 209 of the Agreement, Commission is required to furnish
Developer or Owner or its successors with a [Partial/Final] Cert>fcate of Completion upan completion o%
constructiori,of the [Commission Work (for Partial Certif'icate)/Iriprovements (for Foal Certificate)], which
[partallFinal] Certificate of Completion is required to be in such form as to permit it to be recorded in the
Recorder's Office of Sonoma County. This [PartialiFinal] Certificate of Completion is conclusive
determination of satisfactory completion of the [Gommiss�on WorWlmprovemerts] as required by the
Agreement.
NOW, THEREFORE, Commission hereby certifies as follows:
I . Owner has fully and satisfactorily completed the
conformance with the Agreement.
in
2. All use, maintenance, operation, nondiscrimination and other covenants contained in the
Commission Documents shall remain in effect and enforceable according to their terms.
3. This (10,40 l/Final1 Certificate of Completion shall not be deemed or construed to constitute
evidence of compliance with or satisfaction of j(f Partial - Certificate} tliePath Improvement ar] any
obligation of Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to
1005028v4C 80078/0022
Developer in connection with the Project or any portion thereof. This [eaAWWJ Certificate of
Completion is not a notice of completion as referred to in California Civil Code section 3093.
IN WITNESS WHEREOF, Commission has executed this [katal/Finalj Certificate of Completion
this day of 200_
COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF ROHNERT PARK,
a public body corporate and politic
0
Its:
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
General Counsel
1005028v4C 80078/0022
/Signature must be notarized/
"COMMISSION"
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , 20 , before me, (here insert
name and title of the officer), personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
1005028v4C 80078/0022
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Community Development. Commission
of the City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: Executive Director
Attachment No. 3
This document is exempt from the payment of a recording
fee pursuant to Government Code §27383.
MEMORANDUM OF
AFFORDABLE HOUSING AND LOAN AGREEMENT
THIS MEMORANDUM OF AFFORDABLE HOUSING AND LOAN AGREEMENT
( "Memorandum "), dated for identification purposes as of , 200:: is entered into
by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROHNERT
PARK, a public body, corporate and politic ( "Commission "), the CITY OF ROHNERT PARK, a California
municipal corporation ( "City ") (in connection with the Development Agreement only), and RAINBOW -
COPELAND CREEK, LLC, a California limited liability company ("Developer"),
1. Affordable Housing and Loan Agreement. Commission, the City and Developer have
executed that certain Affordable Housing and Loan Agreement dated , 2007, including
all Attachments thereto ( "Agreement") which provides, among other things, for (i) Commission's loan of
certain Commission Assistance to Developer for purposes stated in the Agreement, (ii) Developer to cause
Owner to maintain and operate on the Site a 171 -unit permanent affordable housing rental complex
affordable to senior households with incomes up to 80% of median area income; (iii) Owner to use, operate
and maintain the Project, including the Affordable Units, in accordance with the terms of the Agreement and
the Affordable Housing and Maintenance Covenant dated for identification purposes as of
. 2007 ( "Covenant ") recorded against the Site which provides, among other things, for
affordable housing and maintenance requirements and transfer restrictions, (iv) extension of the duration of
that certain Development Agreement by and between the City of Rohnert Park and Glenn H. Larson and Jack
Yanoff, Owner's predecessors -in- interest, dated December It, 1985, as amended by that certain Compliance
Agreement dated October 26, 1996, that certain Second Compliance Agreement dated April 26, 1999, and
that certain Third Compliance Agreement dated April 22, 2003, all by. and between the City and Owner's
predecessors -in- interest (collectively, "Development Agreement ") to be coterminous with the 55 -year period
as set forth in Covenant Section 7 and amend the requirements for units to be held vacant for Qualifying
Residents (as defined in the Development Agreement), and (v) addition of Commission as a third -party
beneficiary of the Development Agreement. The Development Agreement and the Agreement are available
for public inspection and copying at the office of the City Clerk, City of Rohnert Park City Hall,
6750 Commerce Boulevard, Rohnert Park, California 94928. All of the terms, conditions, provisions and
covenants of the Agreement are incorporated in this Memorandum by reference as though written out at
length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or
document. Capitalized terms not otherwise defined herein shall have -the meanings ascribed to such terms in
the Agreement.
2. Development Agreement The Development Agreement has been modified as set forth in
the Agreement and the Covenant, including an extension coterminous with the 55 -year period as set forth in
1005028v4C 80078/0022
Covenant Section 7, and addition of Commission as an express third -party beneficiary thereof. Owner and
the City also hereby agree that Section E of Exhibit D of the Development Agreement is amended to state
that if there are eight units or more vacant on the Project, Owner may immediately rent such units to tenants
that are not Qualifying Residents until the vacancy at the Project is reduced to less than eight units. When
the vacancy at the Project is less than eight units, any vacated units shall be made available to Qualifying
Residents (as defined in the Development Agreement) for a period of 120 days, rather than a period of 30
days before Owner shall be permitted to rent the vacant units to tenants that are not Qualifying Residents.
Notwithstanding anything to the contrary in the Commission Documents, the Performance Documents, the
Subordinate Indebtedness;. the Subordination Agreement, or in any other subordination agreements, the terms
and conditions of the Development Agreement shall remain superior to any Senior Financing and Senior
Financing Documents, and only the modifications thereof pursuant to this Agreement can be construed to be
junior obligations, liens or encumbrances.
3. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only,
and in no way modifies the terms, conditions, provisions and covenants of the Agreement or the
Development Agreement. In the event of any inconsistency between the terms, conditions, provisions and
covenants of this Memorandum and the Agreement orthe Development Agreement, the terms, conditions,
provisions and covenants of the Agreement or the Development Agreement, as applicable, shall prevail.
The parties have executed this Memorandum on the dates specified immediately adjacent to their
respective signatures.
Dated:
1005028v4C 80078/0022
RAINBOW - COPELAND CREEK, LLC, a
California limited liability company,
By: Rainbow Housing Assistance
Corporation, a California nonprofit
public benefit corporation, its Sole
Member
By:
Flynann Janisse,
Executive Director
[Signatures continue on next page)
"DEVELOPER"
[Signatures must be notarized]
COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF ROHNERT PARK, a public body,
corporate and politic
By:
Its:
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
Commission General Counsel
"COMMISSION
/Signature must be notarized%
THE CITY OF ROHNERT PARK, a California
municipal corporation
Dated: By:
[Signature must be notarized]
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
1005028v4C 80078/0022
"CITY"
Exhibit A
LEGAL DESCRIPTION OF SITE
1005028AC 80078/0022
Order Number: NCS- 290963 -CC
Page Number: 8
LEGAL DESCRIPTION
Real property in the City of Rohnert Park, County of Sonoma, State of California, described as
follows:
PARCEL ONE:
PARCEL 1, AS SHOWN AND DESIGNATED UPON CITY OF ROHNERT PARK, PARCEL MAP NO.
104, FILED FOR RECORD IN THE OFFICE OF THE SONOMA COUNTY RECORDER ON AUGUST 05,
1986 IN BOOK 388 OF MAPS, PAGES 1 AND 2, SONOMA COUNTY RECORDS.
PARCEL TWO:
AN EASEMENT FOR PRIVATE PARKING, ACCESS AND UTILITIES OVER PARCEL 2, AS SHOWN
AND DESIGNATED UPON CITY OF ROHNERT PARK, PARCEL MAP NO. 104, FILED FOR RECORD
IN THE OFFICE OF THE SONOMA COUNTY RECORDER ON AUGUST 05, 1986 IN BOOK 388 OF
MAPS, PAGES 1 AND 2, SONOMA COUNTY RECORDS.
PARCEL THREE:
AN EASEMENT OVER THAT PORTION OF LAND DESIGNATED AS "PARKING EASEMENT A" OVER
PARCEL 2, AS SHOWN AND DESIGNATED UPON CITY OF ROHNERT PARK, PARCEL MAP NO.
104, FILED FOR RECORD IN THE OFFICE OF THE SONOMA COUNTY RECORDER ON AUGUST 05,
1986 IN BOOK 388 OF MAPS, PAGES 1 AND 2, SONOMA COUNTY RECORDS.
PARCEL FOUR:
AN EASEMENT OVER THAT PORTION OF LAND DESIGNATED AS "PARKING EASEMENT B" OVER
PARCEL 2, AS SHOWN AND DESIGNATED UPON CITY OF ROHNERT PARK, PARCEL MAP NO.
104, FILED FOR RECORD IN THE OFFICE OF THE SONOMA COUNTY RECORDER ON AUGUST 05,
1986 IN BOOK 388 OF MAPS, PAGES 1 AND 2, SONOMA COUNTY RECORDS.
PARCEL FIVE:
PARCEL 2, AS SHOWN AND DESIGNATED UPON CITY OF ROHNERT PARK, PARCEL MAP NO,
104, FILED FOR RECORD IN THE OFFICE OF THE SONOMA COUNTY RECORDER ON AUGUST 05,
1986 IN BOOK 388 OF MAPS, PAGES 1 AND 2, SONOMA COUNTY RECORDS.
APN: 143- 061 -066 (Affects: Parcel One) and 143 - 061 -067 (Affects: Parcel Five)
First American TWe Insurance Company
State of California
County of
) ss.
}
On before me,
(insert name and title of the officer), personally appeared
, personally known to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s)
on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature
State of California )
) ss.
County of )
On before me,
(insert name and title of the officer), personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s)
on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature
1005028AC 80078/0022
Attachment No. 4
PROMISSORY NOTE
(COMMISSION ASSISTANCE)
Not to Exceed
$1 ,200,000
2007
Rohnert Park, California
FOR VALUE RECEIVED, RAINBOW -- COPELAND CREEK, LLC, a California limited liability
company ( "Borrower "), having an address of 34975 N. North Valley Parkway, Suite 152, Phoenix, AZ
85086, hereby promises to pay COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
ROHNERT PARK ( "Lender "), the principal sum not to exceed One Million, Two Hundred Thousand
Dollars ($1,200,000), pursuant to the terms and conditions set forth below. All capitalized terms not defined
herein shall have the meaning as defined in the Agreement.
1. Promise to Pay. This promissory note ( "Commission Note ") is made pursuant to that certain
Affordable Housing and Loan Agreement dated 2007, between Borrower as Developer
and Lender as Commission including all Attachments thereto ( "Agreement "). This is a promissory note for
the repayment to Lender of financial assistance provided to Borrower in order to enable Developer to
perform and /or cause TRG- Copeland Creek, LP ( "Owner ") to perform certain work on that certain real
property as described in the Agreement ( "Site ").
2. Secured by Commission Deed of Trust. Payment of this Commission Note is secured by a
pledge of a deed of trust, assignment of rents, security agreement and fixture filing and addendum thereto
(collectively "Commission Deed of Trust ") from Owner to Lender and recorded against the Site.
3. Purpose. Pursuant to the Agreement, Developer will cause Owner to perform certain work
and maintain a 171 -unit permanent affordable rent senior housing complex. The Commission Assistance
shall be used only for those purposes and subject to the terms and conditions set forth in the Agreement.
4. Conditions. Subject to the Conditions Precedent set forth in the Agreement, Commission
agrees to loan to Developer an amount maximum loan of $1,200,000 ( "Commission Assistance "). No
portion of the Commission Assistance shall be utilized for ineligible costs as set forth in California Health &
Safety Code section 33334.2(e). All disbursements shall be held by Developer in trust and applied solely for
the purposes for which the funds have been disbursed as set forth in the Agreement. Commission is not
obligated to monitor or determine Owner's use or application of the disbursements.
5. Interest. Simple interest on the unpaid principal balance will accrue from the date of
advance at an annual rate equal to one percent. Lender's Conditions Precedent to Disbursement are as set
forth in the Agreement. In no event or contingency, whether because of the advancement of the proceeds of
this Commission Note, acceleration of maturity of the unpaid principal balance, or otherwise, shall the
amount paid or agreed to be paid to Lender for the use, forbearance, or retention of the money to be
advanced under this Commission Note exceed the highest lawful rate permissible under applicable usury
laws.
6. Method of Calculating Interest. Interest shall be computed based on a 360 -day year and the
actual number of days elapsed. Interest computed based on a 360 -day year is greater than interest computed
based on a 365 -day year.
7. Payment of Principal and Interest; Maturity Date. So long as Borrower is not in Default
under the Commission Documents, then payments of both principal and interest under this Commission Note
1005028v4C 80078/0022,
shall be deferred until 55 years from the date of the first disbursement hereunder ( "Maturity Date "). The
parties shall mutually acknowledge the Maturity Date in writing. If Borrower is not in Default under the
Commission Documents as of the Maturity Date, then the principal and interest due under the Commission
Note shall be forgiven. Notwithstanding the foregoing if Borrower is in Default under any of the
Commission Documents Commission may elect to declare the entire indebtedness evidenced by this
Commission Note including but not limited to all accrued but unpaid interest hereunder, be due and
payable in full on the Maturity Date. Borrower may prepay this Note at any time without prepayment
penalty or premium.
8. Payment Method and Application. Payment shall be made in lawful money of the United
States to Lender c/o Community Development Commission of the City of Rohnert Park, Attention: Finance
Director, 6750 Commerce Boulevard, Rohnert Park, California 94928. The place of payment may be
changed from time to time as the Lender may from time to time designate in writing. Checks constitute
payment only when collected. Each payment under this Commission Note shall be credited in the following
order: (a) costs, fees, charges, and advances paid or incurred by Lender or payable to Lender and interest
under any provision of this Commission Note or the Commission Deed of Trust, in such order as Lender, in
its sole and absolute discretion, elects; (b) interest payable under the Commission Note; and (c) principal
under the Commission Note. All prepayments of principal under this Commission Note shall be applied to
the most remote principal installment then unpaid.
9. Default. The occurrence of any of the following shall at Lender's option constitute a
"Default" under this Commission Note: (i) Borrower fails to pay any amount due hereunder within 15 days
of its due date; (ii) any default by Borrower under the Commission Documents, subject to any applicable
cure periods provided therein; (iii) any default by Borrower as to any other loan or loans by Lender to
Borrower, or (iv) if Borrower assigns this Commission Note or any proceeds of it, or assigns or delegates any
of Borrower's rights or obligations under this Commission Note, except as provided in the Agreement. If a
Default occurs, Lender may exercise any right or remedy which it has under any of the Commission
Documents, or which is otherwise available at law or in equity or by statute, and all of Lender's rights and
remedies shall be cumulative.
10. Acceleration. At the option of Lender and without notice, the entire unpaid principal and
interest owing on this Commission Note shall become immediately due and payable at or any time after the
following events: (i) if all or any part of the Project, or any interest therein, or any beneficial interest in
Borrower is sold, transferred, mortgaged, assigned, pledged, or further encumbered, whether directly or
indirectly, whether voluntarily or involuntarily or by operational law (collectively, "Transfer ") to the extent
permitted under the terms of the bond issuance from which the Commission Assistance was derived; or (ii) if
a Default occurs. The acceptance of one or more installments after any such event shall not constitute a
I aiver of Lender's option. Lender's failure to exercise such option shall not constitute a waiver of such
option with respect to any subsequent event. Lender's failure in the exercise of any other right or remedy
hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any
right or remedy and no single or partial exercise of any such right or remedy shall preclude any further
exercise thereof. If any payment for or proceeds of the Transfer are paid to or held by a title company or
other third party, Borrower shall instruct such title company or third party to pay Lender directly.
Notwithstanding the foregoing, at any particular time the Project may be encumbered by: (a) liens for taxes,
assessments, or governmental charges not then due and payable or not then delinquent; and (b) liens in favor
of or consented to in writing by Lender.
H. Default Interest. From and after the Maturity Date (either according to the terms of this
Commission Note or as the result of an acceleration of the then unpaid principal balance under the terms of
this Commission Note), the entire unpaid principal balance shall automatically bear an annual interest rate
(instead of the rate specified in Section 5 equal to the lesser of: (a) five percent over the prime interest rate
announced by Wells Fargo Bank, NA, or (b) the maximum interest rate allowed by law ( "Default Rate "). If
1005028AC 80078/0022
any interest payment under this Commission Note is not paid when due, the unpaid interest shall be added to
the principal of this Commission Note, shall become and be treated as principal, and shall thereafter bear like
interest.
12. Attorneys Borrower agrees to pay immediately upon demand all costs and expenses of
Lender including reasonable attorneys' fees, (i) if after default this Commission Note be placed in the hands
of an attorney or attorneys for collection; (ii) if after a Default under any of the Commission Documents,
Lender finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to
collection of this Commission Note against Borrower, any guarantor or any other party liable therefor or to
the protection of its rights under the Commission Documents; or (iii) if Lender seeks to have the Project, or
any portion thereof, abandoned by or reclaimed from any estate in bankruptcy, or attempts to have any stay
or injunction prohibiting the enforcement or collection of the Commission Note or prohibiting the
enforcement of the Commission Deed of Trust or any other agreement evidencing or securing this
Commission Note lifted by any bankruptcy or other court.
13. Defense of Title. If Lender shall be made a party to or shall reasonably intervene in any
action or proceeding, whether in court or before any governmental agency, affecting the property or the title
thereto or the interest of the Lender under the Commission Deed of Trust, including, without limitation, any
form of condemnation or eminent domain proceeding, Lender shall be reimbursed by Borrower immediately
upon demand for all costs, charges and. attorneys' fees incurred by Lender in any such case, and the same
shall be secured by the Commission Deed of Trust as a further charge and lien upon the Project.
14. Waivers; Forbearance. Borrower and any endorsers hereof and all others who may become
liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and
notice of protest, and of dishonor and nonpayment of this Commission Note, and expressly consent to any
extension of the time of payment hereof or of any installment hereof, to the release of any party liable for this
obligation, and any such extension or release may be made without notice to any of said parties and without
any way affecting or discharging this liability. Borrower, endorsers, and all other persons liable or to
become liable on this Commission Note waive presentment, protest, and demand; notice of protest, demand,
and dishonor; and all other notices or matters of a like nature. The pleading of any statute of limitations as a
defense to the obligations evidenced by this Commission Note is waived to the fullest extent permissible by
law. If Lender delays in exercising or fails to exercise any of its rights under this Commission Note, that
delay or failure shall not constitute a waiver of any Lender rights or of any breach, default, or failure of
condition under this Commission Note. No waiver by Lender of any of its rights or of any such breach,
default, or failure of condition shall be effective, unless the waiver is expressly stated in a writing signed by
Lender.
15. Notice. Any notice required to be provided in this Commission Note shall be given in
writing and shall be sent (a) for personal delivery by a delivery service that provides a record of the date of
delivery, the individual to whom delivery was made, and the address where delivery was made; (b) by first -
class certified United States mail, postage prepaid, return receipt requested; (c) by a nationally; recognized
overnight courier service, marked for next day business delivery; or (d) sent by facsimile (immediately
followed by one of the preceding methods). All notices shall be addressed to the party to whom such notice
is to be given at the property address stated in this Commission Note or to such other address as a party may j
designate by written notice to the other. All notices shall be deemed effective on the earliest of (a) actual
receipt; (b) rejection of delivery; (c) if sent by certified mail, the third day on which regular United States
mail delivery service is provided after the day of mailing or, if sent by overnight delivery service, on the next
day on which such service makes next - business -day deliveries after the day of sending.
1005028v4C 80078/0022
To Commission: Community Development Commission
of the City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: Executive Director
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
With a copy to: City of Rohnert Park
6750 Commerce Boulevard
Rohnert Park, California 94928
Attention: City Attorney
Telephone: (707) 588 -2227
Facsimile: (707) 588 -2274
To Borrower Rainbow— Copeland Creek, LLC
34975 N. North Valley Parkway, Suite 152
Phoenix, AZ 85086
Attention: Executive Director
Telephone: (623) 889 -3391
Facsimile: (623) 687 -9472
With a copy to: TRG- Copeland Creek, LP
556 Commercial Street, Suite 300
San Francisco, California 94111
Attention: Executive Director
Telephone: (415) 788 -0700
Facsimile: (415) 788 -0435
With a copy to: Cox, Castle & Nicholson LLP
555 California Street, Tenth Floor
San Francisco, California 94104
Attention: Stephen Ryan, Esq.
Telephone: (415) 262 -5150
Facsimile: (415) 392 -4250
16. Assignment. This Commission Note inures to and binds the heirs, legal representatives,
successors, and assigns of Borrower and Lender; provided, however, that THIS COMMISSION NOTE IS
PERSONAL TO BORROWER AND IS NOT ASSUMABLE OR ASSIGNABLE, and Borrower may not
assign this Commission Note or any proceeds of it, or assign or delegate any of its rights or obligations
except as provided in the Agreement. Any such action on Borrower's part shall constitute a Default under
this Commission Note and the Commission Deed of Trust. Lender in its sole discretion may transfer this
Commission Note, and may sell or assign participations or other interests in all or any part of this
Commission Note, all without the consent of Borrower but with notice to Borrower.
17. Miscellaneous. This Commission Note shall be binding upon Borrower, its successors and
assigns. This Commission Note shall be construed in accordance with and be governed by the laws of the
State of California. If any provision of this Commission Note shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or
impaired thereby. Time is of the essence in this Commission Note. In the event of any conflict between this
Commission Note and the balance of the Commission Documents, the provisions of this Commission Note
1005028v4C 80078/0022 4
shall control. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms
in the Agreement.
18. Borrower Liability. Notwithstanding anything to the contrary set forth in the Agreement,
this Note, the Covenant or the Commission Deed of Trust, the obligations of the Borrower hereunder shall be
without recourse to any member, officer, employee, agent or manager of Borrower and no member, officer,
employee, agent or manager ofthe Borrower shall be personally liable for the payment of any obligation of
the Borrower hereunder. In the event any legal actions or proceedings are brought in respect of such
obligations, any judgment against the Borrower shall be enforced only against the assets of the Borrower and
not against any property of any partner, member, officer, employee, agent or manager of the Borrower.
RAINBOW — COPELAND CREEK, LLC, a California
limited liability company
By: Rainbow Housing Assistance Corporation, a
California nonprofit public benefit
corporation, its Sole Member
LI-M
1005028v4C 80078/0022
Flynann Janisse,
Executive Director
Attachment No. 5
[Standard Form Deed of Trust to be provided by Title Company]
ADDENDUM TO COMMISSION DEED OF TRUST
(COMMISSION ASSISTANCE)
This Addendum to Commission Deed of Trust is part of the Commission Deed of Trust
2007 to which it is attached between TRG- COPELAND CREEK, LP, a California limited partnership, as
Trustor, and RAINBOW - COPELAND CREEK, LLC, a California limited liability company, as Beneficiary.
All capitalized terms not defined herein shall have the meaning as defined in the Agreement. The following
provisions are made a part of the Commission Deed of Trust:
No Discrimination.
A. Trustor covenants by and for itself and any successors in interest that there shall be no
discrimination against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of section 12955 of the Government Code, as those bases are defined in sections
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of section 12955, and section 12955.2
of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
Project, the property, the improvements thereon or any part thereof, nor shall the grantee or any person
claiming under or through him, her or it, establish or permit any practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the Project, the property, the improvements thereon or any part thereof.
B. Al l deeds, leases or contracts trade relative to the Project, the property, the improvements
thereon or any part thereof, shall contain or be subject to, the nondiscrimination clauses set forth in
California Health and Safety Code section 33436.
2. Default. The occurrence of any of the following shall constitute a "Default" under the Owner Note
and this Commission Deed of Trust, and a Default may be declared under this Commission Deed of Trust
solely upon the occurrence of any of the following; (i) any failure by Trustor to pay any amount due under
the Owner Note within 15 days of its due date; (ii) any default by Beneficiary under that certain Affordable
Housing and Loan Agreement dated , 2007, between Beneficiary and Commission
including all Attachments thereto ( "Agreement ") or under any of the Commission Documents, subject to any
applicable cure periods provided therein; (iii) any default by Borrower under the Covenant or the
Development Agreement, subject to any applicable cure periods provided therein; (iv) any default by Trustor
as to any other loan or loans by Beneficiary to Trustor, or (v) if Trustor assigns the Owner Note or any
proceeds of it, or assigns or delegates any of Trustor's rights or obligations under the Owner Note. Upon a
Default hereunder, Beneficiary may, at its option, declare all sums owing under the Owner Note immediately
due and payable.
4. Nonrecourse. Notwithstanding anything to the contrary set forth in the Agreement, the Note, the
Covenant or the Commission Deed of Trust, the obligations of the Trustor hereunder shall be without
recourse to any partner, member, officer, employee, agent or manager of the Trustor, and no partner,
member, officer, employee, agent or manager ofthe Trustor shall be personally liable for the payment of any
obligation of the Trustor hereunder. In the event any legal actions or proceedings are brought in respect of
such obligations, any judgment against the Trustor shall be enforced only against the assets of the Trustor
and not against any property of any partner, member, officer, employee, agent or manager of.the Trustor.
1005028v4C 80078/0022
5. Extended Use Agreement. Beneficiary agrees that the Liens of this Deed of Trust shall be
subordinate to.any extended low- income housing commitment (as such term is defined in Section
42(h)(6)(B) of the Internal Revenue Code) (the "Extended Use Agreement ") recorded against the Property,
provided that such Extended Use Agreement, by its terms, must terminate upon foreclosure under this Deed
of Trust or upon a transfer of the Property by instrument in lieu of foreclosure, in accordance with Section
42(h)(6)(E) of the Internal Revenue Code, subject to the limitations upon evictions, terminations of tenancies
and increases in gross rents of tenants of low- income units as provided in that Section.
6. Scope of Secured Obligations. The Commission Deed of Trust is intended to, and does, secure
Owner's Performance Obligations, Subordinate Financial Obligations, and any and all other Owner
obligations (whether direct obligations or received through assignment from Trustor) under the Owner Note,
the Note Pledge Agreement, the Development Agreement, the Commission Documents, the Subordinate
Financing Documents or the Performance Documents (including the Covenant, the Memorandum of
Agreement, the Commission Deed of Trust, and the Commission Financial Assistance).
TRG- COPELAND CREEK, LP, a California limited
partnership
By: Rainbow- Copeland Creek, LLC, a California limited
liability company, its Managing General Partner
By: Rainbow Housing Assistance Corporation, a
California nonprofit public benefit
corporation, its Sole Member
go
Dated:
Flynann Janisse,
Executive Director
By: Gung Ho- Copeland Creek, LLC, a California
limited liability company, its Co-General Partner
Dated:
1005028v4C 80078/0022 2
By: Gung Ho Partners, LLC, a Delaware limited
liability company; acting with respect to its
series 13, its Sole Member
By: Fidelity Partners, Inc., a California
corporation, its Managing Member
By:
Joseph L. Sherman,
President
"TRUSTOR
[Signatures must be notarized]
State of California )
ss.
County of )
On before me,
(insert name and title of the officer), personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s)
on the instrument the person(s), or the. entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature
1005028AC 80078/0022
Attachment No. 6
CERTIFICATE OF COMPLETION
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
)
Community Development Commission )
of the City of Rohnert Park )
6750 Commerce Boulevard )
Rohnert Park, California 94928 )
Attention: Executive Director )
This document is exempt from the payment of a recording fee
pursuant to Government Code § 27383.
[PARTi1fFLNAL] CERTIFICATE OF COMPLETION
OF CONSTRUCTION AND IMPROVEMENTS
THIS [PARTTAVP)N:. AL] CERTIFICATE OF COMPLETION OF CONSTRUCTION AND
IMPROVEMENTS ( "rPartal/Final] Certificate of Completion ") is made by the COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF ROHNERT PARK, a public body corporate and
politic ( "Commission "), in favor of TRG- COPELAND CREEK, LP, a California limited partnership
( "Owner "), as of the date set forth below.
2. RECITALS
A. Commission and Rainbow — Copeland Creek, LLC ( "Developer ") have entered into that
certain Affordable Housing and Loan Agreement dated 2007, including all Attachments
thereto ( "Agreement ") concerning that certain real property and improvements thereon situated in the City of
Rohnert Park, California, as more fully described in Exhibit "A" attached hereto and made a part hereof.
( "Site ").
B. As referenced in Section 209 of the Agreement, Commission is required to furnish
Developer or Owner or its successors with a [I'arttal/FuralJ Certificate oi`Complehoti ttpon coitipletiori,of.
construction of the [Cornnssion WoxIE (for I?art�arI first ate�nmproyerne�ats�( oral Csrticate)], which
[PartallFinal] Certificate of Completion is required to be in such form as to permit it to be recorded in the
Recorder's Office of Sonoma County. This Par txaiuiah] Certificate of Completion is conclusive
determination of satisfactory completion of the �ommtsstonf Sok/Improvemens as required by the
Agreement.
NOW, THEREFORE, Commission hereby certifies as follows:
1. Owner has fully and satisfactorily completed the ission Work/Improvements] in
0*
conformance with the Agreement.
2. All use, maintenance, operation, nondiscrimination and other covenants contained in the
Commission Documents shall remain in effect and enforceable according to their terms.
1005028AC 80078/0022
3. This [Part alfF.14A Certificate of Completion shall not be deemed or construed to constitute
evidence of compliance with or satisfaction of [(fPartial Certificate} the Pathnprovement or] any
obligation of Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to
Developer in connection with the Project or any portion thereof. This [Pami"inal] Certificate of
Completion is not a notice of completion as referred to in California Civil Code section 3093.
IN WITNESS WHEREOF, Commission has executed this [Parf�allF3raL] Certificate of Completion
this day of 200
COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF ROHNERT PARK,
a public body corporate and politic
By:_
Name:
Its:
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
General Counsel
1005028v4C 80078/0022 5
/Signature must be notarized]
"COMMISSION"
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , 2Q_, before me, (here insert
name and title of the officer), personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
1005028v4C 80078/0022
Exhibit "A"
LEGAL DESCRIPTION OF SITE
1005028v4C 80078/0022
Attachment 7
PROFORMA
[to be inserted]
1005028AC 80078/0022
Attachment 8
SUBORDINATION AGREEMENT
[to be inserted]
1005028AC 80078/0022
Attachment 9
SCOPE OF WORK
[to be inserted]
1005028v4C 80078/0022
Attachment 10
NOTE PLEDGE AGREEMENT
[to be inserted]
1005028AC 80078/0022
Attachment 11
OWNER'S NOTE
[to be inserted]
1005028AC 80078/0022