City of Culver City, California
Agenda Item Report
Page 1 of 10
Meeting Date: January 30, 2012 Item Number: JPH-1
JOINT CITY COUNCIL/CULVER CITY HOUSING AUTHORITY AGENDA ITEM:
PUBLIC HEARING For - (1) Adoption of a City Council Resolution Making Certain
Findings and Approving a Disposition and Development Agreement and the Sale of
Property at 4044-4068 Globe Avenue, Culver City to Habitat for Humanity of Greater
Los Angeles; and (2) Adoption of a Housing Authority Board Resolution Making
Certain Findings and Approving a Disposition and Development Agreement with
Habitat for Humanity of Greater for the Construction of 10 Affordable Ownership
Units located at 4044-4068 Globe Avenue, Culver City; and (3) Approval of a Budget
Amendment Appropriating Housing Set Aside Funds.
Contact Person/Dept.: Tevis Barnes
John Fisanotti
Phone Number: (310) 253-5782
(310) 253-5767
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [X] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [] Date:
Public Notification
Notice by US Postal Service to all property owners/occupants and businesses within a 500
foot radius of the site (approximately 490 recipients) (1/12/2012 and 1/23/2012); and by e-
mail to the Master Notification List (1/27/2012) and published on in the Culver City News on
January 12, 2012 and January 19, 2012. Meetings and Agendas – City Council
(1/27/2012.)
Department Approval:
Sol Blumenfeld: (01/26/12)
City Attorney Approval:
Carol Schwab (01/26/12)
Agency General Counsel Approval:
Murray O. Kane: (01/26/12)
Chief Financial Officer Approval:
Jeff Muir (01/26/12)
City Manager/Executive Director Approval:
John M. Nachbar (01/26/12)
RECOMMENDATION:
Staff recommends the City Council:
(1) Adopt a resolution pursuant to Section 33433 of the California Health and Safety
Code making certain findings and approving a Disposition and Development
Agreement and the sale of 4044-4068 Globe Avenue, Culver City, which was
purchased by the Culver City Redevelopment Agency with Housing Set Aside
Funds (Attachment No. 1); and
(2) Approve a budget amendment appropriating $1,262,500 from the Housing Set
Aside Fund (which are now held in one of the City’s Special Revenue Fund).
A budget amendment requires 4/5ths vote. City of Culver City, California
Agenda Item Report
Page 2 of 10
Staff recommends the Housing Authority Board:
(1) Adopt a resolution making certain findings and approving a Disposition and
Development Agreement (DDA) (Attachment No. 3) between the Culver City Housing
Authority Board (CCHA Board) and Habitat for Humanity of Greater Los Angeles
(Developer) for the sale of 4044-4068 Globe Avenue, Culver City and subsequent
development of 10 ownership affordable housing units. (Attachment No. 2)
PROCEDURE:
(1) Presiding Officer seeks motion from the City Council to receive and file the
affidavit of publication of notice and all correspondence received in
response to the public hearing notices (Attachment No. 5).
(2) Presiding Officer calls for a staff report and/or poses questions to staff as
desired.
(3) Presiding Officer opens the public hearing.
(4) Presiding Officer seeks motion to close the Public Hearing after all
audience testimony, including any written testimony, has been presented.
(5) City Council consider the draft DDA and the proposed sale of the property
and arrives at their respective decisions.
(6) Housing Authority Board consider the draft DDA and the proposed sale of
the property and arrives at their respective decisions
BACKGROUND:
General Information:
In 2005, the Culver City Redevelopment Agency purchased the Site comprised of seven
surplus properties from the California Department of Transportation (Caltrans) for $3.1
million with Housing Set Aside Funds. The properties were acquired by Caltrans as part
of widening of the 405 Freeway. Caltrans is required to dispose of surplus residential
property at less than fair market value to a governmental entity that will use the property
for low and moderate income housing purposes.
On June 13, 2011 the City Council and Agency Board approved the Developer to create
low and moderate income ownership housing and directed staff to negotiate the terms
and conditions of an Exclusive Negotiation Agreement (ENA) for the preparation of a
DDA. Additionally, Council directed staff to examine reducing the number of required
units to 10.
The City Council approved an Exclusive Negotiation Agreement (ENA) with the
Developer on December 5, 2011 related to a proposed DDA for the construction of 10
affordable ownership housing and acquisition of the Site.
City of Culver City, California
Agenda Item Report
Page 3 of 10
Comprehensive Housing Strategy
In March 2008, the Culver City Redevelopment Agency (Agency) reviewed and
approved the implementation of Years 1-2 of the Comprehensive Housing Strategy
(CHS)
1
in order to prioritize affordable housing project development to address the
Regional Housing Needs Assessment requirement and allocate funding.|1010| The approval
of the DDA for the Globe project will bring the total of approved affordable housing units
to 54.
DISCUSSION:
Site Description
The Globe site consists of seven lots and is zoned R-2, Residential Two Family which
allows the development of up to two residential dwelling units per lot. The geometry of the
lots created by the freeway and Edison easements resulted in a substandard depth or
width for some of the lots. Consequently, it will be necessary to process the project
application through a Comprehensive Plan.|1010| A 16.27 foot, non-buildable easement runs
along the easterly property line which reduces the developable area to 27,369 sq. ft. The
west, north and south sides of the Globe site are bound by single-family homes.|1010|
Project Description
The proposed Project consists of 10 for-sale traditionally designed, affordable single-family
townhome units consistent with the property’s R-2 Zoning (Project). The townhomes will
be 3 bedrooms/2 bathrooms. All townhomes will be two stories with the living space on the
first floor and the bedrooms on the second floor. One of the townhomes will be fully
accessible with a downstairs bedroom and full bathroom. All townhomes will incorporate
energy saving appliances and will be constructed using sustainable materials,
environmentally-friendly building practices, and solar panels. The townhomes will be built to
the Leadership in Energy and Environmental Design (LEED) Silver residential standard and
will be at least 10% more efficient than Title 24 requirements.
The driveways are configured to prevent the removal of street trees and to retain as much
street parking as possible. The current number of street parking available is 13 spaces.
The proposed design will result in the loss of 2 street parking spaces reducing the number
to 11. A covered carport or attached garage that accommodates two side-by-side parked
cars will be supplied to each townhome. Conditions, Covenants, and Restrictions (CCRs)
will be imposed on each unit requiring that the areas designated for parking must be
maintained at all times to allow for the parking of one car to prevent the use of street
parking. The project design will also include trash receptacle storage areas discouraging
use of carports and garages for storage of trash containers.
Staff was directed by City Council on December 5, 2012 to pursue a Preferential Parking
District for Globe Avenue and surrounding streets. The Public Works, Engineering Division
is currently investigating the boundaries of the district and the hours of restriction. This City of Culver City, California
Agenda Item Report
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item is projected to be presented for City Council approval in February, 2012. The
Developer is investigating the cost to purchase the enforcement signs on Globe Avenue
which will be negotiated as part of the DDA.
Income and Affordability Restrictions:
Five of the townhomes will be sold to low-income buyers (50%-80% of Area Median
Income or up to $68,300 for a household of 4 persons) and 5 of the townhomes will be sold
to moderate-income buyers (less than 120% of Area Median Income or up to $76,800 for a
household of 4 persons). Each townhome will carry a 45-year affordability covenant per
California Redevelopment Law (California Health and Safety Code 33334.3 (f) (1) (B)).
Public Outreach:
A lengthy public outreach process commenced in 2009. The most recent community
meeting was held on January 12, 2012 to obtain public input on the preliminary project
design and planning.|1010| The next community meeting is scheduled for February 9, 2012. The
Developer will also invite the Council and Globe residents to tour their projects and meet
Habitat homeowners. City staff from Housing, Redevelopment, Planning, Code
Enforcement and Building Safety conducted a tour of the Developer’s Lawndale Project on
June 24, 2011. The project was overall impressive and no concerns were noted.
Developer Description:
Habitat for Humanity International is the largest non-profit home builder in the United
States. The organization’s most noted volunteer and spokesperson is former President
Jimmy Carter. Habitat for Humanity of Greater Los Angeles (Habitat) was formed on July 1,
1990 and has constructed and rehabilitated over 360 homes in Los Angeles County and
300 homes internationally. Based on a philosophy of involving the local community in their
projects, the Developer engages over 10,000 volunteers annually. Habitat has raised $30
million dollars in private donations and sponsorships and been awarded $50 million dollars
in Federal, State and local funding. Currently, they hold approximately $18 million in
assets. Uniquely, the Developer also acts as a mortgage lender and provides in-house no-
interest mortgages to very-low and low-income home buyers. Through their in-house
mortgage lending program, 200 mortgages have been issued with a default rate of less
than 1% within the past 20 years. The revenue from these loans is used to fund additional
loans.
Habitat will be the building contractor for the project and the organization will utilize
volunteer labor in the construction of the homes. Additionally, the families selected to live
in the house will be required to contribute 500 sweat equity hours (250 sweat equity hours
for single or disabled households) toward the construction of their home and/or other
Habitat for Humanity homes.
City of Culver City, California
Agenda Item Report
Page 5 of 10
Cooperation Agreements
On January 15, 2011, the Culver City Redevelopment Agency and the City of Culver
City entered into a Cooperation Agreement For Payment of Costs Associated With
Certain RDA Funded Capital Improvements and Affordable Housing Projects (“Agency-
City Cooperation Agreement”), which provides for the Agency’s payment of costs
incurred by the City to bring about the redevelopment of the Culver City Redevelopment
Project Area, to accomplish various tasks set forth in the Redevelopment Plan and the
Implementation Plan, and to increase, improve and preserve the community’s supply of
affordable housing.
On January 9, 2012, the City of Culver City approved a resolution pursuant to Assembly
Bill No. 26 (2011-2012 1
st
Ex. Sess.) designating the Culver City Housing Authority to
receive the assets and perform the housing functions previously performed by the
Culver City Redevelopment Agency. Additionally, on January 9, 2012 the Culver City
Housing Authority approved a resolution accepting the transfer of the housing assets
and functions of the Culver City Redevelopment Agency.
Furthermore, the City and the Authority have prepared a Cooperation Agreement for
Payment of Costs Associated With Certain Redevelopment Agency Funded Low and
Moderate Income Housing Projects to provide for the Housing Authority’s implementation
of low and moderate income housing projects and programs and to make payments by the
City to the Housing Authority for the cost of the Housing Authority to carry out the terms
and conditions of the above Cooperation Agreement
33433 Summary Report
The sale of the Site is subject to Article 11, Section 33430 et. seq. of the California
Health and Safety Code, which requires: (1) a Notice of Public Hearing published for
two weeks in the local paper; (2) a report pursuant to Section 33433 prepared and
available to the public; a copy of the proposed sale. The summary report pursuant to
Section 33433 is Attachment No. 3 and determines that the proposed sale of the Site to
the Developer will assist in the elimination of blight and will provide housing for low and
moderate income persons.
Environmental Determination
Pursuant to California Environmental Quality Act (CEQA) guidelines, initial review of
the Project by staff established that there are no potentially significant adverse
impacts on the environment and the Project has been determined to be exempt from
CEQA pursuant to Sections 15192, 15194, and 15195 of the CEQA Guidelines
(affordable housing and residential infill exemptions) and Categorically Exempt
pursuant to Section 15332, Class 32 (In-Fill Development Projects). The project is
consistent with applicable policies of the Low Density Two Family General Plan
designation and R2, Residential Two Family Zoning regulations. Furthermore, the City of Culver City, California
Agenda Item Report
Page 6 of 10
project site is substantially surrounded by urbanized and residentially developed uses
and so it has minimal potential as a habitat for endangered, rare or threatened
species. Also, the approval of the project would not result in any significant impacts
relating to traffic, noise, air quality, or water quality. A Notice of Exemption will be filed
with the Los Angeles County Clerk’s office upon approval of the above subject
resolutions.
FISCAL ANALYSIS:
The Agency expended $3.1 million to purchase the Site from Caltrans in 2005. The
development costs for the project are estimated at $3.4 million, which equals approximately
$336,000 per unit or $249 per square foot of gross building area .
Based on an analysis conducted by the City’s financial consultant, Keyser Marston
Associates, Inc. (KMA), the Project requires the Developer to purchase the Site from the
City for a sale price of $751,000. In addition, the Project requires $1.26 million in direct
public financial assistance to achieve financial feasibility. The $1.26 million in direct
financial assistance, plus the $751,000 in land costs, will be treated as a loan to the
Developer. This equates to a $2.01 million City loan, which will be converted into second
trust deed mortgages to the home buyers as each unit is sold.
The Developer will obtain a $1.4 million conventional construction loan and anticipates
receiving $75,000 in WISH Program funds offered by the Federal Home Loan Bank. In
addition, the Developer is committing to receiving $600,000 in Corporate/Faith
Sponsorships grants that are awarded from Habitat for Humanity International from cash
donations. In addition to the Corporate/Faith Sponsorship provided by Habitat for Humanity
International, the Developer will outreach to local businesses/agencies to secure donation
of materials, cash and volunteer builders. The Developer is also willing to apply for Cal
Home funds from the State of California if funding becomes available next year. If
awarded, these funds could be used to reduce the City’s level of financial assistance. The
Cal Home Program provides up to $60,000 per unit for units being sold to low income
home buyers.
Based on the KMA analysis, the market rate sales price of the units is estimated at
$450,000 per unit. To make the homes affordable, the low-income affordable sales price is
set at $212,000 and the moderate-income affordable sales price is set at $285,300. The
Developer will provide first trust deed mortgage loans to the low-income buyers at a zero-
interest rate and a 30-year repayment term. The moderate-income buyers will secure first
trust deed mortgages from a list of lenders that have established relationships with the
Developer.
Agency Financial Assistance $1,262,500
Conventional Loan $1,462,500
Corporate/Faith Sponsorship $ 600,000
WISH $ 75,000
Total Project Budget $3,400,000 City of Culver City, California
Agenda Item Report
Page 7 of 10
To protect the income and affordability covenants being imposed on the Project, each
home will be encumbered with a second deed mortgage. These mortgages will not be
subject to interest and principal payment obligations until the homes transfer title. The
amounts of the second trust deeds are set at $238,000 for the low- income home buyers
and $164,700 for the moderate income home buyers, which totals $2.01 million in second
mortgages. The $2.01 million in second mortgages will be payable to the City if the unit is
resold on an unrestricted basis.
As of June 30, 2011, the cash balance of Housing Set Aside funds was $19.6 million ($16.6
million held by the City in fund 482 and $3 million held by the Housing Authority). The
subject site, 4044-4068 Globe Avenue, is a real estate asset purchased with the Housing
Set Aside Funds and is currently held by the City in fund 482. The Globe Project is
identified in the Cooperation Agreement approved by the City in January 2011 and $2.5
million is earmarked for the Project. There are sufficient funds appropriated in the Fiscal
Year (FY) 2011-2012 Budget (48297410) to fund the requested assistance.
MOTION:
That the City Council
1. Adopt a Resolution making certain findings and approving a Disposition and
Development Agreement and the sale of 4044-4068 Globe Avenue, Culver City,
which was purchased by the Culver City Redevelopment Agency with Housing
Set Aside Funds, to Habitat for Humanity of Greater Los Angeles, pursuant to
Section 33433 of the California Health and Safety Code; And
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City; and
4. Approve a budget amendment appropriating $1,262,500 from the Housing Set
Aside Funds (which are now held in one of the City’s Special Revenue Funds).
A budget amendment requires a 4/5ths vote.
That the Housing Authority Board:
1. Adopt a Resolution making certain findings and approving a Disposition and
Development Agreement between the Culver City Housing Authority and Habitat for
Humanity of Greater Los Angeles for the 4044-4068 Globe Avenue, Culver City and the
subsequent development of 10 affordable ownership residential units; and
2. Authorize Housing Authority Special Counsel to review/prepare the necessary
documents; and
3. Authorize the Executive Director to execute such documents on behalf of the Housing
Authority. City of Culver City, California
Agenda Item Report
Page 8 of 10
ATTACHMENTS:
1. Proposed City Council Resolution making certain findings and approving a
Disposition and Development Agreement and the sale of 4044-4068 Globe Avenue
2. Proposed Housing Authority Resolution making certain findings and approving a
Disposition and Development Agreement
3. Draft Disposition and Development Agreement between the Culver City Housing
Authority and Habitat for Humanity of Greater Los Angeles
4. Summary Report pursuant to Section 33433
5. Affidavit of Proof of Publication
NOTES:
1.
In March 2008, the Agency Board reviewed and approved the implementation of Years 1-2 of the
Comprehensive Housing Strategy (CHS). The CHS intends to improve the City’s affordable housing
stock and meet housing production requirements under the Regional Housing Needs Assessment
(RHNA) through the use of Redevelopment Agency Housing Set Aside Funds. The purpose of the
Housing Set Aside Fund is to “preserve, improve and increase the supply of affordable housing”
(Health and Safety Code Section 33334.2(a)).
Culver City’s RHNA requirement over the next 7 years is 504 housing units, with 294 units designated
for very-low, low and moderate income households.
The CHS is based on the concept of mixed-income, low-density, scattered site affordable housing
developments. Based upon the RHNA requirements, the City must annually develop approximately
17 units of very-low income, 10 units of low-income and 11 units of moderate income housing. During
the last RHNA cycle, the City only produced 29% of its allocation of 650 units. Since 2000, the City,
on average, only creates 8.1 units of multi-family housing per year and has only created twenty-three
(23) units of affordable housing.
Regional Housing Needs Assessment Goals for Culver City
Number
of Units
Income Category % of Area
Median
Income*
Max. Income
Limits+
129 Very-low 50 $42,150
80 Low 80 $68,300
85 Moderate 120 $76,800
211 Above Moderate
(Market)
Above 120 Unrestricted
*2011 Los Angeles Median Income = $63,000
+Income Limits based upon a household size of four (4) persons
2.
Under RHNA, over the next seven years, the City must create 504 units of housing with 294 of those
units being designated for very-low, low and moderate households. The Agency-owned site located at
4044-4068 Globe Avenue is one of three sites identified under Years 1-2 of the CHS.
The housing production sites approved for implementation under Years 1 -2 of the CHS are depicted
in the chart below. These sites have the potential to yield 71 units which include 54 units designated
for very-low, low and moderate income households. On July 26, 2010, the Agency Board approved City of Culver City, California
Agenda Item Report
Page 9 of 10
an Affordable Housing Agreement for the development of the 4043 Irving Site. This project will yield
28 units of housing with 12 units of affordable housing. On March 21, 2011, the Board approved a
Disposition and Development Agreement (DDA) for the development of 32 units of very-low, low and
moderate income affordable housing units and 10,700 sq./ft. of commercial space with Los Angeles
Housing Partnership.
CHS – Years 1 – 2
SITE UNITS HOUSING TYPE AFFORDABILITY
4044-4068
Globe
Avenue
10 Townhomes/
Ownership
5 moderate
5 low
4043 Irving
Place*
28 Rental Housing
Units
16 market
9 moderate
3 low
11042-
11056
Washington
Blvd.
33 Mixed-use/Rental 12 moderate
6 low
14 very low
1 manager
Total 71 16 market
1 manager
26 moderate
14 low
14 very low
3.
Per Section 17.560 of the Zoning Code, a Comprehensive Plan allows for more effective project
design in response to site features, including oddly configured or substandard lots. The
Comprehensive Plan provides a description of development standards, preliminary site plans with the
intent to allow flexibility in the project design in order to create a harmonious environment with
surrounding uses.
4.
The total easement is comprised of a 16.27 foot easement for the freeway retaining/sound wall
footing and ten feet power line easement for Southern California Edison).
5.
The Advisory Committee on Redevelopment (ACOR) reviewed the project on January 8, 2009 and
March 5, 2009. Public meetings on the project demolition were held on March 16, 2009, and October
5, 2009. The selection of the developer was presented to Council on June 13, 2011. For each of the
above activities, public notices were transmitted to all residents and businesses within a 500 foot
radius of the Globe Site. The above meetings produced the following public comments:
? Twelve units is too dense for the neighborhood
? Ten units is still too dense for the neighborhood
? Additional driveways would eliminate street trees
? Additional driveways would decrease street parking in front of Globe Site
? Desire to establish a preferential parking district to discourage parking intrusion from adjacent
commercial uses City of Culver City, California
Agenda Item Report
Page 10 of 10
? Tandem parking garages will not be used
? Only moderate income units
? The homes should be finished in stucco to match the majority of homes across the street from the
site
As note in the above Project Description, the project design preserves all the streets, eliminates
tandem on-site parking, reduces the Project density from the originally proposed 12 to 10 units, and
results in the loss of only 2 on-street parking spaces. Additionally, the Developer is investigating a
siding material that has the same texture as stucco.
6
Estimated Project Development Cost and City Financial Assistance are depicted below:
Units
Total Development Cost Financial Assistance
10 $3,364,000 $1,262,500
Per Unit Cost
10 $336,000 $126,250
Per Sq./ Ft. Cost
(based on GBA=13,500)*
10 $249 $94
*Gross building area
7
Market Value
Buyer Market Value* Affordable Price Silent Second Total
Low
Income
$450,000 $212,000 $238,000 $450,000
Moderate $450,000 $285,300 $164,700 $450,000
*Affordable Price + Silent Second = Market Value
8
Second Trust Deeds Mortgages (silent second)
$238 X 5 = $1,190,000 (moderate income second trust deed mortgage)
+
$164,700 X 5 = $823,500 (low income second trust deed mortgage)
=
______________________________
$2,013,000
MEETING DATE: 01.30.12
AGENDA ITEM: PUBLIC HEARING For - (1) Adoption of a City Council
Resolution Making Certain Findings and Approving a
Disposition and Development Agreement and the Sale of
Property at 4044-4068 Globe Avenue, Culver City to Habitat
for Humanity of Greater Los Angeles; and (2) Adoption of a
Housing Authority Board Resolution Making Certain Findings
and Approving a Disposition and Development Agreement
with Habitat for Humanity of Greater for the Construction of
10 Affordable Ownership Units located at 4044-4068 Globe
Avenue, Culver City; and (3) Approval of a Budget
Amendment Appropriating Housing Set Aside Funds.
ATTACHMENTS
Pages
1. Proposed City Council Resolution making certain
findings and approving a Disposition and Development
Agreement and the sale of 4044-4068 Globe Avenue 1-5
2. Proposed Housing Authority Resolution making certain
findings and approving a Disposition and Development
Agreement 6-10
3. Draft Disposition and Development Agreement between
the Culver City Housing Authority and Habitat for Humanity
of Greater Los Angeles 11-108
4. Summary Report pursuant to Section 33433 109-112
5. Affidavit of Proof of Publication 113
ATTACHMENT 1
1ATTACHMENT 1
2ATTACHMENT 1
3ATTACHMENT 1
4ATTACHMENT 1
5ATTACHMENT 2
6ATTACHMENT 2
7ATTACHMENT 2
8ATTACHMENT 2
9ATTACHMENT 2
10
DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT
(4044, 4048, 4050, 4054, 4058, 4062, AND 4068 GLOBE AVENUE)
By and Between
CULVER CITY HOUSING AUTHORITY
and
HABITAT FOR HUMANITY OF GREATER LOS ANGELES
ATTACHMENT 3
11
i
i
ATTACHMENTS
ATTACHMENT NO. 1 - LEGAL DESCRIPTION
ATTACHMENT NO. 2 - LICENSE AGREEMENT
ATTACHMENT NO. 3 - SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 4 - FORM OF ESCROW AGREEMENT
ATTACHMENT NO. 5 - SCOPE OF DEVELOPMENT
ATTACHMENT NO. 6 - PROJECT BUDGET
ATTACHMENT 3
12
|1010|
DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT
This DISPOSITION, DEVELOPM ENT AND LOAN AGREEMENT (this
“Agreement”) is entered into by and between the CULVER CITY HOUSING AUTHORITY, a
public body, corporate and politic, (the “Authority ”), and HABITAT FOR HUMANITY OF
GREATER LOS ANGELES, a Californi a non-profit corporation (the “ Developer”) as of
January 30, 2012 (“Effective Date”). The Authority and the Developer agree as follows:
RECITALS
A. The Authority has been authorized to admini ster affordable housing activities within the
City boundaries. One major goal of the Authority is to provide affordable owner-occupied
housing for low and moderate income households in the City of Culver City (“City”).
B. The Authority now owns the Property (a s hereinafter defined) located at 4044, 4048,
4050, 4054, 4058, 4062, and 4068 Globe Avenue.
C. The Developer proposes developing 10 for-sale townhome units (the “ Units”), 5 of
which to be sold exclusively to Low Income hom ebuyers and 5 of which to be sold exclusively
to Moderate Income homebuyers at a sales contract price with financing that is structured to
assure that the Purchaser’s total Housing Cost do es not exceed an Affordable Housing Cost (the
“Project”).
D. The Authority will loan to the Developer funds for the acquisition of the Property and
predevelopment and construction of the Project, which will be repaid with second mortgage
loans made by the Authority to the purchasers of the Units, subject to the terms and conditions
set forth herein.
E. It is anticipated that a Federal Home Loan Bank member bank will loan to Purchasers
funds from the Federal Home Loan Bank’s Affo rdable Housing Program through its Workforce
Initiative Subsidy for Homeownership (WISH) Program.
F. In furtherance of the public purposes set forth in California’s Community Redevelopment
Law (Health & Safety Code §33000, et seq.) and the Housing Authorities Law of the State of
California, Sections 34200 et seq. of the California Health and Safety Code (collectively, the
“Housing Law”), and in order to facilitate the Project, the Authority desires to sell the Property
to the Developer subject to the terms of this Agreement.
G. The sale and use of the Property pursuant to this Agreement, and the fulfillment generally
of this Agreement are in the vital and best intere sts of the City of Culver City and the health,
safety, morals and welfare of its residents, a nd in accord with the public purposes and provisions
of applicable federal, state and local laws and requirements.
ATTACHMENT 3
13
Page 2
Now, therefore, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Authority and the Developer hereby agree as follows:
ARTICLE 1 SUBJECT OF AGREEMENT
Section 1.1 Definitions
For purposes of this Agreement, the following capitalized terms shall have the following
meanings:
“Acquisition Price” shall mean that amount which the Developer shall pay to the
Authority for the Property, which shall be $751,000.
“Addendum to Purchaser Grant Deed” shall mean the instrument to be included with
all grant deeds from the Developer to purchasers of the Units, in such form as is reasonably
agreed to by the Parties, to be dated as of the Closing Date,
“Affordable Housing Cost” shall mean Housing Cost that does not exceed the product
of (i) 30% times 70% of Area Median Income adju sted for family size appropriate to the unit for
Low Income homebuyers or (ii) 28-35% times 110% of Area Median Income adjusted for family
size appropriate to the unit for Moderate Income homebuyers. As used in this paragraph,
“family size appropriate to the unit” shall equal the number of bedrooms in the unit plus one.
“Affordable Housing Program” or “AHP” shall mean the Federal Home Loan Bank’s
Affordable Housing Program.
“Affordable Purchase Price” shall mean that portion of the Contract Price for a Unit
that is equal to the sum of a reasonable down pa yment and the Habitat First Mortgage (the terms
of which, based on a 30-year fixed mo rtgage at a zero percent interest rate, will result in a total
Housing Cost that does not exceed the Affordab le Housing Cost) for Low Income homebuyers,
or a private loan for Moderate Income homebuyers.
“Area Median Income” shall mean the median income of the Los Angeles-Long Beach,
CA HUD Metro FMR Area, adjusted for family size by HUD (as hereinafter defined), as
determined by HUD and published annually by the California Department of Housing and
Community Development.
“Assignment of Agreements, Plans, Specifications and Entitlements” shall mean an
Assignment of Agreements, Plans, Specifications, and Entitlements in such form as is reasonably
agreed to by the Parties.
“CalHome Program” shall mean that grant and/or loan program available from the
California Department of Hous ing and Community Development under California Health and
Safety Code Section 50560, et seq., California Code of Regul ations, title 25, Section 7715, et
ATTACHMENT 3
14
Page 3
seq., and the respective grant or loan terms esta blished thereunder designed to assist low and
very-low income households to become or remain homeowners.
“Authority Instruments” shall mean and include this Agreement, the Authority Grant
Deed, including the Addendum to Purchaser Grant Deed, the Authority Note, Authority Deed of
Trust, the Environmental Indemnity, Notice of A ffordability Restrictions and the Assignment of
Agreements, Plans, Specifications, and Entitlements, each in a form that is reasonably agreed to
by Developer and the Authority’s Executive Director or designee.
“Authority Deed of Trust” shall mean the Deed of Tr ust, Security Agreement and
Fixture Filing securing the Author ity Loan, in such form as is reasonably agreed to by the
Parties, to be dated as of the Closing Date, executed by the Developer in favor of the Authority
and recorded on the Closing Date.
“Authority Grant Deed” shall mean the instrument by which the Authority shall convey
title to the Property to the Developer on the Closing Date, in such form as is reasonably agreed to
by the Parties.
“Authority Loan” shall mean that certain loan to be made to Developer by the Authority
in the original principal amount of $2,103,500 in accordance with this Agreement, evidenced by
the Authority Note and secured by the Authority Deed of Trust.
“Authority Note” shall mean the Promissory Note evidencing the Authority Loan in
such form as is reasonably agreed to by the Pa rties, to be dated as of the Closing Date and
executed by the Developer in favor of the Authority.
“Authority Phase I” is defined in Section2.3.1.
“Authority Second Mortgage Loan” shall mean a zero interest deferred payment
second mortgage loan from the Authority to a Purchaser of a Unit in an amount equal to the sales
contract price less the sum of th e Down Payment, the Habitat First Mortgage Loan (or private
loan, as applicable), and all subordinate Pu rchaser down payment a ssistance, including the
CalHome Mortgage Loan (if any) and the WISH Mortgage Loan (if any). The Authority Second
Mortgage Loan shall be eviden ced by a promissory note and secured by, among other things, an
Authority Second Mortgage Loan Deed of Trust that is subordinate to the Habitat First Mortgage
Loan Deed of Trust (or deed of trust for the private loan, as applicable).
“Authority Second Mortgage Loan Deed of Trust” shall mean the subordinate deed of
trust on the Property which secures the Authority Second Mortgage Loan, in such form as is
reasonably agreed to by the Parties.
“Authority Second Mortgage Loan Note” shall mean the promissory note given by a
Purchaser to Authority evidenci ng the Authority Second Mortgage Loan in such form as is
reasonably agreed to by the Parties.
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“Closing” or “Close of Escrow ” shall mean the point in time when all conditions
precedent to the sale of the Property have been satisfied, in accordance with this Agreement.
“Closing Date” shall mean the date of recordation of the Authority Deed of Trust.
“Closing Escrow Instructions” shall mean escrow instructions prepared on behalf of the
Authority relating to the sale of the Property to the Developer.
“Completion” shall mean the point in time when all of the following shall have occurred:
(i) issuance of a certificate of occupancy by the City; (ii) recordation of a Notice of Completion
by the Developer or its contract or; (iii) certification by the De veloper’s architect that such
improvements (with the exception of minor “punch list” items) have been completed in a good
and workmanlike manner and substantially in accordance with the approved plans and
specifications; and (iv) any mechan ic’s liens that have been reco rded or stop notices that have
been delivered have been paid, settled or othe rwise extinguished, discharged, released, waived,
bonded around or insured against.
“Conditions” shall mean, with respect to the Property, the condition of the soil, geology,
the presence of known or unknown faults or defects, or Hazardous Substances, the suitability of
the Property for its intended uses, or the condition of any related public improvements.
“Construction Loan” means a loan obtained by Deve loper for construction costs
associated with the Units to be sold to households of Moderate Income to be secured by all or a
portion of the Property.
“Developer” shall mean Habitat for Humanity of Greater Los Angeles, a California non-
profit corporation, any assignee of or successo r to its rights, powers and responsibilities
permitted by this Agreement, including any Habitat for Humanity entity formed by the division
of Habitat for Humanity of Greater Los Angeles into one or more separate entities, or the merger
of the Developer and/or one or more other Habitat for Humanity entities (such new Habitat for
Humanity entity to be referred to in this Agreement as a New Habitat Entity).
“Development Costs” shall mean all costs which are actually incurred by the Developer
for the acquisition of the Property and the financing, design, development and construction of the
Project, and shall include, wit hout limitation, all of the items of cost set forth in the Project
Budget and similar costs, fees and expenses as approved by the Authority’s Executive Director.
“Down Payment” shall mean the cash payment to be made by a Purchaser towards the
purchase price of a Unit.
“Draw Request” is defined in Section 2.2.3.
“Due Diligence Period” means such period commencing on the date this Agreement is
executed by the Authority and terminating on such date as is set forth in the Schedule of
Performance.
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“Escrow Instructions” means the escrow instructions fo r the deposit of the proceeds of
the Authority Note into an escrow account in accordance herewith.
“Force Majeure” or “Force Majeure Event” shall mean the following events, provided
that they actually delay and interfere with th e timely performance of th e matter to which they
would apply and despite the exercise of dilig ence and good business practices are or would be
beyond the reasonable control of the party claiming such interference: Ac ts of terrorism; war;
insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of
the public enemy; epidemics; quarantine restricti ons; freight embargoes; lack of transportation;
governmental restrictions or priority; litigatio n including litigation challenging the validity of
this transaction or any element thereof; unusually severe weather; inability to secure necessary
labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other
party; acts or failure to act of any Governmental Authority (except acts or failure to act of the
Authority shall not excuse pe rformance by the Authority); the imposition of any applicable
moratorium by a Governmental Authority; or any other causes which despite the exercise of
diligence and good business practices are or would be beyond the reasonable control of the party
claiming such delay and interference. Notw ithstanding the foregoing, none of the foregoing
events shall constitute a Force Majeure Event unless and until the party claiming such delay and
interference delivers to the other party written notice describing the event, its cause, when and
how such party obtained knowledge, the date the event commenced, and the estimated delay
resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice
within 30 days after it obtains actual knowledge of the event.
“Force Majeure Delay” shall mean any delay in taki ng any action required by this
Agreement, proximately caused by the occurrence of any Force Majeure Event.
“Governmental Approvals” shall mean and include any and all general plan
amendments, zoning approvals or changes, re quired approvals and certifications under the
California Environmental Quality Act, tentative and final tract maps, variances, conditional use
permits, demolition permits, excavation/foundation permits, grading permits, building permits,
inspection reports and approvals, certificates of occupancy, and other approvals, permits,
certificates, authorizations, consents, orders, entitlements, filings or registra tions, and actions of
any nature whatsoever required from any Governmental Author ity in order to commence and
complete the construction of the Project.
“Governmental Authority” means the United States, the State of California, the County
of Los Angeles, the City, the Authority or any other political subdivision in which the Property is
located, and any court or political subdivision, agency or instrumentality having jurisdiction over
the Property.
“Habitat First Mortgage Loan” shall mean a loan made by the Developer to a Low
Income Purchaser to be used to pay a portion of the Affordable Purchase Price of the Unit,
which, upon the sale of a Unit to a Purchaser, sh all be secured by the Ha bitat First Mortgage
Loan Deed of Trust and other security instrument s having a lien on the Property that is senior in
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priority to the lien of the Authority Second Mortgage Deed of Trust, the CalHome Third
Mortgage Deed of Trust (if any), and the WISH Fourth Mortgage Deed of Trust (if any).
“Habitat First Mortgage Loan Deed of Trust” shall mean, upon the sale of a Unit to a
Purchaser, the first priority deed of trust on the Propert y, in a form reasona bly agreed to by the
Authority, which secures the Habitat First Mortgage Loan.
“Habitat First Mortgage Loan Documents” shall mean any and all documents executed
in connection with the Habitat First Mortgage Loan, including, w ithout limitation, a promissory
note, loan agreement and Habitat First Mortgage Loan Deed of Trust, in a form reasonably
agreed to by Developer and the Authority’s Executive Director. The Authority shall approve the
form of all Habitat First Mortgage Loan Docume nts prior to execution of such documents by a
Purchaser.
“Hazardous Substances” shall have the meaning set forth in the Environmental
Indemnity.
“Housing Cost” shall have the meaning set forth in Title 25 California Code of
Regulations Section 6920.
“HUD” shall mean the United States Department of Housing and Urban Development.
“Improvements” shall mean the 10 for-sale townhome units and ancillary improvements
to be constructed on the Property in accordance with this Agreement.
“License Agreement” means a License Agreement for entry onto the Property by
Developer during the Due Diligence Period in su bstantially the form attached hereto as
Attachment No. 2.
“Low and Moderate Income Housing Fund” shall mean the Low and Moderate Income
Housing Fund established by the West Washingt on Area, pursuant to California Health and
Safety Code Sections 33334.3 and 33334.6.
“Low Income” shall have the meaning given to the term “lower income” in California
Health and Safety Code Section 50079.5. The upper income limit for Low Income households
shall be the income limits for such households published annually by th e California Department
of Housing and Community Development with adjustments for household size.
“Marketing and Buyer Selection Plan” shall mean a plan for the marketing of the
Units and selection of qualified Purchasers of the Units, to be submitted by Developer to
Authority for Authority approval by the date set forth in the Schedule of Performance.
“Moderate Income” shall have the meaning given to the term “persons and families of
moderate income” in California Health and Safety Code Section 50093(b), adjusted for
applicable household size.
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“Notice of Affordability Restrictions” shall mean the Notice of Affordability
Restrictions on Transfer of Property to be recorded concurrently with the recording of the
Authority Grant Deed in such form as is reasonably agreed to by the Parties.
“Permitted Exceptions” shall mean those encumbrances, liens, taxes, assessments,
easements, rights of way, leases, covenants, agreem ents or other exceptions affecting title to the
Property as of the date of recordation of the Authority Grant Deed which are not disapproved in
writing by the Developer.
“Party” means either Authority or Developer, “ Parties” means both Authority and
Developer.
“Permitted Transfer” shall mean assignment of all or a ny part of this Agreement or any
right therein, or the sale, agreement to sell, transfer, conveyance or assignment of the Property or
any portion thereof or interest therein to any of the following:
a. A New Habitat Entity, as defined in Section 1.4 (b) below;
b. A partnership or joint venture in which (i) the Developer, (ii) an entity
controlled by the Developer, (iii) a New Habitat Entity , as that term is defined above, or (iv) any
combination thereof is a general partner and is in control thereof;
c. The admission of additional ne w general or limited partners, or the
substitution or deletion of partners to any such partnership or jo int venture set forth in b. above,
so long as (i) the Developer, (ii) an entity controlled by the Developer, (iii) a New Habitat Entity,
as that term is defined above, or (iv) any combination thereof, continues in control;
d. A corporation that is wholly ow ned and that is co ntrolled by (i) the
Developer, (ii) an entity controlled by the Devel oper, (iii) a New Habitat Entity, as that term is
defined above, or (iv) any combination thereof;
e. The granting of easements, licen ses or permits to facilitate the
development of the Property;
f. The transfer or conveyance of all or any portion of the Property by
foreclosure or deed of trust or by transfer in-lieu-of foreclosure thereof, and a subsequent transfer
or conveyance of all or any portion of the Property to a third party transferee; and
g. The sale or lease pending sale for occupancy of any Unit to a Purchaser in
accordance with this Agreement.
Except as otherwise provided herein, any tran sfer described in clauses a. through f. shall
not require the approval of the Authority’s Ex ecutive Director or designee. Any sale for
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occupancy of a Unit, as described in clause g., shall be subject to the approval of the Authority’s
Executive Director.
“Plans” shall mean any architectural and cons truction plans and drawings prepared on
behalf of the Developer for Project in accordance with this Agreement.
“Project” shall mean the financing, planning, c onstruction and use of the Property as
provided in this Agreement.
“Project Budget” shall mean the applicable schedule of Project Costs attached to this
Agreement as Attachment No. 6, which is incorporat ed herein by this reference, as such Project
Budget shall be amended from time to time prior to the Closing.
“Property” shall mean the real property, incl uding all improvements thereon, legally
described as set forth in Attachment No. 1, which is incorporated herein by this reference.
“Purchaser” shall mean a person or family of Low Income or Moderate Income.
“Release of Construction Covenants” shall refer to a release of construction covenants
in such form as is reasonably agreed to by the Parties.
“Restricted Period” shall mean the longest feasible time, but not less than 45 years from
the date the grant deed conveying a Unit from the Developer to the initial Purchaser is recorded.
“Schedule of Performance” shall refer specifically to Attachment No. 3 hereof, which is
incorporated herein by this reference.
“Scope of Development” shall refer specifically to Att achment No. 5 hereof, which is
incorporated herein by this reference.
“Title Company” shall mean Lawyers Title Company, or another title insurance
company approved by the Authority’s Executive Director or designee.
“Transfer” shall mean the assignment of all or a ny part of this Agreement or any right
therein, or the sale, agreement to sell, transfer, conveyance, or assignment of the Property or any
portion thereof or interest therein.
“Unit” shall mean one of the 10 for-sale tow nhome units to be constructed on the
Property and sold to a Low In come homebuyer or a Moderate Income homebuyer at an
Affordable Purchase Price in accordance with this Agreement.
“WISH” or “Workforce Initiative Subsidy for Homeownership Program” shall mean
the Federal Home Loan Bank’s Affordable Housing Program subsidy for workforce
homeownership.
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“WISH Fourth Mortgage Loan” shall mean a loan from a member financial institution
to a Purchaser derived from the Federal Ho me Loan Bank’s Affordable Housing Program
through its Workforce Initiative Subsidy for Homeownership (WISH) Program, which shall be
used to pay a portion of the Affordable Purchase Price of a Unit, evidenced by a promissory note
and secured by a WISH Mortgage Loan Deed of Trust, that is subordinate to the Habitat First
Mortgage Loan Deed of Trust, the Authority Second Mortgage Loan Deed of Trust, and any
CalHome Program mortgage loan d eed of trust (if any). The WISH Mortgage Loan shall be a
forgivable loan pursuant to the terms thereof.
“WISH Mortgage Loan Deed of Trust” shall mean a deed of trust, in a form reasonably
acceptable to the Authority, which shall be subordinate to the Habitat First Mortgage Loan Deed
of Trust, Authority Second Mortgage Loan Deed of Trust and CalHome Program mortgage loan
deed of trust (if any), which secures the WISH Fourth Mortgage Loan.
“WISH Mortgage Loan Documents” shall mean any and all documents executed in
connection with the WISH Fourth Mortgage Loan, including, without limitation, a promissory
note, loan agreement and WISH Mortgage Loan Deed of Trust, in a form reasonably acceptable
to the Developer and Authority’s Executive Direct or. The Authority shall approve the form of
all WISH Mortgage Loan Documents prior to execution of such documents by a Purchaser.
Section 1.2 Purpose of Agreement
a. The purpose of this Agreemen t is to provide affordable housing
opportunities in the City of Cu lver City for Low Income homebuyers and Moderate Income
homebuyers by providing for the sale of the Property to the Developer, the Loan of the Authority
Loan to Developer, the construction of the Units by the Developer and thei r sale to Low Income
homebuyers or Moderate Income homebuyers so that their total Housing Cost does not exceed an
Affordable Housing Cost.
b. Subject to the terms and conditions of this Agreement, Authority shall sell
the Property to the Developer, and make the Au thority Loan to Developer, and the Developer
shall construct the Improvements and sell the Units to Low Income ho mebuyers and Moderate
Income homebuyers at an Affordable Purchase Price. Authority shall provide Authority Second
Mortgage Loans to the Purchasers of the Units. The sale of the Property and the construction
and use of the Units pursuant to this Agreement, the financial assistance provided to Developer,
and the fulfillment generally of this Agreement, are in the public intere st and in accord with
applicable federal, state and local laws and requirements.
c. The Property is located in the City of Culver City and is currently owned
by the Authority; subject to the terms and conditions of this Agreement, the Authority will
convey fee title to the Property to the Developer for the Project.
d. By this Agreement, and subject to the terms and conditions herein, the
Authority desires to finance the acquisition of the Property and certain of the Developer’s
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predevelopment, development and construction costs, in the form of the Authority Loan to the
Developer in the original principal amount of $2,103,500.
e. In the event that any general provi sion of this Section 1.2 conflicts with
any specific provision of this Agreement, the specific provision shall prevail.
Section 1.3 Authority
a. The Authority is a public body, corporate and politic, exercising
governmental functions and powers, including those existing under the Housing Authorities Law
of the State of California (California Health and Safety Code § 34200 et seq.). The principal
office of the Authority is located at Attn: So l Blumenfeld, 9770 Culver Boulevard, Culver City,
California 90232-0507.
b. “ Authority” as used in this Agreement includes any assignee of, or
successor to, the Authority’s rights, powers and responsibilities. The Authority represents that it
has sole authority to transfer the Property to Developer and make the Authority Loan.
Section 1.4 Developer
a. The Developer is Habitat for Hu manity of Greater Los Angeles. The
principal address of the Developer for purposes of this Agreement is Attn: Erin Rank, 17700 S.
Figueroa Street, Gardena, CA 90248. The “ Developer” shall mean the Developer and any
assignee of or successor to the rights, powers and responsibilities of the Developer permitted by
this Agreement.
b. The Developer as used in this Agreement includes Habitat for Humanity
of Greater Los Angeles, and any assignee of or successor to its rights, powers and
responsibilities permitted by this Agreement, in cluding any Habitat for Humanity entity formed
by the division of Habitat for Humanity of Great er Los Angeles into one or more separate
entities, or the merger of the Developer and/or one or more other Habita t for Humanity entities
(such new Habitat entity to be referred to in this Agreement as a “New Habitat Entity”).
Section 1.5 Prohibition Against Transfers
a. The qualifications and identity of the Developer are of particular concern
to the Authority. It is because of those qualific ations and identity that the Authority has entered
into this Agreement with the Developer. No voluntary or involuntary successor in interest of the
Developer shall acquire any rights or powers under this Agreement except as expressly set forth
herein.
b. Prior to the completion of the development of the Property and the
issuance of the Release of Construction Covenant s by the Authority, the following shall apply:
(i) except for a Permitted Transfer, the Develope r shall not assign all or any part of this
Agreement or make (or enter into any agreement to make) any total or partial sale, transfer,
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conveyance or assignment of the whole or any pa rt of the Property or Improvements without the
prior written approval of the Authority; and (ii) except as permitted by this Agreement, this
Agreement may be terminated by the Authority, and the Authority may exercise its remedies
pursuant to the Authority Loan D eed of Trust, if there is any significant change (voluntary or
involuntary) in the identity of the President and Chief Executive O fficer of the Developer, Erin
Rank. The parties agree that an assignment of all or any part of this Agreement to Habitat for
Humanity International, or any subsidiary thereo f, is hereby approved. The parties further agree
that, so long as the Developer remains a non-prof it corporation, a routine change in individual
members of the board of directors or officers of the Developer shall not be deemed to constitute
a significant change. The Authority shall no t unreasonably withhold, c ondition or delay it
approval of any matter for which its approval is required. Any disappr oval shall contain the
Authority’s reasons for disapproval.
c. For the reasons cited above, the Developer represents and agrees for itself
and any successor in interest th at, except as otherwise provided he rein, without the prior written
approval of the Authority, there shall be no significant change in the management, the identity of
the President and Chief Executive Officer of the Developer or the degree of control exercised
thereby, by any method or means.
d. The Developer shall promptly notif y the Authority of any and all changes
whatsoever in the identity of the parties in control of the Developer or the degree of control (only
to the extent such changes have the effect of changing the President and Chief Executive Officer
Developer), of which it or any of its officers ha ve been notified or otherwise have knowledge or
information.
e. Any proposed transferee shall have the qualifications and financial
responsibility necessary and adequate as may be reasonably determined by the Authority, to
fulfill the obligations undertaken in this Agreem ent by the Developer. Any proposed transferee,
by instrument in writing satisfactory to the Aut hority and in form recordable among the land
records, for itself and its successors and assign s, and for the benefit of the Authority shall
expressly assume all of the oblig ations of the Devel oper under this Agreem ent and agree to be
subject to all conditions and restrictions applicable to the Devel oper in this Agreement. There
shall be submitted to the Authority for review all instruments and other legal documents
proposed to effect any such tr ansfer; and if approved by the Au thority its approval shall be
indicated to the Developer in writing. The Au thority shall not be obligated to approve any
proposed assignment of the rights of the Developer hereunder if the proposed assignee does not
have the qualifications, development experience or financial capability necessary and adequate to
fulfill the obligations undertaken in this Agreement by the Developer, or if the Authority’s
Executive Director reasonably determines, in light of the public funds being committed
hereunder and the public purposes of this Agreement, that such approval is not otherwise in the
public interest. Consent to one such transaction shall not be deemed to be a waiver of the right to
require consent to future or successive transactions.
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f. In the absence of specific written agreement by the Authority, no
unauthorized Transfer, or approv al thereof by the Authority, shall be deemed to relieve the
Developer or any other party from any obligations under this Agreement.
g. This prohibition shal l not be deemed to preven t the granting of easements
or permits to facilitate the development of the Property or to prohibit or restrict the sale for
occupancy of all or any of the Units (except as otherwise provided in this Agreement). This
prohibition shall not prevent and does not require written approval from the Authority of the sale,
transfer or conveyance of the Property that is a Permitted Transfer. In the case of any proposed
Permitted Transfer, as defined in Section 1.1 of this Agreement, the Developer shall submit to
the Authority’s Executive Director or designee documentation reas onably demonstrating that the
proposed assignment or transfer complies with the standards for a Permitted Transfer described
in the definition of the term “ Permitted Transfer” in Section 1.1 of this Agreement. Upon
approval of such documentation, which shall not be unreasonably withheld, conditioned or
delayed, the Authority’s Executive Director or designee shall c onfirm to the Developer and the
proposed assignee or transferee in writing that such transfer complies with the standards set forth
in the respective provisions of this Agreement.
ARTICLE 2 DISPOSITION OF PROPERTY AND METHOD OF FINANCING
Section 2.1 Sale and Purchase
In accordance with and subject to all the terms, covenants, and conditions of this
Agreement, the Authority agrees to sell the Prop erty to the Developer a nd the Developer agrees
to purchase the Property from the Authority for the Acquisition Price.
Section 2.2 Authority Loans
In accordance with and subject to all the terms, conditions and covenants of this
Agreement, the Authority agrees to lend, and the Borrower agrees to borrow, the original
principal amount of up to $2,103,500, for payment of the Acquisition Price of construction costs
for the Project. The Proceeds of the Authority Loan in an amount equal to $1,262,500 shall be
deposited into an escrow account before Febr uary 1, 2012, for disbursement therefrom in
accordance with the Escrow Agreement upon satisfac tion of the conditions set forth in Section
2.15 and otherwise in accordance with this Agreement. Upon the sale of the Units to Purchasers,
the Authority Loan shall be re paid with the proceeds of the Authority Second Mortgage Loans
made to the Purchasers in accordance herewith.
2.2.3 Draw Requests
For each disbursement requested under the Authority Loan, Developer shall submit, and
Authority shall reasonably approve, a written itemized statement in a form acceptable to
Authority (“Draw Request”). Each Draw Request shall set fo rth the following: (i) a description
of the work performed or to be performed, mate rial supplied and/or deve lopment costs incurred
or due for which disbursement is requested; and (ii) the total amount incurred, expended and/or
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due for each requested Item, less prior disbursement s, if any. Developer shall attach to the Draw
Request invoices or such other appropriate doc umentation to evidence, document, justify and
support the request.
Approval of each Draw Request shall be subject to satisfaction of the requirements of this
Agreement and/or Authority Loan Documents. Authority shall, within 10 Business Days after
receipt of a Draw Request containing all of th e items described above, determine the amount of
the Draw Request to be approved, notify Developer, and disburse the approved amount, by check
or wire transfer to Developer or to the respec tive contractor or subcont ractor. Any item in a
Draw Request which is not specif ically approved in writing with in 10 Business Days shall be
deemed approved. Authority may disapprove all or part of a requested draw request. In the event
Authority disapproves any portion of the am ount requested by Developer (“Disapproved
Amount”), Authority shall promptly notify Developer in writing of the Disapproved Amount and
the reason for disapproval.
In the event of any dispute concerning wh ether any item listed in a Draw Request should
be approved for payment, Authority shall disb urse the amount not in dispute, and fund any
disputed amounts promptly upon resolution of the dispute. In the event Authority and Developer
are unable to resolve any dispute concerning the appropriateness of any item for payment in a
Draw Request, Authority shall not deduct the disapproved amount from the Authority Loan, but
shall disburse the Disapproved Amount for other approved development costs. Authority and
Developer shall seek to resolve any disputes promptly and in good faith.
Authority shall have the right to condition any disbursement upon receipt and approval of
such documentation, evidence or information that Authority may reasona bly request, including,
but not limited to, vouchers, invoices and similar documentation.
Section 2.2.4 Terms of Authority Loan
The Authority Loan shall be evidenced by the Authority Note and secured by the
Authority Deed of Trust, the Assignment of Agreements, Plans, Specifications and Entitlements
and other documents mutually ag reed to by the parties and executed at Closing in connection
with the Authority Loan (collectively referred to herein as the “Authority Encumbrance”). The
remainder of the Authority Loan shall be disb ursed to Developer from Escrow upon satisfaction
of the conditions set forth in Section 2.15.
The Authority Loan shall bear no interest and shall be deemed repaid as to $238,000
upon the making of an Authority Second Mortgage Loan to each Low Income Purchaser of a
Unit, and as to $164,700 upon the making of Aut hority Second Mortgage Loan as to each
Moderate Purchaser of a Unit. The foregoing loan amounts expected to be made to Purchasers
of the Units constitute the estimated “gap” between the total of the first mortgage loan and the
down payment, on the one hand, and the fair mark et value of the Unit upon its sale date on the
other hand. In the event the amount of the gap is insufficient to support the repayment of the
Authority Loan, any remaining balance of the Authority Loan after the making of each Authority
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Second Mortgage Loan shall be forgiven, and the Developer shall have no further repayment
liability therefore.
The Authority Encumbrance shall be senior to any other lien against or security interest
in the Property or the Project a nd will be released from each Unit upon the sale of that Unit to a
Purchaser in conformance with this Agreement; except that, if required by the maker of the
Construction Loan, the Authority Encumbrance ma y constitute a second priority lien against the
Property provided that the Authority is afforded customary protections of a subordinate lender,
such as notice and an opportunity to cure any default under the Construction Loan. Without the
express written consent of the Authority’s Exec utive Director, except for the Construction Loan,
the Developer shall not place any encumbrances or permit any such encumbrances to be placed,
on or against title to the Property, including s ecurity interests that are subordinate to the
Authority Encumbrance.
Section 2.1.2 Authority Second Mortgage Loans
Authority covenants and agrees to make Authority Second Mortgage Loans in an
aggregate amount of $2,103,500 to Pu rchasers of the Units. Each Authority Second Mortgage
Loan shall be a deferred payment second mortgage loan from the Authority to a Purchaser of a
Unit in the amount and on the terms set forth in the Authority Second Mortgage Loan
documents.
The Authority Second Mortgage Loan shall be evidenced by the Authority Second
Mortgage Loan Note and secured by, among other things, an Authority Second Mortgage Loan
Deed of Trust, that is subordina te to the Habitat First Mortgage Loan Deed of Trust, or private
loan, as applicable.
Moderate Income buyers will be provided a list of lenders working with the Developer
and will also receive assistance with the mortgage lending process.
The Authority Second Mortgage Loans sh all be disbursed upon satisfaction of the
conditions set forth in Section 5.6.
Section 2.1.4 WISH Mortgage Loan
The WISH Mortgage Loan shall be a loan by a member financial institution to a
Purchaser derived from the Federal Home Loan Bank’s Affordable Housing Program through its
Workforce Initiative Subsidy for Homeownership (WISH) Program, in an amount not to exceed
$75,000.00, which shall be used to pay a portion of the Affordable Purchase Price of a Unit,
evidenced by a promissory note and secured by an WISH Mortgage Loan Deed of Trust, that is
subordinate to the Habitat First Mortgage Loan Deed of Trust, the Authority Second Mortgage
Loan Deed of Trust, and the CalHome Program mortgage loan deed of trust (if any). The WISH
Mortgage Loan shall be a forgivable loan pursuant to the terms thereof. The funds are awarded
to the buyer and must be applied for four months prior to the sale date.
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Section 2.2 Escrow
The Authority agrees to open an escrow for the sale of the Property, with the
Stewart Title Company or with any other licensed escrow company (the “ Escrow Agent”)
approved by the Authority and the Developer, no later than the date established therefor in the
Schedule of Performance. Not later than the tim e provided in the Schedule of Performance, the
Authority shall cause to be prepared and shall deliver to the Escrow Agent instructions for the
close of escrow (the “Closing Escrow Instructions ”). The Authority’s Ex ecutive Director, or
his designee, and the Developer shall provide such additional or am ended escrow instructions as
may be necessary and consistent with this Agreement.
Section 2.3 Condition of the Property; Environmental
2.3.1 Phase I Environmental Report
Pursuant to the Exclusive Negotia tion Agreement entered into by the
Parties in 2011, the Authority agreed to undertake to complete a Phase I Environmental Property
Assessment (“Authority Phase I”) no later than six (6) weeks from the effective date of the
Exclusive Negotiation Agreement and provide a copy of any reports generated from said
assessment to Developer. In lieu of the foregoi ng obligation, Authority agrees to undertake and
complete the Authority Phase 1 by the date set fo rth in the Schedule of Performance and provide
a copy thereof to Developer within one week of its completion.
2.3.2 Disclosure
Within 30 days of the Effective Date of this Agreement, the Authority
shall deliver to Developer copies of any repo rts in its possession rega rding the Property (the
“Due Diligence Reports”). Other than as may be set forth in the list of Environmental Reports
included in the list of Due Diligence Reports prov ided to Developer by Authority, the Authority
hereby represents and warrants to Developer that the Authority has not received any prior written
notice or communication from a ny government agencies having ju risdiction over the Property,
notifying the Authority or any th ird party of, and the Authority has no actual knowledge of, the
presence of surface or subsurface zone Hazardous Materials in, on, or under the Property, or any
portion thereof.
2.3.3 Developer’s Investigation of the Property
Developer shall have the opportunity to investigate the condition of the
Properties during the Due Diligence Period. Developer may elect, but shall not be required, to
proceed with the Closing prior to the expiration of the Due Diligence Period. Developer
represents that except for the representations , warranties and covenants of the Authority
contained in this Agreement, it has relied and shall rely solely upon (i) its own expertise and that
of Developer’s consultants in purchasing the Pr operties, and (ii) Deve loper’s own knowledge of
the Properties based on its investigations and inspections of the Properties. Developer has
conducted, or by the Closing will conduct, such insp ections and investigations of the Properties
as Developer deemed or shall deem necessary, including, but not limited to, the physical and
environmental conditions of the Properties a nd shall rely upon same. Developer acknowledges
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that the Property Purchase Price reflects the “as is ” nature of this sale and any faults, liabilities,
defects or other adverse matters that may be associated with the Properties.
During Developer’s Due Diligence Period, representatives of Developer
shall have the right to access the Property during regular business hours and upon reasonable
Notice to the Authority for the purpose of obt aining data and conducting surveys and tests
necessary to reasonably assess the suitability of the Property for the Project. Any surveys and
tests conducted on the Property by Developer’s representatives shall be done at the sole expense
of Developer and only after (i) Developer has secured any necessary permits from the
appropriate governmental agencies and (ii) Deve loper has delivered to the Authority a copy of
the Right of Entry and License Agreement (Due Diligence) fully executed and acknowledged by
Developer and satisfied the conditions precedent to Developer’s entry onto the Property set forth
therein.
2.3.4 Developer Approval or Disapproval of Condition of Property
(A) Physical Condition of Property. Developer shall approve or
disapprove of the physical condition of the Prope rty within Developer’s Due Diligence Period.
Developer’s approval of the physical condition of the Property sha ll be both the Authority’s and
Developer’s Condition Precedent to the Closing. If Developer, based upon Developer’s Soils and
Engineering Reports, disapproves of the physical condition of the Property, then Developer may,
in Developer’s sole discretion, terminate the Escrow and this Ag reement by written Notice to the
Authority.
(B) Environmental Condition of Property. In addition, Developer shall
approve or disapprove of the environmental co ndition of the Property within Developer’s Due
Diligence Period. Developer’s approval of the e nvironmental condition of the Property shall be
both Authority’s and Developer’s Condition Preced ent to the Closing. If Developer disapproves
of the environmental condition of the Property, then Developer may terminate the Escrow and
this Agreement by written Notice to the Authority.
(C) Notice to Proceed or Terminate. Prior to the termination of
Developer’s Due Diligence Period, Developer shall deliver to the Authority and Escrow Agent
either (i) Notice of Developer’s intention to proceed with the acquisition of the Property
(“Developer’s Notice to Proceed”), or (ii) Notice of Developer’s intention to terminate Escrow
and this Agreement (“Developer’s Notice to Terminate”).
Developer shall be deemed to have accepted the environmental, physical and other conditions of
the Property upon the Closing for each Property. In the event that Developer delivers
Developer’s Notice to Terminate and such termination is based upon the physical or
environmental condition of the Property, Escrow for that Property shall terminate.
Section 2.4 Review of Title
Not later than thirty (30) days after the Effective Date, the Authority shall cause
Title Company or another title company mutual ly acceptable to the Parties to deliver to
Developer a standard preliminary title report with respect to the Property, together with legible
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copies of the documents underlying the exceptions (the “ Exceptions”) set forth in the
preliminary title report (collectively, the “Preliminary Title Report”).
Developer shall have until the expiration of the Due Diligence Period to give
Notice to the Authority and the Escrow Agent of Developer’s approval or disapproval of the
Preliminary Title Report, including without limita tion any Exceptions. If Developer notifies the
Authority of Developer’s disapproval of any items with respect to the Pr eliminary Title Report,
the Authority shall have the right, but not the ob ligation, to remove any disapproved items after
receiving Notice of Developer’s disapproval or provide assurances reas onably satisfactory to
Developer that such items will be removed or reme died on or before the Closing. The Authority
shall exercise such right by Notice to Developer w ithin ten (10) days of receipt of Notice from
Developer of Developer’s disapprov al. If the Authority cannot or does not elect to remove any
disapproved items, Developer shall ha ve ten (10) days after the expi ration of the Authority’s ten
(10) day election period to either (i) give the Authority Notice th at Developer intends to proceed
with the Closing subject to the disapproved items or (ii) give the Authority Notice that Developer
does not elect to accept the Closing and elects to terminate the Escrow and this Agreement,
whereupon any sums deposited by Developer into Escrow and all interest earned thereon shall be
returned to Developer.
The Exceptions to title approved by Developer as provided herein shall here inafter be referred to
as the “Permitted Exceptions” and/or the “Condition of Title.” Developer shall have the right
to approve or disapprove in the manner provide d in this Section any Exception reported by the
Title Company or otherwise discovered after Developer has approved the Condition of Title
(which are not created by Developer).
Section 2.5 Conveyance of Title and Delivery of Possession
a. Conveyance of title to the Property shall be completed on or prior to the
date specified for Closing in the Schedule of Performance, or such later date as mutually agreed
to in writing by the Authority and the Develo per and communicated in writing to the Escrow
Agent. The Authority and the De veloper agree to perform all acts necessary to convey title in
sufficient time for escrow to be closed in accordance with the foregoing provisions.
b. Possession of the Property sha ll be delivered to the Developer
concurrently with the conveyance of title, except that access and entry may be granted before the
Closing, as permitted pursuant to Section 2.13 of this Agreement.
Section 2.6 Form of Deed
The Authority shall convey to the Developer title to the Property in the condition
provided in Section 2.5 of this Agreement, by the Authority Grant Deed.
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Section 2.7 Condition of Title
The Authority shall convey to the Developer fee simple merchantable title to the Property
free and clear of all liens, encumbrances, assessments, easements, leases and taxes, except the
Permitted Exceptions.
Section 2.8 Closing Date
Subject to any mutually agreed-upon extension of time, the Parties sh all use their best
efforts to satisfy all Conditions Precedent to th e Closing set forth herein prior to the date
specified therefor in the Schedule of Performanc e. The Authority shall not be obligated to
convey the Property to the Develo per unless all the conditions pr ecedent to the Closing have
been satisfied, and such conditions precedent shall be satisfied on or before the date established
for the conveyance of the Property to the Developer in the Schedule of Performance.
Section 2.9 Title Insurance
a. Concurrent with the Closing, the Title Company shall be prepared to issue
the following title insurance policies: (i) to the Developer a CLTA Owner’s policy (the
“Owner’s Title Policy”), insuring that the title is vested in the Developer in the condition
required by Section 2.5 of this Agreement; and (i i) to the Authority an ALTA Lender’s policy
(the “Authority’s Title Policy”), insuring the first priority of th e Authority Loan Deed of Trust.
The Title Company shall provide the Owner’s Title Policy in such amount as the Developer may
specify, and the Authority’s Title Policy in the amount of the Authority Loan.
b. The Authority shall pay the cost of the title insurance premium for the
Owner’s Title Insurance Policy only to the extent of a standard coverage CLTA title insurance
policy on the Property in the amo unt of the Acquisition Price. The Author ity shall also be
responsible for paying the premium for the Author ity’s Title Insurance Policy and any additional
title insurance, including any extended coverage or special endorsements which the Authority
may require.
Section 2.10 Taxes and Assessments
Ad valorem taxes and assessments, if any, on the Property and taxes upon this Agreement
or any rights hereunder levied, assessed, or imposed as to any period prior to the Closing shall be
borne by the Authority. All ad valorem taxes and assessments levied or imposed on the Property
as to any period after the Closing shall be paid by the Developer.
Section 2.11 Possession of Property
The Authority warrants and agrees that title to the Property shall be conveyed free of any
possession and any right of possession except that of the Developer, except as waived by the
Developer in writing, and the Permitted Exceptions.
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Section 2.12 Condition of Property
a. The Property shall be conveyed in an “as is” condition, with no warranty,
express or implied by the Authority as to the cond ition of the Property or the buildings situated
thereon, its soil (or water) conditions, its geology, or the presence of known or unknown seismic
faults.
b. The Developer shall have the ri ght and responsibil ity during the Due
Diligence Period to investigate and determine the soil and seismic conditions of the Property and
their suitability for the Project. The Developer shall perform all work ne cessary to grade, clear
and prepare the Property and to i nvestigate and determine the soil conditions of the Property and
the suitability of the Property for the Project , including, without limitation, flood zones, Alquist-
Priolo Earthquake Fault Zoning Act, and similar matters.
Section 2.13 Preliminary Work by Developer
a. Prior to the conveyance of title, representatives of the Developer shall
have the right of access to the Property at all reasonable times in accordance with the License
Agreement for the purpose of obtaining data, making surveys and tests necessary to carry out this
Agreement.
b. The Developer hereby indemnifies and holds the Authority and its
members, officers, employees, agents and contractors harmless for any injury or damages arising
out of any activity of the Developer, its agen ts, employees and contractors, performed and
conducted on the Property pursuant to the License Agreement and this Section 2.11, except as
the same may be due to the gross negligence or willful misconduct of the Authority. The
Developer shall have access to all data concerning the condition of the Property in the possession
of the Authority.
Section 2.14 Conditions Precedent to Closing
Closing of the conveyance of the Property to Develope r is conditioned
upon satisfaction of the terms and conditions set forth in this Section.
2.14.1 Authority’s Conditions.
Authority’s obligation to close Es crow and convey any Property to
Developer is conditioned upon the satisfaction or wr itten waiver by Authority of each and every
one of the conditions precedent (A) through (O), inclusive, described below (“ Authority’s
Conditions Precedent to Closing”), which are solely for the benefit of Authority, and which
shall be satisfied or waived by the time periods provided for herein. Authority at its option may
terminate this Agreement if any of the conditions precedent set forth belo w are not satisfied by
the Developer or waived in writing by Authority by the Closing Date.
(A) Physical Condition of Property. Prior to the expiration of the
Developer’s Due Diligence Period, Developer shall not have elected to cancel Escrow and
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terminate this Agreement due to the physical co ndition of the Property to be conveyed and shall
not have delivered to Authority a written notice not to proceed.
(B) Environmental Condition of Propert y. Prior to the expiration of
the Developer’s Due Diligence Period, Developer sh all not have elected to cancel Escrow and
terminate this Agreement due to the environmenta l condition of the Property to be conveyed and
shall not have delivered to Authority a written notice not to proceed.
(C) Execution of Authority Instruments. This Agreement shall be in
full force and effect. Developer shall have ex ecuted and delivered into Escrow the Authority
Instruments and such other documents as ma y be reasonably requested by Authority in
connection therewith and all of which shall be in a form acceptable to Authority.
(D) Financing. Developer shall ha ve submitted and the Authority
Manager shall have approved Developer’s Project Budget and evidence of financing.
(E) Schedule of Performance. Developer shall have submitted and
Authority shall have approved a Construction Schedule of Performance dated as of Closing.
(F) Construction Budget. A Construction Budget shall have been
submitted to and approved by Authority.
(G) Construction Drawings. Authority shall have approved the site
plans and final construction drawings for the Property to be conveyed.
(H) General Liability Insurance. Deve loper, at its cost, shall have
procured and be maintaining in full force and e ffect insurance consistent with the requirements
hereof and in the amounts specified therein.
(I) Entitlements. Developer shall have obtained all entitlements
necessary to develop the Property with the Project in the manner contemplated by this
Agreement (which shall be final and not subject to further appeal), including building permits for
the Project, except that this condition shall be deemed satisfied if issuance of all permits
necessary for construction of the Project is subject only to payment of permit fees.
(J) Lender Policy. The Title Compa ny shall, upon payment of the
Title Company’s regularly scheduled premium, be irrevocably committed to issue to Authority
the Authority Lender’s Policy and all reasonably requested endorsements upon the Closing.
(K) Authority Loan. Developer, Authority and any other necessary
third party shall have executed all documents required by Authority in connection with the
Authority Loan, all of which shall be in a form acceptable to Authority, and any documents
required to be recorded in connection therewith shall have been si gned by all parties and
deposited into Escrow.
(L) No Litigation. No litigation shall be pending or threatened by any
third party which seeks to enjoin the transactions contemplated herein or asserts that either Party
or the Parties lack the authority to consummate the transactions contemplated hereby.
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(M) No Default. There shall exis t no condition, event or act which
would constitute an event of default under this Agreement, or which, upon the giving of notice or
the passage of time, or both, would constitute an event of default.
(N) Representations and Warranties. All representations and
warranties of Developer herein contained and contained in this Agreement shall be true and
correct as if made on and as of the date of Closing.
(O) Construction Loan. The Constr uction Loan shall have been
executed by its maker and Developer, and shall be closing concurrently with the Closing.
2.14.2 Developer’s Conditions
Developer’s obligation to close Es crow on the Property is conditioned
upon the satisfaction or written waiver by Develope r of each and every one of the conditions
precedent (A) through (M), inclusive, described below (the “Developer’s Conditions Precedent
to Closing”), which are solely for the benefit of De veloper, and which shall be satisfied or
waived by the time periods provided for herein. Developer at its option may terminate this
Agreement if any of the conditions precedent set forth below are not satisfied by the Authority or
waived in writing by Developer by the Closing Date.
a. Physical Condition of Property. Prior to the expiration of the
Developer’s Due Diligence Period, Developer shall not have elected to cancel Escrow and
terminate this Agreement due to the physical condition of the Propert y and shall not have
delivered a written notice not to proceed to Authority.
b. Environmental Condition of Propert y. Prior to the expiration of
the Developer’s Due Diligence Period, Developer sh all not have elected to cancel Escrow and
terminate this Agreement due to the environmenta l condition of the Prope rty and shall not have
delivered a written notice not to proceed to Authority.
c. Execution of Authority Instruments. This Agreement shall be in
full force and effect. Authority shall have executed and delivered into Escrow all Authority
Instruments to which Authority is a Party an d such other documents as may be reasonably
requested by Developer in connection therewith and all of which shall be in a form acceptable to
Developer.
d. Construction Drawings. Authority shall have approved the site
plans and final construction drawings for the Project.
e. Entitlements. Developer shall have obtained all entitlements
necessary to develop the Property with the Project in the manner contemplated by this
Agreement (which shall be final and not subject to further appeal), including building permits for
the Project, except that this condition shall be deemed satisfied if issuance of all permits
necessary for construction of the Project is subject only to payment of permit fees.
f. Review and Approval of Title. Developer shall have reviewed and
approved the condition of title, as provided herein.
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g. Title Policy. The Title Company shall, upon payment of the Title
Company’s regularly scheduled premium, be i rrevocably committed to issue a Title Policy to
Developer including all Additional Endorsements upon the Closing, in accordance with this
Agreement.
h. Project Feasibility. No event shall have occurred that results in the
Developer determining, in its sole discretion, that the Project is no longer financially feasible.
i. No Litigation. No litigation shall be pending or threatened by any
third party which seeks to enjoin the transactions contemplated herein or asserts that either Party
or the Parties lack the authority to consummate the transactions contemplated hereby.
j. No Default. There shall exis t no condition, event or act which
would constitute an event of default under the Ag reement, or which, upon the giving of notice or
the passage of time, or both, would constitute an event of default.
k. Representations and Warranties. All representations and
warranties of Authority herein contained and contained in this Agreement shall be true and
correct as if made on and as of the date of Closing.
l. Deposit of Funds. Authority shall have deposited or caused to be
deposited into Escrow or the Closing Escrow al l funds necessary for the Authority Loan, the
Authority Second Mortgage Loans and the Closing.
m. Construction Loan. The Constr uction Loan shall have been
executed by its maker and Developer, and shall be closing concurrently with the Closing.
Section 2.15 Conditions Precedent to Funding of Authority Loan
Authority shall not be obligated to rele ase any proceeds of the Authority Loan
escrow until after the Closing has occurred. Subsequent to the Closing, Developer shall submit a
written Draw Request to receiv e disbursement of Authority Lo an Proceeds. Authority shall
instruct escrow to disburse Loan Proceeds not later than ten (10) Business Days after approval by
Authority. Notwithstanding the foregoing, Authority will use commercially reasonable efforts to
cause escrow to disburse loan funds as soon as possible after receipt of a Draw Request.
Upon Closing, the amount of the Acquisition Price shall be deemed disbursed
from the Authority Loan.
Authority shall instruct escrow to disburse Loan Proceeds for Project cost to or on
behalf of Developer only upon satisfaction of the conditions precedent set forth in this Section as
reasonably determined by the Authority Manager. No disbursement of the Loan Proceeds shall
be made until all of the following conditions precedent have been satisfied or waived as
determined by Authority:
2.15.1 Evidence of Expenditure
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Developer shall have submitted to Authority evid ence of expenditure or incurrence of costs,
invoices, receipts, cancelled chec ks or other written documentati on satisfactory to the Authority
Manager evidencing Developer’s incurrence of Project costs.
2.15.2 No Default
There shall be no condition, event or act whic h would constitute an Event of Default by
Developer under the Authority Instruments, or event which upon the giving of notice or the
passage of time, or both, would constitute such an Event of Default.
2.15.3 General Liability Insurance
Developer, at its cost, shall have procured and be maintaining in full force and effect insurance
on the Properties consistent with the requirements hereof.
2.15.4 Representations and Warranties
All representations and warranties of Developer herein contained sh all be true and correct as if
made on and as of the date of the disbursement.
2.15.5 No Stop Notice
No stop notice shall have been served upon or ot herwise delivered to Authority in connection
with the development of the Project or otherwise in connection with the Authority Loan, unless
Developer shall have (or shall be with the procee ds of the requested disbursement) (a) paid and
discharged the same, or (b) effected the releas e thereof by delivering to Authority a surety bond
complying with the requirements of applicable Governmental Regulations for such release.
2.15.6 No Liens
No claim of lien, notice and claim of mechanic’s lien or other similar document or instrument
shall have been recorded against the Property or any portion thereof, unless Developer shall have
(or shall with the proceeds of the requested disb ursement) (a) paid and di scharged the same, (b)
effected the release thereof by delivering to Authority a surety bond complying with the
requirements of applicable Governmental Regulati ons for such release, or by insurance over the
same, or (c) caused the Title Company to commit in writing to issue a policy of title insurance
showing such lien not to be an exception to title.
2.15.7 Applicable Laws
There shall be no condition, event or act of Developer existing in connection with the Project
which constitutes, or would, with the passage of time, constitute a violation of any applicable
law.
Section 2.16 Relationship of Authority and Developer
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Nothing contained in this Agreement or in any other document or instrument made in
connection with this Agreement sh all be deemed or construed to create a partnership, tenancy in
common, joint tenancy, joint venture or co-ownership by or between the Authority and the
Developer. The Authority shall not be in any way responsible or liable for the debts, losses,
obligations or duties of the De veloper with respect to the Pr operty or otherwise, and the
Developer shall not be in any way responsible or liable for the debts, losses, obligations or duties
of the Authority with respect to the Property or otherwise.
Section 2.17 Representations and Warranties
a. As an inducement to the Authority to enter into this Agreement, make the
Authority Loan and convey the Property to the Developer, the Developer hereby represents and
warrants to the Authority, which representations and warranties are true and correct as of the date
of this Agreement and which shall be true as of the Closing:
(1) The Developer has the legal power, right and authority to enter into
this Agreement and the instruments referenced herein, and to satisfy all obligations of the
Developer in this Agreement or in any instrument or document referred to herein (referred to
collectively as the “Developer’s Obligations”);
(2) This Agreement and all documents required hereby to be executed
by the Developer are, and shall be, valid, legally binding obligations of and enforceable against
the Developer in accordance with their terms, subj ect only to applicable bankruptcy, insolvency,
reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the
rights of contracting parties generally;
(3) There is no charter, bylaw , or capital stock provision of the
Developer, and no provision of any indenture, instrument, or agreement, written or oral, to which
the Developer is a party or which governs the ac tions of the Developer or which is otherwise
binding upon the Developer or the Developer’s pr operty, nor is there any statute, rule or
regulation, or any judgment, decree, or order of any court or agency binding on the Developer or
the Developer’s property which would be contravened by the execution, delivery or performance
of any of the Developer’s Obligations;
(4) There is no action, suit, or proc eeding at law or in equity or by or
before any governmental instrumentality or other agency now pending, or, to the knowledge of
the Developer, threatened against or affecting th e Developer, or any prop erties or rights of the
Developer, which, if adversely determined, would materially impair the right of the Developer to
execute or perform any of the Developer’s Obligations, or would ma terially adversely affect the
financial condition of the Developer;
(5) Neither the execution and delivery of this Agreement and
documents referenced herein, nor the incurr ence of the Developer’s Obligations, nor the
consummation of the transactions herein contem plated, nor compliance with the terms of this
Agreement and the documents referenced herein conflict with or result in the material breach of
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any terms, conditions or provisions of, or c onstitute a default under, any bond, note or other
evidence of indebtedness or any contract, indentur e, mortgage, deed of tr ust, loan, partnership
agreement, lease or other agreements or instruments to which the Developer is a party;
(6) No attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy, re organization or other proceedings are pending or
threatened against the Developer, nor are any of such proceedings contemplated by the
Developer;
(7) All reports, documents, instruments, information and forms of
evidence delivered to the Authority concerning or required by this Agreement are accurate,
correct and sufficiently complete to give the Authority true and accurate knowledge of their
subject matter, and do not contain any misrepresentation or omission;
(8) No representation, warranty or statement of the Developer in this
Agreement contains or will contain any untrue stat ement of a material fact or omits or will omit
to state a material fact necessary to make the statements or fact s contained therein not
misleading.
b. As an inducement to the Developer to enter into this Agreement and
develop the Property as provided herein, the Authority hereby repr esents and warrants to the
Developer, which representations and warranties ar e true and correct as of the date of this
Agreement and which shall survive the Close of Escrow:
(1) The Authority has the legal pow er, right and authority to enter into
this Agreement and the instruments referenced herein, to satisfy all of the obligations of
Authority in this Agreement and the instrument s referenced herein and to consummate the
transactions contemplated hereby;
(2) This Agreement and all documents required hereby to be executed
by the Authority are, and shall be, valid, legally binding obligations of and enforceable against
the Authority in accordance with their terms, s ubject only to applicable bankruptcy, insolvency,
reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the
rights of contracting parties generally;
(3) There is no charter or byla w of the Authority, and no provision of
any indenture, instrument, or agreement, written or oral, to which the Authority is a party or
which governs the actions of the Authority or wh ich is otherwise binding upon the Authority or
the Authority’s property, nor is there any statute, rule or regulation, or any judgment, decree, or
order of any court or agency binding on the Au thority or the Authority ’s property which would
be contravened by the execution, delivery or performance of this Agreement or any documents
required hereby to be executed by the Authority;
(4) There is no action, suit, or proc eeding at law or in equity or by or
before any governmental instrumentality or other agency now pending, or, to the knowledge of
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the Authority, threatened against or affecting the Authority, or any properties or rights of the
Authority, which, if adversely determined, would ma terially impair the right of the Authority to
execute or perform the Authority Obligations u nder this Agreement or any documents required
hereby to be executed by the Authority, or would materially adversely affect the financial
condition of the Authority;
(5) Neither the execution and delivery of this Agreement and
documents referenced herein, nor the incurrence of the obligations set forth herein, nor the
consummation of the transactions herein contem plated, nor compliance with the terms of this
Agreement and the documents referenced herein conflict with or result in the material breach of
any terms, conditions or provisions of, or c onstitute a default under, any bond, note or other
evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, lease or other
agreements or instruments to which the Authority is a party;
(6) To the best of the Aut hority’s knowledge, there are no pending,
threatened or contemplated actions, suits, arbitrations, claims or proceedings, at law or in equity,
affecting the Property or in which the Authority is, or to the best of the Authority’s knowledge
will be, a party by reason of this Agreement, in cluding, but not limited to, judicial, municipal or
administrative proceedings in eminent domain, unlawful detainer or tenant evictions, collections,
alleged building code, health and safety or zo ning violations, employment discrimination or
unfair labor practices, or workers’ compensation, personal injuries or property damages;
(7) No attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy, re organization or other proceedings are pending or
threatened against the Authority, nor are any of such proceedings contemplated by the Authority;
(8) All reports, documents, instruments, information and forms of
evidence delivered to the Developer concerning or required by this Agreement are accurate,
correct and sufficiently complete to give the Developer true and accurate knowledge of their
subject matter, and do not contain any misrepresentation or omission;
(9) No representation, warranty or statement of the Authority in this
Agreement contains or will contain any untrue stat ement of a material fact or omits or will omit
to state a material fact necessary to make the statements or fact s contained therein not
misleading;
(10) The Authority is in posse ssion of the funds constituting the
Authority Loan and has the legal right, power an d authority to commit and disburse those funds
to Developer in accordance herewith.
c. Each party’s representations and warranties made in this Section 2.14 shall
be continuing and shall be true and correct as of the date of th e Close of Escrow with the same
force and effect as if remade at that time. The truth and accuracy of each party’s representations
and warranties made herein shall constitute a co ndition for the benefit of the other party to the
performance of such other party’s obligations hereunder.
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ARTICLE 3 DEVELOPMENT OF PROPERTY
Section 3.1 Scope of Development
The Property shall be developed in accordance with and within the limitations established
in the Scope of Development and the schematic plans and specifications attached thereto and
subsequent plans approved by the Authority pursuant to this Agreement and permits issued by
the City. Developer shall submit to the Authority project finish materials submittals no less than
14 days prior to installation of said materials, for review and approval by the Authority.
Section 3.2 Construction Drawings and Related Documents
a. The Developer shall prepare and submit construction drawings and related
documents for the development of the Property to the Authority for review (including, but not
limited to, architectural review) a nd written approval at the times established in the Schedule of
Performance. The construction drawings and related documents shall be submitted in two
stages, preliminary and final drawings, plans a nd specifications. Final drawings, plans, and
specifications are hereby defined as those in su fficient detail to obtain a building permit. Any
items so submitted and approved in writing by the Au thority shall not be subject to subsequent
disapproval. Authority approval shall not be unreasonably withheld or delayed.
b. Progressively detailed plans shall be approved by the Authority if exterior
spaces and areas open to public view do not vary and the plans otherwise do not materially vary
from previously approved plans, and if they ar e a logical evolution of previously approved plans
and conform to the provisions of the Scope of De velopment. In the event of the disapproval by
the Authority of any plans submitted by the Developer, the Authority shall promptly
communicate in writing to the Developer all reasons for such disapproval and all requirements
for subsequent approval of revised plans.
c. During the preparation of all draw ings and plans, the Authority staff and
the Developer shall hold regular progress meetings to coordinate the pr eparation of, submission
to, and review of construction plans and related documents by the Authority. The Authority staff
and the Developer shall communicat e and consult informally as fr equently as is necessary to
insure that the formal submittal of any documen ts to the Authority can receive prompt and
speedy consideration.
d. If any revisions or corrections of plans approved by the Authority shall be
required by a governmental offici al, agency, department or bureau having jurisdiction over the
development of the Property, the Developer and the Authority shall cooperate in efforts to obtain
waivers of such requirements or to develop a mutually acceptable alte rnative. Neither the
Authority nor the Developer shall unreasonably withhold or delay a pproval of a mutually
acceptable alternative. It is the intention of the parties to this Agreement that the plans for the
development of the Property should not be chan ged in any way that makes the development of
the Property economically infeasible. In the event the Authority requires changes to plans which
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materially adversely change the Developer’s reasonable economic assumptions such that the
Project is no longer economically feasible, and the Au thority and the Devel oper are unable to
obtain a waiver of such requirements or agr ee on a mutually acceptable alternative, the
Developer shall have the right, upon 30 days notice to the Authority, to terminate this
Agreement.
Section 3.3 Authority Approval of Plans, Drawings and Related Documents
As provided in Section 3.2 above, the Authorit y shall have the right of reasonable review
(including, but not limited to, arch itectural review) of all plans, drawings and related documents
for the development of the Prope rty, including any proposed changes therein. The Authority
shall approve or disapprove such plans, drawings, and related documents referred to in this
Agreement (and any proposed changes therein), in writing, within the times established in the
Schedule of Performance. Any disapproval shall st ate, in writing, the reasons for disapproval.
The Developer, upon receipt of disapproval shall revi se such portions of the plans, drawings or
related documents in a manner that satisfies the reasons for disapproval and resubmit such
revised portions to the Authority as soon as possible af ter receipt of the no tice of disapproval.
The Authority shall approve or di sapprove such revised portions in the same manner and within
the same times as provided in this Section 3.3 for approval or disapproval of plans, drawings,
and related documents initially submitted to the Authority. No matter once approved shall be
subsequently disapproved.
Section 3.4 Cost of Construction
The cost of developing the Property and constructing all Im provements thereon shall be
the responsibility of the Developer. The Develo pment Costs are set forth in the Project Budget,
which shall be subject to change from time-to-time.
Section 3.5 Schedule of Performance
a. The Developer and the Authority shall perform all acts respectively
required of such party in the Schedule of Performance and this Agreement within the times
provided in the Schedule of Performance, and if no time is provided, within a reasonable time.
b. The Developer shall diligently a nd continuously prosecute to completion
all procedures reasonably necessary for accomplishing the following:
(1) preparation and submission to the Authority of construction
drawings for the Project;
(2) application to the Authority for and approval of a comprehensive
plan and tentative tract map;
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(3) plan check and issuance of all necessary permits;
(4) construction of the Units in accordance with a construction
schedule, with time-lines and milestones, submitted to and
approved by the Authority; and
(5) marketing and sales of the Units.
c. After the Closing, the Developer shall promptly begin and thereafter
diligently prosecute to completion the construc tion of the Improvements as provided in the
Scope of Development. The Developer sha ll begin and complete all construction and
development within the times specified in the Sc hedule of Performance, with such reasonable
extensions of said times as may be granted by th e Authority, which such extensions shall not be
unreasonably withheld or delayed. The Schedule of Performance is subject to revision from time
to time as mutually agreed upon in writing by the Developer and the Authority.
d. During periods of construction, the Developer sha ll submit to the
Authority a written report of the progress of the construction when and as requested by the
Authority. The report shall be in such form an d detail as may be reasonably required by the
Authority and shall include a reasonable number of construction photographs (if requested) taken
since the last report by the Developer.
Section 3.6 Local, State, and Federal Laws
a. The Developer shall carry out th e construction of the Improvements in
conformity with all applicable laws, including a ll applicable federal an d state labor standards
(including, without limitation, the requirement to pay state prevailing wages, if applicable).
b. The Developer shall be responsible for obtaining all Permits and land use
approvals required by the Authority and/or the City for the construction of the Improvements,
ensuring that the use of the Pr operty for the purposes described in this Agreement complies with
the zoning and other City land use regulations (including any applicable exemptions and/or
exceptions) applicable to the Property at the time of Closing.
c. Prior to or concurrently with th e Closing, the Developer shall satisfy all
conditions to the issuance of any Permit required for the developm ent of the Property, other than
transfer of title and payment of fees to be paid upon the Closing. The Authority shall provide
reasonable assistance to the Developer in obtaining these permits.
d. This Agreement is not a “Development Agreement” as provided in Section
65864 et seq. of the California Government Code. The Developer shall comply with all
applicable conditions of approval required by the City.
e. The Developer agrees to carry out development, construction (as defined
by applicable law) and operation of the Im provements on the Property, including, without
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limitation, any and all public works (as defined by applicable law), in conformity with all
applicable local, state and federal laws, includ ing, without limitation, all applicable federal and
state labor laws (including, with out limitation, if applicable, any requirement to pay state
prevailing wages). The Project is a self-help housing project in which no fewer than 500 hours
of construction work associated with the homes are to be performed by the homebuyers and
therefore (except that if any buyers are single parent or disabled households, only 250 “sweat
equity” hours will be required), pursuant to Labor Code Section 1720(c)(6)(A), the construction
of the Improvements is not a “public works pr oject”. The Developer expressly acknowledges
and agrees that the Authority has never previously affirmatively represented to the Developer or
its contractor(s) for the Improvements in writing or otherwise, in a call for bids or otherwise, that
the work to be covered by the bid or contract is not a “public work”, as defined in Section 1720
of the Labor Code. The Developer agrees that the Developer shall have the obligation to provide
any and all disclosures, represen tations, statements, rebidding, a nd/or identifications which may
be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provi sion of law. The Developer agrees that the
Developer shall have the obligation to provide and maintain any and all bonds to secure the
payment of contractors (including the payment of wages to workers performing any public work)
which may be required by the Civil Code, Labor Code Section 1781, as the same may be
enacted, adopted or amended from time to time, or any other provision of law. The Developer
agrees that the Developer shall have the oblig ation, at the Developer’s sole cost, risk and
expense, to obligate any party as may be requ ired by Labor Code Sections 1726 and 1781, as the
same may be enacted, adopted or amended from time to time, or any other provision of law. The
Developer shall indemnify, prot ect, defend and hold harmless th e Authority a nd its elected
officers, employees, contractors and agents, with counsel reasonably acceptable to the Authority,
from and against any and all loss , liability, damage, claim, cost , expense, and/or “increased
costs” (including labor costs, penalties, reasonable attorneys fees , court and litigation costs, and
fees of expert witnesses) which, in connection with the development, construction (as defined by
applicable law) and/or operation of the Improve ments, including, without limitation, any and all
public works (as defined by applicable law), resu lts or arises in any way from any of the
following: (i) the noncompliance by the Developer of any applicable local , state and/or federal
law, including, without limitation, any applicable federal and/or state la bor laws (including,
without limitation, if app licable, the requirement to pay state prevailing wages); (ii) the
implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted,
adopted or amended from time to time, or any other similar law; (iii) fail ure by the Developer to
provide any required disclosure, representation, statement, rebidding and/or identification which
may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provis ion of law; (iv) failure by the Developer to
provide and maintain any and all bonds to secu re the payment of contractors (including the
payment of wages to workers performing any p ublic work) which may be required by the Civil
Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to
time, or any other provision of law; and/or (v) failure by the Developer to obligate any party as
may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. It is agreed by the parties that, in
connection with the development, construction (as defined by applicable law) and operation of
the Improvements, including, without limitation, any public work (as defined by applicable law),
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the Developer shall bear all ri sks of payment or non-payment of state prevailing wages and/or
the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted
or amended from time to time, and/or any other pr ovision of law. “Increased costs” as used in
this section shall have the mean ing ascribed to it in Labor C ode Section 1781, as the same may
be enacted, adopted or amended from time to time. The foregoing indemnity shall survive
termination of this Agreement and shall continue after recordation of the Release of Construction
Covenants.
Notwithstanding the foregoing, the Parties ack nowledge that Developer will utilize a
significant amount of volunteer labor to construct the Project.
Section 3.7 Nondiscrimination During Construction
The Developer, for itself and its successors and assigns, agrees that during the
construction of the Improvements provided for in this Agreement, the Developer will not
discriminate against any employee or applicant fo r employment because of race, color, religion,
sex, or national origin.
Section 3.8 Indemnification and Insurance
a. During the period commencing with execution of this Agreement by the
Authority, and until the issuance of the Release of Construction Covenants, the Developer agrees
to and shall defend, indemnify and hold the Aut hority and its officers, employees, contractors
and agents harmless from and against all claims , liability, loss, damage, costs or expenses
(including reasonable attorneys’ fees and court costs) arising from or as a result of the death of
any person or any accide nt, injury, loss or damage whatsoever caused to any person or to the
property of any person arising direc tly or indirectly out of or related to the actions of Developer
or its officers, employees, contractors or agents in construction of the Project. The Developer
shall not be responsible for (and such indemnity sh all not apply to) any acts, errors or omissions
of the Authority or its officers, employees, contractors or agents.
b. Other than arising from a disp ute between the Developer and the
Authority, the Developer shall indemnify, defe nd, and hold the Authority and its directors,
officers, employees, agents, and successors and assigns (collectively, the “ Indemnitees”)
harmless from and against all suits and causes of action, claims, costs, a nd liability, including,
without limitation, reasonable attorneys’ fees a nd costs of any litigation, or arbitration or
mediation, if any, brought (i) ch allenging the validity, legality or enforceability of this
Agreement (other than an action brought by a third party in connection with Chapter 5, Statutes
2011, First Extraordinary Session (Assembly Bill No. x1 26)) or (ii) seeking damages which may
arise directly or indirectly from the ne gotiation, formation, execution, enforcement or
termination of this Agreement, or which are incident to the performance of the activities
contemplated in this Agreement (other than an action brought by a third party in connection with
Chapter 5, Statutes 2011, First Extraordinary Session (Assembly Bill No. x1 26)). Nothing in
this section shall be construed to mean that the Developer shall hold the Indemnitees harmless
and/or defend them to the extent of any claims arising from, or alleged to arise from the sole
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negligence, willful misconduct or illegal acts of any of the Indemnitees or the Culver City
Redevelopment Agency (the “ Agency”) and its directors, officers, employees, agents and
successors and assigns (collectively the “ Agency Parties”), the failure of the Authority or the
Agency Parties to follow any rule, procedure or law applicable to the Authority or the Agency
Parties (including, without limitation Chapter 5, Statutes 2011, First Ex traordinary Session
(Assembly Bill No. x1 26)), and/or any claims that this Agreement violates any current
agreement to which the Authority or the Agency Parties is subject. The Authority agrees that it
shall fully cooperate with the Developer in the defense of any matter in which the Developer is
defending and/or holding the Indemnitees harmle ss. The Authority may make all reasonable
decisions with respect to its representation in any legal proceeding, including, without limitation,
the selection of attorney(s). This indemnity obligation shall survive the termination of this
Agreement.
c. Prior to the Closing (and until the issuance of the Release of Construction
Covenants), the Developer shall furnish or cause to be furnished to the Authority evidence of the
following policies of insurance, naming the Developer as insured and, except as to the insurance
described in paragraph (iii), below, the Authority as an additional insured.
(i) Fire Policies: the Developer shall maintain or cause to be
maintained a policy or policies of insurance ag ainst loss or damage to the Property or the
Improvements and all property of an insurable nature located upon the Property, resulting from
fire, lightning, vandalism, malicious mischief, riot and civil comm otion, and such other perils
ordinarily included in extended coverage fire insurance policies. Such insurance shall be
maintained in an amount not less than 100% of th e full insurable value of the Improvements, as
defined herein in paragraph d.
(ii) Liability Insurance: the De veloper shall maintain or cause to be
maintained public liability insurance, to protec t against loss from liability imposed by law for
damages on account of bodily inju ry, including death therefrom, suffered or alleged to be
suffered by any person or persons whomsoever on or about the Property and the business of the
Developer on the Property, or in connection with the operation thereof, resulting directly or
indirectly from any acts or activities of the Deve loper or its sublessees, or any person acting for
the Developer, or under its respecti ve control or direction, and also to protect against loss from
liability imposed by law for damages to any prop erty of any person oc curring on or about the
Property, or in connection with th e operation thereof, caused direct ly or indirectly by or from
acts or activities of the Developer or its tenants, or any person acting for the Developer, or under
its control or direction. Such property damage a nd bodily injury insurance shall also provide for
and protect the Authority against incurring any lega l cost in defending claims for alleged loss.
Such bodily injury and property damage insurance shall be maintained in full force and effect
during the Term in the following amounts: commercial general liability in a general aggregate
amount of not less than $2,000,000; and not less than $1,500,000 of bodily in jury and property
damage insurance. It is the mutual intent of the parties that the levels of insurance coverage
described herein shall be and remain comparable to the level of insurance coverage that is
customary with comparable operations in Los Angeles County. At any time during the Term,
and from time to time, either party may provide notice to the other party that the level of
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insurance being maintained by th e Developer is no longer comparab le to the level of insurance
coverage that is customary with comparable oper ations in Los Angeles County, and request that
the minimum limit hereinabove designated shall be changed (either in creased or decreased)
accordingly. The party receiving such request shall not unreasonably withhold its consent to
such change. The Developer agrees that provis ions of this paragraph as to maintenance of
insurance shall not be construed as limiting in any way the extent to which the Developer may be
held responsible for the indemnif ication of the Authority or the payment of damages to persons
or property resulting from the Deve loper’s activities, activities of its tenants or the activities of
any other person or persons for which the Developer is otherwise responsible.
(iii) Workers’ Compensation Insurance: the Developer shall maintain
or cause to be maintained workers’ compensa tion insurance issued by a responsible carrier
authorized under the laws of the State of California to insure employers against liability for
compensation under the workers’ compensation laws now in force in California, or any laws
hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers’
compensation insurance shall cover all persons employed by the Developer in connection with
the Property and shall cover liability within statutory limits for compensation under any such act
aforesaid, based upon death or bodil y injury claims made by, for or on behalf of any person
incurring or suffering injury or death in connection with the Property or the operation thereof by
the Developer. Notwithstanding the foregoing, th e Developer may, in compliance with the laws
of the State of California and in lieu of mainta ining such insurance, self-insure for workers’
compensation in which event Developer shall deliv er to the Authority evidence that such self-
insurance has been approved by the appropriate State authorities.
d. All policies hereunder shall not be subject to cancellation, reduction in
coverage, or non-renewal except af ter notice in writing shall have been sent by registered mail
addressed to the Authority, to the extent practicable within 30 days but in any event prior to the
effective date thereof. All policies may name the Authority and the Developer as insureds,
additional insureds, and/or loss payable parties as their interests may appear.
e. The term “full insurable value” as used in this Section 3.8 shall mean the
actual replacement cost (excluding the cost of excavation, foundation and footings below the
lowest floor and without deduction for depr eciation) of the Improvements on the Property
immediately before such casualty or other loss, including the cost of constructi on, architectural
and engineering fees, and inspection and supervision. To ascertain the amount of coverage
required, the Developer shall cause the full insurabl e value to be determined from time to time
by appraisal by the insurer, by agreement between the Developer and the Authority or by an
appraiser mutually acceptable to the Authority and the Developer.
f. All insurance provided under this Section 3.8 shall be for the benefit of the
Developer and the Authority. The Developer ag rees to timely pay all premiums for such
insurance and, at its sole cost and expense, to comply and secure compliance with all insurance
requirements necessary for the maintenance of such insurance. The Developer agrees to submit
policies of all insurance required by this Section 3.8, or certificates ev idencing the existence
thereof, to the Authority within 30 days prio r to the Closing, indicati ng full coverage of the
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contractual liability imposed hereby. Within 30 days, if practicable, but in any event prior to
expiration of any such policy, copies of renewal policies, or certificates evidencing the existence
thereof, shall be submitted to the Authority. All insurance herein provided for under this Section
3.8 shall be effected under policies issued by insu rers of recognized responsibility, licensed or
permitted to do business in the State of Califor nia reasonably approved by the Authority. All
policies or certificates of insura nce shall provide that such policies shall not be canceled or
limited in any manner without at least 30 days prior written notice to the Authority.
g. If the Developer fails or refuses to procure or maintain insurance as
required by this Agreement, the Authority shall have the right, at the Au thority’s election, and
upon 10 days prior notice to the Developer, to procure and maintain such insurance. The
premiums paid by the Authority shall be treated as a loan, due from the Developer, to be paid on
the first day of the month following the date on which the premiums were paid. The Authority
shall give prompt notice of the payment of su ch premiums, stating th e amounts paid and the
name of the insured(s).
Section 3.9 Disclaimer of Responsibility by Authority
The Authority neither undertakes nor assume s nor will have any responsibility, right or
duty to the Developer or to any third party to review, inspect, supervise, pass judgment upon or
inform the Developer or any third party of a ny matter in connection with the Property. The
Developer and all third parties shall rely upon its or their own judgment regarding such matters,
and any review, inspection, supervision, exercise of judgment or information supplied to the
Developer or to any third party by the Authority in connection with such matter is for the public
purpose of providing affordable housing, and neither the Developer (except for the purposes set
forth in this Agreement) nor any third party is entitled to rely thereon.
Section 3.10 Rights of Access
The Authority shall have the right, at its so le risk and expense, to enter the Property or
any part thereof at reasonable times and with as little interference as possible, for the purpose of
inspecting the Property for purposes of the Devel oper’s compliance with this Agreement. The
representatives of the Authority entering the Property shall be identified in writing in advance by
the Authority’s Executive Director (or his or her designee). Any such entry shall be made only
after reasonable notice to the Developer, an d the Authority shall indemnify and hold the
Developer harmless from any claims or liabiliti es pertaining to such entry. Any damage or
injury to the Property resulting from such entry sha ll be promptly repaired at the sole expense of
the Authority.
Section 3.11 Taxes, Assessments, Encumbrances and Liens
The Developer shall be responsible for pa ying when due all real estate taxes and
assessments, if any, assessed and levied on or against the Property for any period after the
Closing. The Developer’s obligation to pay taxe s and assessments shall terminate as to each
Unit upon the sale and conveyance of title of that Unit to its purchaser. Except as set forth
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herein, the Developer shall not place, or allow to be place d, on the Property or any portion
thereof, any mortgage, trust deed, encumb rance (excluding easements not unreasonably
interfering with the use of the Property) or lien (excluding m echanic’s liens paid prior to
foreclosure or liens for current year property ta xes not paid). The Developer shall remove, or
shall have removed, any levy or attachment made on the Property (or any portion thereof), or
shall assure the satisfaction thereof within a reasonable time but in any event prior to foreclosure.
Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity
or amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to the
Developer in respect thereto. The covenants of the Developer set forth in this Section 3.11
relating to the placement of any unauthorized mortgage, trust d eed, encumbrance or lien, shall
remain in effect until issuance of the Release of Construction Covenants. Neither the Developer
nor any successor owner of the Pr operty shall appeal or challe nge any assessment of the fair
market value of the Property for property tax purposes; notwithstanding the foregoing, the
Developer and successor owners of the Propert y and improvements located thereon shall be
permitted to request that the Los Angeles County Assessor and any appropriate related entity
assess property tax on the affo rdable units based on the afford able housing sales price, or a
similar methodology that acknowledges that the units are subject to affordability restrictions.
Section 3.12 Rights to Plans
a. All work product prepared pursuant to this Agreement, including (but not
limited to), all Plans, construction documents, soils tests and similar reports, Permits and other
entitlements are hereby assigned to the Authority as security for the Developer’s obligations
hereunder. In the event that this Agreement is te rminated prior to Closing, except in the event of
a default hereunder by Authority, the Developer sh all, within 10 days of such termination,
transmit all such work product to the Authority.
b. To effectuate the assignment descri bed in paragraph a., concurrently with
executing a contract with the project architect, the Developer shall execute and deliver to the
Authority an Assignment of Agreements, Plans, Specifications and Entitlements, granting to the
Authority all of the Developer’s rights to: (i) th e Plans prepared pursuant to this Agreement; (ii)
the contract between the Developer and its architect and engineer; (iii) all Permits relating to the
Project; and similar rights and property interests.
Section 3.13 Release of Construction Covenants
a. Promptly after completion of the Improvements, as generally and
specifically required by this Agreement and in particular the Scope of Development and approval
by the Authority of the CC&Rs (as defined in S ection 4.1(e) below), the Authority shall furnish
the Developer with a Release of Constructi on Covenants upon written re quest therefor by the
Developer certifying that the De veloper has completed its construction obligations hereunder.
The Authority shall not unreasonably withhold such Release of Construction Covenants and such
Release of Construction Covenants shall be issued so long as th e Developer has constructed and
developed the Units in accordance with this Agreement, the Authority Grant Deed, and the
Plans. Such Release of Construction Covenants shall be, and shall so state, conclusive
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determination of satisfactory completion of all of the construction required by this Agreement.
The Developer shall not transfer title to any Un it prior to the issuance by the Authority of a
Release of Construction Covenants, but shall have the right to enter into a purchase and sale
agreement with respect to such Unit prior to the issuance of a Release of Construction
Covenants.
b. The Release of Construction Covenant s shall be in such form as to permit
it to be recorded in the Recorder’s Office of Los Angeles County.
c. If the Authority refuses or fails to furnish a Release of Construction
Covenants after written request fr om the Developer, the Authority shall, within 30 days of the
written request, provide the Developer with a written statement of the reasons the Authority
refused or failed to furnish a Release of Cons truction Covenants. The statement shall also
contain the Authority’s opinion of the action the Developer must take to obtain a Release of
Construction Covenants. If the reason for such refusal is confined to the immediate availability
of specific items or materials fo r landscaping, and/or minor items, the Authority will issue its
Release of Construction Covenants upon the posting of a bond by the Developer with the
Authority in an amount representing a fair value of the work not yet completed.
d. Such Release of Construction Cove nants shall not constitute evidence of
compliance with or satisfaction of any obligation of the Develope r to any person. Such Release
of Construction Covenants is no t notice of completion as refe rred to in Section 3093 of the
California Civil Code.
Section 3.14 Use of Project Images
The Developer hereby consents to the use by the Authority of images of the Project, its
models, plans and other graphical representations of the Project and its various elements
(collectively, “Project Images”) in connection with marketi ng, public relations, and special
events, websites, presentations, and other uses required by the Au thority in connection with the
Project. Such right to use the Project Images shall not be assignable by the Authority to any
other party (including, without lim itation, any private party) without the prior written consent of
the Developer. Use by the Authority of Project Images, the Developer’s name or names of its
affiliates will be subject to prior Developer a pproval, which shall not be unreasonably withheld
or delayed. For any Project Imag es provided to the Authority by the Developer, the Developer
shall use reasonable efforts to obtain any rights a nd/or consents from any third parties necessary
to provide these Project Image use rights to the Authority.
Section 3.16 LEED
The Project shall be built to the LEED Silver residential standards and will be at least
10% more efficient than Title 24 requirements
Section 3.17 Consistency with Developer’s Proposal
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Except to the extent specifically set forth he rein, the Project shall be consistent with the
description set forth in that certain proposal dated January 12, 2012.
ARTICLE 4 USE OF PROPERTY
Section 4.1 Uses
The Developer covenants and agrees (for itself, its successors, its assigns, and
every successor in interest to th e Property or any part thereof) th at the Developer, its successors
and assigns shall use the Property as follows:
a. The Developer, its successors and assigns shall develop the Property
exclusively to provide affordable housing for Low Income homebuyers and Moderate Income
homebuyers, as provided in this Agreement and the Authority Grant Deed;
b. The Developer shall sell Units only to Purchasers, for an Affordable
Purchase Price. This requirement shall be d eemed satisfied for each Unit when the Developer
has sold that Unit to a Purchaser in accordance with this Agreement.
c. The Developer shall be responsible for obtaining all source documentation
evidencing income as required by this Agreement. The Developer shall provide priority in the
selection of Purchasers to persons and families who have been displaced as a result of the
acquisition of property by the Aut hority or by other redevelopment activities in the Authority.
To the extent permitted by law, the Developer shall provide priority to Purchasers who live or
work in the City of Culver City (“Culver City Residents”). The Developer shall cooperate with
the Authority prior to the initial sale of any Units to effectuate this provision. The Developer
must accept any Authority displacee or Culver City Resident who meets the Developer’s
selection criteria. To implement this provision, the Developer agrees to provide notice to the
Authority, in writing, prior to beginning to market Units and shall have received Authority
approval of the Marketing and Buyer Selection Plan (“ Marketing Plan”) consistent with the
terms and provisions of this Agreement. This requirement shall be deemed satisfied when the
Developer has sold all of the Units to qualifie d Low Income homebuyers and Moderate Income
homebuyers in accordance with this Agreement.
d. Prior to initial sale and occupancy of any Unit, the Developer shall prepare
and submit to the Authority’s Executive Director for approval (i) all documents required to be
submitted by the Developer to the California Department of Real Estate; and (ii) all documents
required to be submitted pursuant to The Davis-Stirling Common Interest Development Act,
including but not limited to articles of inco rporation, the by-laws, the condo plan and the
Homeowner Association’s Covenants, Conditions and Restrictions (“ CC&Rs”). The CC&Rs
shall be recorded against the Property and run with the land and shall incorporate the
maintenance obligations set forth in Section 4.2 of this Agreement. Until such time as all the
Units are sold to Purchasers, the Property shal l be maintained in accordance with the CC&Rs
approved by the Authority.
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Section 4.2 Maintenance of Property
Until such time as all the Units are so ld to Purchasers, Developer covenants and
agrees that the Developer and/ or the homeowner’s association, for so long as Developer is a
member of such association, shall maintain the interior and exterior of the improvements and the
landscaping on the Property in a manner consistent with community standards which will uphold
the value of the Property, in accordance with this Agreement, the Authority Grant Deed and the
Culver City Municipal Code (the “Code”), as follows:
a. Exterior Maintenance. All exterior, painted surfaces of any structures
located on the Property shall be maintained at al l times in a clean and presentable manner. Any
such defacing marks shall be cleaned or removed within a reasonable time.
b. Front and Side Exteriors. The Deve loper shall, at all times, maintain the
front exterior and any visible side exteriors and yards, if any, in a clean, safe and presentable
manner.
c. Graffiti Removal. All graffiti, and defacement of any type, including
marks, words and pictures, must be removed fr om the Property and any necessary painting or
repair completed within a reasonable time, but in no event more than 1 week after notice to the
Developer from the Authority.
d. Landscaping. All landscaping surrounding the Property shall be
maintained in a manner consistent with standard s of the Code and any rules, regulations and
standards adopted pursuant to the Code. In a ddition, for example, the yard areas shall not
contain the following: (i) lawns with grasses in excess of 9 inches in height; (ii) trees, shrubbery,
lawns or other plant life which are dying from a lack of water or other necessary maintenance;
(iii) trees and shrubbery grown uncontrolled without proper pruning; (iv) vegetation so
overgrown as to be likely to harbor rats or vermin; (v) dead, decayed or diseased trees, weeds
and other vegetation; and (vi) inoperative irrigation systems.
e. Maintenance by Developer. Until such time as all the Units are sold to
Purchasers, Developer shall, at his, her or their sole cost and expense, maintain and repair the
Property and the improvements thereon, keeping the same in good condition and making all
repairs as may be required by this Agreement, the Authority Grant Deed and the Code.
f. Damage and Destruction Affecting Property -- Duty to Rebuild. Until a
Unit is old by Developer to a Purchaser, all or any portion of the Unit is damaged or destroyed
by fire or other casualty, it shall be the duty of th e Developer to rebuild, repair or reconstruct the
Property in a timely manner to restore it to Code compliance condition.
g. Variance in Exterior Appearance and Design. Until a Unit is old by
Developer to a Purchaser, if a Unit is damaged or destroyed by casualty, the Developer may not,
without the prior written consent of the Authorit y, reconstruct, rebuild or repair the Unit in a
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manner which will provide different exterior app earance and lot design from that which existed
prior to the date of the casualty.
h. Time Limitation. In the event of damage or destruction of a Unit prior to
sale to a Purchaser due to casualty, the Develope r shall be obligated to proceed with all due
diligence to commence reconstruction within 2 mont hs after the damage occurs and to complete
reconstruction within a reasonable time after da mage occurs, unless prevented by causes beyond
the reasonable control of the Developer.
i. Inspection. In the event the Au thority, in the sole discretion of the
Authority’s Executive Director, determines that the Developer has failed to maintain any Unit
prior to the sale of such Unit to a Purchaser, the Authority, or its designee, on 2-weeks’ prior
written notice of any noted code violations and maintenance de ficiencies (collectively, the
“Deficiencies”), shall have the right, but not the oblig ation, to enter the Property, correct any
Deficiency, and hold the Developer responsible for the cost ther eof. Any cost incurred by
Authority to cure any such Deficiency, until paid, shall constitute a lien on the Property pursuant
to Civil Code Section 2881.
Upon sale of each of the Units, the Developer shall have be deemed to assign its
responsibilities pursuant to this Section 4.2 to the Purchasers of the Units or homeowners
association. It is the intention of the parties to this Agreement that the Developer’s obligations
pursuant to this section shall be transferred to the homeowners association as to common areas,
and to each Purchaser of a Unit as to the respective Units.
Section 4.3 Obligation to Refrain from Discrimination
The Developer shall refrain from restri cting the rental, sale or lease of the
Property or any Unit on the basis of sex, sexual orie ntation, marital status, race, color, creed,
religion, ancestry or national origin of any person. All deeds, leases or contracts shall contain or
be subject to substantially the following nondiscrimination or nonsegregation clauses:
1. In deeds: “The grantee herein cove nants by and for himself or herself, his
or her heirs, executors, administra tors, and assigns, and all persons
claiming under or through them, that there shall be no discrimination
against or segregation of, any pers on 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 C ode, 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 pr actice or practices of discrimination
or segregation with reference to th e selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The fore going covenants shall run with the
land.”
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2. In leases: “The lessee herein covena nts by and for himself or herself, his
or her heirs, executors, administra tors, 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 ag ainst 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 C ode, 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 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.”
3. In contracts: “There shall be no di scrimination 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 Secti ons 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 th e land, nor shall th e transferee itself
or any person claiming under or through him or her, establish or permit
any such practice or practices of discrimination or segregation with
reference to the selection, location, nu mber, use, or occupancy, of tenants,
lessees, sublessees, subtenants, or vendees of the land.”
Section 4.4 Effect and Duration of Covenants
The covenants established in this Agreem ent shall, without regard to technical
classification and designation, be binding on the Developer and any successor in interest to the
Property or any part thereof for the benefit a nd in favor of the Authority, its successors and
assigns, and the Authority. The covenants shall remain in effect for the respective time periods
set forth in this Agreement and in the Authority Grant Deed, in cluding the Addendum to
Purchaser Grant Deed. The covenants against di scrimination in Section(s) 3.7 and 4.3 of this
Agreement shall remain in effect in perpetuity.
Section 4.5 Effect of Violation of Terms and Provisions of Agreement
The Authority is deemed a beneficiary of the terms and provisions of this Agreement and
the covenants herein, both for and in its own right and for the purposes of protecting the interests
of the community and other parties, public or pr ivate, for whose benefit this Agreement and the
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covenants running with the land have been provide d. The Authority shall have the right if the
covenants contained in this Agreement are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing
of such breaches to which it or any other beneficiaries of this Agreement and covenants are
entitled.
Section 4.6 Hazardous Substances
At the Closing, the Developer shall ex ecute and deliver to the Authority an
Environmental Indemnity, in such form as is reasonably agreed to by the Parties.
ARTICLE 5 SALE OF THE UNITS
5.1 Sales; Proceeds
Developer acknowledges that the purpose of the sale of the Property to Developer
and the Authority Loan is to encourage affordable homeownership among Low and Moderate
Income households. Pursuant to such purpose, upon the completion of construction of the Units,
Developer agrees to make availa ble, hold for sale and sell the Units at fair market value to
Purchasers consistent with applicable requi rements of this Agreement, the Community
Redevelopment Law and all applicable Government al Regulations at the time of sale of the
Units. Notwithstanding that the contract price for the sale of the Units shall be at fair market
value, the terms of the financing utilized in the sale of each Un it shall result in an Affordable
Housing Cost to the Purchaser of each Unit.
In connection with the sale of each Unit to a Low Income buyer, Developer shall
provide the Habitat First Mortga ges (as hereinafter defined) and Authority shall provide the
Authority Second Mortgage Assistance in th e amount of $238,000 per Unit; and, in accordance
with the terms set forth herein in connection with the sale of each Unit to a Moderate income
Purchaser, the Authority shall provide the Author ity Second Mortgage Assistance in the amount
of $164,700 per Unit in accordance with the terms set forth herein.
Authority acknowledges and agrees that but for the Authority’s commitment to
make the Authority Second Mortgage Loans in accordance herewith, Developer would not have
agreed to purchase the Property, develop the Project and enter into this Agreement.
5.2 Conversion of Authority Loan
Subject to (i) the satisfaction of all app licable Governmental Regulations, (ii) the
satisfaction of the conditions set forth below, and (iii) any additional requirements reasonably
imposed by Authority, Authority shall convert the Authority Loan to Authority Second Mortgage
Assistance on a unit by unit basis and such convers ion shall be a credit against the outstanding
Authority Loan amount. Developer shall require that Purchasers utilize the Second Mortgage
Assistance. Any Authority Loan amounts remaining after such conversion and repayment of the
Authority Loan shall be forgiven, and Develope r shall have no further obligation for repayment
of the Authority Loan.
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5.3 Authority Second Mortgage Assistance
Upon satisfaction of the conditions set forth herein, Authority shall provide to
Purchasers of the Units second mortgage loans (collectively “Authority Second Mortgage
Assistance”) as follows: $238,000 per Unit for each of 5 Units to be sold to Low Income
Purchasers, and $164,700 per Unit for each of 5 Units to be sold to Moderate Income Purchasers.
The Authority Second Mortgage Assistance sh all be provided to Purchaser of the
Units in the form contemplated by the approp riate Authority Second Mortgage Documents and
secured by the appropriate Unit. The Deve loper First Mortgages and Authority Second
Mortgages shall be entered into concurrently with the sale of the Units to any Purchaser.
5.4 Second Mortgage Assistance Documents and Terms
Each Purchaser of a Unit who qualifies as a Low or Moderate Income household
and receives Authority Second Mortgage Assistance shall be required to execute loan documents
as required by Authority, such as a loan agreem ent, promissory note, agreement of conditions,
covenants and restrictions and similar documents as determined by Authority in accordance with
all applicable Governmental Regulations. Th e Second Mortgage Assistance Documents shall
document the terms of the Second Mortgage A ssistance in accordance with all applicable
Governmental Regulations, and shall include, at a minimum, the following terms (unless
prohibited by Governmental Regulat ions): (i) payments shall be deferred during the Restricted
Period; (ii) subject to earlier payment due to breach or sale of the Unit, principal shall not be due
until the first transfer after the expiration of the Restricted Period; and (iii) the sale of the Unit
shall be restricted to sales to a Moderate Income Purchaser at a sales price resulting in an
Affordable Housing Cost consistent with th e requirements of the Community Redevelopment
Law during the Restricted Period.
5.5 Additional Purchaser Requirements
Subject to the requirements of all appli cable Governmental Regulations, prior to
the purchase and sale of the Units, any proposed Purchaser must (i) demonstrate ability to pay
the appropriate down payment specific to the underwriting guidelines of the conventional or
governmental loan program applied for; and (ii) have sufficient credit worthiness to qualify for
and obtain a first trust deed financing at a fixed rate of intere st. The proposed Purchaser must be
legally residing in the United States and have appropriate documentation demonstrating such
legal residence.
Upon determining that a prospective buyer is a Purchaser, Developer may require
such proposed Purchaser to make a good faith de posit towards the purchase in an amount not to
exceed $2,000, provided, however, that such good faith deposit shall be fully refunded to such
prospective purchaser in the event that: (i) De veloper cancels the propos ed sale; or (ii) the
prospective purchaser cancels the sale later than 60 days prior to the agreed upon close of escrow
for such Unit.
5.6 Conditions Precedent to Authority Second Mortgage Assistance
Subject to the terms of this Agreem ent and all applicable Governmental
Regulations at the time of sale of the Unit, Aut hority agrees to provide to each Purchaser of a
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Unit the Second Mortgage Assistance as set forth herein, upon satisfaction of the following
conditions:
5.6.1 Purchaser
The buyer(s) of the Unit shall have satisfactorily de monstrated to
Developer and Authority his/her/ their status as a Low or M oderate Income household in
accordance with the terms and conditions of this Agreement and all applicable Governmental
Regulations. Authority shall ha ve approved the Purchaser’s loan application and the form in
which title is to be held by the Purchaser(s).
5.6.2 No Default
There shall exist no condition, event or act which would constitute an
Event of Default by Developer hereunder or whic h, upon the giving of notic e or the passage of
time, or both, would constitute an Event of Default by Developer under this Agreement.
5.6.3 First Mortgage
The Purchaser shall have qualified (and provided evidence to Authority
therefore) for a conventional first mortgage from an institutional lender or a Habitat First
Mortgage in an amount not greater than one hun dred percent (100%) of the Affordable Housing
Cost. The terms of the first mortgage shall comply with all applicable Governmental
Regulations and any additional requirements as may be reasonably imposed by Authority. For
example, Authority may require that the first mortgage be a thirty (30) year fixed interest rate
level payment loan. Authority may allow, in its reasonable discretion, the Purchaser to pay
points in connection with the firs t mortgage. The first mortgage holder and/or Developer must
be ready, willing and able to fund the first mortgage loan and/or the Habitat First Mortgage at the
proposed time of the closing of the Purchaser’s pur chase of the Unit. The first mortgage loan
and/or the Habitat First Mortgage shall fund concurrently with Authority’s funding of the
Authority Second Mortgage Assistance and the purchase of the Unit from the Developer.
5.6.4 Down Payment
The Purchaser shall have deposited into escrow any down payment as may
be required.
5.6.5 Second Mortgage Assistance Documents
The Purchaser of a Unit shall have si gned and delivered to Authority or
escrow, as applicable, all applicable Second Mortgage Assistance Documents.
5.6.6 Insurance
The Purchaser shall have provided Authority and Developer, if applicable,
with evidence of insurance on the Unit in accordan ce with the applicable Habitat First Mortgage
or Second Mortgage Assistance Documents.
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5.6.7 Sales Contract
Authority shall have approved the sales contract between Developer and
the Purchaser in the amount of fair market valu e of the Unit and such sales contract and any
other documents required in connect ion with the sale and purchase of the Unit shall have been
executed by the parties thereto.
5.6.8 Fair Market Sales Price; Purchaser
Developer shall have demonstrated to Authority that the Unit is being sold
to the Purchaser at fair market value, determin ed by a comparable sales analysis prepared on
behalf of Developer and approved by Authority’s financial consultant.
5.6.9 Release of Construction Covenants
A Release of Construction Covenants shall have been recorded against the
Unit for which the Second Mortgage Assistance is being requested.
ARTICLE 6 DEFAULTS, REMEDIES AND TERMINATION
Section 6.1 Defaults - General
a. Subject to the Force Majeure Delay, as provided in Section 6.4 below,
failure or delay by either party to perform any term or provision of this Agreement constitutes a
default under this Agreement. The party who fa ils or delays must immediately commence to
cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy
with reasonable diligence.
b. The injured party shall give writ ten notice of defau lt to the party in
default, specifying the default complained of by the injured party. Failure or delay in giving
such notice shall not constitute a waiver of any default, nor shall it change the time of default.
Except as otherwise expressly provided in this Agreement, 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. Delays by either party in asserting any of its rights and
remedies shall not deprive either party of its right to institute and ma intain any actions or
proceedings which it may deem necessary to pr otect, assert or enforce any such rights or
remedies.
c. If a monetary event of default oc curs, prior to exerci sing any remedies
hereunder, the injured party shall give the party in default written notice of such default. The
party in default shall have a period of 7 days afte r such notice is given within which to cure the
default prior to exercise of remedies by the injured party.
d. If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the injured party shall give the party in default notice of such default. If the default is
reasonably capable of being cured within 30 days, the party in default shall have su ch period to
effect a cure prior to exercise of remedies by the in jured party. If the default is such that it is not
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reasonably capable of being cured within 30 days, and the party in default (i) initiates corrective
action within said period, and (ii) diligently, continually, and in good faith works to effect a cure
as soon as possible, then the pa rty in default shall have such additional time as is reasonably
necessary to cure the default prior to exercise of any remedies by the in jured party. In no event
shall the injured party be precluded from exercisi ng remedies if its security becomes or is about
to become materially jeopardized by any failure to cure a default or th e default is not cured
within 90 days after the first notice of default is given.
Section 6.2 Institution of Legal Actions
Subject to the notice and cure provisions of Section 6.1 above, in addition to any other
rights or remedies (and except as otherwise pr ovided in this Agreement), either party may
institute legal action to cure, correct or remedy a ny default, 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 Los Angeles, State of California, in any
other appropriate court of that county, or in the United States District Court for the Central
District of California.
Section 6.3 Applicable Law
The laws of the State of California shall govern the interpretation and enforcement of this
Agreement.
Section 6.4 Acceptance of Service of Process
a. In the event that any legal action is commenced by the Developer against
the Authority, service of process on the Author ity shall be made by personal service upon the
Executive Director of the Authority or in such other manner as may be provided by law.
b. In the event that any legal acti on is commenced by the Authority against
the Developer, service of process on the Deve loper shall be made by personal service upon the
Developer (or upon an officer of the Developer) and shall be valid whether made within or
without the State of California, or in such manner as may be provided by law.
Section 6.5 Rights and Remedies Are Cumulative
Except with respect to rights and remedies e xpressly declared to be exclusive in this
Agreement, 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.
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Section 6.6 Damages
If either party defaults with regard to any of the provisions of this Agreement, subject to
the notice and cure provisions of Section 6.1 above, the defaulting party sh all be liable to the
non-defaulting party for any damages caused by such default, and the non-defaulting party may,
after such notice and opportunity to cure (but not before) commence an action for damages
against the defaulting party with respect to such default.
Notwithstanding the foregoing, neither Developer nor Authority shall in any event be
entitled to, and each hereby waives, a ny right to seek loss of profits or any special, incidental or
consequential damages of any kind or nature from the other Party arising out of or in connection
with this Agreement or the breach or terminati on hereof, and in connection with such waiver
each Party is familiar with and hereby waives the provision of Section 1542 of the California
Civil Code 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 WHIC H IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
Section 6.7 Specific Performance
If either party defaults with regard to any of the provisions of this Agreement, subject to
the notice and cure provisions of Section 6.1 above, the non-defaulting party, at its option, may,
after such notice and opportunity to cure (but not before) commence an action for specific
performance of the terms of this Agreement pertaining to such default.
Section 6.8 Termination
a. Prior to the Close of Escrow, either party shall have the right to terminate
this Agreement in the event the othe r party is in default of any mate rial term or provision of this
Agreement, and, following notice, fa ils to cure such default within the time provided in Section
6.1 above.
b. Prior to the Close of Escrow, th e Developer shall ha ve the right to
terminate this Agreement as provided in pa ragraph d. of Section 3.2 above, and, upon 10 days
written notice to Authority as follows:
(i) The Developer determines, in its sole and absolute discretion, that
(x) the development of the Project is not financially feasible or (y) it is reasonably likely that the
Project will not obtain all necessa ry entitlements and environmental clearances necessary for the
development and operation of the Proposed Project; and
(ii) In the course of its investigati on of the Site, De veloper discovers
any currently unknown conditions or circumstances which would materially impact the cost of
the Project and/or the use of all or any portion of the Project.
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(iii) Failure of Developer to commen ce and complete predevelopment
work on the Project in accordance herewith shall not constitute a breach hereunder if due to a
lack of financing of predevelopment costs. In such an instance, Developer shall have the right to
terminate this Agreement.
Except as otherwise expressly provided herein, following such termination
by Developer prior to conveyance of the Proper ty, neither Authority nor the Developer shall
have any further rights against or liability to the other under this Agreement or with respect to
the Property or otherwise with respect to the subject matter of this Agreement.
Section 6.9 Termination by Authority after Closing
a. After the Close of Escrow but before Completion, the Authority shall have
the additional right to terminate this Agreement and exercise its right of entry pursuant to Section
5.10 below, in the event any of the following defaults shall occur:
(1) The Developer fails to commence construction of the
improvements as required by this Agreement for a period of 60 days after written notice from the
Authority, provided that the Developer shall not have obtained an extension or postponement to
which the Developer may be entitled pursuant to Section 7.4 hereof; or
(2) The Developer abandons or su bstantially suspends construction of
the improvements for a period of 60 days after wr itten notice has been given by the Authority to
the Developer, provided the Developer has not obtained an extension or postponement to which
the Developer may be entitled to pursuant to Section 7.4 hereof; or
(3) The Developer assigns or atte mpts to assign this Agreement, or
any rights herein, or, transfer (except for sales of Units to Purchasers which shall not close until a
Release of Construction Covenants is issued), or suffer any invol untary transfer of the Property,
or any part thereof, in violation of this Agreem ent, and such breach is not cured within 30 days
after the date of written notice thereof; or
(4) The Developer otherwise materially breaches this Agreement, and
such breach is not cured within the respective times provided in Section 6.1 of this Agreement.
b. The rights to cure established in pa ragraph a. shall run concurrently with
any other rights to cure set forth in this Agreement or any other instrument.
c. The rights established in paragrap h a. shall not apply after the Authority
has issued a Release of Construction Covenants.
d. In the event the Authority terminates this Agreement pursuant to
paragraph a. of this Section 6.9, the Authority sh all have the right to exercise all remedies,
including foreclosing on the Deed of Trust, notwithstanding the termination of this Agreement.
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Section 6.10 Right of Entry for Property
a. Subject to the notice and cure provisions of Section 6.1 above, in the event
of an uncured default described in Section 6.1 above, the Authority shall have the additional
right, at its option, to enter and take possession of the Property (or any portion of the Property)
with all improvements, and the Developer agrees that the Developer shall take such actions and
execute such instruments necessary or proper to vest in the Authority fee title to the Property.
b. Such right to enter, possess and vest shall be subject to and be limited by
and shall not defeat, render invalid or limit: (i) any bona fide mortgage, deed of trust, or other
security instrument of sale a nd leaseback or other conveyance fo r financing, provided that such
mortgage, deed of trust, securi ty instrument, sale and leaseback or conveyance for financing is
permitted by this Agreement; and (ii) any rights or interest provided in this Agreement for the
protection of the holder of such bona fide, permitted mortgages, deeds of trust or other security
instruments, the lessor under such sale and leaseback, or the grantee under such other
conveyance for financing.
c. The Grant Deed shall contain appr opriate reference and provision to give
effect to the Authority’s right, as set forth in this section under specified circumstances prior to
Completion, to enter and take possession of the Property, or any part of the Property, with all
improvements, and the Developer’s obligation to ta ke such actions and execute such instruments
necessary or proper to vest in the Authority fee title to the Property.
d. Upon the vesting in the Authority of title to the Property, or any part of the
Property, as provided in this Section 6.10, the Authority shall, pursuant to its responsibilities
under state law, use its best efforts to resell th e Property, or any part of the Property, as soon and
in such manner as the Authority shall find feasib le and consistent with the objectives of the
affordable housing program to a qualified and res ponsible party or parties (as determined by the
Authority) who will assume the obligation of ma king or completing the improvements, or such
other improvements in their stead, as shall be satisfactory to the Authority and in accordance
with the uses specified for the Property, or any part of the Property. Upon such resale of the
Property, or any part of the Property, the proceeds shall be applied:
(1) First, to reimburse the Authority all costs and expenses reasonably
incurred by the Authority, includ ing salaries of personnel engage d in such action, in connection
with the recapture and resale of the Property, or any part thereof; all taxes, assessments and water
and sewer charges with respect to the Property or any part of the Property; any payments made
or necessary to be made to discharge or prevent from attaching or being made any subsequent
encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or
transferees; any expenditures made or obligati ons incurred with respect to the making or
completion of the agreed improvements on the Pr operty, or any part of the Property; and any
amounts otherwise owing to the Authority by the Developer and its successor or transferee; and
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(2) Second, to reimburse the Devel oper, its successor or transferee, up
to the amount equal to the costs incurred for the development of the Property, or any part of the
Property, or for the construction of the Units.
e. Any balance remaining after such reimbursements shall be retained by the
Authority as its property.
f. To the extent that the right estab lished in this section involves a forfeiture,
it must be strictly interpreted against the Authority, the party for whose benefit it is created. The
rights established in this section are to be interpre ted in light of the fact that the Authority will
convey the Property to the Developer for development and not for speculation.
ARTICLE 7 GENERAL PROVISIONS
Section 7.1 Notices, Demands and Communications between Parties
Formal notices, demands and communi cations between the Authority and the
Developer shall be sufficiently given if dispatched by register ed or certified mail, postage
prepaid, return receipt requested, to the principal offices of the Authority and the Developer, as
designated in Sections 1.3 and 1.4 hereof. Su ch written notices, demands and communications
may be sent in the same manner to such other addresses as either party may from time to time
designate by mail as provided in this Section 7.1. Any notice that is transmitted by electronic
transmission followed by delivery of a “har d” copy, shall be deemed delivered upon its
transmission; any notice that is personally de livered (including by means of professional
messenger service, courier service such as United Parcel Service or Federa l Express, or by U.S.
Postal Service), shall be deemed received on the documented date of receipt by the recipient; and
any notice that is sent by regist ered or certified mail, postage prepaid, return receipt required
shall be deemed received on the date of receipt th ereof. Notices to the Authority shall also be
sent to: Kane, Ballmer & Berkman, Attn: Todd C. Mooney, 515 S. Figueroa Street, Suite 1850,
Los Angeles, California 90071-3301. Notices to the Developer shall also be sent to: Leibold
McClendon & Mann, PC, Attn: Joy Heuser Otsuki, 23422 Mill Creek Drive, Suite 105, Laguna
Hills, California 92653.
Section 7.2 Conflicts of Interest
a. No member, official or employee of the Authority 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 this Agre ement which affects his personal interests or the
interests of any corporation, part nership or association in which he is, directly or indirectly,
interested.
b. The Developer warrants that it ha s not paid or given, and will not pay or
give, any third party any money or other consideration for obtaining this Agreement.
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c. The Developer warrants that it ha s no knowledge of any financial interest
of any Authority employee or official in the Developer, directly or indirectly, or in any person or
entity affiliated with the Developer, or in any transaction in which the Developer has been
involved.
Section 7.3 Nonliability of Authority Officials and Employees
No member, official, employee or consultant of the Authority shall be personally liable to
the Developer, or any successor in interest, in the event of any default or breach by the Authority
or for any amount which may become due to th e Developer or to its successor, or on any
obligations under the terms of this Agreement.
Section 7.4 Force Majeure
In addition to specific provisions of this Agreement, performance by either party
hereunder shall not be deemed to be in default where delays or defaults are due to Force Majeure
Events.
Section 7.5 Inspection of Books and Records
The Developer shall maintain complete, accu rate, and current records pertaining to the
Property for a period of 5 years after the creati on of such records, and shall permit any duly
authorized representative of the Authority, upon reasonable advance notice, to inspect and copy
records, including records pertaining to income and household size of Purchasers of the Units,
during regular business hours. Records must be kept accurate and current.
Section 7.6 Approvals
Unless otherwise provided in this Agreement, approvals required of the Authority or the
Developer shall not be unreasonably withheld or delayed. In addition, unless otherwise provided
in this Agreement, a requirement of Authority approval shall mean the approval of the
Authority’s Executive Director or designee. The Authority’s Executive director shall be
permitted to approve and execute amendments and modifications to this Agreement, provided,
however, any such amendment or modification may be referred for approval of the governing
board of the Authority in the Executive Director of the Authority’s reasonable discretion.
Section 7.7 Real Estate Commissions
Neither the Authority nor the Developer shall be liable for any real estate commissions,
brokerage fees or finders fees which may arise fr om the sale of the Prope rty to the Developer.
The Authority and the Developer each represent to the other that it has employed no broker,
agent, or finder in connection with this transaction.
Section 7.8 Further Assurances
ATTACHMENT 3
62
Page 51
The Developer shall execute any further docu ments consistent with the terms of this
Agreement, including documents in recordable form, as the Authority may from time to time
find necessary or appropriate to effectuate its purposes in entering into this Agreement and
making the Authority Loan and Authority Seco nd Mortgage Loan, including, without limitation,
appropriate controls to regul ate the use of the Property ( e.g., an Agreement Affecting Real
Property, setting forth the Developer’s affordable housing obligations).
Section 7.9 No Third Party Beneficiaries
The Authority and the Developer expressly acknowledge and agree they do not intend, by
their execution of this Agreement, to benefit any persons or entities not signatory to this
Agreement, except as may be expressly provided fo r herein. No person or entity not a signatory
to this Agreement shall have any rights or cause s of action against either the Authority or the
Developer arising out of or due to the Authority’s or the Developer’s entry into this Agreement.
Section 7.10 Limitation of Liability
The obligations of the Authority under th is Agreement shall be a special limited
obligation, payable solely out of funds received by the Author ity from the City or the Agency
pursuant to a 2011 cooperation agreement, and it is not and shall not be a pledge of or obligation
payable through the City’s general fund or the Authority's other funds. Accordingly, nothing in
this Agreement shall require or be deemed to require the City to expend or commit to expend
monies from its general fund (or for the Authority to expend or commit to expend monies from
its other funds) in order to satisfy any of the oblig ations set forth in this Agreement. In the event
that the Authority does not have the funds or property to fulfill any obligation under this
Agreement, it shall not be consid ered a default under this Agreemen t. The Authority shall have
no obligation whatsoever to util ize any other source of funds, ot her than funds received by the
Authority from the City or the Agency under such cooperation agreement, to make any payments
to the Developer required hereunder, nor shall the City.
Section 7.11 California Public Records Act
All information regarding the Developer’s business practice which may be provided to
the Authority shall remain confidential to the extent permissible by law including, without
limitation, the California Public Records Act. If th e Authority at the request of the Developer is
required to defend an action under the California Public Records Act with regard to a request for
disclosure of any of the documents or reports related to the Project, then the Developer agrees to
defend and indemnify the Authority from all cost s and expenses of such defense, including,
without limitation, reasonable attorneys’ fees of the Authority or attorneys’ fees awarded by a
court arising out of such action.
Section 7.12 Advisory Committee on Redevelopment
The Developer shall meet with the Adviso ry Committee on Redevelopment as needed to
identify and resolve project design and impact issues.
ATTACHMENT 3
63
Page 52
ARTICLE 8 ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
a. This Agreement shall be executed in five duplicate originals each of which is
deemed to be an original. This Agreement includes 53 pages and 6 attachments, including all
exhibits appended to such attachments, which constitute the entire understanding and agreement
of the parties.
b. This Agreement integrates all of the terms and conditions mentioned herein or
incidental hereto, and supersedes all negotiations or previous agreements between the parties
with respect to all or any part of the Propert y, including that certai n Exclusive Negotiating
Agreement entered into by the parties in 2011.
c. All waivers of the provisions of this Agreement must be in writing and signed by
the appropriate authorities of the Authority or the Developer, and all amendments hereto must be
in writing and signed by the appropriate authorit ies of the Authority and the Developer. This
Agreement and any provisions hereof may be amended by mutual written agreement by the
Developer and the Authority.
ARTICLE 9 TIME FOR ACCEPTANCE OF AGREEMENT BY AUTHORITY;
DATE OF AGREEMENT
This Agreement, when executed by the Developer and delivered to the Authority, shall
not be effective until executed by the Authority following a noticed public hearing as required by
law. In the event the Authority fails to approve, execute and deliver this Agreement to the
Developer within 60 days after this Agreement is signed by the Develope r, the Developer shall
have the right to withdraw its offer to enter in to this Agreement by providing written notice to
the Authority. This Agreement shall be dated for reference purposes as of the date set forth in
the introductory paragraph hereof, but shall not be effective until executed by the Authority, as
indicated below.
ATTACHMENT 3
64
IN WITNESS WHEREOF, the pa rties hereto have caused this Agreement to be executed
as of the date first written above.
CULVER CITY HOUSING AUTHORITY,
a public body, corporate and politic
By:
John M. Nachbar
Executive Director
APPROVED AS TO CONTENT:
CULVER CITY HOUSING AUTHORITY,
a public body, corporate and politic
By: ____________________________
Sol Blumenfeld, Assistant Executive Director
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
Special Counsel
By: _______________________________
Todd C. Mooney
[Signatures Continued on Following Page]
ATTACHMENT 3
65
HABITAT FOR HUMANITY OF GREATER
LOS ANGELES,
a California non-profit corporation
Dated: ____________________ By: _________________________________
Erin Rank
President and CEO
ATTACHMENT 3
66676869707172737475LICENSE AGREEMENT
BY AND BETWEEN
CULVER CITY HOUSING AUTHORITY AND
HABITAT FOR HUMANITY OF GREATER LOS ANGELES
(4044-4068 Globe Avenue)
THIS LICENSE AGREEMENT is entered into by and between the CULVER CITY
HOUSING AUTHORITY, a public body, corporate and politic (the “Authority”) and HABITAT
FOR HUMANITY OF GREATER LO S ANGELES, a California non-p rofit corporation (the
“Developer”). The Authority and Developer agree as follows:
RECITALS
A. The Authority holds fee title to certain real properties hereinafter defined as the
“Site” and Developer desires to acquire the Site from the Authority for the construction and
operation on the Site of the improvements (the “Project”) described in the Disposition,
Development and Loan Agreement between the Authority and the Developer dated as of January
30, 2012 (the “DDA”).
B. The Authority and Developer desire that Developer have an opportunity to
conduct due diligence on the Site, which may include performing physical tests on the Site, prior
to the parties entering into a written agreement to convey the Site to the Developer.
NOW THEREFORE, the Parties agree as follows:
1. Parties to the Agreement.
(a) The Authority is a public body, corporate and politic, exercising municipal
functions and powers. The principal office of the Authority is lo cated at 9770 Culver Boulevard,
Culver City, California 90232-0507 or such other location of which notice is given pursuant to
this Agreement. “Authority” as used in this Ag reement includes any assignee of or successor to
its rights, powers and responsibilities.
(b) The Developer is Habitat for Humanity of Greater Los Angeles, a
California non-profit corporation. The principal office of th e Developer is located at 17700 S.
Figueroa Street, Gardena, California 90248 or such other location of which notice is given
pursuant to this Agreement.
2. Description of Site.
The Authority is the owner of certain real properties located at 4044-4068 Globe
Avenue in the City of Culver City, Los Ange les County, California, and more particularly
described in Exhibit A and illust rated by the site map in Exhibit B, which are attached to this
Agreement and hereby incorporated by reference (the “Site”).
3. Grant of License.
Attachment No. 2
76
License Agreement
(4044-4068 Globe Avenue)
Page 2 of 9
(a) Subject to and conditioned upon th e terms and conditions of this
Agreement, the Authority grants to Developer and its authorized agents a license (the “License”)
to perform the following acts on the Site: (1) obtain soil samples and make such other surveys,
investigations and tests reasonably necessary to determine the suitability of the Site for the
development, financing and/or constructi on of the Project; and (2) conduct reasonable
investigations on and beneath the Site and all improvements thereon to determine the presence of
Hazardous Materials and/or ot her soil conditions. As used herein, the phrase “Hazardous
Materials” shall have the same meaning given to it in the DDA.
(b) Developer may not use the Site for any other purpose without obtaining
the Authority’s prior written consent.
4. Term.
This License shall commence on the Ef fective Date of the DDA and shall
automatically expire, without need for fu rther notice of any kind, upon Closing of the
conveyance of the Site in accordance with the DDA, unless otherwise mutually extended
beforehand by the parties in writing or earlier terminated in accordance with its terms (the
“Term”).
5. Compliance With Laws.
Developer, at its expense, shall comply in all material re spects with all applicable
federal, state and local laws, or dinances, regulations, ru les and orders with respect to the Site,
including all applicable federal and state labor laws. Developer, its agents, contractors, licensees,
employees or invitees shall not permit to be placed upon the Site any Hazardous Materials,
except for de minimis quantities used in compliance with al l applicable environmental laws and
required in connection with Developer’s permitted activities under this License. Developer shall
conduct all of its operations on the Site at its sole cost and expense.
6. Reports and Studies.
In consideration of the Au thority’s granting of this License, Developer shall
promptly provide the Authority without representation or warranty with a copy of all reports and
test results arising from this License which are not legally privileged.
7. License Nonassignable.
This License is personal to Developer a nd shall not be assigned. Any attempt to
assign the License shall automatically terminate it, without need for notice of any kind. No legal
title or interest in the Site is created or vested in Developer by the grant of this License.
8. Nonexclusive License.
This License is nonexclusive. Nothing c ontained herein shall be construed to
restrict or prevent the entry onto and use of the Site during the Term of the License by the
Authority or its agents, consultants, assigns and other licensees.
Attachment No. 2
77
License Agreement
(4044-4068 Globe Avenue)
Page 3 of 9
9. Surrender.
On or before the termination date for the License, Developer shall remove all of
its personal property from the Site and shall (except as prohibited by any local State or Federal
agency) fill any excavations made by Developer to return the Site to its previous condition and
shall surrender possession of the Site to the Aut hority in good order and repair to the satisfaction
of the Authority, normal wear and tear excepted.
10. Release and Indemnity.
Developer, as a material part of the consideration to be rendered to the Authority
for the granting of this License, for itself and its successors and assigns, hereby agrees:
(a) to indemnify, defend, protect and hol d the Authority and the City of
Culver City (the “City”), their directors, officers, employees, agents, and successors and assigns
(the “Indemnified Parties”), fr ee and harmless against all suits and causes of action, claims,
costs, and liability, including, but not limited to, reasonable attorney’s fees and costs of any
litigation, or arbitration or mediation, if any, aris ing from the exercise of the License, including,
but not limited to:
(1) any and all risks of or exposure to any loss or liability arising from
activities conducted by Developer on the Site under this License;
(2) any and all claims arising from or relating to the transportation,
storage, handling or use of any material taken from the Site pursuant to the
License, or from any substance, known or unknown, emanating or derived
therefrom; and
(3) any and all claims for damage to the Site, any improvements
thereon, or to the property or person of any third party, alleged to have been
caused by, or in any way connected with the activities conducted by Developer on
the Site under this License or any material taken from the Site pursuant to the
License.
Nothing in this Section shall be construed to mean that Developer shall hold the
Indemnified Parties harmless and/or defend them to the extent of any claims arising from, or
alleged to arise from the sole negligence or willf ul misconduct of any of the Indemnified Parties.
The Authority and the City agree that they shall fully cooperate with Developer in the defense of
any matter in which Developer is defending and/or holding the Indemnified Parties harmless.
The Authority and the City may make all r easonable decisions with respect to their
representation in any legal proceeding, including, but not limited to, the selection of attorney(s).
This indemnity obligation shall survive the term ination of this Agreement. Notwithstanding the
foregoing, Developer shall have no obligation to indemnify an Indemnified Party for loss,
liability, claims, damages and expenses arising solely from Developer’s discovery of Hazardous
Materials already present on the Site prior to the commencement of this License, so long as
Developer has not materially contributed to th e placement, release or migration of such pre-
existing Hazardous Materials.
Attachment No. 2
78
License Agreement
(4044-4068 Globe Avenue)
Page 4 of 9
(b) To fully and finally release the In demnified Parties from any and all
claims, demands, actions, or suits of any kind or nature arising out of any liability, known or
unknown, present or future, including, but not limited to, rights or claims for implied
contribution or indemnity, or any claim or liability based or asserted pursuant to any law or
ordinance which seeks to impose any liability or damage whatsoever upon any Indemnified Party
arising from the execution and/or performance of this License Agreement, or from any of its
terms.
In connection with the foregoing release, Developer hereby acknowledges that it
has been advised by legal counsel and is 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 FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF K NOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HI S SETTLEMENT WITH THE
DEBTOR.
Developer, being aware of such code section, agrees to expressly waive any rights
it may have thereunder, as well as under any othe r statute or common law principles of similar
effect.
______________ ________________
Authority’s Initials Developer’s Initials
11. Insurance.
(a) Developer shall maintain or cause to be maintained Commercial General
liability insurance, to protect against loss from liability imposed by law for damages on account
of bodily injury, including death therefrom, suff ered or alleged to be suffered by any person or
persons whomsoever on or about the Site, resultin g directly or indirect ly from any acts or
activities of Developer, or a ny person acting for Developer, or under its respective control or
direction, and also to protect against loss from liability imposed by law for damages to any
property of any person occurring on or about the Site, or in connection with Developer’s
activities thereon, caused directly or indirectly by or from act s or activities of Developer, or any
person acting for Developer, or under its cont rol or direction. Such property damage and
personal injury insurance shall al so provide for and protect the Authority against incurring any
legal cost in defending claims for alleged loss. Such persona l injury and property damage
insurance shall be maintained in full force and effect during the Term in the following amounts:
commercial general liability in a general aggregate amount of not less than Two Million Dollars
($2,000,000); and a per occurrence limit not less than One Million Dollars ($1,000,000) of
bodily injury and property damage insurance. Developer agrees that provisions of this paragraph
as to maintenance of insurance shall not be cons trued as limiting in any way the extent to which
Developer may be held responsible for the inde mnification of Authority or the payment of
damages to persons or property resulting from De veloper’s activities, or the activities of any
other person or persons for which Developer is otherwise responsible.
Attachment No. 2
79
License Agreement
(4044-4068 Globe Avenue)
Page 5 of 9
(b) Developer shall maintain or cause to be maintained workers’
compensation insurance issued by a responsible carri er authorized under the laws of the State of
California to insure employers against li ability for compensation under the workers’
compensation laws now in force in California, or any laws hereafter enacted as an amendment or
supplement thereto or in lieu thereof. Such workers’ compensation insurance shall cover all
persons employed by Developer in connection with the Site and shall cover liability within
statutory limits for compensation under any such act aforesaid, based upon death or bodily injury
claims made by, for or on behalf of any employee of Developer incurring or suffering injury or
death in connection with the Site or the opera tion thereof by Developer. Notwithstanding the
foregoing, Developer may, in complianc e with the laws of the State of California and in lieu of
maintaining such insurance, self-insure for wo rkers’ compensation in which event Developer
shall deliver to Authority evidence that such self-insurance has been approved by the appropriate
State authorities.
(c) All policies shall name the Authority and the City as additional insureds.
(d) All insurance provided under this sec tion shall be for the benefit of
Developer, Authority and the Ci ty. Developer agrees to timel y pay all premiums for such
insurance and, at its sole cost and expense, to comply and secure compliance with all insurance
requirements necessary for the maintenance of such insurance. Developer agrees to submit
policies of all insurance required by this section, or certificates ev idencing the existence thereof,
and additional insured endorsements to Authority not less than 15 days prior to its
commencement of any activities on th e Site, indicating full coverage of the contractual liability
imposed hereby. “Full coverage” for contractual lia bility in this section (d) is defined as the
coverage grant under the ISO CG 0001 policy form definition of an “insured contract.” All
insurance herein provided for shall be effected under policies issued by insurers of recognized
responsibility, licensed and admitted to do business in the State of California (or if not admitted
in California shall have a “General Policyholders Rating” of at least “A-” as set forth in the most
current issue of “Best’s Key Ra ting Guide”), reasonably approved by Authority. All policies or
certificates of insurance shall provide that such policies shall not be canceled or limited in any
manner without at least thirty (30) days prior written notice to Authority.
(e) The evidence of insurance required hereunder is a condition precedent to
Developer’s right to enter upon the Site. If Developer fails or refuses to procure or maintain the
insurance required by this Agreement, the License granted by this Agreement shall automatically
terminate and be of no further force or effect.
12. Authority’s Authorized Representative.
Unless otherwise specified or the context requires otherwise, all references to the
Authority in this Agreement and its attachments shall mean the Executive Director of the
Authority or any officer or employee of the Au thority to whom the governing board of the
Authority delegates authority to perform, carry out and/or enforce this Agreement. Unless
otherwise specified or the context requires otherwise, all references to the Executive Director of
the Authority shall mean the Executive Director of the Authority or his or her designee.
13. Notices, Demands And Communications Between The Parties.
Attachment No. 2
80
License Agreement
(4044-4068 Globe Avenue)
Page 6 of 9
Formal notices, demands and communications between the Authority and
Developer shall be sufficiently given if dispatched by register ed or certified mail, postage
prepaid, return receipt requested, to the principa l offices of the Authority and the Developer.
Such written notices, demands and communications may be sent in the same manner to such
other addresses as either party may from time to time designate by mail. Any notice that is
transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be
deemed delivered upon its transmission; any notic e that is personally delivered (including by
means of professional messenger service, courier service such as United Parcel Service or
Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of
receipt by the recipient; and any notice that is sent by registered or certified mail, postage
prepaid, return receipt required shall be deemed received on the date of receipt thereof.
14. Conflict of Interest.
To the extent prohibited by law, no member, official or employee of the Authority
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 or
her personal interests or the inte rests of any corporation, partners hip or association in which he
or she is directly or indirectly interested.
Developer warrants that it has not paid or given, and will not pay or give, any
third party any money or other consideration for obtaining this Agreement.
15. Non-liability of Officials and Employees.
(a) No member, official or employee of the Authority or the City shall be
personally liable to Developer, or any successor in interest, in the event of any default or breach
by the Authority or for any amount which may b ecome due to Developer or on any obligations
under the terms of this Agreement. This release shall not appl y in the event of fraud by the
Authority or the City or any member, officer or employee thereof.
(b) No member, official or employee of Developer shall be personally liable
to the Authority, or any successor in interest, in the event of any default or breach by Developer
or for any amount which may become due to the Authority or its successor or on any obligations
under the terms of this Agreement. This rel ease shall not apply in the event of fraud by
Developer or any member, official, or employee of Developer.
16. Interpretation of Agreement; Terminology; Application of Law.
This Agreement has been negotiated at arm’s length and between persons
sophisticated and knowledgeable in the matters addressed herein. In addition, each Party has
been given the opportunity to consult with experienced a nd knowledgeable legal counsel.
Accordingly, any rule of law (including Civil C ode section 1654) or legal decision that would
require interpretation of any ambiguities in this Agreement against the Party that has drafted it is
not applicable and is waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effectuate the purpose and inte nt of the parties to this Agreement. This
Agreement shall be construed and enforced in a ccordance with the internal laws of California
Attachment No. 2
81
License Agreement
(4044-4068 Globe Avenue)
Page 7 of 9
and not the law regarding conflict of laws, except to the extent that Federal law preempts State
law
When the context so requires when used in this Agreement, the masculine gender
shall be deemed to include the feminine and neuter gender and the neuter gender shall be deemed
to include the masculine and feminine gender. Wh en the context so requires when used in this
Agreement, the singular shall be deemed to in clude the plural. The paragraph and section
headings have been used for convenience only, and shall not be used in the interpretation hereof.
17. Waivers.
A waiver by the Authority or Developer of any term, covenant, or condition
herein contained shall not be a waiver of such term, covenant, or condition on any subsequent
breach. All waivers must be in writing and sign ed by the appropriate re presentatives of the
Authority or Developer.
18. Time of the Essence.
Time is of the essence in this Agreem ent and each and all of its provisions in
which performance is a factor.
19. Attorneys’ Fees and Costs.
If any action or proceeding is brought by any Party ag ainst any other Party under
this Agreement, whether for interpretation, enfor cement or otherwise, the prevailing Party shall
be entitled to recover all costs and expenses, including the reasonable fees of its attorney and any
expert witnesses in such action or proceeding. This provision shall also apply to any post-
judgment action by either Party, including without limitation efforts to enforce a judgment.
20. Severability.
Any provision of this Agreement that sha ll prove to be invali d, void, or illegal
shall in no way affect, impair, or invalidate any other provision hereof and such other provisions
shall remain in full force and effect.
21. Entire Understanding Of The Parties; Amendments.
This Agreement, including any document or instrument incorporated herein by
reference, contains a complete and final expre ssion of the agreement between the Authority and
Developer relating to this License, and there are no promises, representations, agreements,
warranties, or inducements either express or implied other than as are set forth in this
Agreement. Any and all previous discussions or agreements between the Authority and
Developer with respect to this License, whether oral or written, are superseded by this
Agreement. No amendment, change, or addition t o, or waiver of termination of, this Agreement
or any part hereof shall be valid unless in writing and signed by the Authority and Developer.
22. No Third Party Beneficiaries.
Attachment No. 2
82
License Agreement
(4044-4068 Globe Avenue)
Page 8 of 9
The parties to this Agreem ent acknowledge and agree that the provisions of this
Agreement are for the sole benefit of the Author ity and the Developer, a nd not for the benefit,
directly or indirectly, of any other person or entity, except as otherwise expressly provided
herein.
23. Further Assurances.
Each of the parties hereto shall execute and deliver an y and all additional papers,
documents and other assurances, and shall do any and all necessary acts and things in connection
with the performance of their obligations hereunder and to carry out the intent and agreements of
the parties.
24. Execution in Counterparts.
This Agreement may be executed in several counterparts and all such executed
counterparts shall constitute one agreement, binding on all of the parties hereto, notwithstanding
that all of the parties hereto are not signatories to the original or to the same counterpart. This
Agreement shall not be binding unless and until all parties hereto have executed this Agreement.
25. Authority to Sign.
The Developer represents and warrants that it has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party
warrants that the individuals w ho have signed this Agreement ha ve the legal power, right, and
authority to make this Agreement and to bind each respective Party.
Attachment No. 2
83
License Agreement
(4044-4068 Globe Avenue)
Page 9 of 9
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first written above.
CULVER CITY HOUSING AUTHORITY
Dated: _______________ By: __________________________
John M. Nachbar
Executive Director
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
By: _______________________________
Todd C. Mooney
Special Counsel
HABITAT FOR HUMANITY OF GREATER
LOS ANGELES, a California non-profit
corporation
Dated: ___________________ By: ____________________________
Erin Rank
President and CEO
Attachment No. 2
84
License Agreement
(11054-11056 West Washington Boulevard)
Exhibit A - Legal Description
EXHIBIT A
LEGAL DESCRIPTION OF SITE
THAT REAL PROPERTY LOCATED IN THE CITY OF CULVER CITY, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
Attachment No. 2
85
EXHIBIT “B”
SITE MAP
Attachment No. 2
86Final SOP Globe Ave DDA v3.docx Globe Avenue Properties ENA
ATTACHMENT NO. 3
SCHEDULE OF PERFORMANCE
Deadline for Performance
Days from
Effective Date
(Step 1)
1. Authority approves DDA
January 30, 2012
2. Authority Deposits Loan Funds into
Escrow
January 31, 2012 1
3. Developer conducts first community
meeting.
[Completed]
4. Developer conducts second
community meeting
February 9, 2012 10
5. Developer submits financial pro
forma, including proposed sources
and uses and cash flow projections
March 13, 2012 43
6. Developer submits Conceptual Plans
to Planning staff for Preliminary Plan
Review
March 13, 2012 43
7. Authority opens Escrow for sale of
the Property
March 29, 2012 59
8. Authority delivers preliminary title
report, Due Diligence and
Environmental Reports to Developer
April 10, 2012 71
9. Authority staff determines whether
Conceptual Plans are complete to
submit for a Preliminary Plan Review
(PPR) and submits draft of Authority
Grant Deed, Addendum to Purchaser
Grant Deed, Authority Note,
Authority Deed of Trust,
Environmental Indemnity, Notice of
Affordability Restrictions,
Assignment of Agreements and any
other documents to be executed by
Developer prior to Closing to
May 30, 2012 121
87Final SOP Globe Ave DDA v3.docx Globe Avenue Properties ENA
Developer
10. Developer provides comments on
draft grant deed, deed of trust,
promissory note, second mortgage
documents and other attachments to
DDA
May 31, 2012 122
11. Submittal of Comprehensive Plan and
Tentative Tract Map
October 31, 2012 275
12. Developer conducts third community
meeting
In lieu of a 3
rd
meeting,
Developer gets credit for
the ACOR Meetings in
January and March of
2009.
13. Authority delivers Phase I
Environmental Report to Developer
March 23, 2012 53
14. Authority approves or disapproves
Conceptual Plans
July 7, 2012 159
15. Council Hearing – Comprehensive
Plan
February 28, 2013 395
16. Submit to Plan Check
April 30, 2013 456
17. Expiration of Due Diligence Period
March 15, 2013 410
18. Authority and Developer finalize
Authority Instruments and other
documents necessary for closing
January 31, 2013 367
19. Developer submits final Project
Budget, Construction Budget and
evidence of financing
June 30, 2013 517
20. Authority delivers Closing Escrow
Instructions and updated title report
July 1, 2013 518
21. All documents required for closing
delivered to Closing Escrow
July 8, 2013 525
22. Closing of conveyance of Property to
Developer, Authority Loan and
related transactions under DDLA
July 22, 2013 539
88Final SOP Globe Ave DDA v3.docx Globe Avenue Properties ENA
23. Permits Issued
July 28, 2013 545
24. Construction Commenced
August 15, 2013 563
25. Developer submits Marketing Plan
March 1, 2013 396
26. Construction Completed
February 20, 2015 1117
89
ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated as of January 30, 2012 (this “Agreement”) by and
among CULVER CITY HOUSING AUTHORITY, a public body, corporate and politic, duly
organized and existing under the laws of the state of California (“Party A”); HABITAT FOR
HUMANITY OF GREATER LOS ANGELES, a non-profit corporation, duly organized and
existing under the laws of the state of California (“Party B”); and ________ Bank, N.A., a
national banking association (hereinafter referred to as “Escrow Agent”).
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby
covenant and agree as follows:
Section 1. Appointment of Escrow Agent. Party A and Party B hereby appoint
Escrow Agent to act as escrow agent in accordance with the terms and conditions set forth
herein, and Escrow Agent hereby accepts such appointment.
Section 2. Establishment of Escrow Account. Escrow Agent shall open and maintain
an escrow account on the terms and conditions set forth herein (the “Escrow Account”). The
Escrow Funds (as defined below) held in the Escrow Account shall not bear interest
independently of the interest, dividends and other distributions and payments that may arise from
Permitted Investments (as defined below) made pursuant to Section 5 hereof.
Section 3. Wire Instructions. Wire transfer instructions for sending the Escrow
Funds, as hereinafter defined, to Escrow Agent are as follows:
_________ Bank, N.A.
ABA: _____________
Account: ________________
Account Name: _________________
For Further Credit: [to be provided]
Attention: [________________]
Section 4. Deposits into the Escrow Account. Party A simultaneously with or within
one Business Day after the execution and delivery of this Agreement will make a deposit with
Escrow Agent in the sum of $1,262,500 in immediately available funds (the “Escrow Funds”),
which Escrow Funds shall be held by Escrow Agent under the terms and conditions hereinafter
set forth. The Escrow Funds, plus all interest, dividends and other distributions and payments
thereon received by Escrow Agent from time to time, less any property distributed and/or
disbursed in accordance with this Agreement, from time to time are collectively referred to
hereinafter as the “Escrow Property”. Escrow Agent shall have no duty to solicit delivery of the
Escrow Funds. For purposes of this Agreement “Business Day” shall mean any day _________
Bank, N.A. is open for business at the address set forth herein, excluding Saturdays and Sundays.
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Section 5. Investment of the Escrow Property.
(a) As soon as practicable after the receipt thereof, Escrow Agent shall cause the
Escrow Property to be invested in such Permitted Investments as defined below as Party A may
specify in writing from time to time. During the term of this Agreement, Party A shall bear and
retain the sole responsibility for the selection of the investments of the Escrow Property and all
risks from any such investments.
(b) “Permitted Investments” shall be one or more of the following:
i. direct obligations of, or obligations fully guaranteed as to principal and
interest by, the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit of the
United States, including but not limited to, [the HighMark Funds U.S.
Government Money Market Fund]; or
ii. a deposit account of Escrow Agent insured by the Federal Deposit
Insurance Corporation, provided, however, that such deposit account shall
not exceed $250,000.
(c) In the absence of written instructions, Escrow Agent will invest the Escrow
Property in the _________ Bank, N.A. Institutional Trust Deposit Account l (an interest bearing
deposit account of Escrow Agent). Escrow Agent shall have no obligation to invest the Escrow
Property if deposited with Escrow Agent after 11:00 a.m. (P.T.) on the day of deposit.
Instructions received after 11:00 a.m. (P.T.) will be treated as if received on the following
Business Day. Escrow Agent shall have no responsibility for any investment losses resulting
from the investment, reinvestment or liquidation of the Escrow Property. Any interest or other
income received on such investment and reinvestment of the Escrow Property shall become part
of the Escrow Property and losses incurred on such investment and reinvestment of the Escrow
Property shall be reflected in the value of the Escrow Property from time to time.
Notwithstanding the foregoing, Escrow Agent shall have the power to sell or liquidate the
foregoing investments whenever Escrow Agent shall be required to release all or any portion of
the Escrow Property pursuant to this Agreement. In no event shall Escrow Agent be deemed an
investment manager or adviser in respect of any selection of investments hereunder.
Section 6. Distribution of the Escrow Property. Escrow Agent shall hold the Escrow
Property in its possession and disburse the Escrow Property or any specified portion thereof only
as follows:
(a) Three Business Days prior to any requested disbursement from the Escrow
Account, (i) Party A may deliver a written notice signed by an authorized person set forth on
Schedule I attached hereto (“Authorized Representative”) of Party A to disburse all or a
portion of the Escrow Property to Party B, (ii) Party A may deliver a written notice signed by an
Authorized Representative of Party A and Party B to disburse all or part of the Escrow Property
to Party A or such other party so specified therein, or (iii) if required to comply with any
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applicable law, on or prior to June 1, 2012, Party A may deliver a written notice signed by an
Authorized Representative of Party A only to disburse all or part of the Escrow Property to Party
A or such other party so specified therein (the “Disbursement Instruction”). A Disbursement
Instruction must be signed by the proper party’s Authorized Representative and delivered
pursuant to Section 11 below. Escrow Agent shall and is hereby authorized to withdraw and pay
said disbursement as specified in a Disbursement Instruction. Escrow Agent may act upon a
Disbursement Instruction received pursuant to Section 11 hereunder and may rely upon the
signature(s) thereon of an Authorized Representative regardless of by whom or by what means
the actual or purported signature(s) thereon may have been affixed thereto if such signature(s)
resemble the specimen on Schedule I attached hereto or as provided to Escrow Agent from time
to time. Escrow Agent shall incur no liability to Party A or Party B or otherwise for having acted
in accordance with instructions on which it is authorized to rely pursuant to the provisions
hereof.
All payments of the Escrow Property requested by Party A will be effected by wire transfer in
immediately available funds.
Section 7. Compensation of Escrow Agent. Escrow Agent shall be entitled to receive
payment from Party A for fees, costs and expenses for all services rendered by it hereunder in
accordance with Schedule II to this Agreement. Party A shall reimburse Escrow Agent on
demand for all losses, liabilities, damages, disbursements, advances or expenses paid or incurred
by it in the administration of its duties hereunder, including, but not limited to, all counsel,
advisor and agent fees and disbursements. At all times, Escrow Agent will have a right of set off
and first lien upon the Escrow Account for payment of customary fees, costs and expenses and
all such losses, liabilities, damages or expenses from time to time. Such fees, costs and expenses
shall be paid from the Escrow Property to the extent not otherwise paid hereunder and Escrow
Agent may sell, convey or otherwise dispose of any Escrow Property for such purpose. The
obligations contained in this Section shall survive the termination of this Agreement and the
resignation or removal of Escrow Agent.
Section 8. Resignation or Removal of Escrow Agent. Escrow Agent may resign and
be discharged from its duties hereunder at any time by giving written notice thirty calendar days
prior to such resignation to Party A and Party B as provided in this Section. Party A and Party
B may remove Escrow Agent at any time by giving written notice signed by the proper party’s
Authorized Representative at least thirty calendar days prior to such removal to Escrow Agent.
Following such resignation or removal, a successor Escrow Agent shall be appointed by Party A
and Party B, who shall provide written notice of such to the resigning or removed Escrow
Agent. Such successor Escrow Agent shall become Escrow Agent hereunder, and all Escrow
Property shall be transferred to it upon the resignation or removal date specified in such notice.
If Party A is unable to appoint a successor Escrow Agent within thirty calendar days after such
notice, Escrow Agent may, in its sole discretion, deliver the Escrow Property to Party B at the
address provided herein or may petition any court of competent jurisdiction for the appointment
of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including
but not limited to its attorney fees and expenses) incurred by Escrow Agent in connection with
such proceeding shall be paid by Party A. On the resignation/removal date and after receipt of
the identity of the successor Escrow Agent, Escrow Agent shall either deliver and/or disburse
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92
the Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent’s
fees, costs and expenses or other obligations owed to Escrow Agent. Upon its resignation or
removal and delivery and/or disbursement of the Escrow Property in its entirety as set forth in
this Section, Escrow Agent shall be discharged of and from any and all future obligations
arising in connection with the Escrow Property or this Agreement.
Section 9. Indemnification of Escrow Agent. Party A agrees to indemnify and hold
Escrow Agent harmless with respect to any acts Escrow Agent takes in accordance with the
terms and conditions of this Agreement. Party A agrees to indemnify and hold Escrow Agent
harmless against any and all liabilities, losses, claims, damages or expenses, including reasonable
attorney’s fees, that Escrow Agent may incur by reason of or based upon its actions under this
Agreement other than as a result of the gross negligence or willful misconduct of Escrow Agent.
This indemnification obligation shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent.
Section 10. Rights, Duties and Immunities of Escrow Agent. Acceptance by Escrow
Agent of its duties under this Agreement is subject to the following terms and conditions, which
all parties to this Agreement hereby agree shall govern and control the rights, duties and
immunities of Escrow Agent.
(a) The duties and obligations of Escrow Agent shall be determined solely by the
express provisions of this Agreement and no duties, responsibilities, or obligations shall be
inferred or implied. Escrow Agent shall not be liable except for the performance of such duties
and obligations as are expressly and specifically set out in this Agreement. Escrow Agent shall
not be liable for the accuracy of any calculations or the sufficiency of any funds for any purpose.
(b) Escrow Agent shall not be required to expend or risk any of its own funds or
otherwise incur any liability, financial or otherwise, in the performance of any of its duties
hereunder.
(c) Escrow Agent shall not be required to inquire as to the performance or
observation of any obligation, term or condition under any other agreements or arrangements
between Party A and Party B.
(d) Escrow Agent shall not have any responsibility to determine the authenticity or
validity of any notice, direction, instruction, instrument, document or other items delivered to it
by any party, or for the identity, authority or rights of persons executing or delivering any such
notice, direction, instruction, instrument, document, or other items delivered to it by such party
or parties. Escrow Agent is authorized to comply with and rely upon any notice, direction,
instruction or other communication believed by it to have been sent or given by Party A and/or
Party B and shall be fully protected in acting in accordance with such written direction or
instructions given to it under, or pursuant to, this Agreement.
(e) Escrow Agent is not a party to, and is not bound by, or required to comply with
any agreement or other document out of which this Agreement may arise. Escrow Agent shall
be under no liability to any party hereto by reason of any failure on the part of Party A, Party B
Attachment No. 4
93
or any maker, guarantor, endorser or other signatory of any document or any other third party to
perform, such party’s obligations under any such document. Except for amendments to this
Agreement referred to herein, and except for notifications or instructions to Escrow Agent under
this Agreement, Escrow Agent shall not be obliged to recognize or be chargeable with
knowledge of any of the terms or conditions of any agreement between Party A and Party B,
notwithstanding that references thereto may be made herein and whether or not it has knowledge
thereof.
(f) Escrow Agent shall not be bound by any waiver, modification, termination or
rescission of this Agreement or any of the terms hereof, unless evidenced in writing and
delivered to Escrow Agent signed by the proper party’s Authorized Representative and, if the
duties or rights of Escrow Agent are affected, unless it shall give its prior written consent thereto.
No person, firm or corporation will be recognized by Escrow Agent as a successor or assignee of
Party A or Party B until there shall be presented to Escrow Agent evidence satisfactory to it of
such succession or assignment. This Agreement shall not be deemed to create a fiduciary
relationship among the parties hereto under state or federal law.
(g) If at any time Escrow Agent is served with any judicial or administrative order,
judgment, decree, writ or other form of judicial or administrative process which in any way
affects the Escrow Property (including but not limited to orders of attachment or any other forms
of levies or injunctions or stays relating to the transfer of the Escrow Property), Escrow Agent is
authorized to comply therewith in any manner as it or its legal counsel of its own choosing
deems appropriate; and if Escrow Agent complies with any such judicial or administrative order,
judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall
not be liable to any of the parties hereto or to any other person or entity even though such order,
judgment, decree, writ or process may be subsequently modified or vacated or otherwise
determined to have been without legal force or effect.
(h) Escrow Agent shall not be liable for any action taken or omitted or for any loss or
damage resulting from its actions or its performance of its duties hereunder in the absence of
gross negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i)
for acting in accordance with or relying upon any instruction, notice, demand, certificate or
document from Party A and/or Party B, or any entity acting on behalf of either, (ii) for any
consequential, punitive or special damages, (iii) for the acts or omissions of its nominees,
designees, subagents or subcustodians, or (iv) for an amount in excess of the value of the Escrow
Property, valued as of the date of loss.
(i) In the event of any ambiguity or uncertainty hereunder or in any notice or other
communication received by Escrow Agent hereunder, Escrow Agent is hereby authorized by
Party A and Party B to refrain from taking any action other than to retain possession of the
Escrow Property, unless Escrow Agent receives written instructions, signed by an Authorized
Representative of both Party A and Party B which eliminates such ambiguity or uncertainty.
(j) Escrow Agent may consult with legal counsel of its own choosing, at the expense
of Party A, as to any matter relating to this Agreement and Escrow Agent shall incur no liability
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and shall be fully protected in respect of any action taken, omitted or suffered by it in good faith
in accordance with the advice or opinion of such counsel.
(k) In the event of any dispute or conflicting claim with respect to the payment,
ownership or right of possession of the Escrow Account or the Escrow Property, Escrow Agent
shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or
instructions. Escrow Agent is authorized and directed to retain in its possession, without liability
to anyone, except for its own gross negligence or willful misconduct, all or any part of the
Escrow Property until such dispute shall have been settled either by mutual agreement of the
parties concerned or by final order, decree or judgment of a court or other tribunal of competent
jurisdiction in the United States of America (as notified to Escrow Agent in writing by the parties
to the dispute or their authorized representatives and setting forth the resolution of the dispute).
Escrow Agent shall be under no duty whatsoever to institute, defend or partake in such
proceedings. The rights of Escrow Agent under this paragraph are in addition to all other rights
which it may have by law or otherwise including, without limitation, the right to file an action in
interpleader.
(l) Escrow Agent shall not incur liability for not performing any act or not fulfilling
any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control
of Escrow Agent (including but not limited to any act or provision of any present or future law or
regulation or governmental authority, any act of God or war, terrorism or the unavailability of
the Federal Reserve Bank or other wire or communication facility).
(m) When Escrow Agent acts on any communication (including, but not limited to,
communication with respect to the delivery of securities or the wire transfer of funds) sent by
electronic transmission, Escrow Agent, absent gross negligence or willful misconduct, shall not
be responsible or liable in the event such communication is not an authorized or authentic
communication of the party involved or is not in the form the party involved sent or intended to
send (whether due to fraud, distortion or otherwise). The Escrow Agent shall not be liable for
any losses, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon
and compliance with such instructions notwithstanding such instructions conflict or are
inconsistent with a subsequent written instruction. Party A or Party B, as the case may be, agrees
to assume all risks arising out of the use of such electronic transmission to submit instructions
and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent
acting on unauthorized instructions, and the risk or interception and misuse by third parties.
(n) Escrow Agent will provide to Party A and Party B monthly statements identifying
transactions, transfers or holdings of Escrow Property and each such statement will be deemed to
be correct and final upon rece ipt thereof by Party A and Part y B unless Party A or Party B
notifies Escrow Agent in writing to the contrary within thirty Business Days of the date of such
statement.
(o) The Escrow Agent will not be under any duty to give the Escrow Property held by
it hereunder any greater degree of care than it gives its own similar property and will not be
required to invest any funds held hereunder excep t as directed in this Escrow Agreement.
Uninvested funds held hereunder will not earn or accrue interest.
Attachment No. 4
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Section 11. Notices. All notices, consents, requests, instructions, approvals and other
communications provided for in this Agreement shall be in writing, signed by the proper party’s
Authorized Representative and sent by: (i) personal delivery, overnight delivery by a recognized
courier or delivery service, (ii) mailed by registered or certified mail, return receipt requested,
postage prepaid, or (iii) electronic transmission, which includes fax machine, email with an
imaged or scanned attachment (such as a .pdf) or other similar electronic transmission, (receipt
confirmed); and shall become effective when delivered to the addresses noted below or such
other address as may be substituted therefor by written notification by the proper party’s
Authorized Representative. Notices to Escrow Agent shall be deemed to be effective when
actually received by Escrow Agent’s Corporate Trust Department.
If to Party A, to:
Culver City Housing Authority
9770 Culver Boulevard
Culver City, California 90232-0507
Attention: Executive Director
Email: _________
With a Copy to: Kane, Ballmer & Berkman
515 S. Figueroa Street, Suite 1850
Los Angeles, California 90071-3301
Attn: Todd C. Mooney
Email: _________
If to Party B, to: Habitat for Humanity of
Greater Los Angeles, Inc.
17700 S. Figueroa Street
Gardena, CA 90248
Attention: Robert Dwelle
Email: _________
Copy to: Leibold McClendon & Mann, P.C.
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
Attention: Joy Heuser Otsuki
Email: _________
If to Escrow Agent, to:
_________ Bank, N.A.
__________________
Attn: Corporate Trust Dept.
Attachment No. 4
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Email:
Section 12. Wiring Instructions. In the event fund transfer instructions are given other
than as set forth on Schedule III attached hereto, such instructions must be communicated to the
Escrow Agent in writing delivered pursuant to Section 11. Escrow Agent shall seek
confirmation of such instructions by telephone call-back to an Authorized Representative, and
Escrow Agent may rely upon the confirmations of anyone purporting to be the Authorized
Representative so designated. Escrow Agent and the beneficiary’s bank in any funds transfer
may rely solely upon any account numbers or similar identifying numbers provided by Party A
and Party B to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary
bank. Escrow Agent may apply any of the Escrow Funds for any payment order it executes
using any such identifying number, even when its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an
intermediary bank designated. The parties to this Agreement acknowledge that such security
procedure is commercially reasonable.
Section 13. Termination. This Agreement shall terminate when all the Escrow
Property has been disbursed or returned pursuant to Section 6 or Section 8 of this Agreement.
Section 14. Continuing Obligations. The obligations under Sections 6, 7, 8, 9 and 10
hereof shall survive the resignation or removal of Escrow Agent, the termination of this
Agreement and the payment of all amounts hereunder.
Section 15. Inconsistent Provisions. Party A and Party B agree that to the extent that
the provisions of any other agreement relating to the Escrow Property are inconsistent with the
terms of this Agreement, the terms of this Agreement shall control. The English language
version of this Agreement shall control in the event of any inconsistencies between the English
language version and any foreign language translation.
Section 16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
Section 17. Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original, and all of which together shall
constitute but one and the same instrument. Executed copies of this Agreement delivered
pursuant to Section 11 above shall be as effective as an original to bind the parties.
Section 18. Severability. The invalidity, illegality or unenforceability of any provision
of this Agreement shall in no way affect the validity, legality or enforceability of any other
provision; and if any provision is held to be unenforceable as a matter of law, the other
provisions shall not be affected thereby and shall remain in full force and effect.
Section 19. Authorized Representative. Each of Party A and Party B hereby identify
to Escrow Agent the officers, employees or agents designated on Schedule I attached hereto as
an Authorized Representative with respect to any notice, certificate, instrument, demand, request,
direction, instruction, waiver, receipt, consent or other document or communication required or
Attachment No. 4
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permitted to be furnished to Escrow Agent. Such Schedule I may be amended and updated by
written notice to Escrow Agent with a copy to the other party to this Agreement provided that
failure to furnish such copy shall not affect the validity of such notice to Escrow Agent. Escrow
Agent shall be entitled to rely on such original or amended Schedule I with respect to any party
until a new Schedule I is furnished by such party to Escrow Agent.
Section 20. Jurisdiction. Each of the parties hereto hereby irrevocably agrees that any
action, suit or proceedings against any of them by any of the other aforementioned parties with
respect to this Agreement shall be brought before the jurisdiction of any federal or state court of
competent jurisdiction located in Los Angeles, California. Each party hereto further irrevocably
consents to the service of any complaint, summons, notice or other process relating to any such
action or proceeding by delivery thereof to it by hand or by registered or certified mail, return
receipt requested, in the manner provided for herein. Each party hereto hereby expressly and
irrevocably waives any claim or defense in any such action or proceeding based on improper
venue or forum non conveniens or any similar basis. To the extent permitted by law, in
connection with any claim, cause of action, proceeding or other dispute concerning this
Agreement (each a “Claim”), the parties to this Agreement expressly, intentionally, and
deliberately waive any right each may otherwise have to trial by jury. In the event that the
waiver of jury trial set forth in the previous sentence is not enforceable under the law applicable
to this Agreement, the parties to this Agreement agree that any Claim, including any question of
law or fact relating thereto, shall, at the written request of any party, be determined by judicial
reference pursuant to California law. The parties shall select a single neutral referee, who shall
be a retired state or federal judge. In the event that the parties cannot agree upon a referee, the
court shall appoint the referee. The referee shall report a statement of decision to the court.
Nothing in this paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral or obtain provisional remedies. The parties shall bear the
fees and expenses of the referee equally, unless the referee orders otherwise. The referee shall
also determine all issues relating to the applicability, interpretation, and enforceability of this
paragraph. The parties acknowledge that if a referee is selected to determine the Claims, then the
Claims will not be decided by a jury.
Section 21. Tax Matters.
(a) Withholding Forms. The Escrow Agent does not have any interest in the Escrow
Property deposited hereunder but is serving as escrow holder only and having only possession
thereof. Party A and Party B will pay or reimburse the Escrow Agent upon request for any
transfer taxes or other taxes relating to the Escrow Property incurred in connection herewith and
will indemnify and hold harmless the Escrow Agent from any amounts that it is obligated to pay
in the way of such taxes. Any payments of income from this Escrow Account will be subject to
withholding regulations then in force with respect to United States taxes. Due to the requirement
that all escrow accounts have Taxpayer Identification Numbers documented by appropriate W-8
or W-9 forms, Party A and Party B shall return the appropriate form to Escrow Agent, duly
completed and signed by the proper party’s Authorized Representative. Party A and Party B
acknowledge that failure to provide such forms may prevent or delay disbursement of the Escrow
Funds hereunder.
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(b) Tax Reporting. Escrow Agent will report payments of income from the Escrow
Account as required by law, by providing IRS Form 1099-B or other applicable form reporting
the aggregate amount of income received by any person from the Escrow Account.
Section 22. USA PATRIOT Act. Party A and Party B shall provide to Escrow Agent
such information as Escrow Agent may reasonably require to permit Escrow Agent to comply
with its obligations under the federal USA PATRIOT Act (Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001).
Escrow Agent shall not credit any amount of interest or investment proceeds earned on the
Escrow Fund, or make any payment of all or a portion of the Escrow Fund, to any person unless
and until such person has provided to Escrow Agent such documents as Escrow Agent may
require to permit Escrow Agent to comply with its obligations under such Act. Further, each of
the parties represents and warrants to the Escrow Agent that it is not a hedge fund. If any of the
parties is a hedge fund that is not sponsored by a registered investment advisor, such party agrees
to enter into the form of Due Diligence Agreement provided by the Escrow Agent.
Section 23. Miscellaneous.
(a) The rights and remedies conferred upon the parties hereto shall be cumulative,
and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise
of any additional rights or remedies. The waiver of any right or remedy hereunder shall not
preclude the subsequent exercise of such right or remedy.
(b) This Agreement is for the exclusive benefit of the parties hereto and their
respective successors hereunder, and shall not be deemed to give, either express or implied, any
legal or equitable right, remedy, or claim to any other entity or person whatsoever.
(c) Each party hereby represents and warrants (i) that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes its legal, valid and binding
obligation and (ii) that the execution, delivery and performance of this Agreement by the parties
hereto does not and will not violate any applicable law or regulation.
(d) The headings contained in this Agreement are for convenience of reference only
and shall have no effect on the interpretation or operation hereof.
(e) Except as otherwise permitted herein, this Escrow Agreement may be modified
only by a written amendment signed by the proper party’s Authorized Representative and the
Escrow Agent, and no waiver of any provision hereof will be effective unless expressed in a
writing signed by the proper party’s Authorized Representative and the Escrow Agent.
(f) No party may assign any of its rights or obligations under this Escrow Agreement
without the written consent of the other parties.
(g) Any corporation into which the Escrow Agent may be merged or converted or
with which it may be consolidated, or any corp oration resulting from any merger, conversion or
consolidation to which the Escrow Agent will be a party, or any corpora tion succeeding to all or
substantially all the business of the Escrow Ag ent will be the successor of the Escrow Agent
Attachment No. 4
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hereunder without the execution or filing of any paper with any party hereto or any further act on
the part of any of the parties hereto except wher e an instrument of transfer or assignment is
required by law to effect such succession, anything herein to the contrary notwithstanding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
“Party A”
CULVER CITY HOUSING AUTHORITY,
a public body, corporate and politic
Dated: ________________ By: ___________________________________
John M. Nachbar
Executive Director
APPROVED AS TO CONTENT:
CULVER CITY HOUSING AUTHORITY,
a public body, corporate and politic
By: ____________________________
Sol Blumenfeld, Assistant Executive Director
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
Special Counsel
By: _______________________________
Todd C. Mooney
[Signature Page 1 of 2 to Escrow Agreement]
Attachment No. 4
100
“Party B”
HABITAT FOR HUMANITY OF GREATER LOS
ANGELES, INC., a California nonprofit corporation
By: __________________________________________
Erin Rank, President
“Escrow Agent”
_________ BANK, N.A.
as Escrow Agent
By: __________________________________________
Name:
Title:
[Signature Page 2 of 2 to Escrow Agreement]
Attachment No. 4
101
SCHEDULE I
Authorized Representatives of Party A
Signature: _________________________
Print:
Title: Executive Director
Phone:
Email:
Signature: _________________________
Print:
Title:
Phone:
Fax:
Email:
Signature: _________________________
Print:
Title:
Phone:
Fax:
Email:
Signature: _________________________
Print:
Title:
Phone:
Fax:
Email:
Attachment No. 4
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Authorized Representatives of Party B
Signature: _________________________
Print:
Title:
Phone:
Email:
Signature: _________________________
Print:
Title: President
Phone:
Email:
Attachment No. 4
103
SCHEDULE II
ESCROW AGENT COMPENSATION
Attachment No. 4
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SCHEDULE III
Wire Instructions:
If to Party A:
ABA No.:
Bank Name:
Account No.:
Account Name: ______________
Reference:
If to Party B
ABA No.:
Bank Name: _________
Account No.:
Account Name: ______________
Reference: Please notify recipient upon receipt of wire.
Contact person:
Tel. #:
Date: _____________________________
Attachment No. 4
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ATTACHMENT NO. 5
SCOPE OF WORK
The Project will consist of 10 units of affordable housing. Five of the units will be sold to low income
(50%-80% of Area Median Income) buyers, and 5 units will be sold to moderate income (less than 120%
of Area Median Income) buyers.
Five of the units will be detached, two-story units with 3 bedrooms and 2 bathrooms, with
approximately 1,300 sq feet. These units will have a covered parking area behind the unit for 2 vehicles.
One of the units will be a detached, two-story unit with 3 bedrooms, 2 bathrooms, and a den. The unit
will be approximately 1,450 sq feet. The first floor will be handicapped accessible with a bedroom and
full bathroom located on the first floor.
The remaining four units will be two-story units with 3 bedroom and 2 bathrooms. The units will be
approximately 1,350 sq feet. These units will have attached 2 car garages. These 4 units will be built in
2 pairs. The units in each pair will be built with one unit located behind the front unit. A common
driveway and motor court will be located between the pairs and will serve all four units.
The location of the low- and moderate-income units will be mixed throughout the development.
All homes will incorporate energy saving appliances and will be constructed using sustainable material
environmentally-friendly building practices, and solar panels.
The homes will be built to the Leadership in Energy and Environmental Design (LEED) Silver residential
standard and will be at least 10% more efficient than Title 24 Requirements.
The Project shall maintain the existing street trees to the extent possible; the written consent of the
City‘s Community Development Director shall be required prior to removal of any trees.
106Attachment No. 6
107Attachment No. 6
108Ver. 8
A SUMMARY REPORT
PURSUANT TO SECTION 33433 OF THE
CALIFORNIA HEALTH AND SAFETY CODE
FOR THE SALE OF PROPERTIES
LOCATED 4044 THROUGH 4068 GLOBE AVENUE
IN CULVER CITY, CALIFORNIA
The following Summary Report has been prepared pursuant to California Health
and Safety Code Section 33433 (Section 33433). The report sets forth certain
details of the proposed Disposition, Development and Loan Agreement
(Agreement) between the Culver City Housing Authority (Authority) and Habitat
for Humanity of Greater Los Angeles (Developer). The purpose of the
Agreement is to create affordable housing pursuant to Sections 33071 and
33334.2(a) of the California Health and Safety Code (California Redevelopment
Law).
The Agreement requires the Authority to convey the properties located at 4044
through 4068 Globe Avenue, Culver City, California (Site), to the Developer for
the subsequent development of 10 three-bedroom single-family homes (Project).
The Site includes 32,361 square feet of land area, and is zoned R-2.
The Agreement requires the Developer to sell the units to low- and moderate-
income households at an affordable housing cost. The affordable housing cost
requirements are based on the California Health and Safety Code Section
50052.5 definition. The income covenants require all 10 units to be restricted to
moderate income households as defined by California Health and Safety Code
Section 50093. In addition, the Agreement requires the following restrictions to
be applied to five of the units:
1. Five units must initially be sold to low income households as defined by
California Health and Safety Code Section 50079.5. The Developer must
provide first trust deed mortgages to these home buyers at a 0% interest
rate and a 30-year repayment term.
2. The Agreement allows the low income home buyers to resell their homes
to qualified moderate income buyers at the then current affordable
housing cost. The Developer is not required to provide mortgage
financing to any of the homes when they are resold.
I. COST OF THE AGREEMENT TO THE AUTHORITY
The proposed Agreement requires the Authority to sell the Site to the Developer
for a sale price of $751,000, with the payment to be provided in the form a loan
between the Authority and the Developer. The Site was acquired by the Culver
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City Redevelopment Agency (Agency) in 2005 from the State of California using
Property Tax Increment Housing Set-Aside (Set-Aside) funds. Subsequently, all
improvements on the Site were demolished and the Site was transferred to the
Authority. The Agency did not fund any costs with bond proceeds.
To date the Agency/Authority has spent $3,256,462 in Set Aside funds to
implement the Project. Based on an analysis conducted by the Authority’s
financial consultant, Keyser Marston and Associates (KMA), it was determined
that the Project requires $1,262,500 in public financial assistance to achieve
financial feasibility. This $1,262,500 in direct financial assistance, plus $751,000
in land costs, will be treated as a $2.01 million loan to the Developer.
These Agency/Authority costs are detailed in the following table:
Land acquisition cost $3,103,000
Demolition and hazardous materials abatement (clearance) 68,962
Relocation 0
Consultant costs 40,678
Property management 40,210
Utilities 3,612
Total Costs Previously Incurred by the Agency/Authority $3,256,462
Plus: Direct Financial Assistance to the Developer 1,262,500
Total Agency/Authority Costs $4,518,962
The $2,013,500 loan from the Authority to the Developer will be converted into
second trust deed mortgages to the home buyers as the units are sold. The
second trust deed mortgages are being imposed to protect the income and
affordability covenants being imposed on the Project. These mortgages will not
be subject to any interest or principal payment obligations until the home is
resold. The amounts of the second trust deed mortgages are set as follows:
1. Low Income Units: $238,000 per unit; and
2. Moderate Income Units: $164,700 per unit.
The repayment of principal, and interest, if any, will be based upon the date of
resale for each of the 10 units. Therefore, it is not possible to accurately predict
the amount of repayment the Authority will ultimately receive. As such, the
repayment amount and timing are too speculative to project as part of this
analysis.
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II. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED
AT THE HIGHEST USE PERMITTED BY THE REDEVELOPMENT PLAN
Section 33433 requires this report to identify the value of the interests being
conveyed at the highest use allowed by the Redevelopment Plan. The valuation
must be based on the assumption that the property is vacant, and that near-term
development is required; the valuation does not take into consideration any
extraordinary restrictions being imposed on the development.
The Site is not located within a redevelopment project area, and therefore, the
value must be estimated based on the highest use allowed by the Site’s zoning.
Keyser Marston Associates, Inc. (KMA), the Authority’s financial consultant
reviewed land sales for residential sites and estimated the fair market value of
the Site at $1.14 million. This equates to $35 per square foot of land area.
III. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
The Agreement requires that the homes initially be sold to five low income
households and five moderate income households. KMA prepared a reuse
valuation analysis of the Project based on the financial terms and conditions
imposed by the Agreement. The KMA analysis concluded that the fair reuse
value of the Site is negative $1.26 million.
IV. CONSIDERATION RECEIVED AND COMPARISON WITH THE ESTABLISHED
VALUE
The Agreement imposes extraordinary controls on the Project. Specific
requirements include the following:
1. The Developer must impose long-term income and affordability restrictions
on all 10 units.
2. The Developer must provide interest free first trust deed mortgages to the
five low income households purchasing units in the Project.
3. The income and affordability covenants will be enforceable for a period of
45 years.
The impacts created by the reuse requirements reduce the $1.14 million value of
the Site at the highest use allowed by the Redevelopment Plan, to the
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established fair reuse value of negative $1.26 million. The Agreement provides
the Project with $1.26 million in assistance to fill the financial gap associated with
the Project. It therefore can be concluded that the Authority is receiving fair
compensation for the interests being conveyed.
The Agreement encumbers the Project with a $2,013,500 loan that is comprised
of the $751,000 purchase price plus the $1,262,500 million in direct financial
assistance being provided to the Project. This loan will be converted into
$2,013,500 in second trust deed mortgages as the units are sold to low and
moderate income home buyers. The revenues generated by the repayment of
these mortgages will accrue to the Authority’s benefit.
V. ELIMINATION OF BLIGHT/COMPLIANCE WITH THE AB 1290
IMPLEMENTATION PLAN
The Site was selected for redevelopment when Caltrans offered it to local public
agencies as a site for affordable housing. Caltrans has a mandate to first offer its
surplus properties to affordable housing agencies. In the Comprehensive
Strategy adopted by the Agency Board in March 2008, the Site was identified as
a location for an affordable housing development within the following two years.
Development of the Site as proposed will comport with the mandate to spend Set
Aside funds to create affordable housing. In addition, Section 33433 indicates
that the provision of affordable housing is a blight elimination activity.
The Agency's objectives in acquiring the Site for redevelopment were to convert
nonconforming land uses into a use of the Site that fulfills the Agency’s policy
objectives. The redevelopment of the Site is intended to enhance the area by
removing blighted property and improving it with new affordable housing. The
Site will be redeveloped with land uses that are more attractive, compatible and
safer for the area, and help in achieving affordable housing goals, consistent with
the implementation plan adopted pursuant to California Health and Safety Code
Section 33490.
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