HomeMy WebLinkAboutContracts & Agreements_152-2022CITY OF REDLANDS HOMEKEY GRANT AGREEMENT
This Homekey Grant Agreement (the "Agreement") is dated as of July 19, 2022 (the
"Effective Date"), and is between the City of Redlands, a political subdivision of the State of
California (the "City"), Step Up on Second Street, Inc., a California nonprofit public benefit
corporation ("Step Up"), 1675 Industrial Park, LP, a Delaware limited partnership ("Owner"), and
Shangri-La Industries, LLC, a Delaware limited liability company, and permitted successors and
assigns (collectively "Grantee"). City, Step Up, Owner and Grantee are collectively referred to
herein as the "Parties".
RECITALS
WHEREAS, the State of California implemented a statewide initiative known as "Project
Homekey" with the intention to secure thousands of motel/hotel rooms to provide non -congregate
shelter for extremely vulnerable individuals experiencing homelessness to help keep susceptible,
homeless persons safe from the COVID-19 virus, flatten the curve, and preserve hospital capacity;
and
WHEREAS, the State of California Department of Housing and Community Development
issued a Notice of Funding Availability ("NOFA") for the Homekey 2.0 2021 Program (NOFA);
and
WHEREAS, City has determined that the development of an affordable permanent
motel/hotel housing site for Project Homekey could be accomplished most effectively and
economically if undertaken by an experienced developer under an agreement with City; and
WHEREAS, Owner has identified, and is in escrow to acquire, the Good Nite Inn, located
at 1675 Industrial Park Avenue as more particularly described in Exhibit A (the "Property"), as the
most desirable motel within the City for the interim to permanent housing conversion contemplated
by Project Homekey; and
WHEREAS, the Parties have prepared this Agreement to comply with the NOFA's
requirements to demonstrate how the development team is connected and how the development
team will work together.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for
such other good and valuable consideration, the receipt of which is hereby acknowledged, the
Parties agree as follows:
A. The City, Step Up, and the Grantee jointly applied and were awarded Homekey 2.0
2021 Funds from HCD which shall be disbursed pursuant to the terms of Standard Agreement,
Award: 21-HK-17166 by and among HCD, the City and the Grantee, which shall govern the
expenditure of the Homekey Funds (the "Standard Agreement").
B. The Department of Housing and Community Development ("HCD") issued a
Notice of Funding Availability ("NOFA") for the Homekey Program, Round 2 on September 9,
2021. The NOFA incorporates by reference the Multifamily Housing Program (MHP), as well as
the MHP Final Guidelines ("MHP Guidelines"), dated June 19, 2019, both as amended and in
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effect from time to time. In addition, the NOFA states that Homekey grant funds are derived
primarily from Coronavirus Relief Fund ("CRF") money received from the U.S. Department of
the Treasury. The CRF was established by the federal Coronavirus Aid, Relief, and Economic
Security (CARES) Act (Public Law No. 116-136).
C. The Grantee and Owner intend to convert the Property to provide ninety-eight (98)
permanent supportive housing units and one (1) unrestricted manager's unit for individuals who
are experiencing homelessness, are chronically homeless, or who are at risk of homelessness
("Target Population") on the Property in order to provide increased affordable housing (the
"Improvements"). The Improvements and the Property are referred to as the "Development."
D. The City desires to make a revocable grant to Grantee in an amount not to exceed
$3,573,485.00 of City funds ("City Funds") to fund a City Operating Subsidy (the "Grant").
E. Pursuant the terms of the Standard Agreement, the City is required to cause a 55-
year use restriction to be recorded against the Property in first lien priority (the "Use Restriction")
to secure performance under the Standard Agreement.
F. The Grant is being made to finance an operating subsidy reserve for the
Development to ensure the affordability of the units for the Homekey Term in order to help achieve
financial feasibility for the Development. The Development will increase the supply of affordable
rental housing in the City of Redlands. Due to the assistance provided to Grantee pursuant to this
Agreement and the Standard Agreement, the City has classified ninety-eight (98) units as City -
assisted units (each such unit a "City -Assisted Unit").
NOW, THEREFORE, the Parties agree as follows:
AGREEMENT
ARTICLE 1.
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.
The following terms have the following meanings:
(a) "Affiliate" means an entity that is controlling or controlled by Grantee. For
the purposes of this definition "Control" means (1) direct or indirect management or control of the
managing member or members in the case of a limited liability company; (2) direct or indirect
management or control of a general partner or general partners in the case of a partnership; and (3)
direct or indirect control of a majority of the directors in the case of a corporation.
(b) "Agreement" means this Homekey City Grant Agreement, as such may be
amended from time to time.
(c) "Shangri-La" means* Shangri-La Industries LLC, a Delaware limited
partnership.
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(d) "Approved Financing" means all of the loans, grants and equity obtained by
Grantee for the purpose of financing the Development, which include the following, estimated as
of the Effective Date:
1) An equity contribution from the Grantee of not less than Nine Hundred Four
Thousand Eight Hundred Dollars ($904,800)
2) A loan of approximately Ten Million Two Hundred Seventy Thousand Six
Hundred Twenty Dollars ($10,270,620) (the "Construction Loan")
3) A grant of approximately Twenty Four Million One Hundred Forty -Two
Thousand Dollars ($24,142,000) of Homekey program funding from HCD
(the "Homekey Acquisition Funds") or such other amount approved by
HCD; and
4) A grant of approximately Four Million Eight Hundred Seventy -Eight
Thousand Dollars ($4,878,000) of Homekey program funding from HCD
(the "Homekey Operating Funds") or such other amount approved by HCD;
and
5) A conditional occupancy grant of approximately Nine Hundred Eighty
Thousand Dollars ($980,000) of Homekey program funding from HCD (the
"Expedited Occupancy Conditional Bonus Operating Fund Award")
contingent upon achieving full occupancy (with consideration for an
average of 10% vacancy) within eight (8) months of the date of award
pursuant to the terms of the NOFA and Standard Agreement
(e) "Approved Financing Plan" means the Financing Plan approved by the City
as of the date of this Agreement, as the same may be amended pursuant to Section 3.5. The
Approved Financing Plan shall be updated at the Close of Escrow without need for amendment of
this Agreement.
(0 "Certificate of Completion" means the final Certificate of Completion
issued by the City of Redlands, or comparable City sign -off on the completion of conversion of
the Development.
(g)
"City" means the City of Redlands, a political subdivision of California.
(h) "Completion Date" means the date that a temporary or final Certificate of
Completion, or equivalent document is issued by the City to certify completion of the rehabilitation
and conversion of the Development.
designee.
"City -Assisted Units" has the meaning set forth in Recital F.
"City" has the meaning set forth in the first paragraph of this Agreement.
"City Executive Officer" means the City's City Manager, or an authorized
(1) "Development" has the meaning set forth in Paragraph C of the Recitals.
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(m) "Escrow" means the escrow account established by the Grantee for the
closing of Development financing with Ticor Title Company of California in its Los Angeles
office, located at 660 S. Figueroa Street, #1888, Los Angeles, CA 90017 or another escrow
company satisfactory to the City.
(n) "Event of Default" has the meaning set forth in Section 6.1.
(o) "Grant" has the meaning set forth in Paragraph D of the Recitals.
(p) "Grant Documents" means this Agreement, and the Use Restriction.
(q) "Grantee" has the meaning set forth in the first paragraph of this Agreement.
(r) "Hazardous Materials" has the meaning set forth in Section 4.5(a).
(s) "Hazardous Materials Claims" has the meaning set forth in Section 4.5(b).
(t) "Hazardous Materials Law" has the meaning set forth in Section 4.5(b).
(u) "Homekey Program" has the meaning set forth in Paragraph B of the
Recitals.
(v) "Homekey Funds" means the Homekey Acquisition Funds provided by
HCD under the Standard Agreement.
(w) "Homekey Term" means the period beginning on the date of this Agreement
and ending on the tenth (10th) anniversary of the Completion Date.
(x) "Homekey Regulations" has the meaning set forth in Paragraph B of the
Recitals.
(y)
"Improvements" has the meaning set forth in Paragraph C of the Recitals.
(z) "Notice of Completion" means the Notice of Completion executed by
Grantee in the form specified in California Civil Code Section 3093.
(aa) "Owner" means 1675 Industrial Park, LP, a Delaware limited partnership.
(bb) "Permitted Transfer" has the meaning set forth in Section 4.11 (c).
(cc) "Property" has the meaning set forth in Exhibit A of this Agreement.
(dd) "Use Restriction" means the Regulatory Agreement and Declaration of
Restrictive Covenants between the City and Grantee as described in the Standard Agreement
related to the Grant and the Homekey Funds, to be recorded against the Grantee's fee interest in
the Property.
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(ee) "Schedule of Performance" means the schedule for performance of various
tasks and obligations under this Agreement that is attached as Exhibit B, as such may be modified
pursuant to Section 3.1."Services Budget" has the meaning set forth in Section 3.6.
(ff) "Services Plan" has the meaning set forth in Section 3.6.
(gg) "Program Participant" means a person or household that occupies a Unit in
the Development meeting the Target Population.
(hh) "Term" means the period of time that commences on the date of this
Agreement, and expires, unless sooner terminated in accordance with this Agreement, on the
fourteenth (14th) anniversary of the Completion Date.
(ii) "Transfer" has the meaning set forth in Section 4.11.
(jj) "Unit" means one (1) of the approximately ninety-eight (98) affordable
housing units to be constructed at the Development, including one (1) unrestricted manager's unit.
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
Exhibit A:
Exhibit B:
Legal Description of the Property
Schedule of Performance
ARTICLE 2.
GRANT PROVISIONS
Section 2.1 Grant.
Subject to the satisfaction of the conditions set forth in this Article, the City shall provide
to Grantee the Grant, which the Grantee may use solely to fund the operating subsidy for the
ninety-eight (98) City -Assisted Units at the Development for the Homekey Term, consistent with
the terms of the Use Restriction and the Standard Agreement. Except as set forth in Section 2.4,
Grantee has no obligation to repay the Grant.
Section 2.2 Security.
(a) Owner and Grantee shall also cause or permit the Use Restriction to be
recorded against the fee interest in the Property, in first lien position. The Use Restriction shall
not be subordinated.
Section 2.3 Forgiveness of Revocable Grant.
(a) Provided that no Default exists under this Agreement or the Use Restriction,
without further action of the parties, the Grant shall be forgiven by Five Hundred Thousand Dollars
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($500,000) for each year of the Homekey Term commencing on the first anniversary of the
Effective Date.
Section 2.4 Revocation of Grant Upon Default.
Notwithstanding any provision herein to the contrary, and in addition to any other rights and
remedies available to the City set forth in Article 6, upon a Default by Grantee or Owner, the City
may revoke the outstanding balance of the Grant, and declare the outstanding balance of the Grant
(other than any portion of the Grant that has been previously forgiven by the City as set forth in
Section 2.3 above) to be immediately due and payable, subject to the non -recourse provisions set
forth in Section 2.5.
Section 2.5 Non -Recourse.
Neither Grantee or Owner, nor any member of Grantee (that is not a Guarantor) or any partner
of the Owner (that is not a Guarantor), shall have any direct or indirect personal liability for
payment of the principal of, and interest on, the Grant.
Section 2.6 Conditions Precedent to Disbursement of Grant Funds.
(a) A special "Capitalized Operating Subsidy Reserve" shall be created and
maintained as a segregated interest -bearing account held by the Grantee or Owner for the Homekey
Term of this Agreement, subject to subsections (c) and (d) below. The Capitalized Operating
Subsidy Reserve shall be capitalized in the amount of the City Grant. Any interest earned on funds
in the Capitalized Operating Subsidy Reserve shall be added to and become part of the Capitalized
Operating Subsidy Reserve.
(b) The Capitalized Operating Subsidy Reserve shall be used to pay monthly
operating costs for City -Assisted Units occupied by income qualifying households from the Target
Population, during the Term, and is expected to be drawn down completely within seven (7) years
of the Term.
(c) The City shall disburse the City Grant in seven annual installments of
$510,497. The initial payment shall be made by or before September 1, 2022, and subsequent
payments shall be made annually by or before the anniversary of the effective date thereafter. The
City shall have no obligation to make any disbursements or to take any other action under the
Grant Documents unless the following conditions precedent are satisfied prior to each such
disbursement of the Grant funds. There exists no Event of Default or any other financing
agreements or contracts between the City and Grantee, Owner or their affiliates relating to the
Development;
(1) Grantee has delivered to the City a copy of Grantee's organizational
documents, including an Operating Agreement, and a corporate authorizing resolution
authorizing Grantee's execution of this Agreement and the transactions contemplated by this
Agreement;
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(2) Owner has delivered to the City a copy of Owner's organizational
documents, including a limited partnership agreement, and a corporate authorizing resolution
authorizing Owner's execution of this Agreement and the transactions contemplated by this
Agreement;
(3) Step Up has delivered to the City a copy of Step Up's organizational
documents, and a corporate authorizing resolution authorizing Step Up's execution of this
Agreement and the transactions contemplated by this Agreement;
(4) Grantee or Owner have closed, or are closing, on the Construction
Loan and has provided the Grantee Equity into escrow;
(5) Grantee, Step Up and Owner have furnished the City with evidence
of the insurance coverage meeting the requirements of Section 4.12 below;
(6) The City has received from Grantee and approved a form of program
participation agreement;
(7)
Selection Plan;
The City and the Grantee and Owner have agreed on a Participant
(8) The City has received, from Grantee, Step Up and Owner, and
approved a copy of the Services Plan for the provision of service to residents;
(9) Grantee or Owner have submitted a certification from the architect
or a City approved Certified Access Specialist certifying that the Development will be
rehabilitated in compliance with the accessibility requirements set forth in the Standard
Agreement or has provided the City with other evidence that the Development, as built, complies
with the accessibility requirements set forth in the Standard Agreement;
(10) The City has received from Grantee or Owner a copy of the
Management Plan, and a management agreement and contact information for the property
manager of the Development and the name and phone number of the on -site property manager,
in compliance with the terms of the Use Restriction;
(11) There exists no material adverse change in the financial condition of
Grantee from that shown by the financial statements and other data and information furnished by
Grantee to the City prior to the date of this Agreement;
(d) The Capitalized Operating Subsidy Reserve is intended to assure the
affordability of the City -Assisted Units at the Development and shall not be transferable and must
remain with the Development for the Term of this Agreement. During the Term of this Agreement,
the Grantee and Owner shall be required to either: (1) allow the Capitalized Operating Subsidy
Reserve to remain with the Development upon transfer; or (2) repay to the City any amounts
remaining in the Capitalized Operating Subsidy Reserve as of the date of a transfer.
(e) Notwithstanding any other provisions of this Agreement, the City shall have
no further obligation to disburse any portion of the Grant to Grantee or Owner under this
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Agreement following: (i) termination of this Agreement; (ii) notification by the City to the Grantee
of an Event of Default (excluding any Event of Default of the City) under terms of this Agreement
until such time as the Event of Default has been cured.
ARTICLE 3.
GRANTEE OBLIGATIONS
Section 3.1 Schedule of Performance.
Subject to this Agreement, the Grantee shall perform the tasks described in the Schedule
of Performance no later than the dates set forth in the Schedule of Performance, which shall at all
times be in substantial conformance with the terms and conditions of the Standard Agreement.
The Schedule of Performance may be modified in writing by Grantee and the City Executive
Officer on behalf of the City without the need for formal amendment of this Agreement or further
approval by the City Council .
Section 3.2 Conversion and Rehabilitation.
(a) Grantee shall be solely responsible to obtain all permits and approvals for
the rehabilitation and operation of the Development. Grantee shall convert the Development to
permanent housing and shall cause the commencement and completion of conversion of the
Development to permanent housing no later than the dates set forth in the Standard Agreement.
(b) Grantee shall make Development available for occupancy as permanent
housing in accordance with the terms of the Use Restriction. Grant funds provided to the Grantee
may only be used to fund operating subsidies for Units that are occupied by eligible households.
Section 3.3 Prevailing Wages; Accessibility.
(a) Prevailing Wages. The funding of an operating subsidy is not a public work
under the meaning set forth in Labor Code Section 1720. Nonetheless, if and to the extent required
by law, in the rehabilitation of the Development, Grantee and Owner shall and shall cause all
contractors and subcontractors to pay prevailing wages in performing any construction activities
as may be required under federal Davis -Bacon Act (40 USC 3141-3148) and the labor compliance
provisions to be provided by the City (if applicable), and pursuant to Labor Code Sections 1720 et
sec . (the "Prevailing Wage Requirements"), and the implementing regulations of the Department
of Industrial Relations (the "DIR"), to employ apprentices as required by Labor Code Sections
1777.5 et sec ., and the implementing regulations of the DIR and comply with the other applicable
provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., 1810-1815, and implementing
regulations of the DIR.
(b) Grantee and Owners shall indemnify, hold harmless and defend (with
counsel reasonably acceptable to the City) the City and its City Council, officers and employees
against any claim for damages, compensation, fines, penalties or other amounts arising out of the
failure or alleged failure of any person or entity (including Grantee, its contractors and
subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et
se . and prevailing wage requirements of the federal Davis -Bacon Act (40 USC 3141-3148), to
employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations
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of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et sec .,
1777.5 et sec ., and the implementing regulations of the DIR in connection with the performance
of the development activities or any other work undertaken or in connection with the Property.
The requirements in this subsection survive the termination of this Agreement.
(c) Accessibility Requirements. The Development will be operated at all times
in compliance with all applicable federal, state, and local disabled persons accessibility
requirements including, but not limited to the applicable provisions of the Standard Agreement.
Section 3.4 Inspections.
(a) The Grantee and Owner shall permit and facilitate, observation and
inspection of the Development by the City and by public authorities during reasonable business
hours upon forty-eight (48) hours' written notice for the purposes of determining compliance with
this Agreement, provided, however, that nothing in this Agreement shall entitle the City to enter
an occupied unit in the Development without notice to the program participant thereof, which the
Grantee and/or Owner shall deliver on behalf of the City, and permission from such program
participant to the extent such permission is required by law. Such inspections do not relieve the
Grantee, or its contractors, from any applicable requirement to obtain other City or City inspections
in connection with the conversion of the Improvements.
(b) After the completion of an inspection the City shall deliver a copy of the
inspection report to the Grantee. If the City determines as a result of the inspection that there are
any deficiencies for any of the inspectable items in the Development, the Grantee shall correct
such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period
longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Grantee must
begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as
reasonably possible.
Section 3.5 Approved Financing Plan.
As of the date of this Agreement, the City has approved the Approved Financing Plan.
Grantee shall submit any proposed or required amendments to the Approved Financing Plan, along
with evidence that the changes to the Approved Financing Plan are reasonable and necessary, to
the City for approval within fifteen (15) days of the date Grantee receives information indicating
that actual costs of the Development materially vary or will vary from the costs shown on the
Approved Financing Plan, which approval shall not be unreasonably withheld or delayed. The
City will respond in writing within seven (7) days after receipt of a proposed amendment to the
Approved Financing Plan.
(a) Step Up will be providing on -site services to all program participants in the
Development which are required under the Homekey Program (the "Social Services"). By the
time specified in the Schedule, Step Up shall submit to the City for approval a proposed services
plan which shall include written guidelines or procedures for providing the Social Services (the
"Services Plan"), and a proposed budget for the provision of Social Services (the "Services
Budget").
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(b) The Services Plan shall include the types of Social Services provided,
staffing levels, and overall coordination of the Social Services.
(c) Upon receipt of the proposed Services Plan and Services Budget, the City
shall promptly review the proposed Services Plan and Services Budget and shall approve or
disapprove them within fifteen (15) days after submission. If either the Services Plan or Services
Budget is not approved, Step Up shall submit a revised Services Plan and/or Services Budget
within fifteen (15) days following Step Up's receipt of the City's written disapproval. If the City
does not approve the revised Services Plan and/or Services Budget because the Step Up fails to
make specific revisions requested by the City, Step Up, the Grantee and Owner shall be in default
hereunder. If the City does not approve or disapprove updates to Resident Services Plan or
Resident Services Budget within the timeframe specified herein, then the Resident Services Plan
or Resident Services Budget, as applicable, from the prior year shall remain in effect.
ARTICLE 4.
GRANT REQUIREMENTS
Section 4.1 Annual Operating Budget.
At the beginning of each year of the Term, Grantee or Owner shall provide to the City an
annual budget for the operation of the Development.
Section 4.2 Information.
Grantee, Step Up, and Owner shall provide any information related to the Development
reasonably requested by the City in connection with the Development, including (but not limited
to) any information required by HCD in connection with the Standard Agreement, and any
information required by the City in connection with the Grantee's use of the Grant funds.
Section 4.3 Records.
(a) Grantee, Step Up, and Owner shall keep and maintain at the Development,
or at the corporate offices of the Grantee or the Owner's general partner, or elsewhere with the
City's written consent, full, complete and appropriate books, records and accounts relating to the
Development. Books, records and accounts relating to Grantee's compliance with the terms,
provisions, covenants and conditions of this Agreement. All applicable financial documents are
to be kept and maintained in accordance with generally accepted accounting principles consistently
applied. All such books, records, and accounts shall at reasonable times be open to and available
for inspection and copying by the City, its auditors or other authorized representatives at
reasonable intervals during normal business hours and forty-eight hours' prior written notice to
Grantee and Owner. Grantee, Step Up and Owner shall preserve such records for a period of not
less than five (5) years after the expiration of the Standard Agreement. Copies of all tax returns
and other reports that Grantee or Owner may be required to furnish to any governmental agency
are to be open for inspection by the City at all reasonable times at the place that the books, records
and accounts of Grantee, Step Up or Owner are kept. If any litigation, claim, negotiation, audit
exception, monitoring, inspection or other action relating to the use of the Grant is pending at the
end of the record retention period stated herein, then Grantee, Step Up and Owner shall retain the
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records until such action and all related issues are resolved. Such records are to include but are not
limited to:
(1) Records providing a full description of the activities undertaken
under the Standard Agreement;
(2) Records providing a full description of the activities undertaken
with the use of the Grant funds;
(3) Records documenting compliance with the Participant Selection
Plan and all applicable fair housing, equal opportunity, and affirmative fair marketing
requirements;
(4) Records demonstrating compliance with Use Restriction;
(5) Records demonstrating compliance with all applicable accessibility
requirements;
(6) Records demonstrating compliance with any applicable relocation
requirements, which must be retained for at least five (5) years after the date by which persons
displaced from the property have received final payments; and
(7) Records demonstrating compliance with any applicable labor
requirements (including certified payrolls from Grantee or Owner's general contractor evidencing
that applicable prevailing wages have been paid if it has been deemed a prevailing wage is required
to be paid.
(b) The City shall notify Grantee or Owner of any records it deems insufficient.
Grantee has thirty (30) calendar days after the receipt of such a notice to correct any deficiency in
the records specified by the City in such notice, or if a period longer than thirty (30) days is
reasonably necessary to correct the deficiency, then Grantee must begin to correct the deficiency
within thirty (30) days and correct the deficiency as soon as reasonably possible.
Section 4.4 City Grant Requirements.
(a) Grantee, Step Up and Owner shall, at all times during the Term hereof,
comply with all applicable laws and regulations governing the use of the Homekey Funds under
the Standard Agreement. Grantee shall also comply with the laws and regulations governing the
use of the Grant funds including (but not limited to) the following:
(1) Civil Rights, Housing and Community Development, and Age
Discrimination Acts. The Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing
regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII
of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the
Housing and Community Development Act of 1974 as amended; Section 504 of the Construction
Act of 1973 (29 USC 794, et set.); the Age Discrimination Act of 1975 (42 USC 6101, et sm.);
Executive Order 11063 as amended by Executive Order 12259 and implementing regulations at
24 C.F.R. Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086,
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11478, 12107; Executive Order 11625 as amended by Executive Order 12007; Executive Order
12432; Executive Order 12138 as amended by Executive Order 12608, Executive Order 13672
concerning Gender Identity.
(2) Relocation. The parties agree and acknowledge that the project
contemplated under this Agreement is not expected to result in any displacement. From and after
the Closing, if and to the extent the rehabilitation of Development results in the permanent or
temporary displacement of residential tenants, program participants, homeowners, or businesses,
then the Grantee shall comply with all applicable local, state, and federal statutes and regulations,
(including without limitation the Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 (42 U.S.C. 4601, et se .), and implementing regulations at 49 C.F.R. Part
24; 24 C.F.R. 570.606; Section 104(d) of the Housing and Community Development Act of 1974
and implementing regulations at 24 C.F.R. 42 et sec .; 24 C.F.R. 92.353; and California
Government Code Section 7260 et sec . and implementing regulations at 25 California Code of
Regulations Sections 6000 et seq. ) with respect to relocation planning, advisory assistance, and
payment of monetary benefits. The Grantee and Owner shall be solely responsible for payment
of any relocation benefits to any displaced persons and any other obligations associated with
complying with such relocation laws. The Grantee and Owner shall defend (with counsel
reasonably selected by the City) the City, its governing board members, officers, representatives,
agents, assigns and employees against any claim for damages, compensation, fines, penalties,
relocation payments or other amounts arising out of the failure or alleged failure of any person or
entity (including the Grantee or the City) to satisfy relocation obligations related to the
rehabilitation of the Development. This obligation to indemnify shall survive termination of this
Agreement.
(3) Homekey Regulations. Any other HCD regulations present or as
may be amended, added, or waived in the future pertaining to the Homekey Funds.
Section 4.5 Hazardous Materials.
(a) Grantee and Owner shall keep and maintain the Property in compliance
with, and may not cause or permit the Property to be in violation of any federal, state or local laws,
ordinances or regulations relating to industrial hygiene or to the environmental conditions on,
under or about the Property including, but not limited to, soil and ground water conditions. Grantee
and Owner may not use, generate, manufacture, store or dispose of on, under, or about the Property
or transport to or from the Property any flammable explosives, radioactive materials, hazardous
wastes, toxic substances or related materials, including without limitation, any substances defined
as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under any applicable federal or state laws or regulations
(collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as may
be customarily used in rehabilitation of projects like the Development or kept and used in and
about residential property of this type.
(b) Grantee or Owner shall immediately advise the City in writing if at any time
it receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental
or regulatory actions instituted, completed or threatened against Grantee or the Property pursuant
to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
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Materials, ("Hazardous Materials Law"); (2) all claims made or threatened by any third party
against Grantee, Owner or the Property relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in
clauses (1) and (2) above are hereinafter referred to as "Hazardous Materials Claims"); and (3)
Grantee's or Owner's discovery of any occurrence or condition on any real property adjoining or
in the vicinity of the Property that could cause the Property or any part thereof to be classified as
"border -zone property" (as defined in California Health and Safety Code Section 25117.4) under
the provision of California Health and Safety Code, Section 25220 et seq., or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership,
occupancy, transferability or use of the Property under any Hazardous Materials Law.
(c) The City has the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to
have its reasonable attorneys' fees in connection therewith paid by Grantee or Owner. Grantee and
Owner shall indemnify and hold harmless the City and its board members, supervisors, directors,
officers, employees, agents, successors and assigns from and against any loss, damage, cost,
expense or liability directly or indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on,
under, or about the Property including without limitation: (1) all foreseeable consequential
damages; (2) the costs of any required or necessary repair, cleanup or detoxification of the Property
and the preparation and implementation of any closure, remedial or other required plans and (3)
all reasonable costs and expenses incurred by the City in connection with clauses (1) and (2),
including but not limited to reasonable attorneys' fees and consultant's fees. This indemnification
applies whether or not any government agency has issued a cleanup order. Losses, claims, costs,
suits, liability, and expenses covered by this indemnification provision include, but are not limited
to: (A) losses attributable to diminution in the value of the Property; (B) loss or restriction of use
of rentable space on the Property; (C) adverse effect on the marketing of any rental space on the
Property; and (D) penalties and fines levied by, and remedial or enforcement actions of any kind
issued by any regulatory agency (including but not limited to the costs of any required testing,
remediation, repair, removal, cleanup or detoxification of the Property and surrounding
properties). This obligation to indemnify will survive termination of this Agreement.
(d) Without the City's prior written consent, which will not be unreasonably
withheld, neither Grantee or Owner may take any remedial action in response to the presence of
any Hazardous Materials on, under or about the Property (other than in emergency situations or as
required by governmental agencies having jurisdiction), nor enter into any settlement agreement,
consent decree, or other compromise in respect to any Hazardous Material Claims.
Section 4.6 Maintenance and Damage.
(a) During the Term, Grantee or Owner shall maintain the Development in
good repair and in a neat, clean and orderly condition, consistent with quality affordable housing
developments owned or operated by Shangri-La or Shangri-La affiliates and in compliance with
the City approved Management Plan. If there arises a condition in contravention of this
requirement, and if Grantee or Owner have not cured such condition within thirty (30) days after
receiving written notice from the City of such a condition, if Grantee or Owner are incapable of
curing a default within such thirty (30) day period, the City will give the Grantee or Owner ninety
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(90) days to cure such default provided Grantee or Owner has commenced to cure within such
thirty (30) day period and is diligently proceeding to cure such default through the end of such
period, then in addition to any other rights available to the City, the City may perform all acts
necessary to cure such condition, and to establish or enforce a lien or other encumbrance against
the Property, subject to the provisions provided in subsection (b) below.
(b) Subject to the requirements of Senior Lenders, and if economically feasible
in the City's judgment after consultation with Grantee and Owner, if any improvement now or in
the future on the Property is damaged or destroyed, then Grantee or Owner shall, at its cost and
expense, diligently undertake to repair or restore such improvement. Such work or repair is to be
commenced no later than the later of one hundred twenty (120) days, or such longer period
approved by the City in writing, after the damage or loss occurs or thirty (30) days following
receipt of the insurance proceeds, and is to be completed within one (1) year thereafter. Any
insurance proceeds collected for such damage or destruction are to be applied to the cost of such
repairs or restoration and, if such insurance proceeds are insufficient for such purpose, then
Grantee or Owner shall make up the deficiency. If Grantee or Owner do not promptly make such
repairs then any insurance proceeds collected for such damage or destruction are to be promptly
delivered by Grantee or Owner to the City as a special repayment of the Grant, subject to the rights
of the Senior Lenders, as applicable.
Section 4.7 Fees and Taxes.
(a) Grantee and Owner are solely responsible for payment of all fees,
assessments, taxes, charges, and levies imposed by any public authority or utility company with
respect to the Property or the Development, and shall pay such charges prior to delinquency, except
those which are being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with generally accepted accounting principles.
(b) City acknowledges that the Grantee or Owner intend to apply to the State
Board of Equalization for a welfare exemption from property taxes under California Revenue and
Taxation Code Section 214 for the Development.
Section 4.8 Notice of Litigation.
Grantee, Step Up, and Owner shall promptly notify the City in writing of any litigation
related to the Development, and any litigation related to the Grantee, Step Up, or Owner for which
the amount claimed or at issue is in excess of Fifty Thousand Dollars ($50,000), and of any claims
or disputes that involve a material risk of such litigation. The conditions and obligations set forth
in this Section shall apply for the entire Term of this Agreement.
Section 4.9 Operation of Development as Affordable Housing.
(a) Grantee and Owner shall operate the Development as an affordable housing
development consistent with: (1) HCD's requirements for use of the Homekey Funds and the terms
and conditions set forth in the Standard Agreement; (2) the Use Restriction; and (3) any other
regulatory requirements imposed on Grantee including but not limited to regulatory agreements
associated with the City Grant.
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(b) Before leasing any City -Assisted Unit in the Development, Grantee or
Owner shall submit proposed form of program participation agreement for the City's review and
approval. Any program participation agreement for any unit in the Development or refusal to
renew must be preceded by not less than sixty (60) days written notice to the Program Participant
by Grantee specifying the grounds for the action.
(c) Before letting any City -Assisted Unit in the Development, Grantee, Owner,
Step Up, and the City shall agree upon a written program participant selection plan for the
Development (the "Participant Selection Plan").
(d) Grantee and Owner shall evaluate the income eligibility of each Program
Participant in Units pursuant to the City's approved eligibility certification procedures within sixty
(60) days before the household's expected occupancy of one of the Units. For all City -Assisted
Units, Grantee or Owner shall certify or cause the property manager to certify each Program
Participant's continued program eligibility an annual basis.
(e) Grantee or Owner shall maintain all documents setting forth the program
eligibility, as applicable, household income of each household occupying a Unit, and the total
amount for contribution, utilities, and related services charged to each household occupying the
Development, as prescribed by the Use Restriction and all other recorded regulatory restrictions.
Section 4.10 Nondiscrimination.
(a) Grantee, Step Up, and Owner herein covenant by and for themselves, their
heirs, executors, administrators, successors and assigns, and all persons claiming under or through
them, that there will be no discrimination against or segregation of a person or of a group of persons
on account of race, color, religion, creed, age (except for lawful senior housing in accordance with
state and federal law), familial status, disability, sex, sexual orientation, marital status, ancestry or
national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property, nor may Grantee or any person claiming under or through Grantee establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of program participants, tenants, lessees, subtenants,
sublessees or vendees in the Property. Grantee shall comply with Executive Orders 11246, 11375,
11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964, the California Fair
Housing and Employment Act and other applicable Federal, State and local laws and regulations
and policies relating to equal employment and contracting opportunities, including laws and
regulations hereafter enacted. Notwithstanding the above, with respect to familial status, the above
should not be construed to apply to housing for older persons as defined in Section 12955.9 of the
Government Code and other applicable sections of the Civil Code as identified in Health and
Safety Code Section 33050(b). The foregoing covenant will run with the land.
Section 4.11 Transfer.
(a) Definition. For purposes of this Agreement, "Transfer" means any sale,
assignment, or transfer, whether voluntary or involuntary, of: (1) any rights and/or duties under
this Agreement; and/or (2) any interest in the Development, including (but not limited to) a fee
simple interest, a joint tenancy interest, a life estate, a partnership interest, a fee interest, a security
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interest, or an interest evidenced by a land contract by which possession of the Development is
transferred and Grantee retains title. The term "Transfer" excludes the leasing of a Unit in the
Development to an occupant in compliance with the Use Restriction. The City Executive Officer
is authorized to execute assignment and assumption agreements on behalf of the City to implement
any approved Transfer.
(b) Prohibition. Except as expressly permitted in this Agreement, the Grantee
represents and agrees that the Grantee shall not make or create, or suffer to be made or created,
any Transfer, either voluntarily or by operation of law without the prior written approval of the
City.
(1) The limitations on Transfers set forth in this Section shall apply
throughout the Term.
(2) Any Transfer made in contravention of this Section shall be void
and shall be deemed to be a default under this Agreement whether or not the Grantee knew of or
participated in such Transfer.
(c) Permitted Transfers. Notwithstanding the foregoing, the following are
permitted Transfers shall be permitted and are hereby approved by the City (each a "Permitted
Transfer"):
(1) Any Transfer creating a Security Financing Interest either: (A)
permitted pursuant to the Approved Financing Plan; or (B) created as a result of a loan made to
developer that replaces any existing Senior Lender.
(2) Any Transfer directly resulting from the foreclosure of a Security
Financing Interest or the granting of a deed in lieu of foreclosure of a Security Financing Interest
or as otherwise permitted under this Agreement.
(3) Except as set forth in subsection (c) above, during the Term, Grantee
will not refinance, re -syndicate, take out a line of credit or otherwise further encumber the
property or restructure the debt constituting the Approved Financing without prior notification to
the City.
Section 4.12 Insurance Requirements.
(a) Grantee, Step Up and Owner shall maintain the following insurance
coverage throughout the Term of the Grant written by insurers authorized to do business in the
State of California and with a minimum "Best" Insurance Guide rating of "A-VII". If the Grantee,
Step Up or Owner uses existing coverage to comply with these requirements and that coverage
does not meet the specified requirements, the Grantee, Step Up, and Owner agrees to amend,
supplement, or endorse the existing coverage to do so. The type(s) of insurance required is
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determined by the scope of the contract services and the requirements set forth in the Standard
Agreement.
(b) Without in anyway affecting the indemnity herein provided and in addition
thereto, the Grantee, Step Up, and Owner shall secure and maintain throughout the contract term
the following types of insurance with limits as shown:
(1) Workers' Compensation/Employers Liability.
(A) Workers' Compensation A program of Workers'
Compensation insurance or a state -approved, self-insurance program in an amount and form to
meet all applicable requirements of the Labor Code of the State of California, including Employer's
Liability with $1,000,000 limits covering all persons including volunteers providing services on
behalf of the Grantee and all risks to such persons under this Agreement. A Waiver of Subrogation
or Right to Recover endorsement in favor of the State of California, the Department of Housing
and Community Development and the City will be attached to the certificate — per the Standard
Agreement and the NOFA.
(B) If Grantee, Step Up, or Owner have no employees, each may
certify or warrant to the City, that it does not currently have any employees or individuals who are
defined as "employees" under the Labor Code and the requirement for Workers' Compensation
coverage will be waived by the City's Director of Risk Management.
(C) With respect to borrowers that are non-profit corporations
organized under California or federal law, volunteers for such entities are required to be covered
by Workers' Compensation insurance.
(2) Commercial General Liability. General Liability Insurance
covering all operations performed by or on behalf of Grantee, Step Up, and Owner providing
coverage for bodily injury and property damage with a combined single limit of not less than One
Million Dollars ($1,000,000), per occurrence and Two Million Dollars ($2,000,000) aggregate
for bodily injury and property damage liability. The policy coverage must include:
(A) Premises operations and mobile equipment.
(B) Products and completed operations.
(C) Broad form property damage (including completed
operations).
(D) Explosion, collapse, and underground hazards.
(E) Personal injury.
(F) Contractual liability.
(G) Name the State of California, the Department of Housing
and Community Development and the City, as well as the respective appointees, officers, agents,
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and employees of each, as additional insured, but only with respect to work performed under the
contract — per the Standard Agreement and the NOFA.
(3) Commercial Automobile Liability.
(A) Primary insurance coverage must be written on ISO
Business Auto coverage form for all owned, hired and non -owned automobiles or symbol I (any
auto). The policy will also name the State of California, the Department of Housing and
Community Development, and the City, as well as the respective appointees, officers, agents, and
employees of each, as additional insureds, but only with respect to work performed under the
contract — per the Standard Agreement and the NOFA.
(B) The policy must have a combined single limit of not less than
One Million Dollars ($1,000,000) for bodily injury and property damage, per occurrence.
(C) If the Grantee, Step Up or Owner is transporting one or more
non -employee passengers in performance of contract services, the automobile liability policy must
have a combined single limit of Two Million Dollars ($2,000,000) for bodily injury and property
damage per occurrence.
(D) If the Grantee, Step Up, or Owner own no autos, a non -
owned auto endorsement to the General Liability policy described above is acceptable.
(4) Builder's Risk/Installation Floater
(A) Builders Risk/Installation Floater insurance to cover the labor,
materials, and equipment to be used for completion of the work performed under
this contract against all risks of direct physical loss, excluding earthquake and
flood, for an amount not less that the full amount of the property and/or materials
being installed and/or constructed on or within the facility.
(c) Insurance Review — Insurance requirements are subject to periodic review
by the City. The City's Director of Risk Management or designee is authorized, but not required,
to reduce, waive or suspend any insurance requirements whenever Risk Management determines
that any of the required insurance is not available, is unreasonably priced, or is not needed to
protect the interests of the City. In addition, if the Department of Risk Management determines
that heretofore unreasonably priced or unavailable types of insurance coverage or coverage limits
become reasonably priced or available, the Director of Risk Management or designee is authorized,
but not required, to change the above insurance requirements to require additional types of
insurance coverage or higher coverage limits, provided that any such change is reasonable in light
of past claims against the City, inflation, or any other item reasonably related to the City's risk.
Section 4.13 Anti -Lobbying Certification.
(a) Grantee, Step Up, and Owner, certify, to the best of Grantee's Step Up's and
Owner's respective knowledge or belief', that:
(1) No federal appropriated funds have been paid or will be paid, by or
on behalf of it, to any person for influencing or attempting to influence an officer or employee of
any agency, a member of Congress, an officer or employee of Congress, or an employee of a
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member of Congress in connection with the awarding of any federal contract, the making of any
federal grant, the making of any federal loan, the entering into of any cooperative agreement, and
the extension, continuation, renewal, amendment, or modification of any federal contract, grant,
loan, or cooperative agreement;
(2) If any funds other than federal appropriated funds have been paid or
will be paid to any person for influencing or attempting to influence an officer or employee of
any agency, a member of Congress, an officer or employee of Congress, or an employee of a
member of Congress in connection with the awarding of any federal contract, grant, loan, or
cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to
Report Lobbying, in accordance with its instructions.
(b) This certification is a material representation of fact upon which reliance
was placed when this Agreement was made or entered into. Submission of this certification is a
prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, U. S.
Code. Any person who fails to file the required certification shall be subject to a civil penalty of
not less than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars
($100,000) for such failure.
Section 4.14 Covenants Regarding Approved Financing.
(a) Grantee and Owner shall promptly pay the principal and interest when due
on any Approved Financing.
(b) Grantee and Owner shall promptly notify the City in writing of the existence
of any default under any documents evidencing Approved Financing.
(c)
Section 4.15 Affordability and Project Monitoring.
(a) Throughout the Term, the Grantee and Owner shall comply with all
applicable record keeping and monitoring requirements set forth in the Homekey Regulations and
shall annually complete and submit to City a Certification of Continuing Program Compliance.
(b) Representatives of the City (and HCD or its authorized representatives)
shall be entitled to enter the Property upon at least forty-eight (48) hours' notice at reasonable times
to monitor compliance with this Agreement to inspect the records of the Development with respect
to the City -Assisted Units, and to conduct an independent audit of such records. The Grantee and
Owner agree to cooperate with the City in making the Property available for such inspection. If
for any reason the City is unable to obtain the Grantee's or Owner's consent to such an inspection,
the Grantee and Owner understand and agree that the City may obtain, at the Grantee or Owner's
expense, an administrative inspection warrant or other appropriate legal order to obtain access to
and search the Property.
(c) The Grantee and Owner agree to maintain records in a business -like manner
and to make such records available to the City upon forty-eight (48) hours' notice at reasonable
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times. Unless the City otherwise approves, such records shall be maintained for the most recent
five years until five years after the expiration of the Homekey Term.
(d) Throughout the Term, the Grantee and Owner grant the City inspection
rights as set forth in Section 3.4 above, and Grantee and Owner shall make best efforts to allow
the City to comply with all applicable physical monitoring requirements.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1 Representations and Warranties of Grantee.
Grantee hereby represents and warrants to the City as follows and acknowledges,
understands, and agrees that the representations and warranties set forth in this Article 5 are
deemed to be continuing during the Term. The Grantee shall immediately advise the City in
writing if there is any material change relating to any matters set forth or referenced in the items
set forth below:
(a) Organization. Grantee is duly organized, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted. Copies of the documents evidencing
the organization of the Grantee delivered to the City are true and correct copies of the originals.
(b) Authority of Grantee. Grantee has full power and authority to execute and
deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute
and deliver the Grant Documents and all other documents or instruments executed and delivered,
or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms
and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Grant
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement have been executed and delivered by persons who are duly
authorized to execute and deliver the same for and on behalf of Grantee, and all actions required
under Grantee's organizational documents and applicable governing law for the authorization,
execution, delivery and performance of this Agreement and the Grant Documents and all other
documents or instruments executed and delivered, or to be executed and delivered, pursuant to this
Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Grant Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Grantee enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this
Agreement and the Grant Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
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provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Grantee, or any provision of the organizational
documents of Grantee, or will conflict with or constitute a breach of or a default under any
agreement to which Grantee is a party, or will result in the creation or imposition of any lien upon
any assets or property of Grantee, other than liens established pursuant hereto.
(f) Compliance with Laws; Consents and Approvals. The conversion of the
Development will comply with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government or
agency.
(g) Pending Proceedings. Grantee is not in default under any law or regulation
or under any order of any court, board, commission or agency whatsoever, and there are no claims,
actions, suits or proceedings pending or, to the knowledge of Grantee, threatened against or
affecting Grantee or the Development, at law or in equity, before or by any court, board,
commission or agency whatsoever which might, if determined adversely to Grantee, materially
affect Grantee's ability to repay the Grant or impair the security to be given to the City pursuant
hereto.
(h) Title to Land. At the time of recordation of the Use Restriction, Grantee
will have good and marketable fee title to the Development and there will exist thereon or with
respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other
than liens for current real property taxes and liens ancillary to the Approved Financing and liens
in favor of the City or approved in writing by the City.
(i) Financial Statements. The financial statements of Grantee and other
financial data and information furnished by Grantee to the City fairly and accurately present the
information contained therein. As of the date of this Agreement, there has not been any material
adverse change in the financial condition of Grantee from that shown by such financial statements
and other data and information.
(j) Sufficient Funds. Grantee holds or reasonably expects to receive firm
financial commitments for sufficient funds to complete the acquisition of the Property and the
conversion of the Development in accordance with the Standard Agreement.
(k) Taxes. Grantee and its subsidiaries have filed all federal and other material
tax returns and reports required to be filed, and have paid all federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or their income or
the Property otherwise due and payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in accordance with
generally accepted accounting principles. There is no proposed tax assessment against Grantee or
any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect
upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise)
or prospects of Grantee and its subsidiaries, taken as a whole, which would be expected to result
in a material impairment of the ability of Grantee to perform under any Grant Document to which
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it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability
against Grantee of any Grant Document.
Section 5.2 Representations and Warranties of Owner.
Owner hereby represents and warrants to the City as follows and acknowledges,
understands, and agrees that the representations and warranties set forth in this Article 5 are
deemed to be continuing during the Term. The Owner shall immediately advise the City in writing
if there is any material change relating to any matters set forth or referenced in the items set forth
below:
(a) Organization. Owner is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the power and authority to own its
property and carry on its business as now being conducted. Copies of the documents evidencing
the organization of the Owner delivered to the City are true and correct copies of the originals.
(b) Authority of Owner. Owner has full power and authority to execute and
deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute
and deliver the Grant Documents and all other documents or instruments executed and delivered,
or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms
and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Grant
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement have been executed and delivered by persons who are duly
authorized to execute and deliver the same for and on behalf of Owner, and all actions required
under Owner's organizational documents and applicable governing law for the authorization,
execution, delivery and performance of this Agreement and the Grant Documents and all other
documents or instruments executed and delivered, or to be executed and delivered, pursuant to this
Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Grant Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Owner enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this
Agreement and the Grant Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Owner, or any provision of the organizational
documents of Owner, or will conflict with or constitute a breach of or a default under any
agreement to which Owner is a party, or will result in the creation or imposition of any lien upon
any assets or property of Owner, other than liens established pursuant hereto.
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(0 Compliance with Laws; Consents and Approvals. The conversion of the
Development will comply with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government or
agency.
(g) Pending Proceedings. Owner is not in default under any law or regulation
or under any order of any court, board, commission or agency whatsoever, and there are no claims,
actions, suits or proceedings pending or, to the knowledge of Owner, threatened against or
affecting Owner or the Development, at law or in equity, before or by any court, board, commission
or agency whatsoever which might, if determined adversely to Owner, materially affect Owner's
ability to repay the Grant or impair the security to be given to the City pursuant hereto.
(h) Title to Land. At the time of recordation of the Use Restriction, Owner will
have good and marketable fee title to the Development and there will exist thereon or with respect
thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than
liens for current real property taxes and liens ancillary to the Approved Financing and liens in
favor of the City or approved in writing by the City.
(i) Financial Statements. The financial statements of Owner and other
financial data and information furnished by Owner to the City fairly and accurately present the
information contained therein. As of the date of this Agreement, there has not been any material
adverse change in the financial condition of Owner from that shown by such financial statements
and other data and information.
(j) Sufficient Funds. Owner holds or reasonably expects to receive firm
financial commitments for sufficient funds to complete the acquisition of the Property and the
conversion of the Development in accordance with the Standard Agreement.
(k) Taxes. Owner and its subsidiaries have filed all federal and other material
tax returns and reports required to be filed, and have paid all federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or their income or
the Property otherwise due and payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in accordance with
generally accepted accounting principles. There is no proposed tax assessment against Owner or
any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect
upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise)
or prospects of Owner and its subsidiaries, taken as a whole, which would be expected to result in
a material impairment of the ability of Owner to perform under any Grant Document to which it
is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability
against Owner of any Grant Document.
Section 5.3 Representations and Warranties of Step Up.
Step Up hereby represents and warrants to the City as follows and acknowledges,
understands, and agrees that the representations and warranties set forth in this Article 5 are
deemed to be continuing during the Term. Step Up shall immediately advise the City in writing if
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there is any material change relating to any matters set forth or referenced in the items set forth
below:
(a) Organization. Step Up is duly organized, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted. Copies of the documents evidencing
the organization of Step Up delivered to the City are true and correct copies of the originals.
(b) Authority of Step Up. Step Up has full power and authority to execute and
deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute
and deliver the Grant Documents and all other documents or instruments executed and delivered,
or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms
and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Grant
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement have been executed and delivered by persons who are duly
authorized to execute and deliver the same for and on behalf of Step Up, and all actions required
under Step Up's organizational documents and applicable governing law for the authorization,
execution, delivery and performance of this Agreement and the Grant Documents and all other
documents or instruments executed and delivered, or to be executed and delivered, pursuant to this
Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Grant Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Step Up enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this
Agreement and the Grant Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Step Up, or any provision of the organizational
documents of Step Up, or will conflict with or constitute a breach of or a default under any
agreement to which Step Up is a party, or will result in the creation or imposition of any lien upon
any assets or property of Step Up, other than liens established pursuant hereto.
(f) Compliance with Laws; Consents and Approvals. The conversion of the
Development will comply with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government or
agency.
(g) Pending Proceedings. Except as disclosed to the City in the estoppel
certificate provide by Step Up to the City, Step Up is not in default under any law or regulation or
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under any order of any court, board, commission or agency whatsoever, and there are no claims,
actions, suits or proceedings pending or, to the knowledge of Step Up, threatened against or
affecting Step Up or the Development, at law or in equity, before or by any court, board,
commission or agency whatsoever which might, if determined adversely to Step Up, materially
affect Step Up's ability to perform the obligations to the City pursuant hereto.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
(a) Subject to Section 7.15, each of the following constitutes an "Event of
Default" by Grantee under this Agreement:
(1) Failure under Standard Agreement. Failure of Grantee or Owner to
obtain permits, commence, and prosecute to completion, conversion of the Development within
the times set forth and in compliance with the requirements of the Standard Agreement. Any
failure under this section will not be considered an Event of Default if it is not formally identified
as such by HCD, and in any event, may be cured by Grantee or Owner within 120 days.
(2) Failure to Comply with the Management Plan. Failure to comply
with the Management Plan approved by the City and such failure having continued uncured for
thirty (30) days after receipt of written notice thereof from the City to the Grantee, Step Up and
Owner, which notice provides reasonable detail of the default and the required cure for such
default.
(3) Failure to Comply with the Participant Selection Plan. Failure to
comply with the Participant Selection Plan approved by the City and such failure having
continued uncured for thirty (30) days after receipt of written notice thereof from the City to the
Grantee, Step Up, and Owner, which notice provides reasonable detail of the default and the
required cure for such default.
(4) Breach of Covenants. Failure by Grantee, Step Up, or Owner to
duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the
Grant Documents, and Grantee, Step Up, or Owner fail to cure such default within forty-five (45)
days after receipt of written notice thereof from the City to Grantee Step Up, and Owner, if
Grantee, Step Up, or Owner are incapable of curing a default within such forty-five (45) day
period, the City will give the Grantee, Step Up, or Owner one hundred twenty (120) days to cure
such default provided Grantee, Step Up, or Owner have commenced to cure within such forty-
five (45) day period and is diligently proceeding to cure such default through the end of such
period; provided, however, that if a different period or notice requirement is specified under any
other section of this Article 6, the specific provisions shall control.
(5) Insolvency. A court having jurisdiction makes or enters any decree
or order: (1) adjudging Grantee or Owner to be bankrupt or insolvent; (2) approving as properly
filed a petition seeking reorganization of Grantee or Owner, or seeking any arrangement for
Grantee or Owner under the bankruptcy law or any other applicable debtor's relief law or statute
of the United States or any state or other jurisdiction; (3) appointing a receiver, trustee, liquidator,
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or assignee of Grantee or Owner in bankruptcy or insolvency or for any of their properties; (4)
directing the winding up or liquidation of Grantee or Owner if any such decree or order described
in clauses (1) to (4), inclusive, is unstayed or undischarged for a period of ninety (90) calendar
days; or (5) Grantee or Owner admit in writing its inability to pay its debts as they fall due or will
have voluntarily submitted to or filed a petition seeking any decree or order of the nature described
in clauses (1) to (4), inclusive.
(6) Assignment; Attachment. Grantee or Owner assigns their assets for
the benefit of its creditors or suffers a sequestration or attachment of or execution on any
substantial part of its property, unless the property so assigned, sequestered, attached or executed
upon is returned or released within ninety (90) calendar days after such event or, if sooner, prior
to sale pursuant to such sequestration, attachment, or execution.
(7) Suspension; Termination. Grantee, or Owner or its general partner,
shall have: (1) the operation of their business voluntarily or involuntarily suspended by the State
of California, (2) voluntarily stopped or terminated the operation of their business; (3) the Grantee
or Owner shall have the operation of the partnership voluntarily or involuntarily dissolved,
suspended or terminated by the State of California or Delaware.
(8)
pursuant to Section 4.12.
(9) Failure to Timely Occupancy. Failure of Grantee or Owner to make
the City -Assisted Units available for occupancy within the time specified in the Standard
Agreement. Any failure under this section will not be considered an Event of Default if it is not
formally identified as such by HCD, and in any event, may be cured by Grantee or Owner within
120 days.
Unauthorized Transfer. Any Transfer other than as permitted
Section 6.2 Remedies.
(a) Upon the occurrence of an Event of Default and following the expiration of
all applicable notice and cure periods will, either at the option of the City or automatically where
so specified, gives the City the right to proceed with any and all remedies set forth in this
Agreement and the Grant Documents, including but not limited to the following:
(A) Revocation of Grant. The City may demand that any portion
of the Grant not forgiven pursuant to Section 2.3 above, together with any accrued interest thereon,
to become immediately due and payable.
(B) Specific Performance. The City has the right to mandamus
or other suit, action or proceeding at law or in equity to require Grantee, Step Up, and Owner to
perform their obligations and covenants under the Grant Documents or to enjoin acts on things
that may be unlawful or in violation of the provisions of the Grant Documents.
(C) Termination. The City has the right to terminate this
Agreement and, at its sole option, to seek any remedies at law or equity available hereunder.
Section 6.3 Right of Contest.
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Grantee and Owner may contest in good faith any claim, demand, levy, or assessment the
assertion of which would constitute an Event of Default hereunder. Any such contest is to be
prosecuted diligently and, as to a default related to a third party or third party event, in a manner
unprejudicial to the City or the rights of the City hereunder.
Section 6.4 Remedies Cumulative.
No right, power, or remedy given to the City by the terms of this Agreement or the Grant
Documents is intended to be exclusive of any other right, power, or remedy; and each and every
such right, power, or remedy will be cumulative and in addition to every other right, power, or
remedy given to the City by the terms of any such instrument, or by any statute or otherwise against
Grantee, Step Up or Owner and any other person. Neither the failure nor any delay on the part of
the City to exercise any such rights and remedies will operate as a waiver thereof, nor does any
single or partial exercise by the City of any such right or remedy preclude any other or further
exercise of such right or remedy, or any other right or remedy.
ARTICLE 7.
GENERAL PROVISIONS
Section 7.1 Relationship of Parties.
Nothing contained in this Agreement is to be interpreted or understood by any of the
Parties, or by any third persons, as creating the relationship of employer and employee, principal
and agent, limited or general partnership, or joint venture between the City and Grantee, Step Up
or Owner or their agents, employees or contractors, and Grantee, Step Up and Owner will at all
times be deemed an independent contractor and to be wholly responsible for the manner in which
it or its agents, or both, perform the services required of it by the terms of this Agreement. Grantee,
Step Up, and Owner have and retain the right to exercise full control of employment, direction,
compensation, and discharge of all persons assisting in the performance of services under the
Agreement. In regard to the rehabilitation and operation of the Development, Grantee and Owner
are solely responsible for all matters relating to payment of its employees, including compliance
with Social Security, withholding, and all other laws and regulations governing such matters, and
must include requirements in each contract that contractors are solely responsible for similar
matters relating to their employees. Grantee, Step Up and Owner are solely responsible for their
own acts and those of their agents and employees.
Section 7.2 No Claims.
Nothing contained in this Agreement creates or justifies any claim against the City by any
person that Grantee, Step Up or Owner may have employed or with whom Grantee, Step Up, or
Owner may have contracted relative to the purchase of materials, supplies or equipment, or the
furnishing or the performance of any work or services with respect to the tenancy of the Property,
the rehabilitation or operation of the Development, and Grantee, Step Up and Owner shall include
similar requirements in any contracts entered into for the rehabilitation or operation of the
Development.
Section 7.3 Indemnification.
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The Grantee, Step Up and Owner, each agrees to indemnify, defend (with counsel
reasonably approved by City) and hold harmless the City and its authorized officers, employees,
agents and volunteers ("Indemnities") from any and all claims, actions, losses, damages, and/or
liability arising out of this contract from any cause whatsoever, including the acts, errors or
omissions of any person and for any costs or expenses incurred by the City on account of any claim
except where such indemnification is prohibited by law. This indemnification provision shall apply
regardless of the existence or degree of fault of Indemnities, except as provided in the following
sentence. The indemnification obligations apply to the City's "active" as well as "passive"
negligence but does not apply to the City's "gross negligence" or "willful misconduct" within the
meaning of Civil Code Section 2782. The provisions of this Section shall not be limited by the
existence of insurance and will survive the expiration of the Term.
Section 7.4 Non -Liability of City Officials, Employees and Agents.
No board member, official, employee or agent of the City is personally liable to Grantee,
Step Up, or Owner in the event of any default or breach by the City or for any amount that may
become due to Grantee, Step Up, or Owner or their successor or on any obligation under the terms
of this Agreement.
Section 7.5 No Third Party Beneficiaries.
There are no third party beneficiaries to this Agreement.
Section 7.6 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person
described in Section 7.6(b) below who exercises or has exercised any functions or responsibilities
with respect to the activities funded pursuant to this Agreement or who is in a position to participate
in a decision -making process or gain inside information with regard to such activities, may obtain
a financial interest or financial benefit from the activity, or have an interest in any contract,
subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or
those with whom they have family or business ties, during, or at any time after, such person's
tenure. Grantee, Step Up, and Owner shall exercise due diligence to ensure that the prohibition in
this Section is followed.
(b) The conflict of interest provisions of Section 7.6(a) above apply to any
person who is an employee, agent, consultant, officer of the City, or any immediate family member
of such person, or any elected or appointed official of the City, or any person related within the
third (3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the
Political Reform Act, California Government Code Section 87100 et seq., no person who is a
director, officer, partner, trustee or employee or consultant of Grantee, or immediate family
member of any of the preceding, may make or participate in a decision, made by the City or a City
board, commission or committee, if it is reasonably foreseeable that the decision will have a
material effect on any source of income, investment or interest in real property of that person or
Grantee. Interpretation of this Section is governed by the definitions and provisions used in the
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Political Reform Act, California Government Code Section 87100 et seq., its implementing
regulations manual and codes, and California Government Code Section 1090.
Section 7.7 Notices, Demands and Communications.
All notices required or permitted by any provision of this Agreement must be in writing
and sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by
express delivery service, return receipt requested, or delivered personally, to the principal office
of the Parties as follows:
City:
City of Redlands
35 Cajon Street, Suite 200
Redlands, CA 92373
Attn: Mayor Paul T. Barich
with a copy to:
City of Redlands
35 Cajon Street, Suite 200
Redlands, CA 92373
Attn: City Attorney
Grantee:
Owner:
Shangri-La Industries, LLC
c/o Shangri-La Industries
660 S Figueroa St, Suite 1888
Los Angeles, CA 90017-3433
Attn: Andy Meyers/Cody Holmes
1675 Industrial Park, LP
c/o Shangri-La Industries
660 S Figueroa St, Suite 1888
Los Angeles, CA 90017-3433
Attn: Andy Meyers/Cody Holmes
with a copy to:
Cornelius & Cohanghadosh, APC
23801 Calabasas Rd., Suite 100
Calabasas, CA 91302
Attn: Alex Cornelius
Step Up:
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Step Up on Second Street, Inc.
1328 Second Street
Santa Monica, CA 90401-1122
Attn: Tod Lipka, President and Chief Executive Officer
Such written notices, demands and communications may be sent in the same manner to such other
addresses as the affected party may from time to time designate by mail as provided in this Section.
Receipt will be deemed to have occurred on the date shown on a written receipt as the date of
delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 7.8 Amendments.
No alteration or variation of the terms of this Agreement is valid unless made in writing by
the Parties. The City Executive Officer is authorized to execute on behalf of the City amendments
to the Grant Documents or amended and restated Grant Documents.
Section 7.9 City Approval.
The City has authorized the City Executive Officer or designee to execute the ancillary
Grant documents and deliver such approvals or consents as are required by this Agreement, and to
execute estoppel certificates concerning the status of the Grant and the existence of defaults under
the Grant Documents, including subordination agreements substantially consistent with the terms
of Section 2.7 above.
Section 7.10 Applicable Law and Venue.
This Agreement is governed by the laws of the State of California.
Section 7.11 Parties Bound.
Except as otherwise limited herein, this Agreement binds and inures to the benefit of the
parties and their heirs, executors, administrators, legal representatives, successors, and assigns.
This Agreement is intended to run with the land and to bind Grantee and its successors and assigns
in the Property and the Development for the entire Term, and the benefit hereof is to inure to the
benefit of the City and its successors and assigns.
Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing
party will have the right to recover its reasonable attorneys' fees and costs of suit from the other
party.
Section 7.13 Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions will continue in full force and effect unless
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the rights and obligations of the Parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 7.14 Force Majeure.
In addition to specific provisions of this Agreement, performance by any party hereunder
shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes;
lock -outs; riots; floods; earthquakes; fires; casualties; acts of god; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority;
litigation (including suits filed by third parties concerning or arising out of this Agreement);
weather or soils conditions which, in the opinion of the Grantee's or Owner's contractor, will
necessitate delays; inability to secure necessary labor, materials or tools; acts of the other party;
acts or failure to act of any public or governmental City or entity (other than the acts or failure to
act of the City); or any other causes (other than the Grantee's inability to obtain financing for the
Improvements) beyond the control or without the fault of the party claiming an extension of time
to perform. An extension of time for any cause will be deemed granted if notice by the party
claiming such extension is sent to the other within ten (10) business days from the date the party
seeking the extension first discovered the cause and such extension of time is not rejected in writing
by the other party within ten (10) business days of receipt of the notice. Times of performance
under this Agreement may also be extended in writing by the City and the Grantee. In no event
shall the cumulative delays during the Term of this Agreement exceed three hundred and sixty
(360) days, unless otherwise agreed to by the Parties in writing. As allowed under Section 7.20 of
this Agreement, the City Executive Officer at the City Executive Officer's reasonable discretion
may extend the cumulative delay limit without need for additional Board of Supervisor approval.
Section 7.15 Waivers.
Any waiver by the City of any obligation or condition in this Agreement must be in writing.
No waiver will be implied from any delay or failure by the City to take action on any breach or
default of Grantee or to pursue any remedy allowed under this Agreement or applicable law. Any
extension of time granted to Grantee to perform any obligation under this Agreement does not
operate as a waiver or release from any of its obligations under this Agreement. Consent by the
City to any act or omission by Grantee may not be construed to be consent to any other or
subsequent act or omission or to waive the requirement for the City's written consent to future
waivers.
Section 7.16 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and are to be disregarded in interpreting any part of the Agreement's provisions.
Grant.
Section 7.17 Entire Understanding of the Parties.
The Grant Documents constitute the entire agreement of the Parties with respect to the
Section 7.18 Multiple Originals; Counterpart.
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This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Section 7.19 Action by the City. Except as may be otherwise specifically
provided in this Agreement or any other of the Grant Documents, whenever any approval,
notice, direction, finding, consent, request, waiver, or other action by the City is required or
permitted under this Agreement or any other of the Grant Documents, such action shall be
given, made, taken, refused, denied or withheld by the City Executive Officer, at the City
Executive Officer's reasonable discretion (unless some other standard is expressly stated), or
by any person who shall have been designated in writing to the Borrowers by the City
Executive Officer, without further approval by the City Council. Any such action shall be in
writing.
Date.
WHEREAS, this Agreement has been entered into by the undersigned as of the Effective
[Signatures On Next Page]
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GRANTEE:
Shangri-La Industries, LLC, a Delaware limited liability company
By:
Name: Andrew Meyers Abdul-Wahab
Its: Authorized Signatory
Date: July 18, 2022
OWNER:
1675 Industrial Park, LP, a Delaware limited partnership
By:
Name: Andrew Meyers Abdul-Wahab
Its:
Authorized Signatory
Date: July 18, 2022
STEP UP:
STEP UP ON SECOND STREET, INC., a California nonprofit
public benefit corporation
Date:
By:
Name:
Its:
Tod Lipka
CEO
July 18, 2022
[Signature Page Continues]
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CITY:
CITY OF
Californa
By:
Name:
Title:
Date:
Paul T. Barich
Mayor
7/20/22
ATTEST:
nne Donaldson
City Clerk
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land is situated in the State of California, City of Redlands, and is described as follows:
APN: 0292063380000
H L WILLIAMS TR PTN LOT 2 BLK 1 LYING SLY OF LI DESC AS COM AT PT ON W LI
SD LOT S 0 DEG 25 MIN 34 SECONDS E 198.80 FT FROM NW COR THEREOF TH N 89
DEG 34 MIN 16 SECONDS E 469.83 FT TH ALG A TANGENT CURVE CONCAVE SWLY
WITH RADIUS OF 370 FT THRU ANGLE OF 30 DEG 55 MIN 23 SECONDS 199.69 FT TO
E LI SD LOT EXE 475 FT THEREOF MEAS AT R/A TO AND PARALLEL WITH E LI SD
LOT AND EX ST 7-17-87
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EXHIBIT B
SCHEDULE OF PERFORMANCE
This Schedule of Performance sets forth the schedule for various activities under the Agreement
to which this exhibit is attached. The description of items in this Schedule of Performance is meant
to be descriptive only, and shall not be deemed to modify in any way the provisions of the
Agreement to which such items relate. Times for performance are subject to Force Majeure, as
further provided in Section 7.15 of the Agreement, and the notice and cure rights as further
provided in Section of the Agreement.
As provided in the Agreement, this Schedule of Performance may only be modified in a writing
executed by all Parties, in accordance with Section 7.9 of the Agreement.
Milestone
Date
Execute Standard Agreement
May 24, 2022
Execute Grant Documents
On or before July 30, 2022
Submit Evidence of Insurance
Prior to Acquisition Closing
Close on Acquisition Financing, Construction Financing and Acquire
Property
On or before June 29, 2022
Submit and obtain approval of Management Plan and Social Services
Plan
On or before November 15, 2022
Submit nondiscrimination policy in accordance with Exhibit D of the
Standard Agreement
On or before November 15, 2022
Draft Regulatory Agreement for use restriction
On or before November 15, 2022
Final HCD-approved Regulatory Agreement or other use restriction
recorded against the project real property
On or before March 14, 2023
Submit plans and application(s) for plan check and building permit to
City of Redlands
On or before March 25, 2022
City Grant Issuance
In seven installments on or before
July 15 annually after initial plans
and application submittal
Obtain Building Permits
Within thirty (30) calendar days of
building plan and application
submittal
Begin rehabilitation and Unit conversion
Within thirty (30) business days
from obtaining Building Permits
Complete rehabilitation and unit conversion
On or before March 14, 2023
Provide to the City, project information for Homekey Program and
Expenditure Report as outlined in Section 601 of the NOFA
Annually f�r five (5) years on
January 15 for the prior calendar
year (January 1 to December 31)
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