HomeMy WebLinkAboutD-1 Staff Report - DDDA_736 and 740 Angeleno_HabitatSCHEDULED ITEM-PUBLIC HEARING
D-1
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: MATT MARQUEZ, ECONOMIC AND COMMUNITY DEVELOPMENT
DIRECTOR
DATE: MAY 16, 2022
SUBJECT: CONSIDERATION OF A DISPOSITION AND DEVELOPMENT AGREEMENT
(“DDA”) BETWEEN THE CITY OF AZUSA AND SAN GABRIEL VALLEY
HABITAT FOR HUMANITY, INC. FOR DEVELOPMENT OF REAL
PROPERTY GENERALLY KNOWN AS 736 AND 740 NORTH ANGELENO
AVENUE (APNS: 8608-021-901 AND 8608-021-902)
BACKGROUND:
City staff has been in negotiations with San Gabriel Valley Habitat for Humanity, Inc. (“Habitat”)
regarding the disposition of City owned property located at 736 and 740 North Angeleno Avenue
(“Property”). The Property would be conveyed to Habitat by a Disposition and Development
Agreement (“DDA”) for the creation of four (4) affordable for-sale housing units. The following
map shows the subject property.
APPROVED
CITY COUNCIL
5/16/2022
Disposition and Development Agreement – 736 and 740 North Angeleno Avenue
May 16, 2022
Page 2
The California Government Code authorizes the City Council to convey the Property pursuant to
the DDA upon the City Council adopting a resolution finding that the public interest and
convenience require the sale, and declaring the intention to sell such property (“Resolution of
Intent”). The Government Code requires that the Resolution of Intent fix a time for hearing protests
to the sale of the property; provide for publication of notice of the hearing; fix the time when the
City will take final action regarding the Property conveyance; and contain an accurate description
of the Property to be conveyed. Said Resolution was approved by the City Council on April 18,
2022. The Government Code also requires, at any time prior to the close of escrow, the DDA be
presented to the Planning Commission for a finding that the conveyance from the City to Habitat
is in conformance with the General Plan.
In the attached Resolution, the City approves a Disposition and Development Agreement between
the City and Habitat for Humanity for development of real property generally known as 736 and
740 North Angeleno Avenue (APNS: 8608-021-901 and 8608-021-902). The Resolution
authorizes the City Manager to execute the DDA, in substantially the form attached to the
Resolution as Exhibit “1,” subject to any non-substantive revisions approved by the City Attorney,
and perform any other obligations of the City under the DDA.
Disposition and Development Agreement – 736 and 740 North Angeleno Avenue
May 16, 2022
Page 3
RECOMMENDATIONS:
Staff recommends the City Council take the following actions:
1) Open the public hearing and receive testimony from the public regarding the proposed sale
of the Property;
2) Close the public hearing and, if any protest was received regarding the sale of the Property,
overrule the protest by a 4/5 majority vote;
3) Find that the project is exempt from CEQA pursuant to Section 15061(b)(3) as it can be seen
with certainty that there is no possibility that the activity in question may have a significant
effect on the environment.
4) Approve the attached Resolution No. 2022-C35 approving the DDA with San Gabriel Valley
Habitat for Humanity; and
5) Authorize the City Manager to execute the DDA, subject to any non-substantive revisions
approved by the City Attorney, and perform any other obligations of the City under the
DDA
ANALYSIS:
The subject Property is made up of two parcels measuring approximately 12,600 square feet
combined. The site is currently vacant and located immediately adjacent to property utilized by
MTA for travel of their L-Line (Gold) light rail trains. The Property’s zoning designation is
Neighborhood General 1 – Medium Density Residential and its General Plan Land Use
Designation is Medium Density Residential. To the north of the site, properties all have similar
zoning designations. An Azusa Public Works facilities yard is located to the west of the Property,
across North Angeleno Avenue. To the east of the site are properties that are included within the
scope of the TOD Specific Plan. Other than the City facility to the west of the Property, the area
is characterized by residential uses.
The Property would be conveyed to Habitat for Humanity for the development of an affordable
housing project consisting of four (4) units pursuant to Government Code Section 37364 based on
the following findings:
1. The Property will be sold and utilized, in accordance with the City’s best interests,
to provide affordable housing to persons and families of low or moderate income.
2. Not less than 80 percent of the area of the parcels of the Property shall be used for
development of housing.
3. Not less than 40% of the total number of those housing units developed on the
Property shall be affordable to households whose incomes are equal to or less than
75 percent of the maximum income of lower income households, and at least half
Disposition and Development Agreement – 736 and 740 North Angeleno Avenue
May 16, 2022
Page 4
of which shall be affordable to very low-income households.
Implementation of the DDA and ultimately the construction of affordable housing units will be
consistent with the Azusa General Plan, including the City’s existing Housing Element, and its
draft updated Element currently under review for certification by the State Department of Housing
and Community Development.
• Policy H2.3 – Establish partnerships with private developers and non-profit housing
corporations to assist Azusa in meeting its housing goals.
• Policy H2.4 – Assist residential developers in identifying and preparing land suitable for
residential development.
• Goal H4 – Minimize the impact of governmental constraints on housing production and
affordability.
FISCAL IMPACT:
The City would not realize revenue from the sale of the Property as it is being conveyed to San
Gabriel Valley Habitat for Humanity, Inc. for zero dollars for the purposes of developing
affordable housing for low- or moderate-income persons or families. Pursuant to the subject DDA,
the City will be required to pay one-half of the escrow fees and such other costs as the Escrow
Agent may charge for the conduct of the Escrow.
Prepared by: Reviewed by:
Matt Marquez Marco Martinez
Economic and Community Development Director City Attorney
Fiscal Review by: Reviewed and Approved by:
Talika M. Johnson Sergio Gonzalez
Director of Administrative Services City Manager
Attachments:
1) Resolution No. 2022-C35 and Disposition & Development Agreement
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RESOLUTION NO. 2022-C35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF AZUSA AND SAN GABRIEL
VALLEY HABITAT FOR HUMANITY, INC. FOR DEVELOPMENT OF
REAL PROPERTY GENERALLY KNOWN AS 736 AND 740 NORTH
ANGELENO AVENUE (APNS: 8608-021-901 AND 8608-021-902)
WHEREAS, the City of Azusa (“City”) is the owner of several parcels located at 736 and
740 North Angeleno Avenue (APNS: 8608-021-901 AND 8608-021-902); and
WHEREAS, San Gabriel Valley Habitat for Humanity, Inc. (“Habitat”) desires to acquire the
Property to develop it with four (4) residential units to provide affordable housing to persons and
families of low or moderate income; and
WHEREAS, Habitat and the City have negotiated a Disposition and Development
Agreement (“DDA”) with the City; and
WHEREAS, on April 18, 2022, the City Council adopted a Resolution declaring the City’s
intention to sell the Property and setting the time for a public hearing to consider the sale of the
Property; and
WHEREAS, the City finds that the public interest and convenience require conveyance of
the Property to Habitat for development of housing affordable to persons and families of low or
moderate income and the DDA will further policies and goals of the City’s General Plan by
establishing a partnership with a non-profit housing corporation to assist the City in meeting its
housing goals while minimizing the impact of governmental constraints on housing production and
affordability.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY
THE CITY COUNCIL OF THE CITY OF AZUSA, AS FOLLOWS:
SECTION 1. RECITALS. The recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
SECTION 2. FINDINGS. The City Council intends to sell the Property to Habitat and,
based on the Recitals and all other information and testimony provide, finds that the public interest
and convenience require the sale of Property to Habitat.
SECTION 3. HEARING. As required by California Government Code Section 37423, a
duly noticed public hearing was held by the City Council on May 16, 2022.
SECTION 4. CEQA COMPLIANCE. In accordance with the California Environmental
Quality Act (Pub. Resources Code, § 21000 et seq.: “CEQA”) and the State CEQA Guidelines (14
Attachment 1
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Cal. Code Regs., § 15000 et seq.), the City Council finds that the project is exempt from CEQA
pursuant to Section 15061(b)(3) as it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment.
SECTION 5. APPROVAL OF AGREEMENT. The City hereby approves the DDA, in
substantially the form attached to this Resolution as Exhibit “1,” subject to any non-substantive
revisions approved by the City Attorney, and authorizes the City Manager to execute the DDA and
perform any other obligations of the City under the DDA.
SECTION 6. SEVERABILITY. If any provision of this Resolution or the application of
any such provision to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of this Resolution that can be given effect without the invalid provision or
application, and to this end the provisions of this Resolution are severable. The City declares that the
City would have adopted this Resolution irrespective of the invalidity of any particular portion of this
Resolution.
SECTION 7. CERTIFICATION. The City Clerk of the City of Azusa shall certify to the
adoption of this Resolution.
SECTION 8. EFFECTIVE DATE. This Resolution shall become effective immediately
upon its adoption.
PASSED, APPROVED AND ADOPTED this 16th day of May, 2022.
____________________________________
Robert Gonzales
Mayor
ATTEST:
____________________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2022-C35 was duly adopted by the
City Council, at a regular meeting of said Agency held on the 16th day of May 2022, by the
following vote of the Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
___________________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
APPROVED AS TO FORM:
___________________________________
Marco Martinez
City Attorney
45635.01930\40067393.1
EXHIBIT 1
DISPOSITION AND DEVELOPMENT AGREEMENT between the City of Azusa and San
Gabriel Valley Habitat For Humanity, Inc.
[Attached behind this cover page]
45635.01930\40067393.1
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc.- 736 and 740 N. Angeleno Ave.)
by and between the
CITY OF AZUSA
a California public body, corporate and politic
and
SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC.,
a California non-profit corporation
[Dated as of ____________, for reference purposes only]
45635.01930\40067393.1
CITY OF AZUSA
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. - 736 and 740 N. Angeleno Ave.)
This DISPOSITION AND DEVELOPMENT AGREEMENT (San Gabriel Valley Habitat
for Humanity, Inc.) (“Agreement”) is dated as of __________, for reference purposes only, and
is entered into between CITY OF AZUSA, a California public body, corporate and politic
(“City”), and SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC., a California non-
profit corporation (“Developer”). City and Developer enter into this Agreement with reference
to the following recitals of fact (each, a “Recital”):
RECITALS
A. City owns that certain real property generally located 736 and 740 N. Angeleno Avenue,
Azusa, California, 91702 (defined in Section 1 of this Agreement as the “Property”).
B. The California Legislature has reaffirmed the vital statewide importance of providing
housing for all Californians, and has recognized that City-owned real property can be
utilized in accordance with the City’s best interests by providing affordable housing
pursuant to Government Code section 37364.
C. The California Legislature has recognized that the state housing crisis “has particularly
exacerbated the need for affordable homes at prices below market rates” (HOUSING
CRISIS ACT, 2019 Cal. Legis. Serv. Ch. 654 (S.B. 330), and City has an obligation that
its Housing Element be interpreted and implemented in a manner to afford the fullest
possible weight to the interest of, and the approval and provision of, housing.” (Gov.
Code § 65589.5(a)(2)(L).
D. Developer desires to acquire and redevelop the Property as four (4) affordable for-sale
housing units (more specifically defined in Section 1 of this Agreement as the “Project”)
sold to persons and families of low income, as defined by Section 50093 of the Health
and Safety Code or as defined by the United States Department of Housing and Urban
Development or its successors.
E. Under Government Code section 37364, the City has determined that sale of the Property
to Developer for four (4) affordable for-sale housing units is in the best interest of the
City.
F. Under Government Code section 37364, the required affordability of the Project requires
that not less than 40 percent of the total number of housing units developed on any parcel
be affordable to households whose incomes are equal to, or less than, 75 percent of the
maximum income of lower income households, and at least half of which shall be
affordable to very low income households. Additionally, not less than 80% of the area of
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the parcels being disposed of for the Project must be devoted to housing.
G. This Agreement implements the goals and objectives of City for the development of the
Project on the Property, addresses certain affordable housing needs of the City and certain
affordable housing obligations of City as set forth in the City’s Housing Element and
Regional Housing Needs Allocation. Disposition of the Property to Developer is thus is
furtherance of a recognized City use, and development of the Project on the Property
pursuant to this Agreement is in the best interests of the City and the health, safety and
welfare of the City’s taxpayers and residents and is in accordance with the public
purposes set forth in the City’s General Plan Housing Element. Implementation of this
Agreement will further the goals and objectives of the City’s general plan by: (i)
strengthening the City’s land use and social structure; (ii) alleviating economic and
physical blight in the City; and (iii) providing needed affordable housing in the City.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE
PROMISES AND COVENANTS OF CITY AND DEVELOPER SET FORTH IN THIS
AGREEMENT, CITY AND DEVELOPER AGREE, AS FOLLOWS:
TERMS AND CONDITIONS
1. DEFINITIONS
1.1 Definitions. The following words, terms or phrases are used in this Agreement
with the following meanings, unless the particular context or usage of a word, term or phrase
requires another interpretation:
1.1.1 Affiliate. Any other Person, directly or indirectly, Controlling or Controlled
by or under common Control with the specified Person.
1.1.2 Agreement. This Disposition and Development Agreement (San Gabriel
Valley Habitat for Humanity, Inc.) between City and Developer, including all of the exhibits attached
to this Agreement.
1.1.3 Application. Any agreement, application, certificate, document or submission
(or amendment of any of the foregoing): (a) necessary or appropriate for the Project, including any
application for any building permit, Certificate of Occupancy, utility service or hookup, easement,
covenant, condition, restriction, subdivision or such other instrument as Developer may reasonably
request for the Project; or (b) to enable Developer to seek any Approval or to use and operate the
Project in accordance with this Agreement or the Regulatory Agreement.
1.1.4 Approval. Any license, permit, approval, consent, certificate, ruling, variance,
authorization, conditional use permit, or amendment to any of the foregoing, as shall be necessary or
appropriate under any Law for City conveyance of the Property to Developer pursuant to this
Agreement (including pursuant to Government Code Section 65402) or to commence, perform or
complete the construction of the Project on the Property, including any associated CEQA Document.
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1.1.5 City. City of Azusa, California, a California public body, corporate and
politic.
1.1.6 City Parties. Collectively, City, its governing body, elected officials,
employees, agents and attorneys.
1.1.7 City Party. Individually, City, its governing body, elected officials,
employees, agents or attorneys.
1.1.8 City Quitclaim Deed. A quitclaim deed conveying City’s interest in the
Property from City to Developer, at the Close of Escrow, substantially in the form of Exhibit “E”
attached to this Agreement.
1.1.9 Automobile Liability Insurance. Insurance coverage against claims of
personal injury (including bodily injury and death) and property damage covering all owned, leased,
hired and non-owned vehicles used by Developer regarding the Project, with minimum limits for
bodily injury and property damage of One Million Dollars ($1,000,000). Such insurance shall be
provided by a business or commercial vehicle policy and may be provided through a combination of
primary and excess or umbrella policies, all of which shall be subject to pre-approval by City, which
approval shall not be unreasonably withheld.
1.1.10 Bankruptcy Law. Title 11, United States Code, and any other or successor
State or Federal statute relating to assignment for the benefit of creditors, appointment of a receiver
or trustee, bankruptcy, composition, insolvency, moratorium, reorganization, or similar matters.
1.1.11 Bankruptcy Proceeding. Any proceeding, whether voluntary or involuntary,
under any Bankruptcy Law.
1.1.12 Builder’s Risk Insurance. Builder’s risk or course of construction insurance
covering all risks of loss, less policy exclusions, on a completed value (non-reporting) basis, in an
amount sufficient to prevent coinsurance, but in any event not less than one hundred percent (100%)
of the completed value of the subject construction, including cost of debris removal, but excluding
foundation and excavations. Such insurance shall also: (a) grant permission to occupy; and (b)
cover, for replacement cost, all materials on or about any offsite storage location intended for use in,
or in connection with, the Property.
1.1.13 Business Day. Any weekday on which the City is open to conduct regular
municipal functions with City personnel.
1.1.14 CEQA. The California Environmental Quality Act, Public Resources Code
Section 21000, et seq.
1.1.15 CEQA Documents. Any exemption determination, any Negative Declaration
(mitigated or otherwise) or any Environmental Impact Report (including any addendum or
amendment to, or subsequent or supplemental Environmental Impact Report) required or permitted
by any Government, pursuant to CEQA, to issue any discretionary Approval required to approve this
Agreement.
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1.1.16 Certificate of Occupancy. A Certificate of Occupancy as defined in the
Uniform Building Code, 2007 Edition, published by the International Conference of Building
Officials, as may be amended from time to time, as adopted by the City.
1.1.17 City. The City of Azusa, California, a municipal corporation.
1.1.18 City Manager. The individual duly appointed to the position of City Manager
or his or her authorized designee. The City Manager shall have City to implement the terms of this
Agreement in accordance with Section 11.22 of this Agreement.
1.1.19 Claim. Any claim, loss, cost, damage, expense, liability, lien, action, cause of
action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award,
assessment, fine or penalty of any kind (including consultant and expert fees and expenses and
investigation costs of whatever kind or nature, and if an Indemnitor improperly fails to provide a
defense for an Indemnitee, then Legal Costs) and any judgment.
1.1.20 Close of Escrow. The first date on which the Escrow Agent has filed all of the
documents set forth in Section 4.8.1 with the County for recording in the official records of the
County in accordance with Section 4.8.1.
1.1.21 Completion Certificate. City’s written certification acknowledging that the
Project is complete in accordance with the terms and conditions of this Agreement, substantially in
the form of Exhibit “F” attached to this Agreement.
1.1.22 Conditions of Approval. (To be defined and specified in a list here, in relation
to the tentative tract map review process required by the City of Azusa.)
1.1.23 Construction Drawings. The final construction drawings and specifications
and finish grading and landscape plans for the Project prepared by or for Developer.
1.1.24 Control. Possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether by ownership of Equity Interests, by
contract or otherwise.
1.1.25 County. The County of Los Angeles, California.
1.1.26 Default. An Escrow Default, Monetary Default or Non-Monetary Default.
1.1.27 Default Interest. Interest at an annual rate equal to the lesser of: (a) eight
percent (8%) per annum; or (b) the Usury Limit.
1.1.28 Developer. San Gabriel Valley Habitat for Humanity, Inc., a California non-
profit corporation.
1.1.29 Developer Official Action. The official action of the directors, managers,
partners or other Persons in Control of Developer in substantially the form attached to this
Agreement as Exhibit “D” authorizing Developer to enter into and perform this Agreement.
45635.01930\40067393.1
1.1.30 Developer Parties. Collectively, Developer and the directors, officers,
employees, agents, shareholders, members, managers and partners of Developer.
1.1.31 Developer Party. Individually, Developer or the directors, officers, employees
or agents, shareholders, members, managers or partners of Developer.
1.1.32 Developer Title Policy. A standard CLTA owners’ policy of title insurance
issued by the Title Company, with coverage in the amount of $210,000, showing title to the Property
vested in Developer subject only to the Permitted Encumbrances.
1.1.33 Due Diligence Completion Notice. A written notice from Developer delivered
to both City and Escrow Agent, prior to the end of the Due Diligence Period, stating Developer’s
unconditional acceptance of the condition of the Property or stating Developer’s rejection of the
condition of the Property and refusal to accept a conveyance of title to the Property, describing in
reasonable detail the actions that Developer reasonably believes are indicated to allow Developer to
unconditionally accept the condition of the Property.
1.1.34 Due Diligence Investigations. Developer’s due diligence investigations of the
Property to determine the suitability of the Property for development and operation of the Project,
including investigation of the environmental and geotechnical suitability of the Property, as deemed
appropriate in the reasonable discretion of Developer, all at the sole cost and expense of Developer.
1.1.35 Due Diligence Period. The time period of forty-five (45) continuous days
commencing on the day immediately following the Escrow Opening Date.
1.1.36 Dwelling Unit(s). Any or all of the four (4) residential units to be constructed
as the Project.
1.1.37 Effective Date. Defined in Section 2.
1.1.38 Environmental Claim. Any and all claims, demands, damages, losses,
liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs,
disbursements and expenses, including Legal Costs and fees and costs of environmental consultants
and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any
nature whatsoever, directly or indirectly, relating to or arising from any actual or alleged violation of
any Environmental Law or Hazardous Substance Discharge.
1.1.39 Environmental Laws. All Federal, State, local, or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government or City
regulation, relating to, or imposing liability or standards of conduct concerning any Hazardous
Substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to
the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to
hazardous substances on, under, or about the Property), occupational or environmental conditions on,
under, or about the Property, as now or may at any later time be in effect, including without
limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”) [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976
(“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water
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Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act
(“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”)
[49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et
seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC
Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface
Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and
Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health
Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances
Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances
Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking
Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the
Porter-Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any
amendments of or regulations promulgated under the statutes cited above and any other Federal,
State, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to
occupational health or industrial hygiene, and only to the extent the occupational health or industrial
hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the
Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor,
groundwater, surface water, or land use.
1.1.40 Equity Interest. All or any part of any direct equity or ownership interest(s)
(whether stock, partnership interest, beneficial interest in a trust, membership interest in a limited
liability company, or other interest of an ownership or equity nature) in any entity, at any tier of
ownership, that directly owns or holds any ownership or equity interest in a Person.
1.1.41 Escrow. An escrow, as defined in Civil Code Section 1057 and Financial
Code Section 17003(a), that is conducted by the Escrow Agent with respect to the sale of the
Property from City to Developer pursuant to this Agreement.
1.1.42 Escrow Agent. First American Title Company, a California corporation, or
such other Person mutually agreed upon in writing by both City and Developer.
1.1.43 Escrow Closing Statement. A statement prepared by the Escrow Agent
indicating among other things, the Escrow Agent’s estimate of all funds to be deposited or received
by City or Developer, respectively, and all charges to be paid by City or Developer, respectively,
through the Escrow.
1.1.44 Escrow Default. The unexcused failure to submit any document or funds to
the Escrow Agent as reasonably necessary to close the Escrow, pursuant to the terms and conditions
of this Agreement, after all other conditions precedent to the Close of Escrow for the benefit of such
Party are satisfied or waived by such Party.
1.1.45 Escrow Opening Date. The first date on which a copy of this Agreement
signed by both City and Developer is deposited with the Escrow Agent.
1.1.46 Event of Default. The occurrence of any one or more of the following:
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(a) Monetary Default. A Monetary Default (as defined in Section 1.1.62)
that continues for seven (7) calendar days after Notice from the non-defaulting Party, specifying in
reasonable detail the amount of money not paid and the nature and calculation of each such payment;
(b) Escrow Closing Default. An Escrow Default that continues for seven
(7) calendar days after Notice from the non-defaulting Party, specifying in reasonable detail the
document or funds not submitted;
(c) Bankruptcy or Insolvency. Developer admits in writing that it is
unable to pay its debts as they become due or becomes subject to any Bankruptcy Proceeding (except
an involuntary Bankruptcy Proceeding dismissed within ninety (90) days after commencement), or a
custodian or trustee is appointed to take possession of, or an attachment, execution or other judicial
seizure is made with respect to, substantially all of Developer’s assets or Developer’s interest in this
Agreement or the Project (unless such appointment, attachment, execution, or other seizure was
involuntary, and is contested with diligence and continuity and vacated and discharged within ninety
(90) days);
(d) Transfer. The occurrence of a Transfer, whether voluntarily or
involuntarily or by operation of Law, in violation of the terms and conditions of this Agreement; or
(e) Non-Monetary Default. Any Non-Monetary Default (as defined in
Section 1.1.63), other than those specifically addressed in Section 1.1.46(c) or Section 1.1.46(d) that
is not cured within sixty (60) days after Notice to the Party alleged to be in Default describing the
Non-Monetary Default in reasonable detail, or, in the case of a Non-Monetary Default that cannot
with reasonable diligence be cured within sixty (60) days after the effective date of such Notice, if
the Party alleged to be in Default does not do all of the following: (a) within sixty (60) days after
Notice of such Non-Monetary Default, advise the other Party of the intention of the Party alleged to
be in Default to take all reasonable steps to cure such Non-Monetary Default; (b) duly commence
such cure within such period; and (c) diligently prosecute such cure to completion within a
reasonable time under the circumstances.
1.1.47 Federal. The government of the United States of America.
1.1.48 FIRPTA Certificate. A certification that City is not a “foreign person” within
the meaning of such term under Section 1445 of the United States Internal Revenue Code and
sufficient to exempt Developer from the obligation to withhold any funds from City pursuant to
Section 1445 of the United States Internal Revenue Code.
1.1.49 Form 593. A California Franchise Tax Board Form 593.
1.1.50 Government. Any and all courts, boards, agencies, commissions, offices, or
authorities of any nature whatsoever for any governmental unit (Federal, State, County, district,
municipal, City or otherwise) whether now or later in existence.
1.1.51 Hazardous Substance. Any flammable substances, explosives, radioactive
materials, asbestos, asbestos-containing materials, polychlorinated biphenyls, chemicals known to
cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, medical wastes,
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toxic substances or related materials, explosives, petroleum, petroleum products and any
“hazardous” or “toxic” material, substance or waste that is defined by those or similar terms or is
regulated as such under any Law, including any material, substance or waste that is: (a) defined as a
“hazardous substance” under Section 311 of the Water Pollution Control Act (33 U.S.C. § 1317), as
amended; (b) substances designated as “hazardous substances” pursuant to 33 U.S.C. § 1321; (c)
defined as a “hazardous waste” under Section 1004 of the Resource Conservation and Recovery Act
of 1976, 42 U.S.C. § 6901, et seq., as amended; (d) defined as a “hazardous substance” or
“hazardous waste” under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Reauthorization Act of 1986,
42 U.S.C. § 9601, et seq., or any so-called “superfund” or “superlien” law; (e) defined as a
“pollutant” or “contaminant” under 42 U.S.C. § 9601(33); (f) defined as “hazardous waste” under 40
C.F.R. Part 260; (g) defined as a “hazardous chemical” under 29 C.F.R. Part 1910; (h) any matter
within the definition of “hazardous substance” set forth in 15 U.S.C. § 1262; (i) any matter, waste or
substance regulated under the Toxic Substances Control Act (“TSCA”) [15 U.S.C. Sections 2601, et
seq.]; (j) any matter, waste or substance regulated under the Hazardous Materials Transportation Act,
49 U.S.C. Sections 1801, et seq.; (k) those substances listed in the United States Department of
Transportation (DOT)Table [49 C.F.R. 172.101]; (l) any matter, waste or substances designated by
the EPA, or any successor City, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste
or substances defined as “hazardous waste” in Section 25117 of the California Health and Safety
Code; (n) any substance defined as a “hazardous substance” in Section 25316 of the California
Health and Safety Code; (o) any matter, waste, or substance that is subject to any other Law
regulating, relating to or imposing obligations, liability or standards of conduct concerning protection
of human health, plant life, animal life, natural resources, property or the enjoyment of life or
property free from the presence in the environment of any solid, liquid, gas, odor or any form of
energy from whatever source; or (p) other substances, materials, and wastes that are, or become,
regulated or classified as hazardous or toxic under Law or in the regulations adopted pursuant to said
Law, including manure, asbestos, polychlorinated biphenyl, flammable explosives and radioactive
material.
1.1.52 Hazardous Substance Discharge. Any deposit, discharge, generation, release,
or spill of a Hazardous Substance that occurs at on, under, into or from the Property, or during
transportation of any Hazardous Substance to or from the Property, or that arises at any time from the
construction, installation, use or operation of the Project or any activities conducted at on, under or
from the Property, whether or not caused by a Party.
1.1.53 Indemnify. Where this Agreement states that any Indemnitor shall
“indemnify” any Indemnitee from, against, or for a particular Claim, that the Indemnitor shall
indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against such Claim
(alleged or otherwise). “Indemnified” shall have the correlative meaning.
1.1.54 Indemnitee. Any Person entitled to be Indemnified under the terms of this
Agreement.
1.1.55 Indemnitor. A Party that agrees to Indemnify any other Person under the terms
of this Agreement.
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1.1.56 Institutional Lender. A Federal or State chartered banking institution or any
reputable construction lender.
1.1.57 Insurance Documents. Copies of insurance policies and endorsements
evidencing all insurance coverage required to be obtained by Developer pursuant to Section 6.
1.1.58 Law. Every law, ordinance, requirement, order, proclamation, directive, rule,
and regulation of any Government applicable to the Property or the Project, in any way, including
any development, use, maintenance, taxation, operation, or occupancy of, or environmental
conditions affecting the Property or the Project, or relating to any taxes, or otherwise relating to this
Agreement or any Party’s rights, obligations or remedies under this Agreement, or any Transfer of
any of the foregoing, whether in force on the Effective Date or passed, enacted, modified, amended
or imposed at some later time, subject in all cases, however, to any applicable waiver, variance, or
exemption.
1.1.59 Legal Costs. In reference to any Person, all reasonable costs and expenses
such Person incurs in any legal proceeding (or other matter for which such Person is entitled to be
reimbursed for its Legal Costs), including reasonable attorneys’ fees, court costs and expenses and
consultant and expert witness fees and expenses.
1.1.60 Lender. The holder of any Security Instrument and its successors and assigns.
1.1.61 Liability Insurance. Commercial general liability insurance against claims for
bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property,
the Project or adjoining streets or passageways, at least as broad as Insurance Services Office
Occurrence Form CG0001, with a minimum liability limit of Two Million Dollars ($2,000,000) for
any one occurrence and which may be provided through a combination of primary and excess or
umbrella insurance policies. If commercial general liability insurance or other form with a general
aggregate limit is used, either the general aggregate limit shall apply separately to the Property or the
general aggregate limit shall be twice the required minimum liability limit for any one occurrence.
1.1.62 Monetary Default. Any failure by either Party to pay or deposit, when and as
this Agreement requires, any amount of money, any bond or surety or evidence of any insurance
coverage required to be provided under this Agreement, whether to or with a Party or a Third Person,
except to the extent constituting an Escrow Default.
1.1.63 Non-Monetary Default. The occurrence of any of the following, except to the
extent constituting a Monetary Default or an Escrow Default: (a) any failure of a Party to perform
any of its obligations under this Agreement; (b) any failure of a Party to comply with any material
restriction or prohibition in this Agreement; or (c) any other event or circumstance that, with passage
of time or giving of Notice, or both, or neither, would constitute a breach of this Agreement by a
Party.
1.1.64 Normal Business Hours. Any weekday, Monday through Friday, excluding
Federal or State recognized holidays, between the hours of 9:00 a.m. and 5:00 p.m. Pacific Time.
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1.1.65 Notice. Any consent, demand, designation, election, notice, or request relating
to this Agreement, including any Notice of Default. All Notices must be in writing.
1.1.66 Notice of Default. Any Notice claiming or giving Notice of a Default or
alleged Default.
1.1.67 Notify. To give a Notice.
1.1.68 Outside Closing Date. The earlier of: (a) the date when Developer is in a
position to obtain City building and grading permits for the Project by paying the applicable fees that
are conditions precedent to City issuance of such permits; or (b) no later than twenty four (24)
months from the Effective Date.
1.1.69 Parties. Collectively, City and Developer.
1.1.70 Party. Individually, either City or Developer, as applicable.
1.1.71 Permitted Encumbrance. Any of the following: (a) all items shown in the
Preliminary Report, as exceptions to coverage under the proposed Developer Title Policy, that are
approved by Developer pursuant to Section 3.2; (b) any lien for non-delinquent property taxes or
assessments; (c) any Laws applicable to the Property; (d) the Redevelopment Plan; (e) this
Agreement; (f) the Regulatory Agreement; (g) any existing improvements on the Property; (h) any
Project construction financing pursuant to Section 4.4.3; and (i) any other document or encumbrance
expressly required or allowed to be recorded against the Property or the Project under the terms of
this Agreement.
1.1.72 Person. Any association, corporation, governmental entity or agency,
individual, joint venture, joint-stock company, limited liability company, partnership, trust,
unincorporated organization, or other entity of any kind.
1.1.73 Preliminary Report. A preliminary report issued by the Title Company in
contemplation of the issuance of a policy of title insurance, accompanied by the best available copies
of all documents listed in Schedule B of the report as exceptions to coverage under the proposed
policy of title insurance.
1.1.74 Prevailing Wage Action. Any of the following: (a) any determination by the
State Department of Industrial Relations that prevailing wage rates should have been paid, but were
not; (b) any determination by the State Department of Industrial Relations that higher prevailing
wage rates than those paid should have been paid; (c) any administrative or legal action or
proceeding arising from any failure to comply with any of California Labor Code Sections 1720 et
seq. and 1770 et seq. and California Code of Regulations, Title 8, Section 16000 et seq., as amended
from time to time, or any Federal law regarding prevailing wage obligations, including maintaining
certified payroll records pursuant to California Labor Code Section 1776; or (d) any administrative or
legal action or proceeding to recover wage amounts at law or in equity, including pursuant to
California Labor Code Section 1781 or applicable Federal Law.
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1.1.75 Prohibited Encumbrance. Any Security Instrument, mechanic’s lien, easement
or other encumbrance recorded or asserted against the Property or the Project that is not a Permitted
Encumbrance.
1.1.76 Project. The construction of four (4) residential Dwelling Units for-sale
project specifically described in the Project Scope, sold to persons and families of low income, as
defined by Section 50093 of the Health and Safety Code or as defined by the United States
Department of Housing and Urban Development or its successors. The Project shall include all
required or associated on-site and off-site improvements, hardscape improvements, parking areas and
carports, and landscaping improvements to the Property, in accordance with plans and specifications
approved by City and any conditions imposed by the City in issuing development entitlements
related to the Project.
1.1.77 Project Commencement Date. The date that is ninety (90) days after
Developer has obtained all of the land use and other entitlements, permits and approvals required for
development of the Project.
1.1.78 Project Completion Date. The date that is two (2) years after the Project
Commencement Date.
1.1.79 Project Scope. The detailed description of the primary elements of the Project
attached to this Agreement as Exhibit “C.”
1.1.80 Property. That certain real property and improvements legally described in
Exhibit “A” attached to this Agreement and depicted in Exhibit “B” attached to this Agreement.
1.1.81 Property Insurance. Insurance providing coverage for the Property and all
improvements on or to the Property against loss, damage, or destruction by fire and other hazards
encompassed under the broadest form of property insurance coverage then customarily used for like
properties in the County, in an amount equal to one hundred percent (100%) of the replacement
value (without deduction for depreciation) of all improvements comprising the Project (excluding
excavations and foundations) and in any event sufficient to avoid co-insurance and with no co-
insurance penalty provision, with “ordinance or law” coverage. To the extent customary for like
properties in the County at the time, such insurance shall include coverage for explosion of steam
and pressure boilers and similar apparatus located on the Property; an “increased cost of
construction” endorsement; and an endorsement covering demolition and cost of debris removal.
1.1.82 Punchlist Work. Construction of an insubstantial nature that, if not
completed, will not delay issuance of a Certificate of Occupancy (or equivalent approval) for the
Project by the City or materially interfere with use of the Project.
1.1.83 Purchase Price. Zero dollars and zero cents ($0.00).
1.1.84 Redevelopment Plan. The redevelopment plan adopted by the City and
affecting the Property.
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1.1.85 Regulatory Agreement. That certain “Declaration of Affordable Housing
Conditions, Covenants and Restrictions (736 N. Angeleno Avenue and 740 N. Angeleno Avenue)”
to be entered into by and between City and Developer at Close of Escrow, substantially in the form
of Exhibit “G” attached to this Agreement.
1.1.86 Security Instrument. Any security instrument, deed of trust, security deed,
contract for deed, deed to secure debt, or other voluntary real property (including leasehold) security
instrument(s) or agreement(s) intended to grant real property (including leasehold) security for any
obligation (including a purchase-money or other promissory note) encumbering the Property, as
entered into, renewed, modified, consolidated, increased, decreased, amended, extended, restated,
assigned (wholly or partially), collaterally assigned, or supplemented from time to time, unless and
until paid, satisfied, and discharged of record. If two or more such security instruments are
consolidated or restated as a single lien or held by the same Lender (as applicable), then all such
security instruments so consolidated or restated shall constitute a single Security Instrument. A
participation interest in a security instrument (or partial assignment of the secured loan) does not
itself constitute a Security Instrument.
1.1.87 State. The State of California.
1.1.88 Third Person. Any Person that is not a Party, an Affiliate of a Party or an
elected official, officer, director, manager, shareholder, member, principal, partner, employee or
agent of a Party.
1.1.89 Title Company. First American Title Company, a California corporation, or
such other Person mutually agreed upon in writing by both City and Developer.
1.1.90 Title Notice. A written notice from Developer to City stating Developer’s
acceptance of the state of the title to the Property, as described in the Preliminary Report for the
Developer Title Policy, or Developer’s disapproval of specific matters shown in Schedule B of such
Preliminary Report as exceptions to coverage under the proposed Developer Title Policy for the
Property, describing in suitable detail the actions that Developer reasonably believes are indicated to
obtain Developer’s approval of the state of the title to the Property.
1.1.91 Title Notice Response. The written response of City to the Title Notice, in
which City either elects to: (i) cause the removal from the Preliminary Report for the Developer Title
Policy of any matters disapproved; (ii) obtain title or other insurance or endorsement in a form
reasonably satisfactory to Developer insuring against any matters disapproved in the Title Notice; or
(iii) not take either action described in “(i)” or “(ii)” of this Section 1.1.91.
1.1.92 Title Notice Waiver. A written notice from Developer to City waiving
Developer’s previous disapproval in the Title Notice of specific matters shown in Schedule B of the
Preliminary Report for the Developer Title Policy as exceptions to coverage under the proposed
Developer Title Policy.
1.1.93 Transfer. Regarding any property, right or obligation means any of the
following, whether by operation of law or otherwise, whether voluntary or involuntary, and whether
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direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or
other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of
any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of
it (including the grant of any easement, lien, or other encumbrance); (b) any conversion, exchange,
issuance, modification, reallocation, sale, or other transfer of any Equity Interest(s) in the owner of
such property, right or obligation by the holders of such Equity Interest(s); (c) any transaction
described in clause “(b)” of this Section 1.1.93 affecting any Equity Interest(s) or any other interest
in such property, right or obligation or in any such owner (or in any other direct or indirect owner at
any higher tier of ownership) through any manner or means whatsoever; or (d) any transaction that is
in substance equivalent to any of the foregoing. A transaction affecting Equity Interests, as referred
to in clauses “(b)” through “(d)” of this Section 1.1.93, shall be deemed a Transfer by Developer
even though Developer is not technically the transferor. A “Transfer” shall not, however, include
any of the following relating to the Property or any Equity Interest: (i) a change in the composition
of the board of directors of the Developer; (ii) provided that the other Party has received Notice of
such occurrence, a mere change in form of ownership with no material change in beneficial
ownership and constitutes a tax-free transaction under Federal income tax law and the State real
estate transfer tax; or (iii) provided that the other Party has received Notice of such occurrence, a
conveyance only to member(s) of the immediate family(ies) of the transferor(s) or trusts for their
benefit.
1.1.94 Unavoidable Delay. A delay in either Party performing any obligation under
this Agreement, except payment of money, arising from or on account of any cause whatsoever
beyond the Party’s reasonable control, including strikes, labor troubles or other union activities,
casualty, war, acts of terrorism, riots, litigation, governmental action or inaction, regional natural
disasters, or inability to obtain materials. Unavoidable Delay shall not include delay caused by a
Party’s financial condition, illiquidity, or insolvency.
1.1.95 Usury Limit. The highest rate of interest, if any, that Law allows under the
circumstances.
1.1.96 Waiver of Subrogation. A provision in, or endorsement to, any insurance
policy, by which the carrier agrees to waive rights of recovery by way of subrogation against either
Party to this Agreement for any loss such policy covers.
1.1.97 Workers Compensation Insurance. Workers compensation insurance
complying with the provisions of State law and an employer’s liability insurance policy or
endorsement to a liability insurance policy, with a minimum liability limit of One Million Dollars
($1,000,000) per accident for bodily injury or disease, covering all employees of Developer.
2. EFFECTIVE DATE. This Agreement shall not become effective until the date on which all
of the following have occurred: (“Effective Date”): (a) City has received three (3) counterpart
originals of this Agreement signed by the authorized representative(s) of Developer; (b) City has
received a certified copy of the Developer Official Action signed by the authorized representative(s)
of Developer; (c) this Agreement is approved by City’s governing body; (d) this Agreement is signed
by the authorized representative(s) of City; and (e) one (1) original of this Agreement signed by the
authorized representative(s) of City has been delivered by City to Developer. City shall send Notice
45635.01930\40067393.1
of the Effective Date to Developer within seven (7) days following the Effective Date. Developer
shall sign and return a copy of such Notice to City within seven (7) days after receipt of such Notice.
3. PURCHASE AND SALE OF PROPERTY
3.1 Escrow. City shall convey the Property to Developer in consideration of
Developer’s promises and covenants set forth in this Agreement and Developer shall accept
conveyance of the Property from City, subject to the Permitted Encumbrances, pursuant to the terms
and conditions of this Agreement. For the purposes of exchanging funds and documents to complete
the conveyance of the Property from City to Developer and the acquisition of the Property by
Developer from City, pursuant to the terms and conditions of this Agreement, City and Developer
agree to open the Escrow with the Escrow Agent. The provisions of Section 4 of this Agreement are
the joint escrow instructions of the Parties to the Escrow Agent for conducting the Escrow.
3.1.1 [Intentionally Deleted]
3.2 Developer Approval of Property Title.
3.2.1 Title Notice. Within fifteen (15) days after the Escrow Opening Date, City
shall request the Preliminary Report for the Developer Title Policy from the Title Company and that
the Title Company deliver a copy of such Preliminary Report to Developer. Within thirty (30) days
following Developer’s receipt of the Preliminary Report for the Developer Title Policy, Developer
shall send the Title Notice to both City and Escrow Agent.
3.2.2 Failure to Deliver Title Notice. If Developer fails to send the Title Notice to
City and Escrow Agent within the time period provided in Section 3.2.1, Developer will be deemed
to disapprove the status of title to the Property and refuse to accept conveyance of the Property and
both Developer and City shall have the right to cancel the Escrow and terminate this Agreement
upon seven (7) days’ Notice, in their respective sole and absolute discretion.
3.2.3 Title Notice Response. Within fifteen (15) days following City’s receipt of
the Title Notice (if any), City shall send the Title Notice Response to both Developer and Escrow
Agent. If the Title Notice does not disapprove or conditionally approve any matter in the Preliminary
Report for the Developer Title Policy or Developer fails to deliver the Title Notice, City shall not be
required to send the Title Notice Response. If City does not send the Title Notice Response, if
necessary, within the time period provided in this Section 3.2.3, City shall be deemed to elect not to
take any action in reference to the Title Notice. If City elects in the Title Notice Response to take
any action in reference to the Title Notice, City shall, without further City Council approval,
complete such action, prior to the Close of Escrow or as otherwise specified in the Title Notice
Response.
3.2.4 Title Notice Waiver. If City elects or is deemed to have elected not to address
one or more matters set forth in the Title Notice to Developer’s reasonable satisfaction, then within
ten (10) days after the earlier of: (i) Developer’s receipt of City’s Title Notice Response; or (ii) the
date for City to deliver its Title Notice Response pursuant to Section 3.2.3, Developer shall either:
(a) refuse to accept the title to and conveyance of the Property, or (b) waive its disapproval or
45635.01930\40067393.1
conditional approval of all such matters set forth in the Title Notice by sending the Title Notice
Waiver to both City and Escrow Agent. Failure by Developer to timely send the Title Notice
Waiver, where the Title Notice Response or City’s failure to deliver the Title Notice Response
results in City’s election not to address one or more matters set forth in the Title Notice to
Developer’s reasonable satisfaction, will be deemed Developer’s continued refusal to accept the title
to and conveyance of the Property, in which case both Developer and City shall have the right to
cancel the Escrow and terminate this Agreement upon seven (7) days’ Notice, in their respective sole
and absolute discretion.
3.2.5 No Termination Liability. Any termination of this Agreement and
cancellation of the Escrow pursuant to a right provided in this Section 3.2 shall be without liability to
the other Party or any other Person. Termination shall be accomplished by delivery of a Notice of
termination to both the other Party and the Escrow Agent at least seven (7) days prior to the
termination date. Following issuance of a Notice of termination of this Agreement pursuant to a right
provided under this Section 3.2, the Parties and the Escrow Agent shall proceed pursuant to Section
4.12. Once a Notice of termination is given pursuant to this Section 3.2, delivery of a Title Notice or
Title Notice Waiver shall have no force or effect and this Agreement shall terminate in accordance
with the Notice of termination.
3.3 Developer Due Diligence Investigations.
3.3.1 Time and Expense. Developer shall complete all of its Due Diligence
Investigations within the Due Diligence Period and shall conduct all of its Due Diligence
Investigations at its sole cost and expense.
3.3.2 Right to Enter. City licenses Developer to enter the Property for the sole
purpose of conducting the Due Diligence Investigations, subject to all of the terms and conditions of
this Agreement. The license given in this Section 3.3 shall terminate with the termination of this
Agreement. Any Due Diligence Investigations by Developer shall not unreasonably disrupt any
then-existing use or occupancy of the Property. Developer’s exercise of the license provided in this
Section 3.3 shall not extend the Due Diligence Period.
3.3.3 Limitations. Developer shall not conduct any intrusive or destructive testing
of any portion of the Property, other than low volume soil samples, without City’s prior written
consent. Developer shall pay all of its vendors, inspectors, surveyors, consultants or agents engaged
in any inspection or testing of the Property, such that no mechanics liens or similar liens for work
performed are imposed upon the Property by any such Persons. Following the conduct of any Due
Diligence Investigations on the Property, Developer shall restore the Property to substantially its
condition prior to the conduct of such Due Diligence Investigations.
3.3.4 Indemnification of City. The activities of Developer or its agents directly or
indirectly related to the Due Diligence Investigations shall be subject to Developer’s indemnity,
defense and hold harmless obligations pursuant to Section 10.4. Developer shall provide City with
evidence of Liability Insurance in compliance with Section 6 prior to the commencement of any Due
Diligence Investigations on the Property.
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3.3.5 Due Diligence Completion Notice. Developer shall deliver a Due Diligence
Completion Notice to City and Escrow Agent prior to the end of the Due Diligence Period. If
Developer does not unconditionally accept the condition of the Property by delivery of its Due
Diligence Completion Notice stating such unconditional acceptance, prior to the end of the Due
Diligence Period, Developer shall be deemed to have rejected the condition of the Property and
refused to accept conveyance of title to the Property. If the condition of the Property is rejected or
deemed rejected by Developer, then both City and Developer shall have the right to cancel the
Escrow and terminate this Agreement, in their respective sole and absolute discretion, without
liability to the other Party or any other Person, by delivery of a Notice of termination to the other
Party and Escrow Agent, in which case the Parties and Escrow Agent shall proceed pursuant to
Section 4.12.
3.4 “AS-IS” Acquisition. The Close of Escrow shall evidence Developer’s
unconditional and irrevocable acceptance of the Property in the Property’s AS IS, WHERE IS,
SUBJECT TO ALL FAULTS CONDITION AS OF THE CLOSE OF ESCROW, WITHOUT
WARRANTY as to character, quality, performance, condition, title, physical condition, soil
conditions, the presence or absence of fill, ocean or tidal impacts, shoring or bluff stability or
support, subsurface support, zoning, land use restrictions, the availability or location of utilities or
services, the location of any public infrastructure on or off of the Property (active, inactive or
abandoned), the suitability of the Property for the Project or other use or the existence or absence of
Hazardous Substances and with full knowledge of the physical condition of the Property, the nature
of City’s interest in and use of the Property, all laws applicable to the Property and any and all
conditions, covenants, restrictions, encumbrances and all matters of record relating to the Property.
The Close of Escrow shall constitute Developer’s representation and warranty to City that: (a)
Developer has had ample opportunity to inspect and evaluate the Property and the feasibility of the
uses and activities Developer is entitled to conduct on the Property in accordance with this
Agreement; (b) Developer is experienced in real estate development; (c) Developer is relying entirely
on Developer’s experience, expertise and its own inspection of the Property in its current state in
proceeding with acquisition of the Property; (d) Developer accepts the Property in its present
condition; (e) to the extent that Developer’s own expertise with respect to any matter regarding the
Property is insufficient to enable Developer to reach an informed conclusion regarding such matter,
Developer has engaged the services of Persons qualified to advise Developer with respect to such
matters; (f) Developer has received assurances acceptable to Developer by means independent of
City or City’s agents of the truth of all facts material to Developer’s acquisition of the Property
pursuant to this Agreement; and (g) the Property is being acquired by Developer as a result of
Developer’s own knowledge, inspection and investigation of the Property and not as a result of any
representation made by City or City’s agents relating to the condition of the Property. City hereby
expressly and specifically disclaims any express or implied warranties regarding the Property.
3.5 Developer to Obtain all Approvals for the Project.
3.5.1 Permit Ready Project. At least fifteen (15) calendar days before the Close of
Escrow, Developer shall obtain final City approval of the Construction Drawings for the Project such
that Developer is in a position to obtain City building and grading permits for the Project by paying
applicable fees that are conditions precedent to City issuance of such permits.
45635.01930\40067393.1
3.5.2 Submission of Development Application. Subject to Section 3.5.1, Developer
shall exercise reasonable efforts to prepare and submit all required Applications, documents, fees,
charges or other items (including, without limitation, deposits, funds or sureties in the ordinary
course) required for the construction of the Project, pursuant to all applicable Laws and Approvals,
to each Government for review and approval. Further, Developer shall exercise reasonable efforts to
obtain all discretionary Approvals required for the construction of the Project on the Property from
each Government, at least thirty (30) calendar days before the Close of Escrow. Notwithstanding the
foregoing provisions of this Section 3.5 or any other provision of this Agreement, prior to
commencement of any part of the construction of the Project, Developer shall obtain all Approvals
from each Government required for the construction of the Project. The City’s zoning, building and
land use regulations (whether contained in ordinances, the City’s municipal code, conditions of
approval or elsewhere) shall be applicable to the construction of the Project by Developer.
3.5.3 Developer to Pay All Costs and Expenses. The Parties agree that City shall
not provide any financial assistance to Developer in connection with the Project except as may be
expressly set forth in this Agreement. Developer shall be solely responsible for paying for the costs
of all design work, construction, labor, materials, fees and permit expenses associated with the
Project. Developer shall pay any and all fees pertaining to the review and approval of the Project by
City, any other Governmental Agency and utility service providers, including the costs of preparation
of all required construction, planning and other documents reasonably required by a Governmental
Agency pertinent to the development or operation of the Project on the Property, including, but not
limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning
applications, environmental review and disclosure documents and design review documents.
Developer shall pay for any and all costs, including, but not limited to, the costs of design,
construction, relocation and securing of permits for sewer or utility improvements and connections,
that may be required in development of the Project, whether located on or off of the Property.
Developer shall obtain any and all necessary approvals, prior to the commencement of applicable
portions of construction, and Developer shall take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
3.5.4 Reservations. The approval of this Agreement by City or the City Manager
shall not be binding on the City Council, the City governing body, City, Design Review Committee,
or any other commission, committee, board or body of City regarding any Approvals of the Project
required by such bodies. No action by City or the City Manager with reference to this Agreement or
any related documents shall be deemed to constitute issuance or waiver of any required City or City
Approval regarding the Property, the Project or Developer. The Parties acknowledge and agree that
this Agreement is not a statutory development agreement pursuant to Government Code Sections
65864, et seq.
4. JOINT ESCROW INSTRUCTIONS
4.1 Opening of Escrow; Escrow Instructions. The conveyance of the Property from
City to Developer shall take place through the Escrow to be administered by Escrow Agent.
Developer shall cause the Escrow to be opened within five (5) days following Developer’s receipt of
Notice of the occurrence of the Effective Date. Escrow Agent shall promptly confirm the Escrow
Opening Date in writing to each of the Parties.
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4.2 Escrow Instructions. This Section 4 constitutes the joint escrow instructions of
the Parties to Escrow Agent for conduct of the Escrow for the purchase and sale of the Property, as
contemplated by this Agreement. Developer and City shall sign such further escrow instructions
consistent with the provisions of this Agreement as may be reasonably requested by Escrow Agent.
In the event of any conflict between the provisions of this Agreement and any further escrow
instructions requested by Escrow Agent, the provisions of this Agreement shall control. Escrow
Agent shall only proceed to close the Escrow after Escrow Agent receives approved Escrow Closing
Statements from both City and Developer.
4.3 Escrow Agent City. City and Developer authorize Escrow Agent to:
4.3.1 Charges. Pay and charge City and Developer for their respective shares of the
applicable fees, taxes, charges and costs payable by either City or Developer regarding the Escrow;
4.3.2 Settlement/Closing Statements. Release each Party’s Escrow Closing
Statement to the other Party;
4.3.3 Document Recording. File any documents delivered for recording through the
Escrow with the office of the Recorder of the County for recordation in the official records of the
County, pursuant to the joint instructions of the Parties; and
4.3.4 Counterpart Documents. Utilize documents signed by City or Developer in
counterparts, including attaching separate signature pages to one version of the same document.
4.4 Developer’s Conditions Precedent to Close of Escrow. Provided that the failure
of any such condition to be satisfied is not due to a Default under this Agreement by Developer,
Developer’s obligation to accept conveyance of the Property from City through the Escrow shall be
conditioned upon the satisfaction or waiver (waivers must be in writing and signed by Developer) of
each of the following conditions precedent on or before the Outside Closing Date:
4.4.1 Project Permit-Ready. Developer has obtained final City approval of the
Construction Drawings for the Project such that Developer is in a position to obtain City building
and grading permits for the Project by paying applicable fees that are conditions precedent to City
issuance of such permits, all in accordance with Section 3.5;
4.4.2 Document Approval. Developer has received approval for all of the following
described items within City’s reasonable discretion, unless another provision of this Agreement
provides for approval of such document in City’s sole and absolute discretion, in which case City
shall have approved the document in City’s sole and absolute discretion:
(a) A site plan, elevations, color schemes (including material samples) for
the Project; and
(b) All Insurance Documents;
4.4.3 Title Policy. Title Company is committed to issue the Title Policy to
Developer upon payment of Title Company’s premium for such policy;
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4.4.4 Approvals. Final issuance of all Approvals required from any Government for
the construction of the Project on the Property on terms and conditions reasonably satisfactory to
Developer;
4.4.5 Due Diligence. Developer has delivered its Due Diligence Completion Notice
to both City and Escrow Agent stating Developer’s unconditional acceptance of the condition of the
Property, in accordance with Section 3.3;
4.4.6 Surplus Land Act. If the disposition of any parcel of the Property is not
considered exempt surplus land as defined in Government Code Section 54221, the California
Department of Housing and Community Development, or any other applicable Government, has
made all required findings and determinations pursuant to Government Code Section 54220 et. al for
Developer to build the Project on the Property.
4.4.7 Project Construction Financing. Developer has received a written
commitment from at least one Institutional Lender to provide the Project construction financing on
terms reasonably acceptable to Developer;
4.4.8 City Escrow Deposits. City deposits all of the items into Escrow required by
Section 4.7; and
4.4.9 City Pre-Closing Obligations. City performs all of its material obligations
required to be performed by City pursuant to this Agreement prior to the Close of Escrow.
4.5 City’s Conditions Precedent to Close of Escrow. Provided that the failure of any
such condition to be satisfied is not due to a Default under this Agreement by City, City’s obligation
to convey the Property to Developer through the Escrow shall be conditioned upon the satisfaction or
waiver (waivers must be in writing and signed by City) of each of the following conditions precedent
prior to the Outside Closing Date:
4.5.1 Project Permit-Ready. Developer has obtained final City approval of the
Construction Drawings for the Project such that Developer is in a position to obtain City building
and grading permits for the Project by paying applicable fees that are conditions precedent to City
issuance of such permits, all in accordance with Section 3.5;
4.5.2 Document Approval. City has received from Developer and approved all of
the following described items in City’s reasonable discretion, unless another provision of this
Agreement provides for approval of such document in City’s sole and absolute discretion, in which
case City shall have approved the document in City’s sole and absolute discretion:
(a) A site plan, elevations, color schemes (including material samples) for
the Project; and
(b) All Insurance Documents;
4.5.3 Title. Developer accepts the state of the title of the Property, in accordance
with Section 3.2;
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4.5.4 Due Diligence. Developer timely delivers its Due Diligence Completion
Notice to both City and Escrow Agent stating Developer’s unconditional acceptance of the condition
of the Property, in accordance with Section 3.3;
4.5.5 Approvals. Final issuance of all discretionary Approvals required from any
Government for the construction of the Project on the Property on terms and conditions reasonably
satisfactory to City;
4.5.6 65402 Finding. City Planning Commission has made all required findings and
determinations pursuant to Government Code Section 65402 for City to convey the Property to
Developer pursuant to this Agreement;
4.5.7 Surplus Land Act. If the disposition of any parcel of the Property is not
considered exempt surplus land as defined in Government Code Section 54221, the California
Department of Housing and Community Development, or any other applicable Government, has
made all required findings and determinations pursuant to Government Code Section 54220 et. al for
Developer to build the Project on the Property.
4.5.8 Construction Drawings. City has approved the final Construction Drawings
pursuant to Section 3.5.1;
4.5.9 Developer Escrow Deposits. Developer deposits all of the items into
Escrow required by Section 4.6; and
4.5.10 Developer Pre-Closing Obligations. Developer performs all of its material
obligations required to be performed by Developer pursuant to this Agreement prior to Close of
Escrow.
4.6 Developer’s Escrow Deposits. Developer shall deposit the following items into
Escrow and, concurrently, provide a copy of each document submitted into Escrow to City, at least
one (1) Business Day prior to the Close of Escrow:
4.6.1 Closing Funds. All amounts required to be deposited into Escrow by
Developer under the terms of this Agreement to close the Escrow, all in immediately available funds;
4.6.2 Regulatory Agreement. The Regulatory Agreement signed by the authorized
representative(s) of Developer in recordable form;
4.6.3 City Quitclaim Deed and Certificate of Acceptance. City Quitclaim Deed
initialed by and the Certificate of Acceptance attached to the City Quitclaim Deed signed by the
authorized representative(s) of Developer in recordable form;
4.6.4 Escrow Closing Statement. The Developer’s Escrow Closing Statement
signed by the authorized representative(s) of Developer; and
4.6.5 Other Reasonable Items. Any other documents, instruments or funds required
to be delivered by Developer under the terms of this Agreement or as otherwise reasonably requested
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by Escrow Agent or Title Company in order to close the Escrow that have not previously been
delivered by Developer.
4.7 City’s Escrow Deposits. City shall deposit the following documents into Escrow
and, concurrently, provide a copy of each document deposited into Escrow to Developer, at least one
(1) Business Day prior to the Close of Escrow:
4.7.1 Closing Funds. All amounts required to be deposited into Escrow by City
under the terms of this Agreement to close the Escrow, all in immediately available funds;
4.7.2 City Quitclaim Deed. City Quitclaim Deed signed by the authorized
representative(s) of City in recordable form;
4.7.3 Escrow Closing Statement. City’s Escrow Closing Statement signed by the
authorized representative(s) of City;
4.7.4 Regulatory Agreement. The Regulatory Agreement signed by the authorized
representative(s) of City in recordable form;
4.7.5 FIRPTA Affidavit. A FIRPTA affidavit signed by the authorized
representative(s) of City, in the customary form provided by the Escrow Agent;
4.7.6 Form 593.A Form 593 signed by the authorized representative(s) of City; and
4.7.7 Other Reasonable Items. Any other documents, instruments, funds and
records required to be delivered by City under the terms of this Agreement or as otherwise
reasonably requested by Escrow Agent or Title Company in order to close the Escrow that have not
been previously delivered by City.
4.8 Closing Procedure. When each of Developer’s Escrow deposits, as set forth in
Section 4.6, and each of City’s Escrow deposits, as set forth in Section 4.7, are deposited into
Escrow, Escrow Agent shall request confirmation in writing from both City and Developer that each
of their respective conditions precedent to the Close of Escrow, as set forth in Sections 4.5 and 4.4,
respectively, are satisfied or waived. Within five (5) Business Days after Escrow Agent receives
written confirmation from both City and Developer that each of their respective conditions precedent
to the Close of Escrow are satisfied or waived, Escrow Agent shall close the Escrow by doing all of
the following:
4.8.1 Recordation and Distribution of Documents. Escrow Agent shall cause the
following documents to be filed with the Recorder of the County for recording in the official records
of the Recorder of the County in the following order of priority at Close of Escrow: (i) City
Quitclaim Deed; (ii) the Regulatory Agreement; and (iii) any other documents to be recorded through
Escrow upon the joint instructions of the Parties. At Close of Escrow, Escrow Agent shall deliver
conformed copies of all documents filed for recording in the official records of the County through
the Escrow to City, Developer and any other Person designated in the written joint escrow
instructions of the Parties to receive an original or conformed copy of each such document. Each
copy of a document filed for recording shall show all recording information. The Parties intend and
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agree that this Section 4.8.1 shall establish the relative priorities of the documents to be recorded in
the official records of the County through the Escrow, by providing for recordation of senior interests
prior in time to junior interests, in the order provided in this Section 4.8.1;
4.8.2 Distribution of Other Documents. Escrow Agent shall deliver copies of all
documents to be delivered through the Escrow that are not filed for recording to the Parties and any
other Person designated in the written joint escrow instructions of the Parties to receive an original or
copy of each such document.
4.8.3 Funds. Distribute all funds held by the Escrow Agent pursuant to the Escrow
Closing Statements approved in writing by both City and Developer.
4.8.4 FIRPTA Affidavit. File the FIRPTA Affidavit with the United States Internal
Revenue Service;
4.8.5 Form 593. File the Form 593 with the California Franchise Tax Board; and
4.8.6 Title Policies. Obtain and deliver to Developer the Developer Title Policy
issued by the Title Company.
4.9 Close of Escrow. The Close of Escrow shall occur on or before the Outside
Closing Date. The Parties may mutually agree to change the Outside Closing Date by joint written
instruction to Escrow Agent. The City Manager is authorized to agree to one or more extensions of
the Outside Closing Date on behalf of City up to a maximum time period extension of four (4)
months in the aggregate, in the City Manager’s sole and absolute discretion. If for any reason (other
than a Default or Event of Default by such Party) the Close of Escrow has not occurred on or before
the Outside Closing Date, then any Party not then in Default under this Agreement may cancel the
Escrow and terminate this Agreement, without liability to the other Party or any other Person for
such cancellation and termination, by delivering Notice of termination to both the other Party and
Escrow Agent. Following any such Notice of termination of this Agreement and cancellation of the
Escrow, the Parties and Escrow Agent shall proceed pursuant to Section 4.12. Without limiting the
right of either Party to cancel the Escrow and terminate this Agreement, pursuant to the first sentence
of this Section 4.9, if the Escrow does not close on or before the Outside Closing Date and neither
Party has exercised its contractual right to cancel the Escrow and terminate this Agreement under this
Section 4.9 before the first date on which Escrow Agent Notifies both Parties that Escrow is in a
position to close, then the Escrow shall close as soon as reasonably possible following the first date
on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with
the terms and conditions of this Agreement.
4.10 Escrow Costs. Escrow Agent shall notify Developer and City of the costs to be
borne by each of them at the Close of Escrow by delivering an Escrow Closing Statement to both
City and Developer at least two (2) Business Days prior to the Close of Escrow. City shall pay the
premium charged by the Title Company for the Developer Title Policy, exclusive of any
endorsements or other supplements to the coverage of the Developer Title Policy that may be
requested by Developer. The City and Developer shall each pay one half (1/2) of the Escrow fees
and such other costs as the Escrow Agent may charge for the conduct of the Escrow. Developer shall
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pay all recording fees, documentary transfer taxes and any and all other charges, fees and taxes levied
by a Government relative to the conveyance of the Property through the Escrow and the cost of any
endorsements or supplements to the coverage of the Title Policy requests by Developer.
4.11 Escrow Cancellation Charges. If the Escrow fails to close due to City’s Default
under this Agreement, City shall pay all ordinary and reasonable Escrow and title order cancellation
charges charged by Escrow Agent or Title Company, respectively. If the Escrow fails to close due to
Developer’s Default under this Agreement, Developer shall pay all ordinary and reasonable Escrow
and title order cancellation charges charged by Escrow Agent or Title Company, respectively. If the
Escrow fails to close for any reason other than the Default of either Developer or City, Developer
and City shall each pay one-half (1/2) of any ordinary and reasonable Escrow and title order
cancellation charges charged by Escrow Agent or Title Company, respectively.
4.12 Escrow Cancellation. If this Agreement is terminated pursuant to a contractual
right granted to a Party in this Agreement to terminate this Agreement (other than due to an Event of
Default by the other Party), the Parties shall do all of the following:
4.12.1 Cancellation Instructions. The Parties shall, within three (3) Business Days
following Escrow Agent’s written request, execute any reasonable Escrow cancellation instructions
requested by Escrow Agent;
4.12.2 Return of Funds and Documents. Within ten (10) Business Days following
receipt by the Parties of a settlement statement of Escrow and title order cancellation charges from
Escrow Agent (if any) or within twenty (20) days following Notice of Termination, whichever is
earlier: (i) Developer or Escrow Agent shall return to City all documents previously delivered by
City to Developer or Escrow Agent regarding the Escrow; (ii) City or Escrow Agent shall return to
Developer all documents previously delivered by Developer to City or Escrow Agent regarding the
Escrow; (iii) Escrow Agent shall, except as otherwise provided for in this Agreement, return to
Developer all funds deposited in Escrow, less Developer’s share of customary and reasonable
Escrow and title order cancellation charges (if any) in accordance with Section 4.11; (iv) Escrow
Agent shall, except as otherwise provided in this Agreement, return to City all funds deposited in
Escrow, less City’s share of customary and reasonable Escrow and title order cancellation charges (if
any) in accordance with Section 4.11.
4.13 Report to IRS. After the Close of Escrow and prior to the last date on which such
report is required to be filed with the Internal Revenue Service under applicable Federal law, if such
report is required pursuant to Internal Revenue Code Section 6045(e) of the Internal Revenue Code,
Escrow Agent shall report the gross proceeds of the purchase and sale of the Property to the Internal
Revenue Service on Form 1099-B, W-9 or such other form(s) as may be specified by the Internal
Revenue Service pursuant to Internal Revenue Code Section 6045(e). Concurrently with the filing of
such reporting form with Internal Revenue Service, Escrow Agent shall deliver a copy of the filed
form to both City and Developer.
4.14 Condemnation. If any portion of the Property or any interest in any portion of the
Property becomes the subject of any eminent domain proceeding prior to Close of Escrow, including
the filing of any notice of intended condemnation or proceedings in the nature of eminent domain
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commenced by any Government, City shall immediately give Notice to Developer of such
occurrence and this Agreement shall terminate on the giving of such Notice.
5. PROJECT DEVELOPMENT
5.1 Developer’s Covenant to Develop the Project. Developer covenants to and for the
exclusive benefit of City that Developer shall commence, pursue and complete the development of
the Project on the Property in accordance with the requirements of this Agreement and all applicable
Laws and conditions of each Governmental Agency. The covenants of this Section 5.1 shall run with
the Property, until the earlier of: (1) the first date on which a Completion Certificate has been issued
for each Dwelling Unit in the Project; or (2) the twentieth (20th) anniversary of the date of the Close
of Escrow.
5.2 Changes to Project Plans and Specifications During Course of Construction.
Developer shall have the right, during the course of construction of the Project, to make “minor field
changes,” without seeking the approval of City, if such changes do not affect the type of use to be
conducted within all or any portion of a structure. “Minor field changes” shall be defined as those
changes from the Approvals for the Project that have no substantial effect on the Project and are
made in order to expedite the work of construction in response to field conditions. Nothing
contained in this Section 5.2 shall be deemed to constitute a waiver of or change in any Approvals
governing any such “minor field changes” or any Approvals by any Government otherwise required
for any such “minor field changes.”
5.3 Construction Start and Completion of Project.
5.3.1 Commencement. Developer shall commence construction of the Project no
later than the Project Commencement Date. Thereafter, Developer shall diligently proceed to pursue
and complete the construction of the Project, in a good and workmanlike manner, in accordance with
this Agreement, all applicable Laws and all Approvals for the Project issued by each Government.
5.3.2 Completion. On or before the Project Completion Date of the Project,
Developer shall do all of the following:
(a) Record a Notice of Completion, in accordance with California Civil
Code Section 8182, for the entirety of the Project;
(b) Request each applicable Government Agency to inspect the Project,
as required by the applicable Approvals or Laws, and correct any defects or deficiencies that may be
disclosed by any such inspection; and
(c) Request each applicable Government Agency to issue all final
Certificates of Occupancy or other Approvals necessary for the occupancy and operation of the
completed Project and take such other actions reasonably required to obtain all such Certificates of
Occupancy or other Approval.
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5.3.3 Time Extensions. The City Manager, in his or her sole and absolute
discretion, may extend the completion of the Project for up to an additional ninety (90) days, in the
aggregate.
5.4 Compliance with Laws. All work performed in connection with the construction
of the Project shall comply with all applicable Laws and Approvals.
5.5 Developer Attendance at City Meetings. Developer agrees to have one or more of
its employees or consultants who are knowledgeable regarding this Agreement and the construction
of the Project, such that such Person(s) can meaningfully respond to City governing body or City
staff questions regarding the progress of the Project, attend meetings with City staff or meetings of
City governing body, when requested to do so by City staff, with reasonable advance Notice to
Developer, but no more frequently than once a month.
5.6 City Right to Inspect Project and Property. Developer agrees that City shall have
the right of reasonable access to the Property, without the payment of charges or fees, during normal
construction hours, during the period of construction of the Project. Any and all City representatives
who enter the Property shall identify themselves at the construction management office or, if none, to
the apparent on-site construction supervisor on the Property, upon their entrance onto the Property,
and shall at all times be accompanied by a representative of Developer, while on the Property.
Developer shall make a representative of Developer available for this purpose at all times during
normal construction hours, upon reasonable advance Notice from City. City shall Indemnify
Developer regarding Claims arising out of the exercise by City of the right of access to the Property
provided in this Section 5.6, except to the extent that any such Claim arises from the negligence or
willful misconduct of Developer or Developer’s representatives. If in City’s reasonable judgment it
is necessary, Developer agrees that City shall have the further right, from time to time, at its own
cost, to retain a consultant or consultants to inspect the Project and verify compliance by Developer
with the provisions of this Agreement. Developer acknowledges and agrees that any such City
inspections are for the sole purpose of protecting City’s rights under this Agreement, are made solely
for City’s benefit, City’s inspections may be superficial and general in nature, are for the purposes of
informing City of the progress of the Project and the conformity of the Project with the terms and
conditions of this Agreement, and Developer shall not be entitled to rely on any such inspection(s) as
constituting City’s approval, satisfaction or acceptance of any materials, workmanship, conformity of
the Project with this Agreement or otherwise. Developer agrees to make its own regular inspections
of the work of construction of the Project to determine that the progress and quality of the Project
and all other requirements of the work of construction of the Project are being performed in a manner
satisfactory to Developer.
5.7 PREVAILING WAGES.
5.7.1 RESPONSIBILITY. DEVELOPER AGREES WITH CITY THAT
DEVELOPER SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY
RESPONSIBLE FOR DETERMINING WHETHER OR NOT PREVAILING WAGE
REQUIREMENTS MUST BE COMPLIED WITH PURSUANT TO LABOR CODE SECTIONS
1720 ET SEQ. AND 1770 ET SEQ. AND CALIFORNIA CODE OF REGULATIONS, TITLE 8,
SECTION 16000 ET SEQ., OR PURSUANT TO APPLICABLE FEDERAL LAW.
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5.7.2 WAIVERS AND RELEASES. DEVELOPER, ON BEHALF OF ITSELF,
ITS SUCCESSORS, AND ASSIGNS, WAIVES AND RELEASES CITY FROM ANY RIGHT OF
ACTION THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO STATE LABOR
CODE SECTION 1781 OR APPLICABLE FEDERAL LAW. RELATIVE TO THE WAIVERS
AND RELEASES CONTAINED IN THIS SECTION 5.7.2, DEVELOPER ACKNOWLEDGES
THE PROTECTIONS OF CIVIL CODE SECTION 1542, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR
HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
5.7.3 INITIALS. BY INITIALING BELOW, DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION
WITH THE WAIVERS AND RELEASES OF SECTION 5.7.2:
_________________
Initials of Authorized
Developer Representative
5.7.4 INDEMNITY. ADDITIONALLY, DEVELOPER SHALL INDEMNIFY
CITY, PURSUANT TO SECTION 10.4, AGAINST ANY CLAIMS ARISING FROM OR
RELATING TO A PREVAILING WAGE ACTION ASSOCIATED OR IN CONNECTION WITH
THIS AGREEMENT OR THE CONSTRUCTION OF ALL OR ANY PORTION OF THE
PROJECT.
5.8 Completion Certificate.
5.8.1 Completion Certificate for Each Dwelling Unit. Following the issuance of a
final Certificate of Occupancy for a particular Dwelling Unit in the Project by the City, Developer
may request that City inspect such completed Dwelling Unit and issue a Completion Certificate for
that particular Dwelling Unit. Following City’s receipt of such a written request from Developer, the
City Manager shall promptly cause the particular Dwelling Unit to be inspected as deemed
appropriate by the City Manager or his or her designee, in his or her sole and absolute discretion, to
determine whether or not the Dwelling Unit has been completed in compliance with this Agreement.
If the City Manager or his or her designee determines that the Dwelling Unit is complete and in
compliance with this Agreement, City authorizes the Building Official to issue a Completion
Certificate for the particular Dwelling Unit to Developer. If the City Manager determines that the
Dwelling Unit is not complete or not in compliance with this Agreement, City authorizes the City
Manager to send Notice of each non-conformity to Developer, within fifteen (15) calendar days
following City’s receipt of Developer’s written request for a Completion Certificate. The Notice
shall contain the City Manager’s opinion of the action(s) Developer must take to obtain a
Completion Certificate from the City Manager for the particular Dwelling Unit. If the reason for
Developer’s failure to complete the particular Dwelling Unit in accordance with this Agreement is
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confined to the immediate unavailability of specific items or materials for construction or
landscaping at a price reasonably acceptable to Developer or other minor Punchlist Work, City
authorizes the City Manager, in his or her sole and absolute discretion, to issue a Completion
Certificate upon the posting of a bond or irrevocable standby letter of credit by Developer, in form
and substance reasonably acceptable to the City Manager, in an amount representing the fair value of
the work on the particular Dwelling Unit remaining to be completed, as reasonably determined by the
City Manager. If the City Manager fails to provide the Notice required in this Section 5.8.1, within
the specified time period, Developer shall be deemed, conclusively and without further action of City
or the City Manager, to have satisfied the requirements of this Agreement with respect to the
construction of the particular Dwelling Unit, as if a Completion Certificate had been issued for the
particular Dwelling Unit by the City Manager pursuant to this Agreement.
5.8.2 Effect. A Completion Certificate shall only be evidence of City’s conclusive
determination of satisfactory completion of the construction of the subject Dwelling Unit in the
Project in accordance with the terms of this Agreement. A Completion Certificate shall not
constitute a Notice of Completion under California Civil Code Section 8182, nor shall it act to
terminate the continuing reservations, covenants, restrictions or conditions contained in the
Quitclaim Deed or any other instruments recorded against the Property or set forth in this Agreement
or otherwise. A Completion Certificate is not evidence of the compliance of the subject Dwelling
Unit with any Laws or Approvals. A Completion Certificate shall not evidence the satisfaction of
any obligation of Developer to City under this Agreement or otherwise, other than Developer’s
obligation to complete the construction of the subject Dwelling Unit. After the recordation of a
Completion Certificate for a particular Dwelling Unit, any Person then owning or thereafter
purchasing, leasing or otherwise acquiring any interest in the subject Dwelling Unit shall not
(because of such ownership, purchase or lease) incur any obligation or liability under this Agreement
regarding construction of the subject Dwelling Unit, but such Person shall be bound by any other
reservations, covenants, conditions, restrictions and interests affecting the subject Dwelling Unit
pursuant to this Agreement.
6. INSURANCE
6.1 Developer. Developer shall maintain, to protect City Parties against all insurable
Claims resulting from the actions of Developer in connection with this Agreement, the Property and
the Project, at the sole cost and expense of Developer, until issuance of a Completion Certificate for
each Dwelling Unit in the Project, the following insurance (or its then reasonably available
equivalent): (a) Liability Insurance; (b) Automobile Liability Insurance; (c) Property Insurance; (d)
Builder’s Risk Insurance; and (e) Workers Compensation Insurance.
6.2 Nature of Insurance. All Liability Insurance, Property Insurance and Automobile
Liability Insurance policies this Agreement requires shall be issued by carriers that: (a) are listed in
the then current “Best’s Key Rating Guide—Property/Casualty—United States & Canada”
publication (or its equivalent, if such publication ceases to be published) with a minimum financial
strength rating of “A-” and a minimum financial size category of “VII” (exception may be made for
the State Compensation Insurance Fund when not specifically rated); and (b) are authorized to do
business in the State. Developer may provide any insurance under a “blanket” or “umbrella”
insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the
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amount(s) of the total insurance allocated to the Property and the Project, which amount(s) shall
equal or exceed the amount(s) required by this Agreement; and (ii) such policy otherwise complies
with the insurance requirements in this Agreement.
6.3 Policy Requirements and Endorsements. All insurance policies required by this
Agreement shall contain (by endorsement or otherwise) the following provisions:
6.3.1 Insured. Liability Insurance and Automobile Liability Insurance policies shall
name the City Parties as “additional insured.” Property Insurance and Builder’s Risk Insurance
policies shall name City as a “loss payee.” The coverage afforded to the City Parties shall be at least
as broad as that afforded to Developer regarding the Property and the Project and may not contain
any terms, conditions, exclusions, or limitations applicable to the City Parties that do not apply to
Developer.
6.3.2 Primary Coverage. Any insurance or self-insurance maintained by the City
Parties shall be excess of all insurance required under this Agreement and shall not contribute with
any insurance required under this Agreement.
6.3.3 Contractual Liability. Liability Insurance policies shall contain contractual
liability coverage, for Developer’s indemnity obligations under this Agreement. Developer’s
obtaining or failure to obtain such contractual liability coverage shall not relieve Developer from nor
satisfy any indemnity obligation of Developer under this Agreement.
6.3.4 Deliveries to City. Developer shall deliver to City evidence of Liability
Insurance prior to the commencement of any Due Diligence Investigations. Evidence of Developer’s
maintenance of all insurance policies required by this Agreement shall be delivered to City prior to
the Close of Escrow. Builder’s Risk Insurance coverage shall commence no later than the time of
initial contractor mobilization for the Project. No later than ten (10) days before any insurance
required by this Agreement expires, is cancelled or its liability limits are reduced or exhausted,
Developer shall deliver to City evidence of such Party’s maintenance of all insurance this Agreement
requires. Each insurance policy required by this Agreement shall state or be endorsed to state that
coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after
thirty (30) calendar days’ advance written notice of such action has been given to City by certified
mail, return receipt requested; provided; however, that only ten (10) days’ advance written notice
shall be required for any such action arising from non-payment of the premium for the insurance.
Phrases such as “endeavor to” and “but failure to mail such Notice shall impose no obligation or
liability of any kind upon the company” shall not be included in the cancellation wording of any
certificates or policies of insurance or endorsements to such policies applicable to the City Parties
pursuant to this Agreement.
6.3.5 Waiver of Certain Claims. Developer shall cause each insurance carrier
providing any Liability Insurance, Builder’s Risk Insurance, Worker’s Compensation Insurance,
Automobile Liability Insurance or Property Insurance coverage under this Agreement to endorse
their applicable policy(ies) with a Waiver of Subrogation with respect to the City Parties, if not
already in the policy. To the extent that Developer obtains insurance with a Waiver of Subrogation,
the Parties release each other, and their respective authorized representatives, from any Claims for
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damage to any Person or property to the extent such Claims are paid by such insurance policies
obtained pursuant to and in satisfaction of the provisions of this Agreement.
6.3.6 No Representation. No Party makes any representation that the limits, scope,
or forms of insurance coverage this Agreement requires are adequate or sufficient.
6.3.7 No Claims Made Coverage. None of the insurance coverage required under
this Agreement may be written on a claims-made basis.
6.3.8 Fully Paid and Non-Assessable. All insurance obtained and maintained by
Developer in satisfaction of the requirements of this Agreement shall be fully paid for and non-
assessable.
6.3.9 City Option to Obtain Coverage. During the continuance of an Event of
Default arising from the failure of Developer to carry any insurance required by this Agreement, City
may, in City’s sole and absolute discretion, purchase any such required insurance coverage. City
shall be entitled to immediate payment from Developer of any premiums and associated reasonable
costs paid by City to obtain or maintain such insurance coverage. Any amount becoming due and
payable to City under this Section 6.3.9 that is not paid within fifteen (15) calendar days after written
demand from City for payment of such amount, with an explanation of the amounts demanded, will
bear Default Interest from the date of the demand until paid in full, with all such accrued interest.
Any election by City to purchase or not to purchase insurance otherwise required by the terms of this
Agreement to be carried by Developer shall not relieve Developer of its obligation to obtain and
maintain any insurance coverage required by this Agreement.
6.3.10 Separation of Insured. All Liability Insurance and Automobile Liability
Insurance shall provide for separation of insured for Developer and the City Parties. Insurance
policies obtained in satisfaction of or in accordance with the requirements of this Agreement may
provide a cross-suits exclusion for suits between named insured Persons, but shall not exclude suits
between named insured Persons and additional insured Persons.
6.3.11 Deductibles and Self-Insured Retentions. Any deductibles or self-insured
retentions under insurance policies required by this Agreement shall be declared to and approved by
City. In the event of an insured loss, Developer shall pay all such deductibles or self-insured
retentions regarding the City Parties or, alternatively, the insurer under each such insurance policy
shall eliminate or waive such deductibles or self-insured retentions with respect to the City Parties.
Each insurance policy issued in satisfaction of the requirements of this Agreement shall provide that,
to the extent that Developer fails to pay all or any portion of a deductible or self-insured retention
under such policy in reference to an otherwise insured loss, City may pay the unpaid portion of such
deductible or self-insured retention, in City’s sole and absolute discretion.
6.3.12 No Separate Insurance. Developer shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that required under this
Agreement, unless City is made an additional insured thereon, as required by this Agreement for the
insurance required to be carried by Developer under this Agreement.
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6.3.13 Insurance Independent of Indemnification. The insurance requirements of this
Agreement are independent of Developer’s indemnification and other obligations under this
Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify
Developer’s indemnification or other obligations or to limit the Parties’ liability under this
Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or
insolvency of the insurer that issues the coverage; nor shall the provision of such insurance preclude
City from taking such other actions as are available to it under any other provision of this Agreement
or otherwise at law or in equity.
7. EVIDENCE OF FINANCING
7.1 Mortgages, deeds of trust, sales and leases-back, collateral assignments of rents or
profits or any other form of conveyance required for any reasonable method of financing are
permitted before issuance of a Certificate of Completion of the construction of the improvements,
but only for the purpose of securing loans of funds to be used for the construction or installation of
improvements or equipment or fixtures on the Property and any other expenditures necessary and
appropriate to develop the Property under this Agreement. Developer shall notify City in advance of
any mortgage, deed of trust, sale and lease-back or other form of conveyance for financing if
Developer proposes to enter into the same before issuance of a Certificate of Completion of the
construction of the improvements on the Property. Developer shall not enter into any such
conveyance for financing without the proper written approval of City which approval City agrees to
give if any such conveyance is given to a responsible financial or lending institution or other
acceptable person or entity. Such lender shall be deemed approved unless rejected in writing by City
within ten (10) days after notice thereof to City by Developer. In any event, Developer shall
promptly notify City of any mortgage, deed of trust, sale and lease-back or other financing
conveyance, encumbrance or lien that has been created or attached thereto prior to completion of the
construction of the improvements on the Property whether by voluntary act of Developer or
otherwise. The words “mortgage” and “deed of trust” as used herein include all other appropriate
modes of financing real estate acquisition, construction, and land development. The obligations and
covenants of Developer set forth in this Section shall terminate upon issuance of a Certificate of
Completion. City agrees to execute and deliver in recordable form any instrument reasonably
requested by the prospective holder of any mortgage, deed of trust or other security interest
authorized by this Agreement so as to indicate the subordination of this Agreement to the holder’s
mortgage, deed of trust or other security interest.
7.2 Only Permitted Encumbrances. Developer shall not record and shall not allow to
be recorded against the Property any Security Instrument, lien or other encumbrance that is not a
Permitted Encumbrance. Developer shall remove or cause to be removed any Prohibited
Encumbrance made or recorded against the Property or shall assure the complete satisfaction of any
such Prohibited Encumbrance to the satisfaction of City, in the City’s sole and absolute discretion.
The covenants of Developer set forth in this Section 7.2 regarding the placement and removal of
encumbrances on the Property shall run with the land of the Property and bind successive owners of
the Property, until issuance (or deemed issuance) of a Completion Certificate for each Dwelling Unit
in the Project.
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8. NOTICE OF LIENS. The Developer shall promptly Notify City of any Security Instrument
or lien asserted against or attached to all or any portion of the Project or the Property, prior to the
date of issuance of a Completion Certificate for each Dwelling Unit in the Project, whether by
voluntary act of Developer or otherwise; provided, however, that no Notice of filing of preliminary
notices or mechanic’s liens need be given by Developer to City, prior to suit being filed to foreclose
any such mechanic’s lien.
9. PROPERTY TAXES AND ASSESSMENTS. All real property taxes and assessments
assessed and levied on or against the Property for the year in which the Closing Date occurs shall be
prorated between City and Developer as of the Closing Date on the basis of actual bills therefor when
issued by the applicable taxing authorities. Nothing in this Agreement shall be deemed to prohibit
Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor
to limit the remedies available to Developer in respect thereto, or for claiming exemptions available
under State Revenue and Taxation Code Section 214(g).
10. REMEDIES AND INDEMNITY
10.1 DEVELOPER’S RIGHT TO SPECIFIC PERFORMANCE AND LIMITATION
ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW.
10.1.1 ELECTION OF REMEDIES. DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT BY CITY UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF
ESCROW, DEVELOPER SHALL BE LIMITED TO EITHER OF THE FOLLOWING REMEDIES:
(1) AN ACTION AGAINST CITY FOR SPECIFIC PERFORMANCE OF THIS AGREEMENT;
OR (2) TERMINATION OF THIS AGREEMENT AND AN ACTION TO RECOVER UP TO A
MAXIMUM AMOUNT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) OF
AMOUNTS ACTUALLY PAID BY DEVELOPER PRIOR TO THE DATE OF SUCH EVENT OF
DEFAULT TO THIRD PERSONS DIRECTLY RELATED TO OBTAINING PROJECT
APPROVALS FROM CITY, BUT EXCLUSIVE OF AMOUNTS PAID OR ALLOCATED
DIRECTLY OR INDIRECTLY TO INTERNAL COSTS OF DEVELOPER OR DEVELOPER’S
EMPLOYEES, MEMBERS, SHAREHOLDERS, PARTNERS, AFFILIATES OR EMPLOYEES
OR AGENTS OF ANY OF THEM. UNDER NO CIRCUMSTANCES SHALL CITY BE LIABLE
TO DEVELOPER UNDER THIS AGREEMENT FOR ANY SPECULATIVE, CONSEQUENTIAL,
COLLATERAL, SPECIAL, PUNITIVE OR INDIRECT DAMAGES OR FOR ANY LOSS OF
PROFITS SUFFERED OR CLAIMED TO HAVE BEEN SUFFERED BY DEVELOPER.
10.1.2 WAIVER OF RIGHTS. DEVELOPER ACKNOWLEDGES AND AGREES
THAT CITY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE
LIABLE TO DEVELOPER FOR ANY MONETARY DAMAGES, MONETARY RECOVERY OR
ANY REMEDY DURING THE CONTINUANCE OF AN EVENT OF DEFAULT UNDER THIS
AGREEMENT BY CITY PRIOR TO THE CLOSE OF ESCROW, OTHER THAN SPECIFIC
PERFORMANCE OF THIS AGREEMENT OR TERMINATION OF THIS AGREEMENT AND
PAYMENT OF THE AMOUNTS SPECIFIED IN SECTION 10.1.1. ACCORDINGLY, CITY
AND DEVELOPER AGREE THAT THE REMEDIES SPECIFICALLY PROVIDED FOR IN
SECTION 10.1.1 ARE REASONABLE AND SHALL BE DEVELOPER’S SOLE AND
EXCLUSIVE RIGHTS AND REMEDIES DURING THE CONTINUANCE OF AN EVENT OF
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DEFAULT UNDER THIS AGREEMENT BY CITY. DEVELOPER WAIVES ANY RIGHT TO
PURSUE ANY REMEDY OR DAMAGES OTHER THAN THOSE SPECIFICALLY PROVIDED
IN SECTION 10.1.1.
10.1.3 CIVIL CODE SECTION 1542 WAIVER. DEVELOPER
ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE
WAIVERS AND RELEASES CONTAINED IN THIS SECTION 10.1, WHICH CIVIL CODE
SECTION READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.
10.1.4 ACKNOWLEDGMENT. BY INITIALING BELOW, DEVELOPER
KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 AND
ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF
SIMILAR EFFECT SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES
CONTAINED IN THIS SECTION 10.1.
_______________________
Initials of Authorized
Developer Representative
10.1.5 STATEMENT OF INTENT. CALIFORNIA CIVIL CODE SECTION 1542
NOTWITHSTANDING, IT IS THE INTENTION OF DEVELOPER TO BE BOUND BY THE
LIMITATION ON DAMAGES AND REMEDIES SET FORTH IN THIS SECTION 10.1, AND
DEVELOPER HEREBY RELEASES ANY AND ALL CLAIMS AGAINST CITY FOR
MONETARY DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE
RELIEF RELATED TO ANY EVENT OF DEFAULT UNDER THIS AGREEMENT PRIOR TO
THE CLOSE OF ESCROW, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 10.1,
WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO
DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT.
10.2 Legal Actions. Either Party may institute legal action, at law or in equity, to
enforce or interpret the rights or obligations of the Parties under this Agreement or recover damages,
subject to the provisions of Section 10.1.
10.3 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the Parties set forth in this Agreement are cumulative and the
exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by
such Party, at the same or different times, of any other rights or remedies for the same Default or the
same rights or remedies for any other Default by the other Party.
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10.4 Indemnification.
10.4.1 Developer Indemnity Obligations. Developer shall Indemnify the City Parties
against any Claim to the extent such Claim arises from any wrongful intentional act or negligence of
the Developer Parties. Developer shall also Indemnify City Parties against any and all of the
following: (a) any Application made by or at Developer’s request; (b) any agreements that Developer
(or anyone claiming by or through Developer) makes with a Third Person regarding the Property or
the Project; (c) any workers compensation claim or determination relating to any employee of the
Developer Parties or their contractors; (d) any Prevailing Wage Action arising from or relating to this
Agreement or the Project; (e) any Environmental Claim attributable to any action or failure to act by
the Developer Parties; and (f) any Claim arising from or related to City’s approval or entry into this
Agreement.
10.4.2 Independent of Insurance Obligations. Developer’s indemnification
obligations under this Agreement shall not be construed or interpreted as in any way restricting,
limiting, or modifying Developer’s insurance or other obligations under this Agreement.
Developer’s obligation to Indemnify City Parties under this Agreement is independent of
Developer’s insurance and other obligations under this Agreement. Developer’s compliance with its
insurance obligations and other obligations under this Agreement shall not in any way restrict, limit,
or modify Developer’s indemnification obligations under this Agreement and are independent of
Developer’s indemnification and other obligations under this Agreement.
10.4.3 Survival of Indemnification and Defense Obligations. The indemnity and
defense obligations of the Parties under this Agreement shall survive the expiration or earlier
termination of this Agreement, until any and all actual or prospective Claims regarding any matter
subject to an indemnity obligation under this Agreement are fully, finally, absolutely and completely
barred by applicable statutes of limitations.
10.4.4 Indemnification Procedures. Wherever this Agreement requires any
Indemnitor to Indemnify any Indemnitee:
(a) Prompt Notice. The Indemnitee shall promptly Notify the Indemnitor
of any Claim.
(b) Selection of Counsel. The Indemnitor shall select counsel reasonably
acceptable to the Indemnitee. Counsel to Indemnitor’s insurance carrier that is providing coverage
for a Claim shall be deemed reasonably satisfactory, except in the event of a potential or actual
conflict of interest for such counsel regarding such representation or such counsel proves to be
incompetent regarding such representation. Even though the Indemnitor shall defend the Claim,
Indemnitee may, at its option and its own expense, engage separate counsel to advise it regarding the
Claim and its defense. The Indemnitee’s separate counsel may attend all proceedings and meetings.
The Indemnitor’s counsel shall actively consult with the Indemnitee’s separate counsel.
(c) Cooperation. The Indemnitee shall reasonably cooperate with the
Indemnitor’s defense of the Indemnitee.
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(d) Settlement. The Indemnitor may only settle a Claim with the consent
of the Indemnitee. Any settlement shall procure a release of the Indemnitee from the subject Claims,
shall not require the Indemnitee to make any payment to the claimant and shall provide that neither
the Indemnitee nor the Indemnitor on behalf of Indemnitee admits any liability.
11. GENERAL PROVISIONS
11.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement
are true and correct and are incorporated into this Agreement in their entirety by this reference.
11.2 Notices, Demands and Communications Between the Parties.
11.2.1 Delivery. Any and all Notices submitted by any Party to the other Party
pursuant to or as required by this Agreement shall be proper, if in writing and dispatched by
messenger for immediate personal delivery, nationally recognized overnight (one Business Day)
courier (i.e., United Parcel Service, Federal Express, etc.) or by registered or certified United States
mail, postage prepaid, return receipt requested, to the address of the recipient Party, as designated in
Section 11.2.2. Notices may be sent in the same manner to such other addresses as either Party may
from time to time designate by Notice in accordance with this Section 11.2. Notice shall be deemed
received by the addressee, regardless of whether or when any return receipt is received by the sender
or the date set forth on such return receipt, on the day that it is dispatched by messenger for
immediate personal delivery, one Business Day after delivery to a nationally recognized overnight
carrier or two (2) calendar days after it is placed in the United States mail in accordance with this
Section 11.2.1. Any attorney representing a Party may give any Notice on behalf of such Party.
11.2.2 Addresses. The Notice addresses for the Parties, as of the Effective Date, are
as follows:
To Developer: San Gabriel Valley Habitat for Humanity, Inc.
With Copy To: DLA Piper LLP (US)
550 South Hope Street, Suite 2300
Los Angeles, California 90071
Attn: John Kim, Esq.; Skyler Anderson, Esq.
To City: City of Azusa
213 E. Foothill Boulevard
Azusa, CA 91702
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Attention: City Manager
(626) 812-5238
With Copy to: Best Best & Krieger, LLP
18101 Von Karman Ave., Suite 1000
Irvine, CA 92612
Attention: Elizabeth Hull
(T) (949) 263-2603
(F) (949) 260-0972
11.3 Relationship of Parties. The Parties each intend and agree that City and
Developer are independent contracting entities and do not intend by this Agreement to create any
partnership, joint venture, or similar business arrangement, relationship or association between them.
11.4 Warranty Against Payment of Consideration for Agreement. Developer represents
and warrants to City that: (a) Developer has not employed or retained any Person to solicit or secure
this Agreement upon an agreement or understanding for a commission, percentage, brokerage, or
contingent fee, excepting bona fide employees of Developer and Third Persons to whom fees are
paid for professional services related to planning, design or construction of the Project or
documentation of this Agreement; and (b) no gratuities, in the form of entertainment, gifts or
otherwise have been or will be given by Developer or any of Developer’s agents, employees or
representatives to any elected or appointed official or employee of either City or the City in an
attempt to secure this Agreement or favorable terms or conditions for this Agreement. Breach of the
representations or warranties of this Section 11.4 shall entitle City to terminate this Agreement or
cancel the Escrow (or both) upon seven (7) days’ Notice to Developer and Escrow Agent. Upon any
such termination of this Agreement, Developer shall immediately refund any payments made to or on
behalf of Developer by City or the City pursuant to this Agreement or otherwise related to the
Property, any Approval, any CEQA Document, or the Project, prior to the date of any such
termination.
11.5 No Discrimination or Segregation. Developer covenants by and for itself and all
Persons claiming under or through it that this Agreement is made and accepted upon and subject to
the following conditions:
11.5.1 Standards. That there shall be no discrimination against or segregation of any
Person or group of Persons, on account of any basis listed in subdivision (a) or (d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in
the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property nor shall
Developer or any Person claiming under or through Developer establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Property.
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11.5.2 Interpretation. Notwithstanding Section 11.5.1, with respect to familial status,
Section 11.5.1 shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in Section 11.5.1 shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to
housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to Section 11.5.1.
11.6 Non-liability of City Officials and Employees. No member, official or employee
of City shall be personally liable to Developer, or any successor in interest to Developer, in the event
of any Default by City under this Agreement or for any amount that may become due to Developer or
to Developer’s successor, or on any obligations under the terms of this Agreement, except to the
extent resulting from the gross negligence or willful act of such member, officer or employee.
11.7 Inspection of Books and Records. City shall have the right at all reasonable times,
at City’s cost and expense, to inspect the books and records of Developer pertaining to the Property
or the Project. City shall not disclose proprietary information of Developer to Third Persons, unless
required by law or otherwise resulting from or related to the pursuit of any remedies by or the
assertion of any rights of City under this Agreement.
11.8 Calculation of Time Periods. Unless otherwise specified, all references to time
periods in this Agreement measured in days shall be to consecutive calendar days, all references to
time periods in this Agreement measured in months shall be to consecutive calendar months and all
references to time periods in this Agreement measured in years shall be to consecutive calendar
years. Any reference to Business Days in this Agreement shall mean consecutive Business Days.
11.9 Principles of Interpretation. No inference in favor of or against any Party shall be
drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both
participated substantially in the negotiation, drafting, and revision of this Agreement, with advice
from legal and other counsel and advisers of their own selection. A word, term or phrase defined in
the singular in this Agreement may be used in the plural, and vice versa, all in accordance with
ordinary principles of English grammar, which shall govern all language in this Agreement. The
words “include” and “including” in this Agreement shall be construed to be followed by the words:
“without limitation.” Each collective noun in this Agreement shall be interpreted as if followed by
the words “(or any part of it),” except where the context clearly requires otherwise. Every reference
to any document, including this Agreement, refers to such document, as modified from time to time
(excepting any modification that violates this Agreement), and includes all exhibits, schedules,
addenda and riders to such document. The word “or” in this Agreement includes the word “and.”
Every reference to a law, statute, regulation, order, form or similar governmental requirement refers
to each such requirement as amended, modified, renumbered, superseded or succeeded, from time to
time.
11.10 Governing Law. The procedural and substantive laws of the State shall govern the
interpretation and enforcement of this Agreement, without application of conflicts or choice of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully
performed in and relates to real property located in the County of Los Angeles, State of California.
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All legal actions arising from this Agreement shall be filed in the Superior Court of the State in and
for the County or in the United States District Court with jurisdiction in the County.
11.11 Unavoidable Delay; Extension of Time of Performance.
11.11.1Notice. Subject to any specific provisions of this Agreement stating that they
are not subject to Unavoidable Delay or otherwise limiting or restricting the effects of an
Unavoidable Delay, performance by either Party under this Agreement shall not be deemed or
considered to be in Default, where any such Default is due to the occurrence of an Unavoidable
Delay. Any Party claiming an Unavoidable Delay shall Notify the other Party: (a) within twenty
(20) days after such Party knows of any such Unavoidable Delay; and (b) within ten (10) days after
such Unavoidable Delay ceases to exist. To be effective, any Notice of an Unavoidable Delay must
describe the Unavoidable Delay in reasonable detail. The Party claiming an extension of time to
perform due to an Unavoidable Delay shall exercise its commercially reasonable best efforts to cure
the condition causing the Unavoidable Delay, within a reasonable time.
11.11.2Assumption of Economic Risks. EACH PARTY EXPRESSLY AGREES
THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF EITHER PARTY
SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET
CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC ASSUMPTIONS OF EITHER
PARTY THAT MAY HAVE PROVIDED A BASIS FOR ENTERING INTO THIS AGREEMENT
SHALL NOT OPERATE TO EXCUSE OR DELAY THE PERFORMANCE OF EACH AND
EVERY ONE OF EACH PARTY’S OBLIGATIONS AND COVENANTS ARISING UNDER
THIS AGREEMENT. ANYTHING IN THIS AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, THE PARTIES EXPRESSLY ASSUME THE RISK OF
UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES OR MARKET DEMAND
OR CONDITIONS AND WAIVE, TO THE GREATEST EXTENT ALLOWED BY LAW, ANY
DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART ON
ECONOMIC NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC
CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES. THE PARTIES
AGREE THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, EITHER OF THE PARTY
SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET
CONDITIONS OR DEMANDS, SHALL NOT OPERATE TO EXCUSE OR DELAY THE STRICT
OBSERVANCE OF EACH AND EVERY ONE OF THE OBLIGATIONS, COVENANTS,
CONDITIONS AND REQUIREMENTS OF THIS AGREEMENT. THE PARTIES EXPRESSLY
ASSUME THE RISK OF SUCH ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER
OR NOT FORESEEABLE AS OF THE EFFECTIVE DATE.
_______________________ _______________________
Initials of Authorized City Initials of Authorized Developer
Representative Representative
11.12 Tax Consequences. Developer acknowledges and agrees that Developer shall
bear any and all responsibility, liability, costs, and expenses connected in any way with any tax
consequences experienced by Developer related to this Agreement.
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11.13 Real Estate Commissions. Each Party: (a) represents and warrants that it did not
engage or deal with any broker or finder in connection with this Agreement and no Person is entitled
to any commission or finder’s fee regarding this Agreement on account of any agreement or
arrangement made by such Party; and (b) shall Indemnify the other Party against any breach of the
representation and warranty set forth in clause “(a)” of this Section 11.13.
11.14 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement on any Person other
than the Parties and their respective permitted successors and assigns, nor is anything in this
Agreement intended to relieve or discharge any obligation of any Third Person to any Party or give
any Third Person any right of subrogation or action over or against any Party.
11.15 Developer Assumption of Risks of Legal Challenges. Developer assumes the risk
of delays and damages that may result to Developer from any Third Person legal actions related to
City’s approval of this Agreement or any associated Approvals, even in the event that an error,
omission or abuse of discretion by City is determined to have occurred. If a Third Person files a
legal action regarding City’s approval of this Agreement or any associated Approval (exclusive of
legal actions alleging violation of Government Code Section 1090 by elected officials of City),
Developer shall have the option to either: (1) cancel the Escrow and terminate this Agreement, in
which case the Parties and the Escrow Agent shall proceed in accordance with Section 4.12; or (2)
Indemnify City against such Third Person legal action, including all Legal Costs, monetary awards,
sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all
financial or performance obligations resulting from the disposition of the legal action; provided,
however, that option “(1)” under this Section 11.15 shall only be available to Developer prior to the
Close of Escrow. Should Developer fail to Notify City of Developer’s election pursuant to this
Section 11.15 at least fifteen (15) days before response to the legal action is required by City,
Developer shall be deemed to have elected to terminate this Agreement pursuant to this Section
11.15. City shall reasonably cooperate with Developer in defense of City in any legal action subject
to this Section 11.15, subject to Developer performing Developer’s indemnity obligations for such
legal action. Nothing contained in this Section 11.15 is intended to be nor shall be deemed or
construed to be an express or implied admission that City may be liable to Developer or any other
Person for damages or other relief regarding any alleged or established failure of City to comply with
any Law. Any legal action that is subject to this Section 11.15 (including any appeal periods and the
pendency of any appeals) shall constitute an Unavoidable Delay and the time periods for
performance by either Party under this Agreement may be extended pursuant to the provisions of this
Agreement regarding Unavoidable Delay.
11.16 Effect. This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective heirs, executors, administrators, legal representatives, successors and
assigns.
11.17 Time Declared to be of the Essence. As to the performance of any obligation
under this Agreement of which time is a component, the performance of such obligation within the
time specified is of the essence.
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11.18 Entire Agreement. This Agreement integrates all of the terms and conditions
mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or
previous agreements between the Parties with respect to all or any portion of the Property and the
development of the Project.
11.19 Waivers and Amendments. All waivers of the provisions of this Agreement must
be in writing and signed by the authorized representative(s) of the Party making the waiver. All
amendments to this Agreement must be in writing and signed by the authorized representative(s) of
both City and Developer. Failure to insist on any one occasion upon strict compliance with any term,
covenant, condition, restriction or agreement contained in this Agreement shall not be deemed a
waiver of such term, covenant, condition, restriction or agreement, nor shall any waiver or
relinquishment of any rights or powers under this Agreement, at any one time or more times, be
deemed a waiver or relinquishment of such right or power at any other time or times.
11.20 Prohibition Against Changes in Ownership, Management or Control of Developer
or Assignment.
11.20.1Developer Identity. Developer acknowledges and agrees that the
qualifications and identity of Developer are of particular importance and concern to City. Developer
further acknowledges and agrees that City has relied and is relying on the specific qualifications and
identity of Developer and that City would not have entered into this Agreement but for the specific
qualifications and identity of Developer. As a consequence, Transfers of Developer’s rights or
obligations under this Agreement or of all or any portion of the Property, except Transfers of
ownership of Dwelling Units after issuance of a Completion Certificate for such Dwelling Unit, are
only permitted with the prior written consent of City, which may be withheld or conditioned in City’s
sole and absolute discretion. Developer represents and warrants to City that it has not made and
agrees that it will not create or permit to be made or created any Transfer, except in accordance with
this Section 11.20, either voluntarily, involuntarily or by operation of law. Any Transfer made in
contravention of this Section 11.20 shall be voidable at the election of City. Developer
acknowledges and agrees that the restrictions on Transfers set forth in this Section 11.20 are
reasonable.
11.20.2Delivery of Transfer Documents. All instruments and other legal documents
proposed to effect any proposed Transfer shall be submitted to City for review, at least thirty-five
(35) calendar days prior to the proposed date of the Transfer, and the written approval, disapproval or
conditions of City regarding the proposed Transfer shall be provided to Developer, within thirty (30)
calendar days following City’s receipt of all proposed Transfer documents.
11.21 Exhibit List. All of the exhibits attached to this Agreement are as follows:
Exhibit A Property Legal Description
Exhibit B Property Site Map
Exhibit C Project Scope
Exhibit D Developer Official Action
Exhibit E City Quitclaim Deed
45635.01930\40067393.1
Exhibit F Completion Certificate
Exhibit G Regulatory Agreement
11.22 City Manager Implementation. City shall implement this Agreement through its
City Manager. The City Manager is hereby authorized by City to enter into agreements or sign
documents referenced in this Agreement or reasonably required to implement this Agreement on
behalf of City, issue approvals, interpretations or waivers and enter into certain amendments to this
Agreement on behalf of City, to the extent that any such action(s) does/do not materially or
substantially change the Project or increase the monetary obligations of City by more than Fifty
Thousand Dollars ($50,000) in the aggregate. All other actions shall require the consideration and
approval of City governing body, unless expressly provided otherwise by action of City governing
body. Nothing in this Section 11.22 shall restrict the submission to City governing body of any
matter in the City Manager’s sole and absolute discretion, to obtain City governing body’s express
and specific authorization on such matter. The specific intent of this Section 11.22 is to authorize
certain actions on behalf of City by the City Manager, but not to require that such actions be taken by
the City Manager, without consideration by City governing body.
11.23 Survival of Agreement. All of the provisions of this Agreement shall be
applicable to any dispute between the Parties arising from this Agreement, whether prior to or
following expiration or termination of this Agreement, until any such dispute is finally and
completely resolved between the Parties, either by written settlement, entry of a non-appealable
judgment or expiration of all applicable statutory limitations periods and all terms and conditions of
this Agreement relating to dispute resolution, indemnification and limitations on damages or
remedies shall survive any expiration or termination of this Agreement.
11.24 Counterparts. This Agreement shall be signed in three (3) originals each of which
is deemed to be an original. This Agreement constitutes the entire understanding and Agreement of
the Parties regarding the subject matter of this Agreement. Each exhibit is incorporated into this
Agreement by reference.
11.25 Facsimile or Electronic Signatures. Signatures delivered by facsimile or
electronic means shall be binding as originals upon the Party so signing and delivering; provided,
however, that original signature(s) of each Party shall be required for each document to be recorded.
[Signatures on following page]
45635.01930\40067393.1
SIGNATURE PAGE
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc.)
IN WITNESS WHEREOF, the Parties have signed and entered into this Agreement by and through
the signatures of their respective authorized representative(s) as follow:
CITY: DEVELOPER:
CITY OF AZUSA SAN GABRIEL VALLEY HABITAT FOR
HUMANITY, INC., a California non-profit
corporation
By: Sergio Gonzalez
City Manager
By: Bryan W ong
Executive Director
ATTEST:
By: Jeffrey Cornejo
City Clerk
By: Sayaka Ota
Director of Finance
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
45635.01930\40067393.1
Sonia R. Carvalho, City Attorney
45635.01930\40067393.1
EXHIBIT A
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. – 736 and 740 Angeleno Ave.)
Property Legal Description
736 N. Angeleno Avenue, Azusa, California, 91702:
LOT 41 AND THAT PORTION OF LOT 40 IN BLOCK 22 OF THE MAP OF AZUSA, IN THE
CITY OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 15, PAGES 93 TO 96, INCLUSIVE OF MISCELLANEOUS RECORDS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A
WHOLE AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE EASTERLY LINE OF THAT 20.00 FOOT
WIDE ALLEY AS SHOWN ON SAID MAP, WITH THE NORTHERLY RIGHT-OF-WAY OF
ATCHISON, TOPEKA AND SANTA FE RAILROAD, 100.00 FEET WIDE AS SHOWN ON
TRACT NO. 46762, FILED IN BOOK 1210, PAGES 94 TO 97, INCLUSIVE OF MAPS, IN SAID
OFFICE OF THE COUNTY RECORDER; THENCE ALONG SAID EASTERLY LINE,
NOO°15'25"E 53.35 FEET TO THE NORTHWESTERLY LINE OF DEED RECORDED IN
BOOK 634, PAGE 181 OF DEEDS; THENCE LEAVING SAID EASTERLY LINE, N89°441351N
20.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID 20.00 FOOT WIDE ALLEY,
SAID POINT BEING THE TRUE POINT BEGINNING; THENCE LEAVING SAID WESTERLY
LINE AND CONTINUING, N89°44'35"W 140.00 FEET TO THE EASTERLY LINE OF
ANGELENO AVENUE, 80.00 FEET WIDE, AS SHOWN ON SAID MAP; THENCE ALONG
SAID EASTERLY LINE, S00°15'25"W 112.93 FEET TO SAID NORTHERLY RIGHT-OF-WAY;
THENCE ALONG SAID RIGHT-OF-WAY, N69°49'59"E 149.39 FEET TO SAID WESTERLY
LINE OF THAT 20.00 FOOT WIDE ALLEY; THENCE ALONG SAID WESTERLY LINE,
NOO°1525"E 60.80 FEET TO THE TRUE POINT OF BEGINNING.
740 N. Angeleno Avenue, Azusa, California, 91702:
LOT 40 OF BLOCK 22 IN TRACT AZUSA, AS PER MAP RECORDED IN BOOK 15,
PAGES 93 THROUGH 96 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
45635.01930\40067393.1
EXHIBIT B
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. 736 and 740 Angeleno Ave.)
Property Site Map
45635.01930\40067393.1
EXHIBIT C
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. 736 and 740 Angeleno Ave.)
Project Scope
Four (4) affordable, low-income, covenant restricted homes ____________________(design
concept/unit mix/etc) in accordance with plans and specifications approved by City.
45635.01930\40067393.1
EXHIBIT D
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. - 736 and 740 Angeleno Ave.)
Developer Official Action
[Attached Behind This Page]
45635.01930\40067393.1
Resolution of the Board of Directors of
SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC.
At a meeting of the Board of Directors of San Gabriel Valley Habitat for Humanity, Inc., a California
non-profit corporation (“Corporation”), duly held on [DATE], at which meeting a quorum of the
Board of Directors were in attendance, the following resolutions were adopted:
WHEREAS, the Corporation is about to enter into that certain Disposition and Development
Agreement (San Gabriel Valley Habitat for Humanity, Inc.) (“Agreement”), dated [DATE], with City
of Azusa, a California public body, corporate and politic (“City”), to acquire that certain real
property owned by City and located in the City of Azusa, County of Los Angeles, State of California,
as more specifically described in the Agreement; and
WHEREAS, the Board of Directors of the Corporation has reviewed the Agreement and all
documents executed or to be executed in connection with the Agreement and considers the
transaction to be in the best interest of the Corporation; and
WHEREAS, the Board of Directors wishes to prescribe appropriate escrow closing powers
and authority to certain officers of the Corporation, as set forth below;
NOW, THEREFORE, BE IT RESOLVED that the Corporation enter into the Agreement and
all documents previously presented to, reviewed, and approved by the Board of Directors of the
Corporation in reference to the Agreement.
RESOLVED, FURTHER, that the Executive Director, together with any of the
President/Executive Director, Chief Financial Officer, Senior Vice President, or Secretary of the
Corporation are authorized to sign any and all documents relating to the purchase of real property
located at _____________, Azusa, California, on behalf of the Corporation and bind the Corporation
to such documents.
RESOLVED, FURTHER, that authority conferred by this Resolution shall be considered
retroactive, and any and all acts authorized in this Resolution that were performed before the passage
of this Resolution are approved and ratified. City conferred by this Resolution shall continue in full
force and effect until City shall have received notice in writing, certified by the Secretary of the
Corporation, of the revocation of this authorization by a resolution duly adopted by the Board of
Directors of the Corporation.
RESOLVED, FURTHER, that the activities covered by the authorities conferred in this
Resolution constitute duly authorized activities of the Corporation; these authorities are now in full
force and effect; and there is no provision in any document under which the Corporation is organized
and/or that governs the Corporation’s continued existence limiting the power of the Board of
Directors of the Corporation to grant such authority, and the activities covered by the authorities
conferred in this Resolution are in conformity with the provisions of all such documents.
The undersigned, [NAME], Secretary of the Corporation, certifies that the foregoing is a true
45635.01930\40067393.1
copy of the Resolution duly adopted by the Board of Directors of the Corporation at a meeting held
on [DATE].
IN TESTIMONY WHEREOF, I have executed this Resolution and affixed the corporate seal
of the Corporation as of [DATE].
Date:
Name [Typed name]
Secretary
[Seal]
Name [Typed name]
Secretary
Name [Typed name]
Secretary
45635.01930\40067393.1
EXHIBIT E
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. – 736 and 740 N. Angeleno Ave.)
City Quitclaim Deed
[Attached Behind This Page]
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Attention: City Clerk / Economic Development
APNs: 8608-021-901, 8608-021-902 SPACE ABOVE THIS LINE FOR RECORDER’S USE
EXEMPT FROM RECORDING FEES – GOVERNMENT CODE SECTION 27383
CITY OF AZUSA
QUITCLAIM DEED
(San Gabriel Valley Habitat for Humanity, Inc.)
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
CITY OF AZUSA, a public body, corporate and politic (“Transferor”),
does hereby remise, release and forever quitclaim to
SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC., a California non-profit
corporation (“Transferee”), all right, title and interest of Transferor in that certain real property in
the City of Azusa, County of Los Angeles, State of California, specifically described in Exhibit
“A” attached to this Quitclaim Deed (“Property”) and made a part of this Quitclaim Deed by this
reference,
SUBJECT TO the following retained and reserved rights and interests in the Property in
favor of Transferor that shall run with the Property and bind Transferee and all successive
owners of all or any portion of the Property:
12. ASSOCIATED AGREEMENT.
45635.01930\40067393.1
12.1 Section 5.1 of that certain Disposition and Development Agreement (San Gabriel
Valley Habitat for Humanity, Inc.), dated as of ___________, entered into between Transferor and
Transferee (“DDA”), which reads as follows:
5.1 Developer’s Covenant to Develop the Project. Developer
covenants to and for the exclusive benefit of City that Developer shall
commence, pursue and complete the development of the Project on
the Property in accordance with the requirements of this Agreement
and all applicable Laws and conditions of each Governmental
Agency. The covenants of this Section 5.1 shall run with the
Property, until the earlier of: (1) the first date on which a Completion
Certificate has been issued for each Dwelling Unit in the Project; or
(2) the twentieth (20th) anniversary of the date of the Close of
Escrow.
13. RESERVATION OF POWER OF TERMINATION REGARDING PROPERTY.
13.1 Reservation. Transferor hereby reserves a power of termination pursuant to Civil
Code Sections 885.010, et seq., exercisable by Transferor, in its sole and absolute discretion, upon
thirty (30) calendar days’ Notice to Transferee referencing this Section 13, to terminate the fee
interest of Transferee in the Property or any improvements to the Property and revest such fee title in
the Transferor and take possession of all or any portion of such real property and improvements,
without compensation to Transferee, upon the occurrence of an “Event of Default” by Transferee
under the DDA. Transferor shall not exercise such power of termination if Transferee cures the
Event of Default within the thirty (30) day Notice period set forth in this Section 13.1. The power of
termination reserved in this Section 13.1 shall terminate with respect to a legal parcel of land
comprising a part of the Property on the date of issuance or deemed issuance of a Completion
Certificate for the Dwelling Unit to be constructed on such parcel by the Transferee under the terms
of the DDA. Such right to terminate, revest and re-enter shall be limited by and shall not defeat,
render invalid or limit: (i) any mortgage or deed of trust permitted by the DDA; or (ii) any rights or
interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust.
13.2 Reconveyance to Transferor. Upon Transferor’s exercise of its power of
termination reserved in this Section 13, Transferee shall convey fee title to all legal parcels of land
comprising the Property regarding which Transferor’s reserved power under this Section 13 is in
effect at the time of such exercise and all improvements on or to such Property to Transferor by
quitclaim deed, in accordance with Civil Code Section 1109, as such code section may hereafter be
amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by
Transferee and a notary public in a manner suitable for recordation with the County. Transferor may
enforce its rights pursuant to this Section 13 by means of an injunctive relief or forfeiture of title
action filed in any court of competent jurisdiction.
13.3 Disposition of Property. Upon the revesting in Transferor of title to all or any
portion of the Property, whether by quitclaim deed or court decree, Transferor shall exercise its
reasonable good faith efforts to resell such Property at such Property’s then fair reuse value, as soon
and in such manner as Transferor shall find feasible, to a qualified and responsible Person or Persons
45635.01930\40067393.1
who will assume Transferee’s obligations to begin or complete or operate the Project, or for such
other replacement development acceptable to Transferor, all in Transferor’s sole and absolute
discretion. Upon any such resale of all or a portion of the Property, the proceeds received by
Transferor from such sale shall be applied, as follows:
13.3.1 First, to pay all amounts required to release/reconvey all security instruments
recorded against such Property; and
13.3.2 Second, to reimburse Transferor for all actual internal and Third Person costs
and expenses incurred by Transferor related to the Property, the Project or the DDA, including
customary and reasonable fees or salaries to Third Person consultants (including Legal Costs) in
connection with the recapture, management or resale of all or any portion of the Property; all taxes,
assessments and utility charges paid by Transferor with respect to all or any portion of the Property;
any payment made or necessary to be made to discharge or prevent from attaching or being made any
subsequent encumbrances or liens due to obligations incurred by Transferee with respect to the
Property or the construction of the Project; and amounts otherwise owing to Transferor from
Transferee pursuant to the terms of the DDA or the Regulatory Agreement; and
13.3.3 Third, to the extent that any proceeds from such resale are, thereafter,
available, to reimburse Transferee, the amount of the Third Person costs actually incurred and paid
by Transferee regarding the construction of the Project, including costs of carry, taxes, and other
items as set forth in a cost certification to be made by Transferee to Transferor, prior to any such
reimbursement, which certification shall be subject to Transferor’s reasonable approval; provided,
however, that Transferee shall not be entitled to reimbursement for any expenses relating to any
loans, liens or other encumbrances that are paid by Transferor pursuant to the provisions of Sections
13.3.1 or 13.3.2 of this Quitclaim Deed; and
13.3.4 Fourth, any portion of the proceeds from the resale of such Property remaining
after the foregoing applications shall be retained by Transferor, as Transferor’s sole and exclusive
property.
13.4 Right of Re-Entry. IMMEDIATELY FOLLOWING THE THIRTY (30) DAY
NOTICE PERIOD SPECIFIED IN SECTION 13.1, TRANSFEROR, ITS EMPLOYEES AND
AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR
ANY PORTION OF THE PROPERTY AND ANY IMPROVEMENTS ON OR TO THE
PROPERTY, WITHOUT FURTHER NOTICE OR COMPENSATION TO TRANSFEREE. BY
INITIALING BELOW, TRANSFEREE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM
EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT TRANSFEREE MAY HAVE
UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED, REPLACED,
RENUMBERED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON
LAW PRINCIPLES OF SIMILAR EFFECT.
_______________________
Initials of Authorized
Transferee Representative
45635.01930\40067393.1
13.5 Transferee Acknowledgments. TRANSFEREE ACKNOWLEDGES AND
AGREES THAT TRANSFEROR’S EXERCISE OF ITS POWER OF TERMINATION AND
RIGHT OF REENTRY PURSUANT TO THIS SECTION 13 MAY WORK A FORFEITURE OF
THE ESTATE IN THE PROPERTY CONVEYED TO TRANSFEREE THROUGH THIS
QUITCLAIM DEED. TRANSFEREE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM
EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT
TRANSFEREE MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO,
THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR
COMPENSABLE DAMAGES. TRANSFEREE FURTHER EXPRESSLY WAIVES, TO THE
MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT
TRANSFEREE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY
OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. TRANSFEREE
ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THE DDA UNDER WHICH
TRANSFEROR HAS MADE THIS QUITCLAIM DEED REFLECT THE POSSIBILITY OF
FORFEITURE BY VIRTUE OF THE EXERCISE OF TRANSFEROR’S POWER OF
TERMINATION PROVIDED IN THIS SECTION 13. TRANSFEREE FURTHER
ACKNOWLEDGES THAT TRANSFEREE HAS RECEIVED INDEPENDENT AND ADEQUATE
CONSIDERATION FOR TRANSFEREE’S WAIVER AND RELINQUISHMENT OF RIGHTS
AND REMEDIES PURSUANT TO THIS SECTION 13.
_______________________
Initials of Authorized
Transferee Representative
14. NO DISCRIMINATION OR SEGREGATION. Transferee, on behalf of itself and all
persons claiming under or through Transferee, accepts this Quitclaim Deed upon and subject to the
following conditions:
14.1 Standards. That there shall be no discrimination against or segregation of any
Person or group of Persons, on account of any basis listed in subdivision (a) or (d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in
the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property nor shall
Developer or any Person claiming under or through Developer establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Property.
14.2 Interpretation. Notwithstanding Section 14.1, with respect to familial status,
Section 14.1 shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in Section 14.1 shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to
housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to Section 14.1.
[Remainder of page intentionally left blank]
45635.01930\40067393.1
15. INCORPORATION OF DDA DEFINITIONS. Any terms indicated to be defined terms by
initial capitalization in this Quitclaim Deed that are not specifically defined in this Quitclaim Deed
shall have the meaning ascribed to the same term in the DDA.
Dated: CITY OF AZUSA, a public body, corporate and
politic
By:
City Manager
[SIGNATURE MUST BE NOTARY ACKNOWLEDGED FOR RECORDING]
45635.01930\40067393.1
Exhibit “A”
To
Quitclaim Deed
(San Gabriel Valley Habitat for Humanity, Inc.)
Property Legal Description
736 N. Angeleno Avenue, Azusa, California, 91702:
LOT 41 AND THAT PORTION OF LOT 40 IN BLOCK 22 OF THE MAP OF AZUSA, IN THE
CITY OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 15, PAGES 93 TO 96, INCLUSIVE OF MISCELLANEOUS RECORDS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A
WHOLE AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE EASTERLY LINE OF THAT 20.00 FOOT
WIDE ALLEY AS SHOWN ON SAID MAP, WITH THE NORTHERLY RIGHT-OF-WAY OF
ATCHISON, TOPEKA AND SANTA FE RAILROAD, 100.00 FEET WIDE AS SHOWN ON
TRACT NO. 46762, FILED IN BOOK 1210, PAGES 94 TO 97, INCLUSIVE OF MAPS, IN SAID
OFFICE OF THE COUNTY RECORDER; THENCE ALONG SAID EASTERLY LINE,
NOO°15'25"E 53.35 FEET TO THE NORTHWESTERLY LINE OF DEED RECORDED IN
BOOK 634, PAGE 181 OF DEEDS; THENCE LEAVING SAID EASTERLY LINE, N89°441351N
20.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID 20.00 FOOT WIDE ALLEY,
SAID POINT BEING THE TRUE POINT BEGINNING; THENCE LEAVING SAID WESTERLY
LINE AND CONTINUING, N89°44'35"W 140.00 FEET TO THE EASTERLY LINE OF
ANGELENO AVENUE, 80.00 FEET WIDE, AS SHOWN ON SAID MAP; THENCE ALONG
SAID EASTERLY LINE, S00°15'25"W 112.93 FEET TO SAID NORTHERLY RIGHT-OF-WAY;
THENCE ALONG SAID RIGHT-OF-WAY, N69°49'59"E 149.39 FEET TO SAID WESTERLY
LINE OF THAT 20.00 FOOT WIDE ALLEY; THENCE ALONG SAID WESTERLY LINE,
NOO°1525"E 60.80 FEET TO THE TRUE POINT OF BEGINNING.
740 N. Angeleno Avenue, Azusa, California, 91702:
LOT 40 OF BLOCK 22 IN TRACT AZUSA, AS PER MAP RECORDED IN BOOK 15, PAGES 93
THROUGH 96 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
45635.01930\40067393.1
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by the above Quitclaim Deed
from the CITY OF AZUSA, a California public body, corporate and politic, to SAN GABRIEL
VALLEY HABITAT FOR HUMANITY, INC., a California non-profit corporation, is hereby
accepted by the undersigned officer on behalf of San Gabriel Valley Habitat for Humanity Inc.
consents to recordation of such Quitclaim Deed in the official records of the County of Los
Angeles, California.
San Gabriel Valley Habitat for Humanity, Inc.,
a California non-profit corporation
By:
Bryan Wong, Executive Director
By:
Sayaka Ota, Director of Finance
45635.01930\40067393.1
EXHIBIT F
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. – 736 and 740 N. Angeleno Ave.)
Completion Certificate
[Attached Behind This Page]
45635.01930\40067393.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Attention: City Clerk / Economic Development
SPACE ABOVE THIS LINE FOR RECORDER’S USE
EXEMPT FROM RECORDING FEES – GOVT. CODE § 27383
CITY OF AZUSA
COMPLETION CERTIFICATE
Disposition and Development Agreement
(San Gabriel Valley Habitat for Humanity, Inc. – 736 and 740 N. Angeleno Ave.)
In his or her capacity as City Manager of the City of Azusa, the undersigned certifies that: (1)
City of Azusa, a public body, corporate and politic (“City”), and San Gabriel Valley Habitat for
Humanity, Inc., a California non-profit corporation (“Developer”), are parties to that certain
Disposition and Development Agreement (San Gabriel Valley Habitat for Humanity, Inc.), dated as
of _________ (“Agreement”); and (2) the portion of the Project described in the Agreement as the
Dwelling Units required to be constructed pursuant to the Agreement on that certain real property
specifically described in the legal description attached to this Completion Certificate as Exhibit “A”
(“New Home”) is complete in accordance with the provisions of the Agreement.
This Completion Certificate constitutes conclusive evidence that the Developer’s obligation
under the Agreement to construct the New Home on the Property has been satisfied, including any
and all buildings, parking areas, landscaping areas and related improvements necessary to support or
meet any requirements applicable to the New Home and its use and occupancy, exclusive of any
Punchlist Work. Notwithstanding any other provision of this Completion Certificate, the operating,
use, maintenance, non-discrimination, non-segregation, construction and other terms, provisions,
covenants, conditions, restrictions and agreements set forth in the Agreement, other than those
specifically requiring construction of the New Home on the Property, shall continue in full force and
effect and City may enforce any and all such terms, provisions, covenants, conditions, restrictions or
agreements in accordance with the Agreement. Nothing contained in this Completion Certificate
shall waive or modify any term, provision, covenant, condition, restriction or agreement contained in
any other document. The Agreement is an official record of the City and a copy of the Agreement
may be inspected in the offices of the City located at 7800 Katella Ave., Azusa, California 90680,
during the regular business hours of the City. All terms indicated to be defined terms in this
Completion Certificate by initial capitalization, but not specifically defined in this Completion
Certificate, shall have the meaning ascribed to the same term in the Agreement.
ISSUED as of [TO BE DETERMINED].
__________________________________
City Manager
45635.01930\40067393.1
EXHIBIT G
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(San Gabriel Valley Habitat for Humanity, Inc. – 736 and 740 N. Angeleno Ave.)
REGULATORY AGREEMENT
Declaration of Conditions, Covenants and Restrictions
[Attached Behind This Page]
45635.01930\40067393.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Attention: City Clerk / Economic Development
SPACE ABOVE THIS LINE FOR RECORDER’S USE
EXEMPT FROM RECORDING FEES – GOVT. CODE § 27383
CITY OF AZUSA
DECLARATION OF AFFORDABLE HOUSING COVENANTS, CONDITIONS AND
RESTRICTIONS
(_____________)
THIS DECLARATION OF AFFORDABLE HOUSING COVENANTS, CONDITIONS
AND RESTRICTIONS (this “Declaration”) is dated as of [INSERT DATE] (“Effective Date”),
and is made by and between the CITY OF AZUSA, a public body, corporate and politic (“City”),
and SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC., a California non-profit
corporation (“Developer”), with reference to the following recited facts (each, a “Recital”).
RECITALS
A. Developer purchased that certain real property specifically defined as the
“Property” in Section 1.26 of this Declaration from City pursuant to that certain Disposition and
Development Agreement (San Gabriel Valley Habitat for Humanity, Inc. - 736 and 740 N.
Angeleno Ave.), dated as of ______________, between City and Developer (“DDA”);
B. The Developer is obligated under the terms of the DDA to construct four (4) New
Homes (as defined in Section 1 of this Declaration) on the Property, as more specifically
described in the DDA (“Project”), and convey each New Home to a low-income household at an
affordable housing cost, all for the purpose of increasing and improving the supply of affordable
owner-occupied housing in the City;
C. This Declaration is intended to restrict the use of the Property for forty-five (45)
years following the date of the original conveyance of all of the New Homes to low-income
households at an affordable housing cost for occupancy by low-income households as their
primary residences;
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES, COVENANTS AND
UNDERTAKINGS SET FORTH IN THIS DECLARATION AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, DEVELOPER AND CITY COVENANT, DECLARE AND AGREE FOR
THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, AS FOLLOWS:
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1. DEFINITIONS.
As used in this Declaration, the following words, phrases and terms shall have the meaning as
provided in the initial paragraph of this Declaration, in the Recitals or in this Section 1, unless
the specific context of usage of a particular word, phrase or term requires otherwise:
1.1 Affordable Housing Cost. An “affordable housing cost” as defined in Health and
Safety Code Section 50052.5 and accompanying regulations of the California Department of
Housing and Community Development.
1.2 Affordability Period. The time period beginning on the Effective Date and ending
on the forty-fifth (45th) anniversary of the Completion Date.
1.3 City. City of Azusa, California, a California public body, corporate and politic.
1.4 Certificate of Occupancy. A Certificate of Occupancy as defined in the Uniform
Building Code, 2007 Edition, published by the International Conference of Building Officials, as
may be amended from time to time, as adopted by the City.
1.5 City. The City of Azusa, California, a municipal corporation.
1.6 Completion Date. The first date on which all of the New Homes are owned and
occupied by Qualifying Households at an Affordable Housing Cost.
1.7 Default. Any Monetary Default or Non-Monetary Default.
1.8 Default Interest. Interest at an annual rate equal to the lesser of: (a) eight percent
(8%) per annum; or (b) the Usury Limit.
1.9 Developer Transfer Notice. Defined in Section 2.7.1.
1.10 Event of Default. The occurrence of any one or more of the following:
1.10.1 Monetary Default. A Monetary Default that continues for ten (10) calendar
days after Notice to the defaulting Party from City, specifying in reasonable detail the amount of
money not paid and the nature and calculation of each such payment.
1.10.2 Non-Monetary Default. Any Non-Monetary Default that is not cured within
thirty (30) days after Notice to the defaulting Party from City describing the Non-Monetary Default
in reasonable detail, or, in the case of a Non-Monetary Default that cannot with reasonable diligence
be cured within thirty (30) days after the effective date of such Notice, if the defaulting Party does
not do all of the following: (a) within thirty (30) days after Notice of such Non-Monetary Default,
advise City of the intention of the defaulting Party to take all reasonable steps to cure such Non-
Monetary Default; (b) duly commence such cure within such period, and then diligently prosecute
such cure to completion; and (c) complete such cure within a reasonable time under the
circumstances.
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1.11 First Purchase Money Deed of Trust. A deed of trust recorded against the Owner’s
title to its New Home securing repayment of such Owner’s then current First Purchase Money Loan.
1.12 First Purchase Money Loan. A loan from a Federal or State chartered bank,
savings and loan or credit union to the then current Owner of a New Home, the proceeds of which
were entirely used by such Owner to acquire title to the subject New Home, in conjunction with the
proceeds of each Second Purchase Money Loan to such Owner.
1.13 First Purchaser. First transferee of a New Home from Developer.
1.14 Maintenance Deficiency. The occurrence of an adverse condition on any area of
the specified property in contravention of the Maintenance Standard.
1.15 Maintenance Standard. Maintenance of the specified property in good condition
and repair and a neat, clean and orderly condition, including, without limitation, maintenance, repair,
reconstruction and replacement of any and all asphalt, concrete, landscaping, utility systems,
irrigation systems, drainage facilities or systems, grading, subsidence, retaining walls or similar
support structures, foundations, ornamentation, and all other improvements on or to the specified
property, now existing or made in the future by or with the consent of the Person specified as having
the obligation to maintain the specified property, as necessary to maintain the appearance and
character of the specified property, including all of the following: (i) maintaining the surfaces in a
level, smooth and evenly covered condition; (ii) removing all papers, mud, sand, debris, filth and
refuse and sweeping areas to the extent reasonably necessary to keep areas in a clean and orderly
condition; (iii) removing or covering graffiti with the type of surface covering originally used on the
affected area, (iv) installing, operating, keeping in repair and replacing where necessary, such
artificial lighting facilities as shall be reasonably required; (v) maintaining, mowing, weeding,
trimming and watering all landscaped areas and making such replacements of plants and other
landscaping material as necessary to maintain the appearance and character of the landscaping; (vi)
properly maintaining windows, structural elements, and painted exterior surface areas of
improvements in a clean and presentable manner; (vii) keeping outdoor areas free of accumulated
debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber,
building materials or equipment; (viii) parking of any commercial motor vehicle in excess of 10,000
pounds gross weight anywhere at the specified property on other than on a temporary basis; and (ix)
the use of garage areas for purposes other than the parking of motor vehicles and the storage of
personal possessions of the owners or occupants of the specified property.
1.16 Low-Income Household. An individual or family with an income that does not
exceed the maximum allowable income of a low-income household pursuant to Health and Safety
Code Section 50093 and associated regulations of the California Department of Housing and
Community Development.
1.17 Monetary Default. Any failure by Developer or Owner, as applicable, to pay or
deposit, when and as this Declaration requires, any amount of money, any bond or surety or evidence
of any insurance coverage required to be provided under this Declaration, whether to or with City or
a Third Person.
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1.18 New Home. Each separate residential dwelling unit in the Project, whether in the
form of a single-family residence, town-home, condominium or another form, and the associated
legal parcel of the Property on which the dwelling unit is located.
1.19 Non-Monetary Default. Any or all of the following, excepting any such failure
constituting a Monetary Default: (a) failure of a Party to perform any of its obligations under this
Declaration; (b) failure of a Party to comply with any affirmative or negative covenant or material
restriction or prohibition in this Declaration; or (c) occurrence of any other event or circumstance
that, with the passage of time or giving of Notice, or both, or neither, would constitute a breach of
this Declaration by a Party.
1.20 Notice. Any consent, demand, designation, election, notice, or request relating to
this Declaration, including any Notice of Default. All Notices must be in writing.
1.21 Notice of Default. Any Notice claiming or giving Notice of a Default or alleged
Default.
1.22 Owner. Each Qualifying Household purchaser of a New Home in compliance
with this Declaration.
1.23 Parties. Collectively, City, Developer and after acquisition of a New Home, such
New Home’s Owner.
1.24 Party. Individually, either City, Developer or, after acquisition of a New Home,
such New Home’s Owner, as applicable.
1.25 Person. Any association, corporation, governmental entity or City, individual,
joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated
organization or other entity of any kind.
1.26 Property. That certain real property located within the City of Azusa, County of
Los Angeles, State of California, specifically described in the legal description attached as Exhibit
“A” to this Declaration, which is incorporated into this Declaration by this reference.
1.27 Purchase Money Deeds of Trust. Collectively, the First Purchase Money Deed of
Trust made by a particular applicable Owner, the Second Purchase Money Deed of Trust made by
such Owner and, if applicable, the Third Purchase Money Deed of Trust made by such Owner.
Individually, a First Purchase Money Deed of Trust, a Second Purchase Money Deed of Trust or a
Third Purchase Money Deed of Trust may be referred to in this Agreement as a “Purchase Money
Deed of Trust.”
1.28 Purchase Price. The amount paid by the then current Owner of the subject New
Home to acquire title to the New Home from the Developer or the previous Owner of the New
Home, plus any associated Sale Costs paid by the then current Owner.
1.29 Qualifying Household. A Low-Income Household.
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1.30 Record, recorded, recording or recordation. Recordation of the referenced
document in the official records of the County.
1.31 Resale. Transfer of a New Home by its Owner.
1.32 Resale Purchaser. Transferee of a New Home from the New Home’s immediately
prior Owner.
1.33 Resale Transfer Notice. Defined in Section 3.8.1.
1.34 Sale Costs. All of the following related to a Transfer of a New Home: (a) the
seller’s portion of any closing costs; (b) the actual cost of necessary health and safety related repairs
to the New Home; and (c) costs of obtaining homeowners association documents (if any).
1.35 Transfer. Regarding any property, right or obligation means any of the following,
whether by operation of law or otherwise, whether voluntary or involuntary, and whether direct or
indirect, any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer,
whether direct or indirect, of all or any part of such property, right or obligation, or of any legal,
beneficial, or equitable interest or estate in such property, right or obligation or any part of it
(including the grant of any easement, lien, or other encumbrance) or any change in the occupancy of
the Property from being occupied by Owner as Owner’s principal residence to being rented by
Owner to any other person, exclusive of any of the following (provided that City has received written
notice of such occurrence) relating to the Property: (a) a mere change in form of ownership with no
material change in beneficial ownership and constitutes a tax-free transaction under United States
income tax law and the State of California real estate transfer tax; (b) a conveyance only to
member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit; or (c) a
collateral conveyance pursuant to a Purchase Money Deed of Trust.
1.36 Unavoidable Delay. A delay in a Party performing any obligation under this
Declaration, except payment or deposit of money, arising from or on account of any cause
whatsoever beyond the Party’s reasonable control, including strikes, labor troubles or other union
activities, casualty, war, acts of terrorism, riots, litigation, governmental action or inaction, regional
natural disasters or inability to obtain required materials. Unavoidable Delay shall not include delay
caused by a Party’s financial condition, illiquidity, or insolvency.
1.37 Usury Limit. The highest rate of interest, if any, that Law allows under the
circumstances.
2. DEVELOPER COVENANTS
2.1 Acknowledgment of Potential Impact of Declaration. Developer acknowledges
and agrees that City has informed Developer that this Declaration imposes certain restrictions on the
occupancy and resale of the Property during the Affordability Period. Developer agrees that City
may record this Declaration against the Property in the official records of the County of Los Angeles,
California.
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____________________
Initials of Authorized
Developer Representative
2.2 Reservation of Property for Affordable Housing. Developer, on behalf of itself
and each successor or assign of Developer, including each Owner, covenants and agrees that
throughout the Affordability Period: (a) the Property, including each New Home, shall be reserved
and restricted for ownership and residential use and occupancy as the primary residence of a
Qualifying Household at an Affordable Housing Cost; (b) neither Developer nor any Owner shall
lease, sublease or rent all or any portion of the Property, including each New Home, to any Person,
except as expressly provided in Section 3.9; (c) neither Developer nor any Owner shall Transfer all
or any portion of the Property, including each New Home, to any Person who is not a Qualifying
Household; (d) neither Developer nor any Owner shall Transfer all or any portion of the Property,
including each New Home, to a Qualifying Household for more than an Affordable Housing Cost for
such Qualifying Household; and (e) neither Developer nor any Owner shall Transfer all or any
portion of the Property, including each New Home, to a Qualifying Household for a use other than
such Qualifying Household’s primary residence. Additionally, Developer covenants and agrees that,
at all times during the Affordability Period, the four (4) New Homes will be reserved for ownership
and occupancy by Low Income Households. Notwithstanding anything to the contrary herein, this
Declaration shall automatically and permanently terminate as to a New Home upon foreclosure,
deed-in-lieu of foreclosure or assignment to the United States Department of Housing and Urban
Development of any mortgage or deed of trust on a New Home that is insured by the Federal
Housing Administration.
2.3 Developer Covenant to Build Project. Developer covenants that Developer shall
commence, pursue and complete the development of the Project in accordance with the requirements
of the DDA. The covenants of this Section 2.3 shall run with the land of the Property until the earlier
of: (1) the first date on which a final Certificate of Occupancy has been issued by the City for each of
the New Homes in the Project; or (2) the twentieth (20th) anniversary of the Effective Date.
2.4 Developer Covenant Regarding No Discrimination or Segregation. Developer
covenants by and for itself and all Persons claiming under or through Developer that there shall be no
discrimination against or segregation of any Person or group of Persons, on account of any basis
listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined
in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the Property nor shall Developer or any Person claiming under or
through Developer establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the Property. Notwithstanding the first sentence of this Section 2.4, with
respect to familial status, this Section 2.4 shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the Government Code. With respect to familial status,
nothing in this Section 2.4 shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and
Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the
Government Code shall apply to this Section 2.4. Developer shall prepare and deliver to City a
45635.01930\40067393.1
project-specific marketing plan (the “Plan”) in connection with its local outreach campaign to
establish contact with prospective Qualifying Households. To the fullest extent permitted by
applicable law (to include, as an example only, applicable State fair housing laws), the Plan shall
include an outreach plan to establish contact with (a) organizations that work with veterans, (b)
veterans that live or work in Azusa, California, and (c) Qualifying Households with members who
are actively serving in the armed forces.
2.5 City Right to Inspect Project and Property. Developer agrees that City shall have
the right of reasonable access to the Property, without the payment of charges or fees, during normal
construction hours, during the period of construction of the Project. Any and all City representatives
who enter the Property shall identify themselves at the construction management office or, if none, to
the apparent on-site construction supervisor on the Property, upon their entrance onto the Property,
and shall at all times be accompanied by a representative of Developer, while on the Property.
Developer shall make a representative of Developer available for this purpose at all times during
normal construction hours, upon reasonable advance Notice from City. If in City’s reasonable
judgment it is necessary, Developer agrees that City shall have the further right, from time to time, at
its own cost, to retain a consultant or consultants to inspect the Project and verify compliance by
Developer with the provisions of this Agreement. Developer acknowledges and agrees that any such
City inspections are for the sole purpose of protecting City’s rights under this Declaration and the
DDA, are made solely for City’s benefit, may be superficial and general in nature, are for the
purposes of informing City of the progress of the Project and the conformity of the Project with the
terms and conditions of this Declaration and the DDA, and Developer shall not be entitled to rely on
any such inspection(s) as constituting City’s approval, satisfaction or acceptance of any materials,
workmanship, conformity of the Project with this Declaration, the DDA or otherwise. Developer
agrees to make its own regular inspections of the work of construction of the Project to determine
that the progress and quality of the Project and all other requirements of the work of construction of
the Project are being performed in a manner satisfactory to Developer.
2.6 Developer Property Maintenance. Developer, for itself, its successors and assigns,
covenants and agrees that:
2.6.1 Maintenance Obligation. All portions of the Property owned or controlled by
Developer shall be continuously maintained by Developer, at Developer’s sole cost and expense, in
accordance with the Maintenance Standard.
2.6.2 City Remedies. During the continuance of a Maintenance Deficiency
regarding any portion of the Property owned or controlled by Developer, City may send Notice to
Developer of the Maintenance Deficiency. If Developer fails to cure or commence and diligently
pursue to cure the Maintenance Deficiency within thirty (30) calendar days following receipt of
Notice of the Maintenance Deficiency, City may conduct a public hearing, following transmittal of
Notice of the public hearing to Developer, at least, ten (10) days prior to the scheduled date of such
public hearing, to verify whether a Maintenance Deficiency regarding the Property exists. If, upon
the conclusion of the public hearing, City finds that a Maintenance Deficiency exists and remains
uncured, City shall have the right to enter the affected portion of the Property and perform all acts
necessary to cure the Maintenance Deficiency or to take any other action at law or in equity that may
then be available to City to accomplish the abatement of the Maintenance Deficiency. Any sum
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expended by City for the abatement of a Maintenance Deficiency pursuant to this Section 2.6.2 shall
be reimbursed to City by Developer within thirty (30) calendar days after Notice to Developer
requesting payment. If any amount becoming due to City under this Section 2.6.2 is not paid within
thirty (30) calendar days after Notice to Developer requesting payment, Developer shall also pay
Default Interest on such amount, until such amount is paid in full.
2.7 First Sale of Completed New Homes by Developer.
2.7.1 City Notice. Developer, for itself, its successors and assigns, hereby
covenants and agrees that Developer shall not Transfer a New Home (or any interest in a New
Home), without first giving Notice to City (each, a “Developer Transfer Notice”) and obtaining the
written concurrence of City that the proposed Transfer complies with this Declaration. Within
fifteen (15) days following the receipt of a Developer Transfer Notice, City shall deliver to
Developer a written concurrence or objection to the Transfer of the New Home. Each Developer
Transfer Notice shall include all of the following information:
(a) the identity of the proposed First Purchaser, including the identity of
all persons in the household of the proposed First Purchaser proposing to reside in the New Home;
(b) all of the documentation described in Section 3.4 regarding the
household of the proposed First Purchaser;
(c) the proposed sale price of the New Home payable by the proposed
First Purchaser, including the terms of the First Purchase Money Loan, the Second Purchase Money
Loan and, if applicable, the Third Purchase Money Loan to be obtained by the proposed First
Purchaser, the estimated amount of Sale Costs, real estate broker fees and other costs or charges
payable by the proposed First Purchaser to acquire ownership of the New Home;
(d) the name, address, and telephone number of the escrow agent
proposed to conduct the escrow for the Transfer of the New Home from Developer to the proposed
First Purchaser;
(e) a written acknowledgment and agreement from the proposed First
Purchaser for the benefit of City that the ownership and occupancy of the subject New Home is
subject to this Declaration; and
(f) such other information as City may reasonably request.
2.7.2 First Purchaser Qualifications. Developer acknowledges and agrees that, in
accordance with Section 2.2, each proposed First Purchaser of a New Home must be a Qualifying
Household, the proposed sale price of a New Home to a First Purchaser must be an Affordable
Housing Cost for such First Purchaser and the First Purchaser must occupy the New Home as its
principal residence. Developer, further agrees that City shall have the right and reasonable
opportunity, prior to each conveyance of a New Home to a First Purchaser, to verify that each
proposed sale of a New Home will be to a Qualifying Household at an Affordable Housing Cost for
such Qualifying Household, that the First Purchaser intends to occupy the New Home as its principal
residence after acquiring title to the New Home and that the sale of the New Home to the First
45635.01930\40067393.1
Purchaser is consistent with achieving the income level mix for the Project required under Section
2.2.
2.7.3 Effect of First Sale on Developer Obligations. Upon conveyance of a New
Home to a First Purchaser in compliance with this Declaration, Developer’s obligations under
Sections 2.3 and 2.6 shall be satisfied regarding the subject New Home and the subject New Home
shall be subject to all of the covenants of Section 3, in addition to being subject to all of the other
covenants, conditions, restrictions and agreements of this Declaration.
2.8 Developer Repurchase and Resale of New Homes. Pursuant to a separate written
and recorded agreement between Developer and an Owner, Developer may require Owner to agree to
certain covenants, conditions and restrictions related to the affordability of the New Homes, to
include a right of first refusal to purchase a New Home from such Owner, if the Owner decides to
sell the New Home (the “ROFR Agreement”). Nothing in this Declaration is intended to prohibit
Developer’s exercise of any such right of first refusal; provided, however, that Developer shall, as
soon as reasonably possible, sell each New Home purchased by Developer by exercise of such right
of first refusal to a Qualifying Household (consistent with the income level requirements of Section
3.8.3), at a resale price that is an Affordable Housing Cost for such Qualifying Household and the
Qualifying Household must occupy the New Home as its principal residence. Developer agrees to
give Notice to City of Developer’s intended purchase and resale of each New Home and, when
available, deliver to City all of the information required by Section 3.8.1 regarding the proposed
resale of the subject New Home. Developer agrees that it will not exercise its right of first refusal to
purchase a New Home, without first giving City Notice, at least thirty (30) days in advance of the
closing of the Developer’s purchase of the New Home. Developer acknowledges and agrees that all
of the covenants of Section 3, other than application of income and occupancy requirements to the
Developer itself, shall apply to Developer (as an Owner) during any time that Developer owns a New
Home following Developer’s first sale of the subject New Home, as described in Section 2.7.
Developer further agrees that Developer will not resell any New Home without first giving Notice to
City and obtaining the written concurrence of City that each proposed Transfer complies with this
Declaration. Within thirty (30) days following the receipt of a Notice from Developer of
Developer’s intended resale of a New Home, including all of the information required by Section
3.8.1 regarding the proposed resale of the subject New Home, City shall deliver to Developer a
written concurrence or objection to the Transfer of the New Home.
3. OWNER COVENANTS
3.1 Owner Covenants of Qualification to Own New Home. Each Owner hereby
covenants, represents and warrants to City that as of the date on which such Owner is accepted by
Developer into Developer’s program for construction and acquisition of the New Homes, the total
household income for such Owner does not exceed the maximum household income permitted for a
Qualifying Household. Each Owner hereby further covenants, represents and warrants to City that,
as of the date on which such Owner acquires title to its New Home: (a) Owner shall promptly
occupy the New Home after the date on which such Owner acquires title to its New Home as
Owner’s principal place of residence; (b) Owner has not entered into any arrangement to, and shall
not sell, lease, rent, transfer or assign the New Home to any Third Person during the Affordability
Period, except as expressly allowed by this Declaration for resale to a Qualifying Household at an
45635.01930\40067393.1
Affordable Housing Cost; (c) Owner has no present intention to lease or rent any room or sublet or
rent a portion of the New Home to any relative of the Owner or to any Third Person; and (d) the
aggregate sum payable each month by Owner following Owner’s acquisition of title to its New
Home towards principal and interest on such Owner’s First Purchase Money Loan, Second Purchase
Money Loan and Third Purchase Money Loan (if any), any loan insurance fees associated with such
loans, property taxes and assessments, fire and casualty insurance covering replacement value of
property improvements, property maintenance and repairs, a reasonable allowance for utilities,
including garbage collection, sewer, water, electricity, gas, and other heating, cooking and
refrigeration fuels, but exclusive of telephone service, and home owner association fees, all in
relation to the New Home, does not exceed an Affordable Housing Cost for the Owner’s household.
3.2 Owner Voluntary Submission to Declaration. Each Owner acknowledges that,
without the assistance of Developer and City, the Owner would not have been able to acquire its
New Home. Therefore, each Owner agrees that all of the covenants, conditions and restrictions
created by this Declaration are: (a) required to increase and preserve housing available to Qualifying
Households in the City; (b) reasonable in light of their purposes; and (c) approved in every respect by
Owner. Each Owner acknowledges that in acquiring its New Home, the sole and exclusive benefit
sought by Owner was decent and affordable shelter and Owner has received such benefit. Each
Owner further acknowledges that ownership of its New Home is not intended to give Owner a
business opportunity or right, expectation or entitlement to any profits from any sale of its New
Home. Therefore, each Owner agrees not to challenge the covenants, conditions or restrictions of
this Declaration or any right of Developer or City created under this Declaration and acknowledges
and agrees that the covenants, conditions or restrictions of this Declaration are not an unreasonable
restraint on any right of Owner to Transfer all or any part of such Owner’s New Home.
3.3 Residency Verification. Each Owner for itself, its heirs, successors and assigns,
covenants and agrees that City shall have the right and reasonable opportunity, at least once every
twelve (12) months, to verify Owner’s continued occupancy of such Owner’s New Home as its
principal place of residence and Owner agrees to cooperate in providing evidence of such residency.
3.4 Occupant Income Information. Each Owner covenants and agrees to provide any
or all of the following information or documentation to City, upon request by City: (1) an income
tax return and copy of each W2 Wage and Earnings Statement for the most recently concluded
income tax year for each adult Person in the Owner’s household; (2) an income verification form
from the current employer(s) of adult Person’s in the Owner’s Household; (3) an income verification
form from the United States Social Security Administration or the California Department of Social
Services for each Person in the Owner’s household who receives assistance from either of such
agencies (if any); or (4) for each adult Person in the Owner’s household who is unemployed or has
no such income tax return, another form of independent income verification.
3.5 Household Income Changes. Each New Home will continue to be treated as
occupied by a Qualifying Household, even if during Owner’s residency, Owner’s household ceases
to be a Qualifying Household, as long as Owner’s household was a Qualifying Household on the date
Owner acquired title to its New Home. No resident of a New Home shall be denied continued
occupancy of the New Home solely because the income of the individual or household increases (or
family size decreases) in a manner that causes the individual or household to cease being a
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Qualifying Household, as long as the income of the individual or household did not exceed the
maximum income allowable for a Qualifying Household on the date such individual or household
acquired title to its New Home.
3.6 Inspections. Each Owner covenants and agrees to permit City to conduct a
reasonable inspection of Owner’s New Home, from time-to-time, for purposes of verifying
compliance with this Declaration, upon seven (7) days prior written notice to Owner.
3.7 Owner Covenant Regarding No Discrimination or Segregation. Each Owner
covenants by and for itself and all Persons claiming under or through such Owner that there shall be
no discrimination against or segregation of any Person or group of Persons, on account of any basis
listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined
in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of Owner’s New Home nor shall Owner or any Person claiming
under or through Owner establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees,
sublessees, subtenants, or vendees in Owner’s New Home. Notwithstanding the first sentence of
this Section 3.7, with respect to familial status, this Section 3.7 shall not be construed to apply to
housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to
familial status, nothing in this Section 3.7 shall be construed to affect Sections 51.2, 51.3, 51.4,
51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of
Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of
the Government Code shall apply to this Section 3.7.
3.8 Resale of a New Home by Owner.
3.8.1 City Notice. Each Owner, for itself, its successors and assigns, hereby
covenants and agrees that such Owner shall not Transfer its New Home (or any interest in its New
Home), other than a collateral transfer under a Purchase Money Deed of Trust for the benefit of the
beneficiary of such Purchase Money Deed of Trust, without first giving Notice to City (each, a
“Resale Transfer Notice”) and obtaining the written concurrence of City that the proposed Transfer
complies with this Declaration. Within thirty (30) days following the receipt of a Resale Transfer
Notice, City shall deliver to Owner a written concurrence or objection to the Transfer of the New
Home. Each Resale Transfer Notice shall include all of the following information:
(a) the identity of the proposed Resale Purchaser, including the identity
of all persons in the household of the proposed Resale Purchaser proposing to reside in the New
Home;
(b) all of the documentation described in Section 3.4 regarding the
household of the proposed Resale Purchaser;
(c) the proposed resale price of the New Home payable by the proposed
Resale Purchaser, including the terms of the First Purchase Money Loan, the Second Purchase
Money Loan and, if applicable, the Third Purchase Money Loan to be assumed or obtained by the
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proposed Resale Purchaser, the estimated amount of Sale Costs, real estate broker fees and other
resale costs or charges payable by the Owner or the proposed Resale Purchaser regarding the Resale
of the subject New Home;
(d) the name, address, and telephone number of the escrow agent
proposed to conduct the escrow for the Transfer of the New Home from the Owner to the proposed
Resale Purchaser;
(e) a written acknowledgment and agreement from the proposed Resale
Purchaser for the benefit of City that the ownership and occupancy of the subject New Home is
subject to this Declaration; and
(f) such other information as City may reasonably request.
3.8.2 Resale Purchaser Qualifications. Owner acknowledges and agrees that, in
accordance with Section 2.2, all Resale Purchasers of a New Home must be a Qualifying Household
(consistent with the income level requirements of Section 3.8.3), the proposed resale price of a New
Home must be an Affordable Housing Cost for such Resale Purchaser and the Resale Purchaser must
occupy the New Home as its principal residence. Each Owner agrees that City shall have the right
and reasonable opportunity, prior to each Resale of a New Home, to verify that each proposed Resale
of a New Home will be to a Qualifying Household (with the income level required under Section
3.8.3) at an Affordable Housing Cost for such Qualifying Household and that the Resale Purchaser
intends to occupy the New Home as its principal residence after acquiring title to the New Home.
3.8.3 Maintenance of Affordability Level. Each New Home shall, at all times
during the Affordability Period, remain affordable to the income level of the Low Income
Household, as defined in Health and Safety Code and associated regulations of the California
Department of Housing and Community Development) to which the New Home is originally
Transferred by Developer, such that each Resale Purchaser of a New Home must have an income
within the qualifying limits for such income level.
3.9 Temporary Rentals. Developer may determine that extenuating circumstances
justify the temporary rental of a New Home by its Owner, as when such Owner must temporarily
relocate to another area of the country, but will return to occupy the New Home as such Owner’s
primary residence within less than twelve (12) months. However, even if Developer allows
temporary rental of a New Home, the tenant must be a Qualifying Household at the income level
applicable to the New Home pursuant to Section 3.8.3 and the rent must not exceed an Affordable
Housing Cost for such tenant. Developer shall provide City with ten (10) days written notice of
Developer’s intention to approve a temporary rental, and City shall have the right to approve or deny
such temporary rental, which approval shall not be unreasonably withheld. City may impose
conditions upon the Owner and the tenant as a condition to consenting to temporary rental of a New
Home, in the sole and absolute discretion of City.
3.10 Owner New Home Maintenance. Each Owner, for itself, its successors and
assigns, covenant and agree that:
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3.10.1 Owner Obligation. The Owner’s New Home shall be continuously maintained
by the Owner, at Owner’s sole cost and expense, in accordance with the Maintenance Standard.
3.10.2 City Remedies. During the continuance of a Maintenance Deficiency
regarding a New Home, City may send Notice to the Owner of such New Home of the Maintenance
Deficiency. If such Owner fails to cure or commence and diligently pursue to cure the Maintenance
Deficiency within thirty (30) calendar days following receipt of Notice of the Maintenance
Deficiency, City may conduct a public hearing, following transmittal of Notice of the public hearing
to such Owner, at least, ten (10) days prior to the scheduled date of such public hearing, to verify
whether a Maintenance Deficiency exists regarding the Owner’s New Home. If, upon the conclusion
of the public hearing, City finds that a Maintenance Deficiency exists regarding such Owner’s New
Home and remains uncured, City shall have the right to enter the New Home and perform all acts
necessary to cure the Maintenance Deficiency or to take any other action at law or in equity that may
then be available to City to accomplish the abatement of the Maintenance Deficiency. Any sum
expended by City for the abatement of a Maintenance Deficiency pursuant to this Section 3.10.2
shall be reimbursed to City by the subject Owner within thirty (30) calendar days after Notice to such
Owner requesting payment. If any amount becoming due to City under this Section 3.10.2 is not
paid within thirty (30) calendar days after Notice to such Owner requesting payment, such Owner
shall also pay Default Interest on such amount, until such amount is paid in full.
3.11 Only Purchase Money Encumbrances. Owner shall only be allowed to encumber
its New Home with Purchase Money Deeds of Trust. Encumbering the title to a New Home with
other than Purchase Money Deeds of Trust is prohibited and shall constitute a Monetary Default
under this Declaration. The sum of the outstanding balances of the Owner’s then current First
Purchase Money Loan, Second Purchase Money Loan and Third Purchase Money Loan (if any) shall
never exceed the Purchase Price paid by such Owner to acquire the subject New Home. Owner
acknowledges and agrees by accepting a Transfer of a New Home subject to this Declaration that
City has a substantial interest in promoting stability of ownership of New Homes and that the
restriction on encumbrance in this Section 3.11 is reasonable and calculated to avoid potential
foreclosure and sale of the New Home.
3.12 ROFR Agreement. Notwithstanding the restrictions in Section 3.11, Owner shall be
allowed to, if requested by Developer, encumber its New Home with the ROFR Agreement as
described in Section 2.8 herein and any other such documents as may be reasonably requested by
Developer to maintain the affordability of each New Home or to evidence its right of first refusal to
purchase the New Home from such Owner.
3.13 Refinancing. Owner shall be entitled to enter into a refinancing transaction, which
meets all of the following requirements: (a) the transaction represents a refinancing of either or all of
the Owner’s then current First Purchase Money Loan or Second Purchase Money Loan or Third
Purchase Money Loan; (b) the refinancing loan bears for its entire term a fixed annual percentage
rate that is lower than the annual percentage rate of the loan being refinanced; (c) the entirety of the
gross proceeds of the refinancing loan, less reasonable and customary costs of processing the
refinancing loan, obtaining appraisals, and the like not exceeding six percent (6%) of the refinancing
loan amount, are used to refinance the entire balance of either or all of the Owner’s then current First
Purchase Money Loan, Second Purchase Money Loan or Third Purchase Money Loan, as applicable
45635.01930\40067393.1
(no “cash out” to Owner and the New Home is completely released from the lien of the then current
Purchase Money Deed of Trust securing the loan or loans being refinanced); (d) the refinancing loan
does not provide Owner with the ability to obtain cash advances or other “cash out” options; and (e)
Owner’s monthly principal and interest expenses or loan term are reduced relative to the same
elements of the loan being refinanced. Owner’s then current Purchase Money Loan. A refinancing
loan obtained by Owner that satisfies all of the requirements of this Section 3.13 shall be considered
the Owner’s then current First Purchase Money Loan, Second Purchase Money Loan or Third
Purchase Money Loan, as applicable, and the deed of trust securing such refinancing loan shall be
considered the then current First Purchase Money Deed of Trust, Second Purchase Money Deed of
Trust or Third Purchase Money Deed of Trust, as applicable.
4. COVENANTS RUN WITH THE LAND. The Parties hereby declare their mutual specific
intent that the covenants, conditions, restrictions, reservations and agreements set forth in this
Declaration are part of a plan for the promotion and preservation of affordable housing within the
territorial jurisdiction of the City and that each shall be deemed covenants running with the land of
the Property, including each New Home, binding upon each successor-in-interest of Developer,
including each Owner, for the duration of the Affordability Period. Regardless of classification or
characterization, each of the covenants, conditions, restrictions and agreements contained in this
Declaration touch and concern the land of the Property, including each New Home, and each of them
is expressly declared to be for the benefit and in favor of City for the duration of the Affordability
Period, regardless of whether or not City is or remains an owner of any land or interest in land to
which such covenants, conditions, restrictions or agreements relate. City, in the event of any Default
or breach of this Declaration, has the right to exercise all of the rights and remedies, and to maintain
any actions at law or suits in equity or other proper proceedings, to enforce the curing of such
Default or breach, as provided in this Declaration, at law or in equity. Each and every contract, deed
or other instrument hereafter executed covering or conveying all or any portion of the Property or any
interest in the Property, including each New Home, shall incorporate all of the provisions of this
Declaration, either expressly or by reference, and any contract, deed or other instrument transferring
any estate or interest in the Property, including each New Home, shall conclusively be deemed to
have been executed, delivered and accepted subject to the agreements, covenants, conditions,
reservations, and restrictions of this Declaration, regardless of whether such agreements, covenants,
conditions, reservations and restrictions are set forth in or referenced such contract, deed or other
instrument.
5. CITY REMEDIES. If an Event of Default occurs, City shall have the right to exercise any or
all of the remedies described in this Section 5, all cumulative (so exercise of one remedy shall not
preclude exercise of another remedy), in addition to such other remedies as may be available at law
or in equity or under any other provisions of this Declaration.
5.1 Suits Before End of Affordability Period. City may sue the defaulting Party for
damages or other relief, from time to time, at City’s election, without terminating this Declaration,
including by mandamus or other suit, action or proceeding at law or in equity, to require the
defaulting Party to perform the covenants or agreements or observe the conditions or restrictions of
this Declaration, or enjoin any acts or things that may be unlawful or in violation of the rights of City
under this Declaration; or by other action at law or in equity, as necessary or convenient to enforce
the covenants, agreements, conditions or restrictions of this Declaration.
45635.01930\40067393.1
5.2 Receipt of Moneys. No receipt of money by City from any Person after any
Notice of Default to a Party shall affect any Notice previously given to such Party, or waive City’s
right to enforce payment or deposit of any amount payable or later falling due, or City’s right to enter
the Property, including each New Home, it being agreed that after service of Notice of Default or the
commencement of suit or proceedings, or after final order or judgment, City may demand, receive,
and collect any moneys due or thereafter falling due, without in any manner affecting such Notice,
proceeding, order, suit or judgment, all such moneys collected being deemed payments on account of
the applicable Party’s liability to City.
5.3 No Waiver. No failure by City to insist upon strict performance of any condition,
covenant, agreement, restriction or reservation of this Declaration or to exercise any right or remedy
upon a Default, and no acceptance of full or partial payment of any amount due or becoming due to
City during the continuance of any such Default, shall waive any such Default or such condition,
covenant, agreement, restriction or reservation. No obligation of a Party under this Declaration shall
be modified and no Default shall be waived, except by a written instrument signed by City. No
waiver of any Default shall modify this Declaration. Each and every covenant, agreement, condition,
restriction and reservation of this Declaration shall continue in full force and effect with respect to
any other then-existing or subsequent Default of such condition, covenant, agreement, restriction or
reservation of this Declaration.
5.4 Damages. City may recover from each other Party all damages City incurs by
reason of such Party’s Default and reimbursement of City’s reasonable out of pocket costs, including
reasonable attorney fees. City may recover such damages at any time after another Party’s Default,
including after the expiration of the Affordability Period. Notwithstanding any applicable law to the
contrary, City need not commence separate actions to enforce another Party’s obligations for each
amount or payment not paid, or each month’s accrual of damages and costs for the other Party’s
Default, but may bring and prosecute a single combined action for all such damages and costs.
5.5 Injunction of Breaches. Whether or not an Event of Default has occurred, the City
may obtain a court order enjoining each other Party from continuing any Default or from committing
any threatened Default.
5.6 Specific Enforcement. Developer and each Owner agree that specific enforcement
of their respective non-monetary obligations under this Declaration is one of the reasons that City
entered into this Declaration and that, if Developer or Owner Defaults or breaches in performance or
failure to perform any such obligation, potential monetary damages to City, as well as to prospective
Qualifying Households, would be difficult, if not impossible, to evaluate and quantify. Therefore, in
addition to any other relief to which City may be entitled as a consequence of a Default by Developer
or Owner under this Declaration, Developer and each Owner agree to the imposition of the remedy
of specific performance against Developer or any Owner under this Declaration.
5.7 Enforcement. City or its successor in interest shall have the power to enforce this
Declaration and no other Person shall have any right or power to enforce any provision of this
Declaration on behalf of City or to compel City to enforce any provision of this Declaration against
Developer, Owner or the Property, except to the extent required by Health and Safety Code Section
33334.3(f)(7).
45635.01930\40067393.1
6. GENERAL PROVISIONS
6.1 Relationship of Parties. Nothing contained in this Declaration shall be interpreted
or understood by any of the Parties, or by any Third Person, as creating the relationship of employer
and employee, principal and agent, limited or general partnership, or joint venture between or among
City, Developer or any Owner.
6.2 Governing Law. This Declaration shall be governed by the laws of the State of
California, without application of conflicts or choice of laws principles.
6.3 Amendment. This Declaration may be amended only by a written instrument
signed by City and each other Party then owning an estate in the Property.
6.4 Principles of Interpretation. No inference in favor of or against any Party shall be
drawn from the fact that such Party has drafted any part of this Declaration. The Parties have
participated substantially in the negotiation, drafting, and revision of this Declaration, with advice
from counsel and other advisers of their own selection. A term defined in the singular in this
Declaration may be used in the plural, and vice versa, all in accordance with ordinary principles of
English grammar, which govern all language in this Declaration. The words “include” and
“including” in this Declaration shall be construed to be followed by the words: “without limitation.”
Each collective noun in this Declaration shall be interpreted as if followed by the words “(or any
part of it),” except where the context clearly requires otherwise. Every reference to any document,
including this Declaration, refers to such document as modified from time to time (except, at City’s
option, any modification that violates this Declaration), and includes all exhibits, schedules, and
riders to such document. The word “or” in this Declaration includes the word “and.” Every
reference to a law, statute, regulation, order, form or similar governmental requirement refers to each
such requirement as amended, modified, renumbered, superseded or succeeded, from time to time.
6.5 Attorney’s Fees. In the event that a Party brings an action to enforce this
Declaration or otherwise arising out of this Declaration, the prevailing Party in such action shall be
entitled to recover from the other Party reasonable attorney fees to be fixed by the court in which a
judgment is entered, as well as the costs of such suit. For the purposes of this Declaration, the words
“reasonable attorney fees” in the case of City, include the salaries, costs and overhead of the lawyers
employed in the Office of the City Attorney of the City who are legal counsel to City in such an
action, as allocated on an hourly basis.
6.6 Severability. If any term or provision of this Declaration or its application to any
Person or circumstance shall to any extent be invalid or unenforceable, then the remainder of this
Declaration, or the application of such term or provision to Persons or circumstances, other than
those as to which it is invalid or unenforceable, shall not be affected by such invalidity. All
remaining provisions of this Declaration shall be valid and be enforced to the fullest extent
applicable law allows.
6.7 Time is of the Essence. Time is of the essence with respect to the performance of
each term, provision, covenant, condition, restriction, reservation or agreement contained in this
Declaration.
45635.01930\40067393.1
6.8 Unavoidable Delay; Extension of Time of Performance. Performance by a Party
under this Declaration shall not be deemed or considered to be in Default, where any such Default is
due to the occurrence of an Unavoidable Delay.
6.9 Titles and Headings for Reference Only. The titles and headings of the articles,
paragraphs and sections of this Declaration are for convenience and reference only and are not to be
considered a part of this Declaration and shall not in any way interpret, modify or restrict the
meaning of any term, provision, covenant, condition, restriction, reservation or agreement contained
in this Declaration.
6.10 Notices.
6.10.1 Delivery. Any and all Notices sent by a Party to another Party pursuant to or
as required by this Declaration shall be proper, if in writing and transmitted to the address of the
recipient Party designated in Section 6.10.2, by one or more of the following methods: (a)
messenger for immediate personal delivery; (b) a nationally recognized overnight (one Business Day)
delivery service (i.e., Federal Express, United Parcel Service, etc.); or (c) registered or certified
United States mail, postage prepaid, return receipt requested. Such Notices may be sent in the same
manner to such other address as a Party may from time to time designate by Notice, in accordance
with this Section 6.10. Any such Notice shall be deemed to be received by the addressee, regardless
of whether or when any return receipt is received by the sender or the date set forth on such return
receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally
recognized overnight courier service or three (3) calendar days after it is placed in the United States
mail, as provided in this Section 6.10. Rejection, other refusal to accept or the inability to deliver a
Notice because of a changed address of which no notice was given, shall be deemed receipt of the
Notice. Any attorney representing a Party may give any Notice on behalf of such Party.
6.10.2 Addresses. The following are the authorized addresses for the submission of
Notices to the Parties, as of the Effective Date:
If to City: City of Azusa
213 E Foothill Blvd
Azusa, CA 91702
Attention: City Manager
If to Developer: San Gabriel Valley Habitat for Humanity, Inc.
724 E. Huntington Drive
Monrovia, CA 91016
Attention: Executive Director
6.11 Entire Agreement. This Declaration may be signed in counterpart originals, each
of which shall be deemed to be an original, and all of which together shall constitute one and the
same instrument. This Declaration and the DDA constitute the entire understanding and integrate all
of the terms, conditions, covenants, restrictions, reservations, terms, provisions and agreements of
the Parties regarding the Property, including each New Home, and supersede all negotiations or
45635.01930\40067393.1
previous agreements between the Parties with respect to all or any part of the Property, including
each New Home. None of the terms, conditions, covenants, restrictions, reservations, terms,
provisions or agreements set forth in this Declaration or the DDA shall be deemed to be merged with
any deed conveying title to any estate or interest in the Property, including each New Home.
6.12 Release. Upon expiration or earlier termination of the Declaration, City shall, at
its sole expense, upon request from either Developer or any Owner cause to be recorded such
instrument or instruments as may be necessary and appropriate to have this Declaration discharged of
record from the real estate records of the County of Los Angeles.
[Signatures on following page]
45635.01930\40067393.1
SIGNATURE PAGE
TO
DECLARATION OF AFFORDABLE HOUSING COVENANTS, CONDITIONS AND
RESTRICTIONS
(__________)
IN WITNESS WHEREOF, City and Developer have caused this Declaration to be signed by
themselves or on their behalf by their duly authorized representatives, as set forth below:
CITY: DEVELOPER:
CITY OF AZUSA, a public body, corporate
and politic
SAN GABRIEL VALLEY HABITAT FOR
HUMANITY, INC., a California non-profit
corporation
By:
City Manager
By:
Bryan Wong, Executive Director
By:
Sayaka Ota, Director of Finance
[SIGNATURES MUST BE NOTARY ACKNOWLEDGED FOR RECORDING]
four
45635.01930\40067393.1
EXHIBIT “A”
TO
DECLARATION OF
AFFORDABLE HOUSING COVENANTS, CONDITIONS AND RESTRICTIONS
Property Legal Description
736 N. Angeleno Avenue, Azusa, California, 91702:
LOT 41 AND THAT PORTION OF LOT 40 IN BLOCK 22 OF THE MAP OF AZUSA, IN THE CITY
OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED
IN BOOK 15, PAGES 93 TO 96, INCLUSIVE OF MISCELLANEOUS RECORDS, IN THE OFFICE
OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE EASTERLY LINE OF THAT 20.00 FOOT
WIDE ALLEY AS SHOWN ON SAID MAP, WITH THE NORTHERLY RIGHT-OF-WAY OF
ATCHISON, TOPEKA AND SANTA FE RAILROAD, 100.00 FEET WIDE AS SHOWN ON TRACT
NO. 46762, FILED IN BOOK 1210, PAGES 94 TO 97, INCLUSIVE OF MAPS, IN SAID OFFICE OF
THE COUNTY RECORDER; THENCE ALONG SAID EASTERLY LINE, NOO°15'25"E 53.35
FEET TO THE NORTHWESTERLY LINE OF DEED RECORDED IN BOOK 634, PAGE 181 OF
DEEDS; THENCE LEAVING SAID EASTERLY LINE, N89°441351N 20.00 FEET TO A POINT ON
THE WESTERLY LINE OF SAID 20.00 FOOT WIDE ALLEY, SAID POINT BEING THE TRUE
POINT BEGINNING; THENCE LEAVING SAID WESTERLY LINE AND CONTINUING,
N89°44'35"W 140.00 FEET TO THE EASTERLY LINE OF ANGELENO AVENUE, 80.00 FEET
WIDE, AS SHOWN ON SAID MAP; THENCE ALONG SAID EASTERLY LINE, S00°15'25"W
112.93 FEET TO SAID NORTHERLY RIGHT-OF-WAY; THENCE ALONG SAID RIGHT-OF-
WAY, N69°49'59"E 149.39 FEET TO SAID WESTERLY LINE OF THAT 20.00 FOOT WIDE
ALLEY; THENCE ALONG SAID WESTERLY LINE, NOO°1525"E 60.80 FEET TO THE TRUE
POINT OF BEGINNING.
740 N. Angeleno Avenue, Azusa, California, 91702:
LOT 40 OF BLOCK 22 IN TRACT AZUSA, AS PER MAP RECORDED IN BOOK 15, PAGES 93
THROUGH 96 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY