HomeMy WebLinkAbout2006-272
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RESOLUTION NO.
2006- 2 72
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE
MAYOR TO EXECUTE THE 2006 REDEVELOPMENT COOPERATION
LOAN AGREEMENT BY AND BETWEEN THE CITY OF SAN
BERNARDINO AND THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO ("AGENCY") - NORTH ARDEN GUTHRIE
COMMERCIAL DEVELOPMENT PROJECT (IVDA REDEVELOPMENT
PROJECT AREA)
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WHEREAS, for the past several years the City of San Bernardino (the "City") and th
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Redevelopment Agency of the City of San Bernardino (the "Agency") have been engaged .
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efforts to address blighting conditions in a portion of the City known as the Arden-Guthri
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neighborhood; and
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WHEREAS, the Arden-Guthrie neighborhood has been afflicted with a number 0
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physical and economic conditions of blight over the years, as these terms are defined in Heal
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and Safety Code Section 33032, including without limitation, conditions of substandar
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structures and dwellings, residential overcrowding, substandard property maintenanc
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conditions, inadequate design of improvements, abandonment of property, depreciating an
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stagnant property values, and criminal activity which has occurred at rates substanti~ly high
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than crime rates in other neighborhoods of the City; and
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WHEREAS, the Agency, in cooperation with the City, has previously embarked on
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program to acquire properties in the Arden-Guthrie neighborhood and to relocate the persons an
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households occupying such property into safe, sanitary and decent housing at other suitabl
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locations; and
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WHEREAS, as of June 30, 2006, the Agency has incurred a redevelopment indebtednes
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in excess of $10,000,000 in connection with its previous efforts to address conditions of blight i
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the Arden-Guthrie neighborhood and to prevent the spread of blight from the Arden-Guthri
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neighborhood into nearby neighborhoods and communities; and
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WHEREAS, the City believes it is necessary and appropriate for the Agency to acquif
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additional lands in the Arden-Guthrie neighborhood in order to foster a commercially viable an
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economically sustainable plan of redevelopment and reuse of the Arden-Guthrie neighborhoo
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and to prevent the spread of blight in the Arden-Guthrie neighborhood into other surroundin
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neighborhoods and communities; and
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WHEREAS, the Arden-Guthrie neighborhood is situated within the redevelopmen
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project area of the Inland Valley Development Project (the "Project Area") which is a speci
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"IVDA"); and
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redevelopment project area administered by the Inland Valley Development Agency (th
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WHEREAS, the IVDA has been established pursuant to a joint exercise of pow
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agreement in January 1990, as a former military base civilian reuse local redevelopmen
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authority as recognized by the United States Secretary of the Air Force, for the purpose 0
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assisting in the conversion, redevelopment and civilian reuse of the former Norton Air Forc
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Base located within the City of San Bernardino; and
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WHEREAS, the IVDA has been granted specific powers by the State Legislature in 198
(Stats. 1989 c.545 and See Now Stats 1997, c.580 and Health and Safety Code Section 33492.40
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et seq.) to assist in the redevelopment of the former Norton Air Force Base and the lands i
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proximity thereto pursuant to the Community Redevelopment Law (Health and Safety Cod
Section 33000, et seq.); and
WHEREAS, the IVDA has adopted the Redevelopment Plan for the Inland Valle
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Redevelopment Project Area (the "Redevelopment Plan") in accordance with the provisions 0
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the CRL, and the Redevelopment Plan provides for certain redevelopment activities to b
undertaken within the Project Area as more fully described in the Redevelopment Plan; and
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WHEREAS, the IVDA, the City and the Agency have entered into an agreement entitl
2 "2003 Redevelopment Cooperation Agreement", dated as of October 8, 2003 (the "IVD
7 provide the City with a "Section 108 Loan Guarantee" under the provisions of the Housing an
3 Redevelopment Cooperation Agreement") assist the City and the Agency to accomplish th
4 redevelopment of the Arden-Guthrie neighborhood.
5 WHEREAS, at the request of the Agency, the City has made arrangements with th
6 United States Secretary of the Department of Housing and Urban Development ("OOD"), t
8 Community Development Act of 1974, as amended (42 USC Section 5308) and HUD Sectio
9 108 Loan Program regulations set forth at 24 CFR Part 570.700 (the "2006 OOD Section 10
10 Loan") in an amount of Seven Million Five Hundred Thousand Dollars ($7,500,000), and in
II the City proposes to loan to the Agency the proceeds of the 2006 HUD Section 108 Loan to th
12 Agency in support of the Project; and
13 WHEREAS, HUD has confirmed it is prepared to provide a Section 108 Loan to the Cit
14 in the maximum principal sum of Seven Million Five Hundred Thousand Dollars ($7,500,000
15 under HUD Section 108 Loan Program Guarantee No. B-03-MC-06-0539 (the "2006 00
16 Section 108 Loan Contract"); and
17 WHEREAS, the City shall provide the Agency with the proceeds of the 2006 Ci
18 Section 108 Loan, as the authorized Subrecipient of the City under the terms of the 2006 Ci
19 Section 108 Loan Contract, for the following activities in connection with the Arden-Guthri
20 Redevelopment Project:
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Site acquisition, pursuant to 24 CFR Part 570.703(a);
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(i)
(ii)
Completing the acquisition by the Agency of certain lands in the "Project Site"
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this term is defined in the 2006 HUD Section 108 Loan Contract;
24 (iii) Residential relocation assistance, pursuant to 24 CFR Part 570. 703( d);
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(iv) Demolition and clearance, pursuant to 24 CFR Part 570.703(e) (See 2006
2 Section 108 Loan Contract Paragraph 15(b)); and
3 WHEREAS, the Mayor and Common Council have adopted a resolution entitled
4 "Resolution of the Mayor and Common Council of the City of San Bernardino approving an
5 authorizing the Mayor to execute the contract and related documents for the Loan Guarant
6 Assistance under Section 108 of the Housing and Community Development Act of 1974,
7 amended, 42 USC Section 5308 (CDBG Section 108 Contract No. B-03-MC-06-0539) - No
8 Arden Guthrie Commercial Development Project (IVDA Redevelopment Project Area)".
9 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED
10 BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
11 FOLLOWS:
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Section 1.
The Recitals of this Resolution are true and correct.
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Section 2.
The Mayor and Common Council hereby finds and declares that severe
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conditions of blight exist in the Arden-Guthrie neighborhood and that the approval of the 2006
HUD Section 108 Loan Contract and the 2006 Redevelopment Cooperation Loan Agreement,
and the implementation of the community redevelopment activities contemplated under each
such agreement shall substantially and materially assist the Agency to prevent and eliminate the
spread of blight which adversely affects the Arden-Guthrie neighborhood and the community
generally. The redevelopment of the Arden-Guthrie neighborhood is in the vital and best
interests of the City.
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Section 3.
The Mayor and Common Council hereby approves the terms of the 2006
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Redevelopment Cooperation Loan Agreement for the Arden-Guthrie Redevelopment Project in
the form as submitted to the Mayor and Common Council at which this Resolution of the Mayor
and Common Council is adopted. The Mayor or his designee are hereby authorized and
directed to execute the 2006 Redevelopment Cooperation Loan Agreement on behalf of the
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City.
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Section 4.
Prior to the time that the Agency may approve an agreement with the
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Developer for the disposition of the Agency Collateral Lands to the Developer for the
implementation of the Arden-Guthrie Redevelopment Project as required under Health and
Safety Code Section 33431 and other applicable law, the Agency shall provide a written
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certification to the City that the "Developer Grant Agreement" as this term is defmed in the
2006 Redevelopment Cooperation Loan Agreement, contains provisions consistent with Section
9 of the 2006 Redevelopment Cooperation Loan Agreement and consistent with Paragraph
l5(c)(iv) of the 2006 HUD Section 108 Loan Contract, and is, in the opinion oflegal counsel to
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the Agency, otherwise in a form satisfactory to HUD.
Section 5. This Resolution shall take effect upon adoption.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE
MAYOR TO EXECUTE THE 2006 REDEVELOPMENT COOPERATION
LOAN AGREEMENT BY AND BETWEEN THE CITY OF SAN
BERNARDINO AND THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO ("AGENCY") - NORTH ARDEN GUTHRIE
COMMERCIAL DEVELOPMENT PROJECT (IVDA REDEVELOPMENT
PROJECT AREA)
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a ioint regular
meeting thereof,
8 held on the 24th day of July , 2006, by the following vote to wit:
9 Council Members: Aves Navs Abstain Absent
10 ESTRADA x
BAXTER ---1L
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MCGINNIS X
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DERRY ---1L
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KELLEY ---1L
14 JOHNSON -.lL
15 MCCAMMACK x
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The foregoing resolution is hereby approved this d-.-1 ~ay of July , 2006.
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atri J. Morris, Ma
Cl of San Bemardino
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Approved as to Form:
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es F. Penman, City Attorney
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2006
CITY OF SAN BERNARDINO AND
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
REDEVELOPMENT COOPERATION LOAN AGREEMENT
(Arden-Guthrie Neighborhood Redevelopment Project)
THIS REDEVELOPMENT COOPERATION LOAN AGREEMENT (2006 ARDEN-
GUTHRIE PROJECT) is dated as of July 1, 2006 (the "Loan Agreement") by and between the
City of San Bernardino (the "City") and the Redevelopment Agency of the City of San
Bernardino (the "Agency") and is entered into in light of the facts set forth in the following
Recital paragraphs:
-- RECITALS --
1.
WHEREAS, for the past many years the City of San Bernardino (the "City") and the
Redevelopment Agency of the City of San Bernardino (the "Agency") have been engaged in
efforts to address blighting conditions in a portion of the City known as the Arden-Guthrie
neighborhood; and
WHEREAS, the Arden-Guthrie neighborhood has been afflicted with a number of
physical and economic conditions of blight over the years, as these terms are defined in Health
and Safety Code Section 33032, including without limitation, conditions of substandard
structures and dwellings, residential overcrowding, substandard property maintenance
conditions, inadequate design of improvements, abandonment of property, depreciating and
stagnant property values, and criminal activity which has occurred at rates substantially higher
than crime rates in other neighborhoods of the City; and
WHEREAS, the Agency, in cooperation with the City, has previously embarked on a
program to acquire properties in the Arden-Guthrie neighborhood and to relocate the persons and
households occupying such property into safe, sanitary and decent housing in other suitable
locations; and
WHEREAS, as of November 1, 2005, the Agency has incurred a redevelopment
indebtedness in excess of $10,000,000 in connection with its previous efforts to address
conditions of blight in the Arden-Guthrie neighborhood and to prevent the spread of blight from
the Arden-Guthrie neighborhood into nearby neighborhoods and communities; and
WHEREAS, the City believes it is necessary and appropriate for the Agency to acquire
additional lands in the Arden-Guthrie neighborhood in order the foster a commercially viable
and economically sustainable plan of redevelopment and reuse of the Arden-Guthrie
neighborhood and to prevent the spread of blight in the Arden-Guthrie neighborhood into other
surrounding neighborhoods and communities; and
WHEREAS, the Arden-Guthrie neighborhood is situated within the redevelopment
project area of the Inland Valley Development Project (the "Project Area") which is a special
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redevelopment project area administered by the Inland Valley Development Agency (the
"IVDA"); and
WHEREAS, the IVDA has been established pursuant to a joint exercise of powers
agreement in January 1990, as a former military base civilian reuse local redevelopment
authority as recognized by the United States Secretary of the Air Force, for the purpose of
assisting in the conversion, redevelopment and civilian reuse of the former Norton Air Force
Base located within the City of San Bernardino; and
WHEREAS, the IVDA has been granted specific powers by the State Legislature in 1989
(Stats. 1989 c.545 and See Now Stats 1997, c.580 and Health and Safety Code Section 33492.40,
et seq.) to assist in the redevelopment of the former Norton Air Force Base and the lands in
proximity thereto pursuant to the Community Redevelopment Law (Health and Safety Code
Section 33000, et seq.); and
WHEREAS, the IVDA has adopted the Redevelopment Plan for the Inland Valley
Redevelopment Project Area (the "Redevelopment Plan") in accordance with the provisions of
the CRL, and the Redevelopment Plan provides for certain redevelopment activities to be
undertaken within the Project Area as more fully described in the Redevelopment Plan; and
WHEREAS, at the present time, substantially all the financial and administrative staff
resources available to the IVDA are devoted to the implementation of certain agreements
affecting the former Norton Air Force Base including an agreement entitled "Agreement
Between the Department of the Air Force and the Inland Valley Development Agency," dated
March 7, 1995, as amended, which specifically relates to the civilian reuse and redevelopment of
the lands comprising the former Norton Air Force Base; and
WHEREAS, the IVDA, the City and the Agency have entered into an agreement entitled
"2003 Redevelopment Cooperation Agreement", dated as of October 8, 2003 (the "IVDA
Redevelopment Cooperation Agreement") to assist the City and the Agency to accomplish the
redevelopment of the Arden-Guthrie neighborhood.
WHEREAS, at the request of the Agency, the City has made arrangements with the
United States Secretary of the Department of Housing and Urban Development ("HUD"), to
provide the City with a "Section 108 Loan Guarantee" under the provisions of the Housing and
Community Development Act of 1974, as amended (42 USC Section 5308) and HUD Section
108 Loan Program regulations set forth at 24 CFR Part 570.700 (the "2006 HUD Section 108
Loan") in an amount of Seven Million Five Hundred Thousand Dollars ($7,500,000), and in turn
the City proposes to loan to the Agency the proceeds of the 2006 HUD Section 108 Loan to the
Agency in support of the Project; and
WHEREAS, HUD has previously indicated it is prepared to provide a Section 108 Loan
to the City in the maximum principal sum of Seven Million Five Hundred Thousand Dollars
($7,500,000) under HUD Section 108 Loan Program Guarantee No. B-03-MC-06-0539 (the
"2006 HUD Section 108 Loan"); and
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WHEREAS, the City shall provide the Agency with the proceeds of the 2006 City
Section 108 Loan, subject to a number of conditions as set forth in this Loan Agreement, for the
purpose of:
(1) completing the acquisition by the Agency of certain lands in the"Project Site";
(ii) relocating persons residing on the lands acquired by the Agency;
(iii) demolishing structures on the lands acquired by the Agency;
(iv) preparing various studies and plans associated with the completion of the
assembly of all of the lands in the Project Site and the selection of a "Developer"
and the completion of the"Project", as each of these terms are defined below.
NOW THEREFORE, THE CITY AND THE AGENCY DO HEREBY AGREE AS
FOLLOWS:
Section 1. Defined Terms and Exhibits. e
(a) In addition to the usage of the defined terms set forth in the Recital paragraphs of
this Loan Agreement, the following words and phrases shall have the meaning as provided
below:
• 2006 HUD Note means and refers to the promissory note issued by the City and
payable to HUD, or its assignee in the original principal amount of Seven Million
Five Hundred Thousand Dollars ($7,500,000). The 2006 HUD Note evidences
the indebtedness of the City to HUD under the 2006 HUD Section 108 Loan.
• 2006 HUD Section 108 Loan means and refers to the loan provided by HUD to
the City in the principal sum of Seven Million Five Hundred Thousand Dollars
($7,500,000) pursuant to the Section 108 Loan guarantee of the United States
Secretary of the Department of Housing and Urban Development under HUD
Section 108 Loan Program Guarantee No. B-03-MC-06-0539.
• Agency Collateral Lands means and refers to the approximately twelve (12)
acres of real property described in Exhibit"C". The Agency Collateral Lands are
owned in fee by the Agency as of the Effective Date of this Loan Agreement.
• Agency Deed of Trust means and refers to the deed of trust as shall be executed
by the Agency and delivered to the City concurrently upon the Agency's receipt
of the Initial Advance from the City under Loan-A. The Agency Deed of Trust
shall pledge the Agency Collateral Lands as security for the repayment of Loan-
A. The form of the Agency Deed of Trust is attached hereto as Exhibit"E".
• Agency Grant Assistance Revenue means and refers to the revenues realized by
the Agency under Section 7 of this Loan Agreement.
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• Agency Lands means and refers to the real property in the Project Site which the
Agency shall transfer to the Developer, subject to the terms and conditions of the
Developer Grant Agreement. The Agency Lands shall include all or such portion
of the Agency Collateral Lands and the Agency Supplemental Collateral Lands as
may be designated by the Agency in the Developer Grant Agreement.
• Agency Supplemental Collateral Lands means and refers to real property which
the Agency shall hereafter acquire within the boundaries of the Project Site using
the proceeds of Loan-A following the Effective Date of this Agreement.
• Annual Agency Site Tax Increment Payment means and refers to a portion of
the property tax increment revenue payable to the Agency by the IVDA under the
IVDA Redevelopment Cooperation Agreement from the Inland Valley
Redevelopment Project which is attributable to the property taxes assessed to the
Site and the Project and paid each tax year by the Developer following the date of
Note-A, which property tax revenues are then allocated and paid to the Agency by
the IVDA each fiscal year in accordance with thb terms of the IVDA
Redevelopment Cooperation Agreement.
• Annual Agency Site Tax Payment means and refers to a sum of money payable
by the City to the Agency during each Accounting Year, as provided in Section 6
of this Loan Agreement.
• Developer means and refers to a third party entity as designated by the Agency
and approved by the City which shall undertake the Developer Project within the
Project Site in accordance with the terms and conditions of the Developer Grant
Agreement.
• Developer Grant Agreement means and refers to the agreement by and between
the Agency and the Developer pursuant to which the Developer shall undertake
the Developer Project within the Project Site, or a portion thereof. The Developer
Grant Agreement shall contain the following provisions:
(i) a grant by the Agency to the Developer of the Agency Lands for the
Developer Project subject to certain conditions;
(ii) if applicable, assistance by the Agency to the Developer to complete the
acquisition of the lands within the Project Site as necessary for the
improvement of the Developer Project;
(iii) a covenant of the Developer that the completed Developer Project will
have a minimum assessed ad valorem property tax value of$18.OM;
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(iv) the delivery to the Agency of acceptable performance security (the
Developer Project Completion Surety) in favor of the Agency securing the
Developer's obligation to complete the Developer Project;
(v) a"Developer Project Profit Participation Fee" payable by the Developer to
the Agency under certain circumstances in the event that the Developer
Project is sold or refinanced within 15 years following its completion; and
(vi) other provisions in favor of the Agency providing assurances that the
Developer Project shall be faithfully completed by the Developer in a
timely fashion.
• Developer Grant Agreement Revenues means and refers to any sums or
revenues realized by the Agency under the Developer Grant Agreement which
shall be payable to the Agency by the Developer, including any amounts drawn
by the Agency under the standby letter of credit or other Project Completion
Surety provided by the Developer in favor of the Agency and the Project Profit
Participation Fee as set forth under the Developer Grant Agreement.
• Loan-A means and refers to the loan in the original principal sum of$7,500,000
to be made by the City to the Agency as provided in Section 3 of this Loan
Agreement.
• Note-A means and refers to the promissory note in the original principal sum of
$7,500,000 which shall evidence the obligation of the Agency to repay the City
the proceeds of the 2006 HUD Section 108 Loan as disbursed by the City to the
Agency. The form of Note-A is attached hereto as Exhibit"D".
• Project means and refers to the neighborhood redevelopment project as shall be
undertaken by the Agency within the Project Site as more particularly described
in Exhibit`B".
• Project Completion Date means and refers to the date on which the City issues
one or more certificates of occupancy for the completed improvement on the Site
by the Developer of at least square feet of new building
area.
• Project Completion Surety means and refers to the Project completion security
provided by the Developer to the Agency under the terms of the Developer Grant
Agreement.
• Project Profit Participation Fee means and refers to the sum of money which
may hereafter be payable by the Developer to the Agency under the terms of the
Developer Grant Agreement, in the event that the Developer may sell or
otherwise hypothecate or refinance its interest in the Project.
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• Project Site means and refers to the lands included within the boundaries of the
plot map attached hereto as Exhibit"A".
(b) This Agreement shall take effect on the date when each of the following
conditions have been satisfied:
(1) the Mayor and Common Council have approved this Loan Agreement and the
Mayor has executed this Loan Agreement on behalf of the City;
(ii) the Community Development Commission of the City of San Bernardino has
approved this Loan Agreement on behalf of the Agency and the Chair of the
Community Development Commission of the City of San Bernardino has
executed this Loan Agreement on behalf of the Commission;
(iii) the Secretary of HUD has approved the 2006 HUD Section 108 Loan and the
Secretary of HUD and the City have each executed the final form of the
documents evidencing the 2006 HUD Section 108 Loan; and
a
(iv) condition numbers (i) —(iii) inclusive shall have occurred by a date not later than
December 31, 2006.
Upon the occurrence of conditions (i) — (iv), above, the Effective Date of this Loan
Agreement shall have occurred. °
(c) The following presents a listing of the various exhibits to this Loan Agreement:
Exhibit "A" Vicinity Map Showing Project Site
Exhibit`B" Description of the Project
Exhibit"C" Listing of Agency Collateral Lands
Exhibit"D" Form of Note-A
Exhibit"E" Form of Agency Deed of Trust
Exhibit"F" HUD Section 108 Loan Covenants Applicable to the
Project
Exhibit"G-1" Collateral Assignment by the Agency to the City of the
Developer Grant Agreement Security Documents
Exhibit"G-2" Borrower Security Agreement and Collateral Assignment
of Documents
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a
Section 2. Indebtedness Authorized Under Developer Grant Agreement. The City
hereby authorizes the Agency to incur an indebtedness with respect to the Project which is
repayable by the Agency to the City from the sources of Agency funds pledged to repay Loan-A
as provided in Section 3(e).
Section 3. Loan-A to the Agency.
(a) The City hereby agrees to loan to the Agency the principal amount of Seven
Million Five Hundred Thousand Dollars ($7,500,000) as Loan-A, subject to the terms of this
Loan Agreement. Loan-A shall be evidenced by Note-A which shall be executed by the Agency
and delivered to the City at the time of disbursement of the proceeds of Loan-A to the Agency.
The form of Note-A is attached to this Loan Agreement as Exhibit"D".
(b) The date of Note-A shall be the date on which all of conditions as set forth in
Section 4(b) of this Loan Agreement for the initial disbursement of the proceeds of Loan-A to
the Agency have been satisfied, and the proceeds of the initial disbursement by HUD to the City
of the 2006 HUD Section 108 Loan have in fact been received by the City. Such date shall be
indicated the face of Nbte-A and such date shall be the date of Note-A. Note-A shall mature, and
the outstanding principal balance and all accrued and unpaid interest shall be due and payable on
the twentieth(20th) anniversary following the date of Note-A (the"Maturity Date").
(c) Interest shall accrue on the outstanding principal balance of Note-A from its date
until paid in full at a rate per annum as set forth in Note-A.
(d) Loan-A shall be payable in annual installments prior to its maturity date in an
amount each year which is not less than the amount of principal and interest payable by the City
to HUD under the terms of the 2006 HUD Section 108 Loan. The Agency shall pay the City
such amount each year from Agency Grant Assistance Revenues, and following the effective
date of the Developer Grant Agreement the Agency shall pay the City the sum of subparagraph
(i) and (ii) as follows: (i) the amount allocated and paid to the Agency by the IVDA as the
Annual Agency Site Tax Increment Payment for the applicable year under the IVDA
Redevelopment Cooperation Loan Agreement and (ii) the amount allocated and paid to the
Agency by the City as the Annual Agency Sales Tax Increment Payment for the applicable
Accounting Year under Section 6 of this Agreement. Each such installment shall be due and
payable on June 30 of each year following the date of Note-A, with the first such installment
payable on the June 30 next following the date of disbursement of the proceeds of Loan-A to the
Agency. The Agency shall use and apply any sums which the Agency may receive under the
Developer Grant Agreement as Project Profit Participation Fees or other Developer Grant
Agreement Revenues as prepayments of Note-A. The City and the Agency acknowledge that the
amount of Annual Agency Site Tax Increment Payment available to pay the initial installment
under Loan-A, assuming a full fiscal year of the Agency (July 1 to the next June 30) following
the completion of the Project is presently estimated to be a sum of not less than $60,000 for the
installment due on the June 30 next following the completion of the redevelopment of the
Project by the Developer.
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(e) The Agency hereby pledges to make payments to the City under Note-A prior to
its Maturity Date from each of the following sources of funds: (i) Agency Grant Assistance
Revenues, (ii) from the sale of the Agency Collateral Lands and the Agency Supplemental
Collateral Lands (iii) Developer Grant Agreement Revenues, if any(iv) Annual Agency Site Tax
Increment (v) Annual Agency Sales Tax Increment Payments and (vi) other legally available
funds of the Agency. The pledge by the Agency of its legally available funds under Section
3(e)(vi) shall at all times be subordinate to any and all other outstanding, or as hereafter may be
outstanding, bonds, notes or other forms of indebtedness of the Agency payable by the Agency
in whole or in part from either other tax increment revenues or from legally available funds of
the Agency and shall not constitute a prior lien on any such revenues or other legally available
funds of the Agency.
(f) The Agency hereby acknowledges and agrees that Note-A shall be considered as
an indebtedness of the Agency as the same is intended for purposes of the filing of a statement of
indebtedness with the County of Los Angeles pursuant to Health and Safety Code Section 33675.
(g) Note-A is a special and limited obligation of the Agency and the sole source of
funds aas pledged for the repayment thereof is as provided in Section 3(e) of this Loan
Agreement. Neither the taxing power of the Agency or any other agency is pledged to repay the
principal or accrued interest under Note-A.
Section 4. Use of Proceeds of Loan-A and Conditions for Disbursement of Proceeds
of Loan-A.
(a) The Agency shall use and apply the proceeds of Loan-A for the following
purposes and for no other:
(i) to acquire the Agency Supplemental Collateral Lands;
(ii) to pay for the costs of the relocation of any persons residing on any such Agency
Supplemental Collateral Lands;
(iii) to pay for costs of the abatement of hazardous substances and to demolish any
structures on the Agency Supplemental Lands;
(iv) to pay for studies, plans and preliminary civil engineering work associated with
the completion of the assembly of the lands in the Project Site and the selection of
a Developer to complete the Project; and
(v) to reimburse the Developer for the cost of acquisition of one or more parcels of
land separately acquired by the Developer, if any, under the terms of the
Developer Grant Agreement.
(b) The following conditions precedent shall be satisfied prior to the initial
disbursement by the City of the proceeds of Loan-A to the Agency:
4815-4167-0656.3 8
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(i) HUD shall have provided the City with an initial disbursement of the proceeds of
the $7,500,000 2006 HUD Section 108 Loan to the City in immediate funds on
terms reasonably acceptable to the City;
(ii) the Agency shall have executed Note-A and the Agency Deed of Trust in
recordable form and shall not be otherwise in default of any provisions of this
Loan Agreement;
(iii) concurrently with the recordation of the Agency Deed of Trust, the Agency shall
deliver a CLTA lender's policy of title insurance in favor of the City insuring its
security interest in the Agency Collateral Lands in a first lien position, subject
only to other title matters approved by the City.
(c) The following conditions shall be satisfied prior to each subsequent disbursement
of the proceeds of Loan-A to the Agency:
(i) the Agency shall have executed in recordable form a notice of amendment to the
a Agency Deed of Trust, adding as collateral to the "Mortgaged Property", as this
term is defined in the Agency Deed of Trust, any Agency Supplemental Collateral
Lands acquired by the Agency in the Project Site since the time of the previous
advance.
(ii) the Agency shall not be in default of any provision of this Loan Agreement or the
Agency Deed of Trust.
(iii) concurrently with the recordation of each amendment to the Agency Deed of
Trust adding as collateral to the Mortgaged Property, any such Agency
Supplemental Collateral Lands as acquired by the Agency, the Agency shall
provide the City with an endorsement of the CLTA lender's policy of title
insurance described in Section 4(b)(iii), including such Agency Supplemental
Collateral Lands.
The Agency shall give the City at least thirty(30) days prior notice of the intention of the
Agency to draw funds under Loan-A following the initial disbursement, and each disbursement
of Loan-A following the initial disbursement shall be in increments of at least Two Hundred
Thousand Dollars($200,000).
(d) Upon ninety (90) days prior notice given at any time prior to the approval by the
Agency of the Developer Grant Agreement as set forth in Section 9 of this Loan Agreement, the
City may terminate its obligation to provide the Agency with any further disbursement of the
proceeds of Loan-A. If the City has terminated its obligation to make any further disbursement
of the proceeds of Loan-A to the Agency, the City may also direct the Agency to sell the Agency
Lands, or any portion thereof, as the subject to the Agency Deed of Trust, in accordance with the
written instruction of the City. Upon such sale of the Agency Lands, the lien of the Agency
Deed of Trust as to such Agency Lands as sold in accordance with the written instruction of the
City, shall be released and reconveyed, and the proceeds realized by the Agency from such sale
4815-4167-0656.3 9
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of the Agency Lands (net of the costs of such sale) shall be used and applied by the Agency to
repay the then outstanding balance of Loan-A.
(e) All of the conditions set forth in Section 4(b) shall have been satisfied by a date
no later than July 1, 2007, and after such date, the City shall have no further obligation to make
available or to disburse to the Agency the proceeds of Loan-A hereunder, and the determination
by the Executive Director and the City Manager that the conditions precedent in this Section 4
have been satisfied shall be conclusive.
(0 The Executive Director is authorized and directed to execute such ancillary loan
security documents as HUD may reasonably request to evidence the collateral assignment by the
City of Note-A to HUD as additional security for the repayment by the City of the 2006 HUD
Section 108 Loan.
Section 5. Protection of Security of Agcy Pledged Funds to the City for the
Repayment of Loan-A.
(a) The Agency hereby agrees to take all reasonable action to protect any of the
security pledged to the City for the repayment of Loan-A.
(b) For so long as any unpaid balance of Loan-A may exist, the Agency further
agrees and covenants to enforce the rights of the Agency under the Developer Grant Agreement.
Section 6. Annual Agency Site Sales Tax Payments.
(a) For the purposes of this Section 6, certain terms and phrases are defined as
follows:
• Accounting Year means and refers to the twelve (12) calendar month time period
commencing on the first calendar day of the month in which the Project
Completion Date occurs, and thereafter each successive twelve (12) calendar
month period, with the last Accounting Year ending on the eighteenth (18th )
anniversary of the first day of the first Accounting Year.
• Annual Agency Site Sales Tax Payment means and refers to a sum of money
payable by the City to the Agency each Accounting Year in quarterly installments
following the Project Completion Date, which shall be determined each
Accounting Year by the Agency in accordance with the following formula:
(i) for each of the first two Accounting Years : an amount determined by
the Agency for each of such Accounting Years as eighty percent (80%) of
the amount of local sales and use taxes as paid and remitted to the City by
the State of California during the twelve (12) calendar month period
preceding the first day of the particular Accounting Year, under Revenue
and Taxation Code Section 7200 et sec. (as may hereafter be amended,
4815-4167-0656.3 10
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substituted or modified by any successor local sales and use tax law) on
the gross taxable retail sales receipts of all business conducted on the Site;
(ii) for each of the third through the eighteenth Accounting Years,
inclusive: an amount determined by the Agency for each of the
Accounting Years as one half ('/z) of the amount of local sales and use
taxes as paid and remitted to the City by the State of California during the
twelve (12) calendar month period preceding the first day of the particular
Accounting Year under Revenue and Taxation Code Section 7200 et seq.,
on the gross taxable retail sales receipts of all businesses conducted on the
Site.
(b) Subject to the terms and conditions of this Agreement, the City hereby agrees to
provide the Agency with the Annual Agency Sales Tax Payments in the following amounts
Accounting Year 1 80%of retail sales attributable to the Project Site
Accounting Year 2 80%of retail sales attributable to the Project Site
Accounting Year 3 through
Accounting Year 18, inclusive 50%of retail sales attributable to the Project Site
(c) The City shall pay the first Annual Agency Site Sales Tax Payment on the June
30, next following the date on which the Project Completion Date occurs and each June 30,
thereafter. The City shall have no obligation to pay any Annual Agency Site Sales Tax Payment
to the Agency until such time as the Project Completion Date has occurred.
(d) The City and the Agency each acknowledge, understand and intend that the
obligation of the City to pay each Annual Agency Site Sales Tax Payment to the Agency each
Accounting Year during the term of this Loan Agreement shall constitute a current expense of
the City. The obligation of the City to provide such payments to the Agency in each fiscal year
during the term of this Agreement is a general obligation of the City, subject to annual
appropriation by the City. Furthermore, the obligation of the City to the Agency to make Annual
Agency Site Sales Tax Payments each Accounting Year as arise under this Loan Agreement shall
not in any way be construed to be a debt of the City in contravention of any applicable
constitutionally restriction of the State of California concerning the creation of indebtedness by
the City.
Section 7. Agency Grant Assistance Revenues.
(a) Subject to the terms and conditions of this Agreement, the City agrees to provide
the Agency Grant Assistance Revenues of the Agency each year during the term of this Loan
Agreement. The City shall disburse the proceeds of the Agency Grant Assistance Revenues to
the Agency in an amount determined by the Agency as provided in Section 7(b), in annual
installments commencing on the first day of August following the initial disbursement of the
48154167-0656.3 11
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proceeds of Loan-A to the Agency, and on each August 1, thereafter until Loan-A is repaid in
full to the City.
(b) The annual Agency Grant Assistance Revenue payment by the City to the Agency
shall be calculated each year during the term of this Loan Agreement by applying the following
formula:
(A) — (B + C + D) = annual Agency Grant Assistance Revenue Payment from the City to
the Agency
A = the amount of principal and interest due the City under Note-A following such
annual calculation between August 1 and the following July 31;
B = Annual Agency Site Tax Payment realized by the Agency from the Project Site
during the Agency fiscal year preceding such annual calculation;
C = Annual Agency Site Sales Tax Payment realized by the Agency from the Project
Site during the Agency fiscal year preceding such annual calculation;
D= any sums of money realized by the Agency from the Developer as Developer
Grant Agreement Revenues during the Agency fiscal year preceding such annual
calculation;
The Agency shall perform the calculation as set forth above as of July 15 of each year
during the term of this Loan Cooperation Agreement, with the first such calculation being
performed by the Agency on the July 15 next following the initial disbursement of the proceeds
of Loan-A by the City to the Agency. On any calculation date in which the sum of the Agency
Site Tax Increment Payment plus the Annual Agency Site Sales Tax Payment realized by the
Agency during the year preceding such calculation is equal to or exceeds the amount of principal
and interest due under Loan-A, the City shall have no duty or obligation to pay the Agency any
Agency Grant Assistance Revenues corresponding -to that year during the term of this Loan
Agreement.
(c) The City and the Agency each acknowledge, understand and intend that the
obligation of the City to pay each annual payment of Agency Grant Assistance Revenues to the
Agency each year during the term of this Loan Agreement shall constitute a current expense of
the City. The obligation of the City to provide such payments to the Agency in each fiscal year
during the term of this Loan Agreement is a general obligation of the City, subject to annual
appropriation by the City. Furthermore, the obligation of the City to the Agency to make such
payments of Agency Grant Assistance Revenues each year as arise under this Loan Agreement
shall not in any way be construed to be a debt of the City in contravention of any applicable
constitutionally restriction of the State of California concerning the creation of indebtedness by
the City.
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Section 8. Expenditure of Proceeds of Loan-A by the Agency. All expenditures of
the proceeds of Loan-A by the Agency shall conform with the applicable provisions of the HUD
Section 108 Loan Covenants applicable to the Project as set forth in Exhibit "F".
Section 9. Selection of Developer and Developer Grant Agreement.
(a) The Agency shall identify a qualified Developer to undertake the Developer
Project. The selection of the Developer and the approval of the terms of the Developer Grant
Agreement by the Agency shall be subject to the separate review and approval by the Mayor and
Common Council as provided in this Section 9 of this Loan Agreement.
(b) The Mayor and Common Council shall not approve the Developer Grant
Agreement unless the Mayor and Common Council shall have found that:
(i) the Developer Grant Agreement contains a covenant of the Developer that the
completed Developer Project shall have a minimum assessed valuation for ad
valorem property tax purposes upon completion of the Developer Project of at
least $17.OM;
(ii) the Developer shall provide the Agency with Project Completion Surety in a form
reasonably acceptable to the Mayor and Common Council;
(iii) the Developer Grant Agreement provides the Agency with a Project Profit
Participation Fee payable to the Agency in the event that the Developer may sell
or otherwise hypothecate or refinance its interest in the Developer Project which
is fair,just and reasonable to the Agency;
(iv) that the Developer Grant Agreement contains all of the applicable provisions of
the HUD Section 108 Loan Covenants applicable to the Developer Project as set
forth in Exhibit"F";
(v) that the Mayor and Common Council have made the findings in support of the
Developer Project and the Developer Grant Agreement as set forth in Health and
Safety Code Section 33433.
(c) Upon the full execution of the Developer Grant Agreement by the parties thereto,
and the satisfaction of all conditions precedent by the Developer and the Agency for the transfer
of the Agency Lands to the Developer, the City shall execute a release and reconveyance of the
security interest of the City in all of the "Mortgaged Property" as this term is defined in the
Agency Deed of Trust. Such release of the security interest of the City in the Agency Lands
shall include both the Agency Collateral Lands and the Agency Supplemental Collateral Lands.
(c) Concurrently upon the release and reconveyance of the Agency Deed of Trust, the
Agency shall execute and deliver to the City the Collateral Assignment by the Agency to the City
of the Developer Grant Agreement Security Documents substantially in the form attached hereto
as Exhibit "G-1" and the Agency shall acknowledge its consent to the delivery by the City to the
4815-4167-0656.3 13
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Secretary of HUD of the Borrower Security Agreement and Collateral Assignment of Documents
substantially in the form attached hereto as Exhibit"G-2".
Section 10. Further Assurances of the A eg ncy. The Agency shall adopt, make,
execute and deliver to the City all such further resolutions, instruments and assurances as may be
reasonably necessary to carry out the intention of this Loan Agreement.
Section 11. Amendment.
(a) This Loan Agreement may be amended by the parties hereto but insofar as an
amendment may affect Loan-A at any time when the City may owe HUD any sum under the City
Section 108 Loan such an amendment shall require the concurrence of HUD.
(b) The Agency hereby covenants that it shall not approve any amendment to the
IVDA Redevelopment Cooperation Agreement, unless concurrently therewith, the Agency shall
deliver an approving legal opinion addressed to the City and to HUD in a form acceptable to the
City, which states that such an amendment to the IVDA Redevelopment Cooperation Loan
Agreement does not reduce or impair the pledge of the tax increment revenues of the IVDA to j
the Agency thereunder.
Section 12. Waiver of Personal Liability. No member, officer, agent or employee of
the Agency shall be individually or personally liable for the payment of the principal of or
interest on Note-A; but nothing herein contained shall relieve any such member, officer, agent or
employee from the performance of any official duty provided by law.
Section 13. Payment of Business Days. Whenever in this Loan Agreement any
amount is required to be paid on a day which is not a business day of the City, such payment
shall be required to be made on the business day of the City immediately following such day.
Section 14. Notices. All written notices to be given under this Loan Agreement shall
be given by first class mail or personal delivery or by telecopier and promptly confirmed by
mail, to the party entitled thereto at its address set forth below, or at such address as the party
may provide to the other party in writing from time to time. Notice shall be effective 48 hours
after deposit in the United States mail, postage prepaid or, in the case of personal delivery to any
person,upon actual receipt at the address set forth below:
To the Agency: Redevelopment Agency of the City of San Bernardino
201 North"E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
To the City: City of San Bernardino
300 North"D"Street
San Bernardino, California 92418
Attention: Mayor
4815-4167-0656.3 14
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Section 15. Partial Invalidity. If any Section, paragraph, sentence, clause of phrase of
this Loan Agreement shall for any reason be held illegal, invalid or enforceable, such holding
shall not affect the validity of the remaining portions of this Loan Agreement. The Agency
hereby declares that it would have adopted this Loan Agreement and each and every other
section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more
Sections, paragraphs, sentences, clauses, or phrases of this Loan Agreement may be held illegal,
invalid or unenforceable.
Section 16. Governing Law. This Loan Agreement shall be construed and governed in
accordance with the laws of the State.
Section 17. Rights of the Secretary of HUD. This Loan Agreement is part of the"City
Section 108 Loan Collateral" as this term is defined in the City Section 108 Loan Agreement
(HUD Section 108 Loan Contract No. B-03-MC-06-0539). Pursuant to the provisions of
paragraph 15(c) of that certain Contract for Loan Guarantee assistance under Section 108 of the
Housing and Community Development Act, of 1974, as amended (the "HUD Section 108 Loan
Agreement") by and between the [City] and the Secretary of Housing and Urban Development
(the "Secretary"), the [City] shall deliver [a collateral assignment of the City's interest in
payments under Note-A] in original, fully executed form to the "Custodian" (as this term is
defined in the HUD Section 108 Loan Agreement).
Paragraph 15(h)of the HUD Section 108 Loan Agreement provides in relevant part:
"The Secretary may complete the endorsement of the Subrecipient Note [e.g.: the
Promissory Note from the Agency to the City] and record the assignments referred to in
paragraph 15(e) and thereby effectuate the transfer of the documents referenced and
underlying indebtedness [e.g., the City Section 108 Loan Collateral] from the Borrower
[e.g.: the City] to the Secretary or the Secretary's assignee."
Paragraph 15(i)of the HUD Section 108 Loan Agreement further provides:
"The Borrower [e.g., the City] agrees that it shall promptly notify the Secretary[of HUD]
in writing upon the occurrence of any event which constitutes a default (an "Event of
Default") under (and as defined in) any of the Security Documents, as defined in
paragraph 15(d) [e.g., the City Section 108 Loan Collateral]. Notification of an Event of
Default shall be delivered to the Secretary [of HUD] as directed in paragraph 12(f) above.
Upon the occurrence of an Event of Default, the Secretary [of HUD] may (without prior
notice or hearing, which Borrower [e.g., the City] hereby expressly waives), in addition
to (and not in lieu of) exercising any and all remedies that may be available under the
Security Documents [e.g., the City Section 108 Loan Collateral] declare the [HUD] Note
in Default and exercise any and all remedies available under paragraph 12. This
paragraph shall not affect the right of the Secretary [of HUD] to declare the [HUD] Note
in Default pursuant to paragraph 11 and to exercise in connection therewith any and all
remedies available under paragraph 12."
4815-4167-0656.3 15
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The Agency acknowledges and agrees that this Loan Agreement is and shall be
enforceable by the Secretary of HUD against the Agency upon the completion of the
endorsement by the Secretary of HUD of the $7,500,000 City Promissory Note; provided
however, that the Secretary of HUD shall have no obligation to pay any sum to the Agency under
Section 6 of this Loan Agreement as an Annual Agency Site Sales Tax Payment.
4815-4167-0656.3 16
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IN WITNESS WHEREOF, the undersigned officers of the parties have executed
this Loan Agreement as of the date indicated next to the signatures of each of them.
CITY
City of San Bernardino
Date: '2-I 06
Mayor
APPROVED AS TO FORM
Attorney
4
AGENCY
Redevelopment Agency of the
City of San Bernardino
Date: Chair of 7eCommu-nh-y-Development Commission
C' oan Bernardino
APPROVED AS TO FORM
Agency Cou sel
4815-4167-0656.3 17
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EXHIBIT"A"
Vicinity Map of Project Site
(Description of Arden-Guthrie Neighborhood Lands)
4
48154167-0656.3 18
11/6/06 jnun
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EXHIBIT "B"
Description of the Project
i
4815-4167-0656.3 19
11/6/06 jnun
EXHIBIT "B"
PROJECT DESCRIPTION
1. Acquisition of Agency Supplemental Collateral Lands
2. Payment of the costs of the relocation of any persons residing on such Agency
Supplemental Collateral Lands
3. Payment of the costs of abatement of hazardous substances and demolition of any
structures on Agency Supplemental Lands
4. Payment of studies, plans and preliminary civil engineering work associated with
a
the completion of the assembly of the lands in the Project Site.
5. Disposition of the site to Home Depot, Inc., a Delaware corporation(the
"Developer") for redevelopment as a 139,000 square foot Home Depot Home
Improvement Store on eleven(11) acres with an estimated value of not less than
$17 million.
6. The Developer will also, but is under no obligation to,negotiate with a Co
Developer for the remaining six (6) acres which would be improved with the
adjacent soccer complex in mind to include youth oriented retail and restaurants
with access to the soccer fields immediately to the south. The Developer will
guarantee development of the remaining six (6) acres.
EXHIBIT"C"
Listing of Agency Lands
0
4815-4167-0656.3 20
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EXHIBIT "C"
LEGAL DESCRIPTION OF AGENCY OWNED PROPERTY
THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF SAN BERNARDINO AND IS DESCRIBED AS
FOLLOWS:
LOTS: 7; 9; 11; 13; 14; 15; 16; 17; 19; 20; 21; 22; 23; 24; 27; 29; 31; 32; 36; 37; 38; 39;
OF TRACT 7106 IN THE CITY OF SAN BERNARDINO.
AND
LOTS: 23; 24; 25; 26; 27; 28; 29; 30; 31; 32; 34; 36; 37; 38; 39; 40; 41; 42; 44; 47; 48;
49; 50; 51; 52; 53; OF TRACT 6898 IN THE CITY OF SAN BERNARDINO
EXHIBIT"D"
Form of$7,500,000 Note-A Payable to the City
4815-4167-0656.3 21
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REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AGENCY PROMISSORY NOTE-A
Arden-Guthrie Neighborhood Redevelopment Project
THIS PROMISSORY NOTE IS A SPECIAL LIMITED
OBLIGATION OF THE AGENCY PAYABLE SOLELY FROM
THE SOURCE OF AGENCY FUNDS DESCRIBED HEREIN
AND NEITHER THE FAITH NOR CREDIT NOR TAXING
POWER OF ANY OTHER LOCAL AGENCY, INCLUDING THE
CITY OF SAN BERNARDINO, IS PLEDGED HEREUNDER
Principal Amount: Date: , 2006
$7,500,000
Maturity Date:
Interest Rate: % 12026
Long Term Rate of Interest: Fixed Rate(equal to 2006 HUD Note"Permanent Rate")
THIS AGENCY PROMISSORY NOTE-A, is dated ("Note-A") and
evidences an indebtedness of the Redevelopment Agency of the City of San Bernardino (the
"Agency") to the City of San Bernardino, California (the "City"). For value received, the
Agency hereby promises to pay to the order of the City at such address as the City shall
designate, the principal amount of Note-A at the times specified herein, together with interest
thereon in accordance with the terms hereof. Note-A is hereby tendered in accordance with
Section 3 of that certain 2006 Redevelopment Cooperation Loan Agreement (Arden-Guthrie
Neighborhood Redevelopment Project), dated as of July 1, 2006 (the"Loan Agreement"),by and
between the City and the Agency as approved by Agency Resolution No. dated
with respect to the following facts:
RECITALS
A. The Agency has undertaken the redevelopment of certain lands in the
redevelopment project area of the Inland Valley Development Project referred to as the "Arden-
Guthrie Project Site"; and
B. The Agency's redevelopment proposal (the "Project") is focused on certain
blighted parcels of land in the Arden-Guthrie neighborhood which are more particularly
identified in the Loan Agreement which include approximately twelve (12) acres of land (the
"Project Site"); and
C. The Project includes the acquisition by the Agency of certain additional lands
adjacent to the Project Site referred to in the Loan Agreement s the "Agency Supplemental
Collateral Lands" and the demolition of the existing improvements on such Agency
4831-5221-7856.2 1
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Supplemental Collateral Lands, including the relocation of the existing occupancies thereon, and
the construction of new buildings and appropriate on-site vehicle circulation and landscape
improvements on the Project Site and the Agency Supplemental Collateral Lands; and
D. The Agency has previously prepared a redevelopment project assistance proposal
for the Project, which includes as elements of such assistance to the "Developer" as this term is
defined in the Loan Agreement, the transfer and conveyance by the Agency to the Developer of
the "Agency Lands" for improvement as the "Developer Project', subject to certain terms and
conditions as set forth in the "Developer Grant Agreement' as each of these terms is defined in
the Loan Agreement; and
E. At the request of the Agency, the City of San Bernardino (the "City") has made
arrangements with the United States Secretary of the Department of Housing and Urban
Development ("HUD"), to provide the City with a "Section 108 Loan Guarantee" under the
provisions of the Housing and Community Development Act of 1974, as amended (42 USC
Section 5308) and HUD Section 108 Loan Program regulations set forth at 24 CFR Part 570.700
(the "2006 City Section 108 Loan") in an amount of Seven Million Five Hundred Thousand
Dollars ($7,500,000), and in turn the City proposes to loan to the Agency the proceeds of the
2006 HUD Section 108 Loan to the Agency in support of the Project; and
F. The City shall provide the Agency with the proceeds of the 2006 HUD Section
108 Loan, all in the aggregate principal amount of Seven Million Five Hundred Thousand
Dollars($7,500,000) subject to a number of conditions as set forth in the Loan Agreement.
SECTION 1. This Note—A is tendered by the Agency to the City as evidence of the
indebtedness of the Agency to the City incurred in connection with the disbursement of the
proceeds of Loan A made by the City to the Agency under the Loan Agreement. The terms and
provisions of the Loan Agreement are hereby incorporated into this Note-A by this reference.
Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them
in the Loan Agreement.
SECTION 2. Interest on the outstanding principal balance of this Note-A, shall accrue
from its date as indicated, above, as follows:
from the date on which the interest rate payable by the City to HUD on the outstanding
balance of the 2006 HUD Note is charged to the City as a fixed rate of interest per
annum, the rate of interest payable by the Agency to the City on the outstanding balance
of this Note-A shall be the same rate of interest equal to the "Permanent Rate", as this
term is defined in the 2006 HUD Note.
SECTION 3. Payments of principal and interest under this Note-A shall be made by the
Agency to the City on June 30 of each year following its date, either in whole or in part, from
"Agency Grant Assistance Revenues", "Developer Grant Agreement Revenues", "Annual
Agency Site Tax Increment Payments" and "Annual Agency Site Sales Tax Payments" as each
of these terms is defined in the Loan Agreement or other legally available funds of the Agency.
4831-5221-7856.2 2
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Each such payment by the Agency shall be applied first to pay current interest, then to pay
accrued and unpaid interest and then to pay principal under this Note-A. It is anticipated that the
outstanding principal balance of this Note-A, together with all accrued interest shall be fully
repaid to the City by the Agency on or before , 2026 (the "Maturity Date"). On
the Maturity Date any remaining principal and all accrued and unpaid interest under this Note-A
shall be due and payable.
SECTION 4. The Agency hereby pledges to make payments hereunder prior to the
Maturity Date from each of the following sources of funds: (i) Agency Grant Assistance
Revenues (ii) Developer Grant Agreement Revenues, if any (iii) Annual Agency Site Tax
Increment Payments (iv) Annual Agency Site Sales Tax Payments and (v) other legally available
funds of the Agency which have not been pledged to repay other indebtedness of the Agency.
The Agency hereby acknowledges and agrees that the Note-A shall be considered as an
indebtedness of the Agency as the same is intended for purposes of the filing of a statement of
indebtedness with the County of San Bernardino pursuant to Health and Safety Code Section
33675.
This Note-A is a special and limited obligation of the Agency and the sole source of
funds as pledged for the repayment thereof is as provided in this Section 4. Neither the taxing
power of the Agency or any other agency is pledged to repay the principal or accrued interest
hereunder.
SECTION 5. This Note-A shall mature as of , 2026, unless prepaid in
full before such date.
SECTION 6. The Agency may prepay to the City the principal amount of this Note-A
and accrued interest thereon, on the same terms and conditions as the City may prepay the
principal amount of the 2006 HUD Note to the Secretary of HUD.
SECTION 7. This Note-A is secured by the collateral pledge and assignment to the City
of the Agency Collateral Lands under the terms of the Agency Deed of Trust of even date
herewith. Upon the release and reconveyance by the City of the Agency Deed of Trust, the
Agency shall upon the request of the City execute a collateral assignment in favor of the City of
the rights and interests of the Agency in the Developer Grant Agreement, as set forth in the
Loan Agreement.
SECTION 8. The City shall have no power to transfer or assign its right to receive the
payment of principal and payments of accrued interest under the Note-A except to HUD as
security for the 2006 HUD Section 108 Loan unless the Agency has first granted written
approval to the City for such a proposed assignment in its sole and absolute discretion; provided,
however, that the Agency agrees to cooperate with the City as necessary or appropriate to
provide the City with additional documentation to evidence the indebtedness of the Agency to
the City under this Note-A and to perfect or protect the pledge of Agency funds as set forth in
Section 4 to secure the payments of the Agency to the City under this Note-A.
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AGENCY
Redevelopment Agency of the City of San
Bernardino, a public body corporate and politic
By:
Chair of the Community Development
Commission of the City of San Bernardino
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EXHIBIT"E"
Form of Agency Deed of Trust
t
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane
Suite 600
San Bernardino, California 92408
Attn: David F. Gondek
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT
AND REQUEST FOR NOTICES
(Arden-Guthrie Neighborhood Redevelopment Project)
(HUD Section 108 Loan Agreement No. B-03-MC-06-0539)
I
THIS DEED OF TRUST,ASSIGNMENT OF LEASES AND RENTS, FIXTURE
FILING AND SECURITY AGREEMENT AND REQUEST FOR NOTICES ("Agency Deed of
Trust") is made as of July 1, 2006,by the Redevelopment Agency of the City of San Bernardino, a
public body corporate and politic(hereinafter referred to as"Trustor"),whose address is 201 North
"E"Street, Suite 301, San Bernardino,California 92401,to LandAmerica NCS Insurance Company
(hereinafter referred to as"Trustee"),whose address is 888 West 6th Street,4th Floor, Los Angeles,
California 90017, for the benefit of the City of San Bernardino, a municipal corporation, its
successors and assigns (herein called"Beneficiary"),whose address is 201 North"E"Street, Suite
301, San Bernardino, California 92401.
WITNESSETH
That Trustor,for valuable consideration,grants,bargains,sells,conveys and warrants
to Trustee, in trust with power of sale,that property in the City of San Bernardino, County of San
Bernardino,State of California,more particularly described in Exhibit"A"attached hereto and made
a part hereof(the "Land"), together with the following described estate, property and rights of
Trustor in the Land and/or in any improvements now or hereafter constructed on the Land(herein
severally and collectively referred to as the"Mortgaged Property")as security for the performance of
each covenant and agreement of Trustor contained herein and in all other instruments executed in
connection herewith, and for the payment of all sums of money secured hereby.
A. All the fee and leasehold estates and rights of Trustor now held and hereafter
acquired in and to the Mortgaged Property and in and to land lying in streets and roads adjoining the
Land, and all access rights and easements appertaining thereto; and
B. All buildings,structures,improvements,furnishings,fixtures and equipment,
real,personal and mixed,now or hereafter attached to,or used or adapted for use in the operation of
the Mortgaged Property and any and all replacements and additions thereto, including without
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limitation, all heating apparatus and equipment whatsoever, all boilers, engines, motors,dynamos,
generating equipment, pumps, piping and plumbing fixtures, cooling, ventilating, sprinkling, fire-
extinguishing apparatus,gas and electric fixtures,elevators,escalators,partitions,and shrubbery and
plants; and including also all interest of any owner of the Mortgaged Property in any of such items
hereafter at any time acquired under conditional sales contract, chattel mortgage or other title-
retaining or security instrument, all of which property mentioned in this paragraph shall be deemed
part of the realty and not severable wholly or in part without material injury to the freehold; and
C. All and singular the lands, tenements, privileges, water, water rights, water
stock, mineral,oil and gas rights,hereditaments and appurtenances thereto belonging or in anywise
appertaining,and the reversion and reversions,remainder and remainders,rents,royalties,issues and
profits thereof,and all the estate, rights,title,claim,interest and demand whatsoever of the Trustor
either in law or equity, of, in and to the Land, whether now held or hereafter acquired;
D. All of the right,title and interest of Trustor now or hereafter existing in and to
the following now or hereafter located in, upon, within or about or used in connection with the
construction, use, operation or occupancy of the Land and/or the improvements thereon and any
business or activity conducted thereon or therein,together with all accessories,additions,accessions,
renewals,replacements and substitutions thereto or therefor and the proceeds and products thereof.
(1)all materials,supplies,furniture,furnishings,appliances,office supplies,equipment,construction
materials,vehicles,machinery,computer hardware and software,maintenance equipment,window
washing equipment, repair equipment and other equipment and tools, telephone and other
communications equipment;(ii)all books,ledgers,records,accounting records,files,tax records and
returns,policy manuals,papers,correspondence,and electronically recorded data;(iii)all"General
Intangibles" (as such term is defined in the California Uniform Commercial Code), instruments,
money,"Accounts,"(as such term is defined in the California Uniform Commercial Code),accounts
receivable,notes, certificates of deposit,chattel paper,letters of credit,choses in action, good will,
rights to payment of money,rents,rental fees,equipment fees and other amounts payable by persons
who utilize the Mortgaged Property or any of the improvements or paid by persons in order to obtain
the right to use the Mortgaged Property and any of the improvements, whether or not so used;
trademarks, service marks, trade dress, tradenames, licenses, sales contracts, deposits, plans and
specifications, drawings, working drawings, studies, maps, surveys; soils, environmental,
engineering or other reports., architectural and engineering contracts, construction contracts,
construction management contracts, surety bonds, feasibility and market studies,management and
operating agreements,service agreements and contracts,landscape maintenance agreements,security
service and other services agreements and vendors agreements; (iv)all compensation, awards and
other payments or relief(and claims therefor)made for a taking by eminent domain,or by any event
in lieu thereof(including,without limitation,property and rights and interests in property received in
lieu of any such taking),of all or any part of the Mortgaged Property(including without limitation,
awards for severance damages),together with interest thereon, and any and all proceeds(or claims
for proceeds)of casualty,liability or other insurance pertaining to the Mortgaged Property,together
with interest thereon;(v)any and all claims or demands against any person with respect to damage or
diminution in value to the Mortgaged Property or damage or diminution in value to any business or
other activity conducted on the Mortgaged Property; (vi) any and all security deposits, deposits of
security or advance payments made to others with respect to: (1) insurance policies relating to the
Mortgaged Property; (2) taxes or assessments of any kind or nature affecting the Mortgaged
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Property;(3)utility services for the Mortgaged Property and/or the improvements;(4)maintenance,
repair or similar services for the Mortgaged Property or any other services or goods to be used in any
business or other activity conducted on the Mortgaged Property; (vii) any and all authorizations,
consents, licenses, permits and approvals of and from all persons required from time to time in
connection with the construction, use, occupancy or operation of the Mortgaged Property, the
improvements, or any business or activity conducted thereon or therein or in connection with the
operation, occupancy or use thereof, (viii) all warranties, guaranties, utility or street improvement
bonds,utility contracts,telephone exchange numbers,yellow page or other directory advertising and
the like;(ix)all goods,contract rights,and inventory;(x)all leases and use agreements of machinery,
equipment and other personal property; (xi)all insurance policies covering all or any portion of the
Mortgaged Property;(xii)all reserves(including those provided for in Section 17 hereof)and funds
held in escrow by Beneficiary or other person for Beneficiary's benefit and any funds deposited with
Beneficiary, all accounts into which such funds are deposited and all accounts,contract rights and
general intangibles or other rights relating thereto;(xiii)all names by which the Mortgaged Property
is now or hereafter known;(xiv)all interests in the security deposits of tenants;(xv)all management
agreements, blueprints, plans, maps, documents, books and records relating to the Mortgaged
Property; (xvi)the proceeds from sale, assignment, conveyance or transfer of all or, any portion of
the Mortgaged Property or any interest therein,or from the sale of any goods, inventory or services
from,upon or within the Mortgaged Property and/or the improvements(but nothing contained herein
shall be deemed a consent by Beneficiary to such sale,assignment,conveyance or transfer,except as
expressly provided in this Agency Deed of Trust); (xvii) any property described in paragraph B,
above,which are not fixtures under California law;(xviii)all other property(other than fixtures)of
any kind or character as defined in or subject to the provisions of the California Uniform
Commercial Code, Secured Transactions, as amended and; (xix) all proceeds of the conversions,
voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims.
TO HAVE AND TO HOLD the Mortgaged Property,together with all and singular
the lands, tenements, privileges, water, water rights,water stock, mineral, oil and gas rights,
hereditaments and appurtenances thereto belonging or in any wise appertaining, and the reversion
and reversions,remainder and remainders,rents,royalties,issues and profits thereof, and all of the
estate,right,title,claims and demands whatsoever of the Trustor,either in law or in equity,of,in and
to the Mortgaged Property, forever as security for the faithful performance of the Promissory Note
(as defined below)secured hereby and as security for the faithful performance of each and all of the
covenants, agreements, terms and conditions of this Agency Deed of Trust, and in all other
instruments executed in connection herewith, SUBJECT, HOWEVER, to the right, power and
authority given to and conferred upon Beneficiary to collect and apply such rents,issues and profits.
This Agency Deed of Trust also constitutes a security agreement in all of the property above
described or referenced in which such interest may be created under the California Uniform
Commercial Code and for such purposes Trustor hereby grants to Beneficiary a security interest
therein.
1. Note Secured. This Agency Deed of Trust is made for the purpose of
securing the performance of each covenant,agreement and obligation of Trustor herein and of each
covenant, agreement and obligation of Trustor described as the 2006 Redevelopment Cooperation
Loan Agreement(Arden-Guthrie Neighborhood Redevelopment Project),dated as of July 1,2006,
by and between the Trustor and the Beneficiary, as the "City" (the "City Section 108 Loan
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Agreement"); the Promissory Note Payable to a Public Agency ($7,500,000) (the "Promissory
Note"), and all interest thereon and other amounts evidenced thereby; all future advances made to
Trustor by Beneficiary, its successors and assigns, under the Promissory Note or pursuant to the
terms of this Agency Deed of Trust or the City Section 108 Loan Agreement; the obligations
evidenced by all renewals,extensions,modifications,substitutions and conditions of the Promissory
Note; and any and all other obligations of Trustor to Beneficiary, its successors and assigns, now
existing and hereafter arising and which are at any time specifically declared by Beneficiary in
writing to be secured by this Agency Deed of Trust or which specifically indicate in the instruments
which evidence the same that they are intended to be so secured. Unless otherwise indicated in this
Agency Deed of Trust,the meaning of defined terms and phrases as denoted by an initial capitalized
letter in a word or phrase, shall be the same as set forth in the City Section 108 Loan Agreement.
2. Trustor's Covenant of Payment. Trustor shall perform all of its obligations
under the Promissory Note,the City Section 108 Loan Agreement and under this Agency Deed of
Trust when due,without excuse or delay of any kind whatsoever,except as expressly provided herein
or therein,and Trustor shall pay the Promissory Note,and all other debts and monies secured by this
Agency Deed of Trust when due, without set off or deduction of any kind.
3. Trustor's Warranties of Title. Trustor warrants to Beneficiary that it is the
sole holder of fee simple absolute title to all of the Mortgaged Property and that except as set forth in
this Agency Deed of Trust,the Promissory Note and the City Section 108 Loan Agreement said title
is marketable and free from any lien or encumbrance,unless approved in writing by Beneficiary,and
the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further
covenants and agrees as follows:that except as required under the City Section 108 Loan Agreement,
Trustor will keep the Mortgaged Property free from all liens of any kind, including, without
limitation, statutory and governmental; that no lien superior or junior to this Agency Deed of Trust
will be created or suffered to be created by Trustor during the life of this Agency Deed of Trust
without Beneficiary's prior written consent;that Trustor has good right to make this Agency Deed of
Trust and the person or persons executing this Agency Deed of Trust on behalf of Trustor has or
have the authority to do so;and that Trustor will forever warrant and defend Beneficiary's interest in
the Mortgaged Property against every person, whomsoever, claiming any right or interest in the
Mortgaged Property or any part thereof.
4. Trustor's Right to Contest Statutory Liens. As used herein the words
"mechanic's lien"and"materialmen's lien"means and includes a stop notice as this term is defined
in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialmen's lien
against the Mortgaged Property or a stop notice against the Trustor or the Beneficiary and/or funds
held by or owed to the Trustor for the improvement of the Mortgaged Property shall not constitute a
default hereunder,if and so long as(a)no defaults exist under the Promissory Note,the City Section
108 Loan Agreement or this Agency Deed of Trust; (b)within fifteen(15)days after filing of such
lien,Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable
to Beneficiary in an amount not less than the entire sum alleged to be owed to the lien claimant or
such other amount as is required to obtain a court order to release said lien of record; (c) Trustor
provides to Beneficiary and pays for an endorsement to Beneficiary's title insurance policy,in a form
satisfactory to Beneficiary, which insures the priority of this Agency Deed of Trust over the lien
being contested; (d) Trustor immediately commences its contest of such lien and continuously
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pursues the same in good faith and with due diligence;(e)such bond or contest stays the foreclosure
of the lien; and (f)Trustor pays in full any judgment rendered for the lien claimant within ten(10)
days following entry of any such judgment.
5. Maintenance and Inspection of Improvements. Trustor shall maintain the
buildings and other improvements now or hereafter located on the Mortgaged Property in a first class
condition and state of repair, reasonable wear and tear excepted. Trustor shall not commit or suffer
any waste; shall promptly comply with all requirements of federal, state and municipal authorities
and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the
Mortgaged Property or the use thereof, and shall pay all fees or charges of any kind in connection
therewith.
6. Construction and Repairs. Trustor shall complete or restore promptly and in
a good and workmanlike manner any building or improvement that may be constructed,damaged or
destroyed on the Mortgaged Property, and pay when due all costs incurred therefor.
7. Alterations. No building or other improvement on the Mortgaged Property
shall be structurally altered,removed or demolished without the Beneficiary's prior written consent,
nor shall any fixture or chattel covered by this Agency Deed of Trust and adapted to the proper use
and enjoyment of the Mortgaged Property be removed at any time without Beneficiary's prior written
consent,unless actually replaced by an article of equal suitability and value, owned by the Trustor,
free and clear of any lien or security interest, except such as may be approved in writing by the
Beneficiary.
8. Compliance With Laws. Trustor shall comply with all statutes, laws,
ordinances and regulations which now or hereafter pertain to the construction,repair,condition,use
and occupancy of the Mortgaged Property, including, without limitation, all environmental,
subdivision,zoning,building code,fire,occupational,health,safety,occupancy and other similar or
dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any
statute or order of any court of competent jurisdiction requires any correction, alteration or
retrofitting of any improvements on or related to the Mortgaged Property, Trustor shall promptly
undertake the required repairs and restoration and complete the same with due diligence at its sole
cost and expense.
9. Environmental Covenants. Representations. Warranties and Indemnitx.
(a) Trustor will not use any Hazardous Materials(as defined herein below)in the
construction of any improvements on or about the Mortgaged Property.
(b) Trustor shall,at its sole expense,comply and cause each tenant leasing space
within the Mortgaged Property to comply with all applicable laws,regulations,codes and ordinances
relating to any Hazardous Materials or to any Environmental Activities(as defined herein below),
including, without limitation, obtaining, filing, serving or posting all applicable notices, permits,
licenses and similar authorizations. Trustor shall establish and maintain a management and
operating policy for the Mortgaged Property to assure and monitor continued compliance by Trustor
48214420-8640.2 5
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and each tenant leasing space in the Mortgaged Property with all such laws,regulations,codes and
ordinances.
(c) Trustor agrees to submit from time to time, if requested by Beneficiary, a
report,satisfactory to Beneficiary,certifying that the Mortgaged Property is not now being used nor
has it ever been used for any Environmental Activities. Beneficiary reserves the right, in its
reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to
review any report prepared by Trustor and/or to conduct its own investigation of the Mortgaged
Property for Hazardous Materials. Trustor hereby grants to Beneficiary, its agents, employees,
consultants and contractors the right to enter upon the Mortgaged Property to perform such tests as
are reasonably necessary to conduct such a review and/or investigation.
(d) Upon the discovery by Trustor of any event or situation which would render
any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any
respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiary of such
event or situation and, within thirty (30) days after such discovery, submit to Beneficiary a
preliminary written environmental plan setting forth a general description of such event or situation
and the action that Trustor proposes to take with respect thereto. Within sixty(60)days after such
discovery, Trustor shall submit to Beneficiary a final written environmental report, setting forth a
detailed description of such event or situation and the action that Trustor proposes to take with
respect thereto,including,without limitation,any proposed corrective work,the estimated cost and
time of completion, the name of the contractor and a copy of the construction contract, if any, and
such additional data, instruments, documents, agreements or other materials or information as
Beneficiary may reasonably request. The plan shall be subject to Beneficiary's written approval,
which approval may be granted or withheld in Beneficiary's sole but reasonable discretion.
Beneficiary shall notify Trustor in writing of its approval or disapproval of the final plan within
fifteen (15) days after receipt thereof by Beneficiary. If Beneficiary disapproves the plan,
Beneficiary's notice to Trustor of such disapproval shall include a brief explanation of the reasons
therefor. Trustor shall submit to Beneficiary a revised final written environmental plan that remedies
the defects identified by Beneficiary as reasons for Beneficiary's disapproval of the previous plan.If
Trustor fails to submit a revised plan to Beneficiary within said thirty(30) day period, or if such
revised plan is submitted to Beneficiary and Beneficiary disapproves said plan, such failure or
disapproval shall, at Beneficiary's option and upon notice to Trustor, constitute an "Event of
Default"hereunder. If Beneficiary does not notify Trustor of its approval or disapproval of the final
plan or any revisions thereof within the fifteen(15)day period described above,Trustor shall provide
written notice to Beneficiary of Beneficiary's failure to respond,at which time Beneficiary shall have
an additional forty-five (45) days after receipt of such notice from Trustor to notify Trustor of its
approval or disapproval of the final plan within said additional forty-five (45) day period. If
Beneficiary fails to notify Trustor of its disapproval or approval of said plan within said forty-five
(45) day period the plan shall be deemed approved. Once any such plan is approved in writing or
deemed approved by Beneficiary, Trustor shall promptly commence all action necessary to
implement such plan and to comply with any requirements or conditions imposed by Beneficiary,
and shall diligently and continuously pursue such action to completion in strict accordance with the
terms of said plan. The rights of Beneficiary with respect to the approval or disapproval of the
environmental plan set forth herein and the actions of Beneficiary pursuant to such rights are not
intended to,and shall not,in and of themselves,confer on Beneficiary a right to manage,operate or
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control the Mortgaged Property on a continuing basis following the discovery of the event(s) or
occurrence(s) described in this subparagraph 9(d).
(e) Trustor agrees to submit from time to time, if requested by Beneficiary, a
report,satisfactory to Beneficiary,specifying any activities involving,directly or indirectly,the use,
generation, treatment, storage or disposal of any Hazardous Materials on the Mortgaged Property.
Beneficiary reserves the right,in its sole and reasonable discretion,to retain,at Trustor's expense,an
independent professional consultant to review any report prepared by Trustor and/or to conduct its
own investigation of the Mortgaged Property. Trustor hereby grants to Beneficiary, its agent,
employees, consultants and contractors the right to enter upon the Mortgaged Property and to
perform such tests as Beneficiary deems are necessary to conduct such a review and/or investigation.
Beneficiary shall hold in confidence any report delivered by Trustor to Beneficiary pursuant to this
Section 9, except for disclosure to (a) any consultant(s)hired by Beneficiary to review said report,
(b)legal counsel,accountants and other professional advisors to Beneficiary,(c)regulatory officials
having jurisdiction over Beneficiary who may request said report, (d) as required by any federal,
state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in
connection with any legal proceeding, and (0 any financial institution in connection with a
disposition or proposed disposition of all or part of Beneficiary's or any participant's interests
hereunder.
"Hazardous Materials" as used in this Agency Deed of Trust shall mean any
hazardous or toxic materials,pollutants, effluents, contaminants,radioactive materials,flammable
explosives,chemicals known to cause cancer or reproductive toxicity,emissions or wastes and any
other chemical, material or substance,the handling, storage,release, transportation, or disposal of
which is or becomes prohibited, limited or regulated by any federal, state, county,regional or local
authority or which,even if not so regulated,is or becomes known to pose a hazard to the health and
safety of the occupants of the Mortgaged Property including, without limitation, (i) asbestos, (ii)
petroleum and petroleum by-products,(iii)urea formaldehyde foam insulation,(iv)polychlorinated
biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous
materials" or "toxic substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980("CERCLA"),42 U.S.C. Section 9601 et seq.,as amended
by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water
Pollution Control Act,33 U.S.C. Section 1251 et seq. the Clean Air Act,42 U.S.C. Section 7401 et
seq.,the Hazardous Materials Transportation Act,49 U.S.C. Section 1801 et seq.,or the Resource,
Conservation and Recovery Act,42 U.S.C. Section 6901 et seq.;(vi)all substances now or hereafter
designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as
"hazardous substances" in Section 253 16 of the California Health & Safety Code; (vii) all
substances now or hereafter designated by the Governor of the State of California pursuant to the
Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or
reproductive toxicity,or(viii)all substances now or hereafter designated as"hazardous substances,"
"hazardous materials" or "toxic substances"under any other federal, state or local laws or in any
regulations adopted and publications promulgated pursuant to said laws.
"Environmental Laws" as used herein shall mean all laws, rules, regulations and
ordinances relating to Hazardous Materials,including,but not limited to,those relating to soil and
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groundwater conditions and those statutes referred to in the definition of Hazardous Materials set
forth hereinabove.
"Environmental Activities" as used herein shall mean the use, generation,
transportation,treatment, storage or disposal of any Hazardous Materials at any time located on or
present on, under or about the Mortgaged Property.
(f) Trustor hereby agrees,at its sole cost and expense,to indemnify,protect,hold
harmless and defend (with counsel of Beneficiary's choice), Beneficiary, its successors and
assignees,and the officials,officers,agents,attorneys and employees of each of them(individually,
each an "Indemnitee", and collectively, the "Indemnitees") from and against any and all claims,
demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action,
judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation,
attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature
whatsoever(collectively, "Claims") which may at any time be imposed upon, incurred or suffered
by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from
any of the following "Environmental Matters," but excluding any Claims arising solely from the
gross negligence or willful misconduct of Beneficiary:
(i) Any past,present or future presence of any Hazardous Materials on,
in, under or affecting all or any portion of the Mortgaged Property or on, in, under or
affecting all or any portion of any property adjacent or proximate to the Mortgaged Property,
if such Hazardous Materials originated or allegedly originated on or from the Mortgaged
Property;
(ii) Any past, present or future storage, holding, handling, release,
threatened release, discharge,generation, leak,abatement,removal or transportation of any
Hazardous Materials on, in, under or from the Mortgaged Property or any portion thereof,
(iii) The failure of Trustor to comply with any and all laws, rules,
regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions,
requirements or the like now or hereafter relating to or governing in any way the
environmental condition of the Mortgaged Property or the presence of Hazardous Materials
on, in, under or affecting all or any portion of the Mortgaged Property including, without
limitation, all Environmental Laws;
(iv) The failure of Trustor to properly complete,obtain,submit and/or file
any and all notices,permits, licenses,authorizations,covenants,and the like relative to any
of the Environmental Matters described herein in connection with the Mortgaged Property or
the ownership, use, operation or enjoyment thereof,
(v) The extraction,removal, containment,transportation or disposal of
any and all Hazardous Materials from any portion of the Mortgaged Property or any other
property adjacent or proximate to the Mortgaged Property, if such Hazardous Materials
originated or allegedly originated on or from the Mortgaged Property;
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(vi) Any past, present or future presence, permitting,operation,closure,
abandonment or removal from the Mortgaged Property of any storage tank that at any time
contains or contained any Hazardous Materials and is or was located on, in or under the
Mortgaged Property or any portion thereof,
(vii) The implementation and enforcement of any monitoring,notification
or other precautionary measures that may at any time become necessary to protect against the
release or discharge of Hazardous Materials on, in, under or affecting the Mortgaged
Property or into the air,any body of water,any other public domain or any property adjacent
or proximate to the Mortgaged Property;
(viii) Any failure of any Hazardous Materials generated or moved from the
Mortgaged Property to be removed,contained,transported or disposed of in compliance with
all applicable Environmental Laws; or
(ix) Any breach by Trustor of any of its covenants, representations or
warranties regarding Environmental Matters contained in this Agency Deed of Trust or any
of the other Transaction Documents.
The indemnity contained herein shall terminate and be of no further force and
effect, if no Claim is pending, upon the repayment of the Loan in accordance with its terms.
(g) Trustor hereby represents and warrants as follows:
W Trustor has not received any written notice of claims or actions
(collectively, "Hazardous Materials Claims")pending or threatened against Trustor or any
previous owner or user of the Mortgaged Property (and relating to Trustor's and/or such
previous owner's or user's ownership of the Mortgaged Property), by any governmental
entity or agency or any other person or entity and relating to Hazardous Materials or pursuant
to Environmental Laws; and
(ii) Trustor has not received any written notice(1)pursuant to which the
Mortgaged Property has been designated as"border zone property"under the provisions of
California Health and Safety Code Sections 25220 et seq., or any regulation adopted in
accordance therewith, (2)of a hearing at which the Mortgaged Property will be considered
for designation as "border zone property,"or(3) of an occurrence or condition on any real
property adjoining or in the vicinity of the Mortgaged Property that could cause the
Mortgaged Property or any part thereof to be designated as "border zone property."
The foregoing shall constitute environmental provisions for purposes of California
Code of Civil Procedure Section 736.
10. Insurance
10.1. Casualty Insurance. Trustor shall at all times keep the Mortgaged
Property insured for the benefit of Trustee and Beneficiary as follows:
4821-4420-8640.2 9
10.1.1. Against damage or loss by fire and such other hazards
(including lightning, windstorm, hail,explosion, riot,acts of striking employees, civil commotion,
vandalism,malicious mischief,aircraft, vehicle,and smoke)as are covered by the broadest form of
extended coverage endorsement available from time to time, in an amount not less than the full
insurable value(as defined in section 10.9)of the Mortgaged Property,with a deductible amount not
to exceed an amount satisfactory to Beneficiary;
10.1.2. Rent or business interruption or use and occupancy insurance
on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiary;
10.1.3. Against damage or loss by flood,if the Mortgaged Property is
located in an area identified by the Secretary of Housing and urban Development or any successor or
other appropriate authority(governmental or private)as an area having special flood hazards and in
which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973,as amended,modified,supplemented,or replaced from time to time,
on such basis and in such amounts as Beneficiary may require;
10.1.4. Against damage or loss from(a)sprinkler system leakage and
(b)boilers,boiler tanks,heating and air conditioning equipment,pressure vessels,auxiliary piping,
and similar apparatus, on such basis and in such amounts as Beneficiary may require;
10.1.5. During any alteration, construction, or replacement of
improvements on the Mortgaged Property, or any substantial portion thereof, a Builder's All Risk
policy with extended coverage with course of construction and completed value endorsements,for an
amount at least equal to the full insurable value of the improvements on the Mortgaged Property,and
workers' compensation, in statutory amounts, with provision for replacement with the coverage
described in this Section 10, without gaps or lapsed coverage, for any completed portion of
improvements on the Mortgaged Property; and
10.2. Liability Insurance. Trustor shall procure and maintain workers'
compensation insurance for Trustor's employees and comprehensive general liability insurance
covering Trustor, Trustee, and Beneficiary against claims for bodily injury or death or for damage
occurring in, on, about, or resulting from the Mortgaged Property, or any street, drive, sidewalk,
curb,or passageway adjacent to it,in standard form and with such insurance company or companies
and in an amount of at least$2,000,000 combined single limit,or such greater amount as Beneficiary
may require, which insurance shall include completed operations, product liability, and blanket
contractual liability coverage that insures contractual liability under the indemnifications set forth in
this Agency Deed of Trust and the City Section 108 Loan Agreement (but such coverage or its
amount shall in no way limit such indemnification).
10.3. [Reserved—No Text]
10.4. Form of Policies. All insurance required under this Section 10 shall be
fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and
expiration dates as Beneficiary from time to time reasonably requests and shall be in such form and
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amounts, and be issued by such insurance companies doing business in the State of California, as
Beneficiary shall approve in Beneficiary's sole and absolute discretion. Unless otherwise expressly
approved in writing by Beneficiary,each insurer shall have a Best Rating of Class A,Category VIII,
or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the
policy will not lapse or be canceled, amended, or materially altered (including by reduction in the
scope or limits of coverage)without at least 30 days' prior written notice to Beneficiary;(c)with the
exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438
BFU Endorsement or equivalent), and name Beneficiary and Trustee as insureds; and (d) include
such deductibles as Beneficiary may approve. If a policy required under this paragraph contains a
co-insurance or overage clause, the policy shall include a stipulated value or agreed amount
endorsement acceptable to Beneficiary.
10.5. Duplicate Originals or Certificates. Duplicate original policies
evidencing the insurance required under this Section 10 and any additional insurance that may be
purchased on the Mortgaged Property by or on behalf of Trustor shall be deposited with and held by
Beneficiary and,in addition,Trustor shall deliver to Beneficiary(a)receipts evidencing payment of
all premiums on the policies and(b) duplicate original renewal policies or a binder with evidence o
satisfactory to Beneficiary of payment of all premiums at least 30 days before the policy expires. In
lieu of the duplicate original policies to be delivered to Beneficiary under this Section 10.5,Trustor
may deliver an underlier of any blanket policy,and Trustor may also deliver original certificates from
the issuing insurance company, evidencing that such policies are in full force and effect and
containing information that,in Beneficiary's reasonable judgment,is sufficient to allow Beneficiary
to ascertain whether such policies comply with the requirements of this Section 10.
10.6. Increased Coverage. If Beneficiary determines that the limits of any
insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall,
within 10 days after written notice from Beneficiary,procure such additional coverage as Beneficiary
may require in Beneficiary's sole and absolute discretion.
10.7. No Separate Insurance. Trustor shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that required under this Section
10,unless endorsed in favor of Trustee and Beneficiary,as required by this Section 10 and otherwise
approved by Beneficiary in all respects.
10.8. Transfer of Title. In the event of foreclosure of this Agency Deed of
Trust or other transfer of title or assignment of the Mortgaged Property in extinguishment,in whole
or in part, of the Promissory Note, all right, title, and interest of Trustor in and to all insurance
policies required under this Section 10 or otherwise then in force with respect to the Mortgaged
Property and all proceeds payable under,and unearned premiums on,such policies shall immediately
vest in the purchaser or other transferee of the Mortgaged Property.
10.9. [Reserved—No Text]
10.10. Approval Not Warranty. No approval by Beneficiary of any insurer
may be construed to be a representation,certification,or warranty of its solvency and no approval by
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Beneficiary as to the amount,type,or form of any insurance may be construed to be a representation,
certification, or warranty of its sufficiency.
10.11. Beneficiary's Right To Obtain. Trustor shall deliver to Beneficiary
original policies or certificates evidencing such insurance at least 30 days before the existing policies
expire. If any such policy is not so delivered to Beneficiary or if any such policy is canceled,
whether or not Beneficiary has the policy in its possession, and no reinstatement or replacement
policy is received before termination of insurance, Beneficiary, without notice to or demand on
Trustor, may(but is not obligated to)obtain such insurance insuring only Beneficiary and Trustee
with such company as Beneficiary may deem satisfactory, and pay the premium for such policies,
and the amount of any premium so paid shall be charged to and promptly paid by Trustor or, at
Beneficiary's option, may be added to the Promissory Note. Trustor acknowledges that, if
Beneficiary obtains insurance,it is for the sole benefit of Beneficiary and Trustee,and Trustor shall
not rely on any insurance obtained by Beneficiary to protect Trustor in any way.
10.12. Duty To Restore After Casualty. If any act or occurrence of any kind
or nature (including any casualty for which insurance was not obtained or obtainable) results in
damage to or loss or destruction of the Mortgaged Property,Trustor shall immediately give notice of
such loss or damage to Beneficiary and, if Beneficiary so instructs,shall promptly,at Trustor's sole
cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose,
shall (i)commence and continue diligently to completion to restore,repair,replace,and rebuild the
Mortgaged Property as nearly as possible to its value, condition, and character immediately before
the damage,loss or destruction; or, (ii)pay all monetary obligations then due under the Promissory
Note to Beneficiary.
11. Assignment of Insurance and Condemnation Proceeds. Should the Mortgaged
Property or any part or appurtenance thereof or right or interest therein be taken or damaged by
reason of any public or private improvement,condemnation proceeding(including change of grade),
a
fire,earthquake or other casualty,or in any other manner,Beneficiary or Trustee may,at its option,
commence, appear in and prosecute, in its own name, any action or proceeding, or make any
reasonable compromise or settlement in connection with such taking or damage, and obtain all
compensation,awards or other relief therefor. All compensation,awards,damages,rights of action
and proceeds, including the policies and the proceeds of any policies of insurance affecting the
Mortgaged Property,are hereby assigned to Beneficiary,but no such assignments shall be effective
to invalidate or impair any insurance policy. Trustor further assigns to Beneficiary any return
premiums or other repayments upon any insurance at any time provided for the benefit of the
Beneficiary and all refunds or rebates made of taxes or assessments on the Mortgaged Property,and
Beneficiary may at any time collect said return premiums, repayments, refunds and rebates in the
event of any default by Trustor under the Promissory Note,the City Section 108 Loan Agreement or
this Agency Deed of Trust. No'insurance proceeds or condemnation awards at any time assigned to
or held by Beneficiary shall be deemed to be held in trust and Beneficiary may commingle such
proceeds with its general assets and shall not be liable for the payment of any interest thereon.
Trustor also agrees to execute such further assignments of any such policies,compensation, award,
damages, rebates, return of premiums,repayments, rights'of action and proceeds as Beneficiary or
Trustee may require.
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12. Use of Insurance Proceeds. After any damage by casualty to the Mortgaged
Property,whether or not required to be insured against under the policies to be provided by Trustor,
Trustor shall give prompt written notice thereof to Beneficiary generally describing the nature and
cause of such casualty and the extent of the damage to or destruction of the Mortgaged Property.
Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the
extent the casualty was covered by an insurance policy. For these purposes, Beneficiary shall make
available to Trustor proceeds of any insurance policy covering the casualty and maintained by
Trustor under and subject to each of the following terms and conditions:
(a) Insurance proceeds which are directly attributable to the damage
(herein the"Proceeds")shall be released to Trustor upon and subject to satisfaction of each
of the following conditions:
(i) There exists no default under the Promissory Note, the City
Section 108 Loan Agreement or this Agency Deed of Trust at any time prior to or
during the course of reconstruction;
a
(ii) Receipt by Beneficiary of satisfactory written evidence that
any proposed restorations by Trustor will comply with all statutes, ordinances,
regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and
contracts; that all proposed plans and specifications are approved by all required
governmental agencies;and that Trustor has obtained all necessary building and other
permits and approvals for such reconstruction;
(iii) Receipt by Beneficiary from Trustor of sufficient cash funds
to cover one hundred percent(100%)of any difference between the estimated costs
of completion, as certified by an architect or engineer approved by Beneficiary in
writing, and the Proceeds, the amount of such difference shall be paid in cash to
Beneficiary with said amount and any interest earned thereon shall be released to
Beneficiary,as necessary,following the exhaustion of available insurance proceeds,
or at such earlier time deemed appropriate by Beneficiary. In the event of any default
under the Promissory Note, the City Section 108 Loan Agreement or this Agency
Deed of Trust, or any reconstruction requirements, Beneficiary may, at its option,
apply any portion or all of such amounts and interest against the accrued interest and
principal sums outstanding under the Promissory Note;
(iv) Receipt by Beneficiary of a certificate executed by Trustor
describing the work to be performed in connection with such restoration and a
certificate by an independent architect or engineer selected or approved by
Beneficiary in writing stating that the work described in the Trustor's certificate is
adequate to restore the Mortgaged Property to substantially the same size, design,
quality and condition as existed prior to the damage. The architect's or engineer's
certificate shall include its estimate of all costs and expenses which will be required
to complete such restorations; and
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(v) Such additional conditions as may reasonably be imposed by
Beneficiary to provide assurance that the Proceeds will be used to restore the
Mortgaged Property to substantially the same condition, to the extent possible, as
existed prior to the damage or taking, including, without limitation, Beneficiary's
prior written approval of all permits,plans,specifications and construction contracts
for such restoration.
(b) Beneficiary shall disburse the Proceeds in increments corresponding to the
percentage of completion costs then incurred for labor performed and materials furnished (which
may, at Beneficiary's discretion, be subject to reasonable holdbacks required by Beneficiary, not
exceeding ten percent (10%) of the total estimated cost of completion and which will be released
upon lien-free completion of the restorations in accordance with the requirements of this Agency
Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien
may be filed). Disbursements shall be conditioned upon Beneficiary's written confirmation that all
of its requirements therefor have been satisfied, including its receipt of periodic inspection and
completion percentage certificates executed by the project architect approved by Beneficiary in
writing, payment acknowledgments and unconditional lien releases, and such other conditions to
periodic disbursements as are customarily imposed by Beneficiary in connection with its construction
loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance
endorsements,payment and performance bonds,and builder's risk policies required by Beneficiary.
Trustor shall, during the progress of the work, also submit to the Beneficiary, at periodic intervals
not less frequently than monthly,a certificate satisfactory to Beneficiary furnished by an architect or
engineer approved by Beneficiary in writing showing the cost of labor and materials incorporated
into the work during the period specified in the certificate,which period shall not include any part of
the period covered by any other such certificate; and
(c) After completion of the restoration and subject to the conditions herein stated,
and, if Trustor is not then in default under the Promissory Note, the City Section 108 Loan
Agreement or this Agency Deed of Trust,Beneficiary shall pay to Trustor(or such other persons or
entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any
estimated restoration expense held by Beneficiary upon delivery to Beneficiary of(i) a certificate
executed by Trustor showing that the work has been completed and that all bills for labor performed
and materials furnished in connection therewith have been paid,(ii)unconditional lien releases and
other appropriate written acknowledgments of payment in full executed by all contractors and
subcontractors performing labor on or furnishing materials to the Mortgaged Property; (iii) a
certificate executed by an architect or engineer approved by Beneficiary confirming that the
Mortgaged Property has been restored to substantially the same size,design,quality and condition as
existed immediately prior to the damage and in accordance with all applicable federal, state, local
and other governmental laws and regulations; and(iv)a certificate of occupancy and other permits
issued by the appropriate governmental authorities authorizing the occupancy of the Mortgaged
Property for its intended purposes and use.
If(i)any of the conditions in subparagraph 12(b),above,are not fulfilled within sixty
(60)days after the date of the casualty,or if the reconstruction cannot be completed within such 60
day period, within such additional time as may be reasonably necessary to complete the
reconstruction,not to exceed one hundred eighty(180)days,and provided such additional time does
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not result in a breach by the Trustor under the Promissory Note, the City Section 108 Loan
Agreement or this Agency Deed of Trust; or (ii) if Trustor fails to exercise diligence in promptly
commencing or continuously prosecuting the work; or(iii) if Trustor is otherwise in default under
the Promissory Note, the City Section 108 Loan Agreement or this Agency Deed of Trust, or any
reconstruction requirements set forth therein or herein, Beneficiary may, at its option, apply the
Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to
complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so
applied to the indebtedness and, together with any other payments due to Beneficiary under the
Promissory Note, and all other debts of Trustor to Beneficiary are discharged, Beneficiary shall not
have the right to require the Mortgaged Property to be repaired under the terms of this Agency Deed
of Trust, but Beneficiary's rights under any other lien that it holds against the Mortgaged Property
and which is not also required to be released shall not be thereby impaired or affected.
Trustor shall not commence any repairs or reconstruction of any casualty until
Beneficiary consents in writing thereto, which consent may be withheld by Beneficiary in its sole
discretion,until all of the conditions contained in this paragraph are satisfied. All work of repairing
or restoring damage shall be done in aP good and workmanlike manner with materials of good quality
and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein
contained shall be construed as authorizing the Trustor to subject the Mortgaged Property to any
mechanic's, materialman's or other lien for the payment of bills for material furnished or labor
performed in connection with any work contemplated by this paragraph.
In any event in which the Beneficiary is not otherwise obligated to permit the
insurance proceeds to be applied to the restoration of the Mortgaged Property as hereinabove
described and, at the option of Beneficiary,the proceeds of a loss under any policy,whether or not
endorsed payable to Beneficiary,may be applied in payment of the principal, interest or any other
sums secured by this Agency Deed of Trust, whether or not then due, or to the restoration or
replacement of any building on the Mortgaged Property, without in any way affecting the
enforceability or priority of the lien of this Agency Deed of Trust or the obligation of the Trustor or
any other person for payment of the indebtedness hereby secured or the reconstruction of the
damaged improvements,whether such Trustor be the then owner of said building or improvements
or not.
13. Use of Condemnation Awards. Should the Mortgaged Property or any portion
thereof or any improvements thereon be taken or damaged by reason of any public improvement or
condemnation proceeding,or by any other form of eminent domain,Trustor agrees that Beneficiary
shall be entitled to all compensation, awards and other payments or relief therefor and may, at its
option, commence, appear in or prosecute in its own name any action or proceeding or make any
reasonable compromise or settlement in connection with such taking or damage,and Trustor agrees
to pay Beneficiary's costs and reasonable attorneys'fees incurred in connection therewith.All such
compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiary
toward the repair of any damage to the improvements on any portion of the Mortgaged Property not
subject to the taking as and subject to the same conditions herein provided with respect to the
disposition of insurance proceeds,as set forth in Section 12 hereinabove;provided,however,that if
the taking results in a loss of the Mortgaged Property to an extent which,in the reasonable opinion of
Beneficiary, renders or will render the Mortgaged Property not economically viable or which
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substantially impairs Beneficiary's security or lessens to any extent the value, marketability or
intended use of the Mortgaged Property,Beneficiary may apply the condemnation proceeds to reduce
the unpaid indebtedness secured hereby in such order as Beneficiary may determine. Trustor agrees
to execute such further assignments of condemnation proceeds as Beneficiary or Trustee may from
time to time require.If so applied,any proceeds in excess of the unpaid principal and accrued interest
due under the Promissory Note plus all other sums due to Beneficiary from Trustor shall be paid to
Trustor or Trustor's assignee.
14. Mortgaged Property Taxes and Assessments. Trustor shall pay in full on or
before the due date thereof all rents,taxes,assessments community redevelopment in lieu of property
tax charges and encumbrances, with interest, that may now or hereafter be levied, assessed or
claimed upon the Trustor's ownership or use of the Mortgaged Property that is the subject of this
Agency Deed of Trust or any part thereof,and upon request,provide the Beneficiary with copies of
official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs,
fees and expenses of, this Agency Deed of Trust.
15. 4 Assessment Districts. Trustor agrees not to consent to inclusion of the Land in
any local improvement or special assessment district or to the imposition of any special or local
improvement assessment against the Mortgaged Property, without Beneficiary's prior written
consent.
16. Mortgage Taxes. In the event of the passage after the date of this Agency
Deed of Trust,of any federal,state or municipal law,ordinance or regulation relating to the taxation
of mortgages,deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiary
or any payments secured hereby. Trustor shall bear and pay the full amount of such taxes.
17. Special Assessment and Insurance Reserves. Trustor shall, at the request of
the Beneficiary, pay to Beneficiary equal moWy installments of the special assessments and
insurance premiums estimated by the Beneficiary next to become due, in addition to any other
periodic payment or performances owed by Trustor under the Promissory Note or this Agency Deed
of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof,
Beneficiary will have on hand an amount sufficient to pay the next maturing assessments and
insurance premiums. The amount of the additional payment to be made on account of assessments
and insurance premiums shall be adjusted annually or more frequently as Beneficiary deems
necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be
credited on the mortgage account. Subsequent payments on account of assessments and insurance
premiums shall be made in accordance with the next estimate by the Beneficiary of annual
requirements. To the extent permitted by applicable law,all monies paid to Beneficiary on account
of assessments or insurance premiums may be commingled and invested with Beneficiary's own
funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiary
shall not exercise the rights granted in this paragraph so long as the following conditions are met:
(a) There is no other default under the Promissory Note, the City Section 108
Loan Agreement or this Agency Deed of Trust; and
(b) Trustor pays all assessments and insurance premiums prior to delinquency;or
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(c) Assessments and insurance premiums are paid to the bond trustee.
Upon Trustor's failure to comply with any of the conditions (a), (b) or (c) above,
Beneficiary may,at its option,then or thereafter exercised,require Trustor to pay the additional sums
described in this paragraph. Notwithstanding the foregoing, in the event that the bond trustee or the
Senior Lender releases casualty or condemnation proceeds to the Trustor for the repair or
reconstruction of the Mortgaged Property, Beneficiary shall also consent to the release of such
proceeds.
18. Trustor's Right to Contest Taxes. Trustor shall have the right to contest any
real property tax or special assessment so long as(a)no defaults exist under the Promissory Note,the
City Section 108 Loan Agreement, this Agency Deed of Trust; (b) Trustor makes any payment or
deposit or posts any bond as and when required as a condition to pursuing such contest; (c)Trustor
commences such contest prior to such tax or assessment becoming delinquent and continuously
pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by
Trustor stays the foreclosure of any lien.securing the payment of any such tax or assessment;and(e)
Trustor pays any tax or assessment within ten (10) days following the date of resolution of such
contest.
19. Report of Real Estate Transaction. Trustor has made or provided for making,
or will make or provide for making,on a timely basis,any reports or returns required by state or local
law relating to the Mortgaged Property, or the development of the Mortgaged Property,
notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiary, or
other party. Trustor's obligations under this paragraph will be deemed to be satisfied,if proper and
timely reports and returns required under this paragraph are filed by a title company involved in each
real estate transaction relating to the Mortgaged Property, but nothing contained herein shall be
construed to require such returns or reports to be filed by Beneficiary.
20. Leases. With respect to any leases currently or hereafter relating to any
portion of the Mortgaged Property, Trustor agrees that each such lease shall comply with the
applicable provisions of the City Section 108 Loan Agreement.
21. Assignment of Leases. Trustor hereby unconditionally and absolutely assigns,
transfers and sets over unto Beneficiary, all leases, subleases, rental agreements, occupancy
agreements,licenses,concessions,entry fees and other agreements that grant a possessory interest in
all or any part of the Mortgaged Property,together with all rents,issues,deposits and profits of the
Mortgaged Property, together with the immediate and continuing right to collect and receive the
same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further
unconditionally and absolutely assigns,transfers and sets over unto Beneficiary all of its right,title
and interest in and to any plans, drawings, specifications, permits, engineering reports and land
planning maps,which it now has or may hereafter acquire regarding any improvements now on or to
be constructed upon the Mortgaged Property. Beneficiary confers upon Trustor a license to collect
and retain the rents,issues,deposits and profits of the Mortgaged Property,as they become due and
payable,subject,however,to the right of Beneficiary upon a default hereunder to revoke said license,
at anytime,in its sole discretion and without notice to Trustor. Beneficiary may revoke said license
4821 4420-8640.2 17
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and collect and retain the rents, issues, deposits and profits of the Mortgaged Property assigned
herein to Beneficiary upon the occurrence of an Event of Default hereunder or under any of the
obligations secured hereby, and without taking possession of all or any part of the Mortgaged
Property, and without prejudice to or limitation upon any of its additional rights and remedies
granted pursuant hereto or pursuant to the Promissory Note or the City Section 108 Loan Agreement,
and Beneficiary shall,in its sole and absolute discretion,have the right to apply such income for the
payment of all expenses or credit the net amount of income that it receives from the Mortgaged
Property, to the indebtedness in the manner,order and amounts as Beneficiary shall determine. In the
event the Beneficiary exercises or is entitled to exercise any of its rights or remedies under this
Agency Deed of Trust as a result of the default of the Trustor under the Promissory Note or the City
Section 108 Loan Agreement,and if any lessee,sublessee or assignee under any lease assigned under
this paragraph files or has filed against it any petition in bankruptcy or for reorganization or
undertakes or is subject to similar action,Beneficiary shall have,and is hereby assigned by Trustor,
all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including,
without limitation,the right to seek"adequate protection"of its interests,to compel assumption or
rejection of any such lease and to seek such claims and awards as may be sought or granted in
a connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiary in
writing,Beneficiary's exercise of any of the rights provided in this paragraph shall preclude Trustor
from the pursuit and benefit thereof, without any further action or proceeding of any nature. The
foregoing assignment shall not impose upon Beneficiary any duty to produce rents from the
Mortgaged Property, and such assignment shall not cause Beneficiary to be a "mortgagee in
possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in
derogation of any similar or related rights granted to Beneficiary in the separate assignment of leases
and rents of even date herewith.
22. Impairment of Security. Trustor shall not, without first obtaining
Beneficiary's written consent,which consent shall not be unreasonably withheld,assign any of the
rents or profits of the Mortgaged Property or change the general nature or use of the Mortgaged
Property or initiate or acquiesce in any zoning reclassification,or do,or suffer to be done,any act or
thing that would impair the security of Beneficiary's lien upon the Mortgaged Property or the rents
thereof. Trustor shall not, without the written consent of Beneficiary, which consent shall not be
unreasonably withheld,(i)initiate or support any zoning reclassification of the Mortgaged Property,
seek any variance under existing zoning ordinances applicable to the Mortgaged Property or use or
permit the use of the Mortgaged Property in a manner that would result in such use becoming a non-
conforming use under applicable zoning ordinances;(ii)modify,amend or supplement any easement,
reservation,restriction, covenant,condition or encumbrance pertaining to the Mortgaged Property;
(iii) impose or consent to any restrictive covenant or encumbrance upon the Mortgaged Property,
execute or file any subdivision or parcel map affecting the Mortgaged Property or consent to the
annexation of the Mortgaged Property to any municipality; or(iv)permit or suffer the Mortgaged
Property to be used by the public or any person in such manner as might make possible a claim of
any implied dedication or easement.
23. Defense of Suits. Trustor shall appear in and defend any suit, action or
proceeding that might affect the value,priority or enforceability of this Agency Deed of Trust or the
Mortgaged Property itself or the rights or powers of Beneficiary or Trustee, including any suits
relating to damage to property or death or personal injuries, whether or not Trustor is ultimately
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found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual
negotiations with Beneficiary, has waived and does hereby waive any immunity to such liability to
Beneficiary under any industrial insurance or similar statute, to the extent such immunity would
impair Beneficiary's rights against Trustor. Should Beneficiary elect to appear in or defend any such
action or proceeding or be made a party to any such action or proceeding by reason of this Agency
Deed of Trust,or elect to prosecute such action as appears necessary to preserve the value,priority or
enforceability of this Agency Deed of Trust or the Mortgaged Property itself,Trustor will at all times
indemnify from and, on demand, reimburse Beneficiary and Trustee for, any and all loss,damage,
expense or cost,including cost of evidence of title expert witness fees and attorneys' fees,arising out
of or incurred in connection with any such suit,action or proceeding, and any appeal or petition for
review thereof,and the sum of such expenditures shall be secured by this Agency Deed of Trust with
interest at the rate of 10%per annum and shall be due and payable on demand. Trustor shall pay
costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any
proceeding or suit brought by Beneficiary to foreclose this Agency Deed of Trust and in any appeal
therefrom or petition for review thereof.
24. Assignments and Transfers by Trustor. Beneficiary may,at its option,declare
immediately due and payable all sums secured by this Agency Deed of Trust upon the sale or
transfer, without the Beneficiary's prior written approval, of all or any part of the Mortgaged
Property, or any interest in the Mortgaged Property. The option of declaring immediately due and
payable all sums secured by this Agency Deed of Trust upon a sale or transfer of the Mortgaged
Property shall be exercised by the Beneficiary in accordance with the provisions of Section 29
hereof; provided however, this option shall not be exercised if such remedy is prohibited by
applicable law.
25. Matters Requiring Beneficiary's Prior Consent. So long as any part of the
Loan remains unpaid or any part of the Obligations remain unperformed, Trustor shall not do or
suffer any of the following without Beneficiary's prior written consent, which consent shall not be
unreasonably withheld:(i)change its form of organization;(ii)modify its organizational documents;
(iii) cause itself to become organized as the same or any other type of legal entity in a jurisdiction
other than that under the laws of which it is organized on the date of this Agency Deed of Trust;(iv)
make or suffer any change in ownership or management that results in a"change of control"of the
Borrower, or that results in the Borrower becoming subject to the control of persons other than its
owners on the date of this Agency Deed of Trust,voluntarily or by operation of law(for purposes of
this Section 25(iv) the words "change of control" shall mean the transfer of 50% or more of the
ownership interest in the Borrower to persons other than its owners on the date of this Agency Deed
of Trust); (v) make or suffer any change in its ownership or management, or become subject to
control by persons other than its owners on the date of this Agency Deed of Trust,voluntarily or by
operation of law;(vi)sell,convey,assign,or transfer any Mortgaged Property or any interest therein,
whether legal or equitable, directly or indirectly, (vii) create, incur, assume, suffer to exist, or
otherwise become liable on any indebtedness relating to the Mortgaged Property other than the Loan;
or(viii)grant or suffer the imposition of any lien upon,security interest in,or other encumbrance of
any of the Mortgaged Property.Any violation of the provisions of this Section 25 shall constitute an
Event of Default under this Agency Deed of Trust and each other Transaction Document, with
respect to which Beneficiary shall have the right to accelerate the maturity of the Loan and pursue all
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other remedies available to Beneficiary under this Agency Deed of Trust, any other Transaction
Document, and/or applicable law.
26. Further Encumbrances. Trustor acknowledges that Beneficiary relied upon
the Mortgaged Property not being subject to additional liens or encumbrances for reasons including,
but not limited to,the possibility of competing claims or the promotion of plans disadvantageous to
Beneficiary in bankruptcy; the risks to Beneficiary in a junior lienholder's bankruptcy; questions
involving the priority of future advances,the priority of future leases of the Mortgaged Property,the
marshaling of Trustor's assets, and the Beneficiary's rights to determine the application of
condemnation awards and insurance proceeds;the impairment of the Beneficiary's option to accept a
deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the
actions to be taken by trustees,receivers,liquidators and fiduciaries;and Beneficiary's requirements
of Trustor's preservation of its equity in the Mortgaged Property and the absence of debt that could
increase the likelihood of Trustor being unable to perform its obligations when due. Therefore,as a
principal inducement to Beneficiary to make the Loan secured by this Agency Deed of Trust, and
with the knowledge that Beneficiary will materially rely upon this paragraph in so doing, Trustor
covenants not to encumber the Mortgaged Property, without first receiving Beneficiary's express
written consent in each instance, which consent may be withheld by Beneficiary. A breach of this
covenant shall constitute a default under the City Section 108 Loan Agreement,the Promissory Note
and this Agency Deed of Trust, and Beneficiary may exercise all remedies available to Beneficiary
under the City Section 108 Loan Agreement, the Promissory Note or this Agency Deed of Trust.
Without limiting the generality of the foregoing, no mortgages, deeds of trust or other forms of
security interests prior or subordinate to the security interests of Beneficiary shall encumber any real
or personal property that is the subject of any lien or security interest granted to Beneficiary,without
Beneficiary's prior written consent.
27. [Reserved—No Text]
28. Event of Default. An"Event of Default"shall be deemed to have occurred in
any of the following circumstances:
(a) Failure of Trustor to satisfy any performance or payment obligation required
under this Agency Deed of Trust, the Promissory Note or the City Section 108 Loan Agreement
when due, however Trustor shall have ten(10) days to cure any such default;
(b) Failure of Trustor to properly perform its obligations under this Agency Deed
of Trust,the Promissory Note or the City Section 108 Loan Agreement,by a date specified herein or
therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than
thirty(30)days nor greater than sixty(60)days from the date of such notice,and shall be determined
by Beneficiary in its sole discretion); provided, however, that: (i) if such default set forth in the
notice cannot be cured by the date specified,(ii)Trustor commences to cure the default prior to the
date specified in the notice, and(iii)Trustor diligently proceeds to cure the default thereafter;then
the date specified in the notice shall be extended by any period reasonably necessary to complete the
cure,but in no event for more than ninety(90)days after the date originally specified in the notice;
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(c) Trustor becomes insolvent or generally is not paying its debts as they become
due,as defined in the United States Bankruptcy Reform Act,as amended from time to time(which
Act, as amended, is herein called the "Bankruptcy Code"), or shall file a voluntary petition in
bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other
relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or
other relief for debtors, whether now or hereafter in effect,or shall consent to or suffer the entry of
any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or
subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within
ninety(90) days of the filing thereof, or shall make an assignment for the benefit of creditors;
(d) Any court(or similar tribunal)having jurisdiction over Trustor or any of the
Mortgaged Property or other property of Trustor shall enter a decree or order appointing a receiver,
trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the
Mortgaged Property,of any other real property of Trustor,of any other significant asset of Trustor,or
shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code;
(e) The entry of any final judgment or arbitration award against Trustor that is not
paid or stayed pending appeal, or the sequestration or attachment of,or any levy or execution upon
(i)any of the Mortgaged Property, (ii) any other collateral provided by Trustor or any other person
under this Agency Deed of Trust or as security for performance or payment of the Loan,or(iii)any
significant portion of the other assets of Trustor,which is not released,expunged or dismissed prior
to the earlier of(30)days after such sequestration, attachment or execution or five(10) days before
the sale of any such assets;
(f) Trustor shall dissolve,liquidate or wind up its affairs or shall bring any legal
action or take any other action contemplating such dissolution, liquidation or winding up;
(g) The determination by Beneficiary that any representation, warranty or
statement contained in this Agency Deed of Trust or the Promissory Note or the City Section 108
Loan Agreement in writing delivered to Beneficiary in connection with Promissory Note or City
Section 108 Loan Agreement was incomplete,untrue or misleading in any material respect as of the
date made and Trustor has not cured such default within thirty (30) days from written notice by
Beneficiary of such default;
(h) The enactment of any law that deducts from the value of the Mortgaged
Property for the purpose of taxation of any lien thereon or imposing upon Beneficiary the payment of
the whole or any part of the taxes,assessments,charges or liens herein required to be paid by Trustor
or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of
trust or Beneficiary's interest in the Mortgaged Property or the manner of collection of taxes so as to
affect this Agency Deed of Trust or the Promissory Note or the City Section 108 Loan Agreement or
the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by
Trustee or Beneficiary by reason of their ownership of this Agency Deed of Trust or the Promissory
Note and, in such event, Trustor, after demand by Beneficiary, does not pay such taxes or
assessments within thirty(30)days or reimburse Beneficiary therefor or,in the opinion of counsel for
Beneficiary, it might be unlawful to require Trustor to make such payment or the making of such
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payment might result in the imposition of interest costs beyond the maximum amount permitted by
applicable law;
(i) Trustor acknowledges and agrees that all material non-monetary defaults are
conclusively deemed to be and are defaults impairing the security of this Agency Deed of Trust,and
that Beneficiary shall be entitled to exercise any appropriate remedy, including, without limitation,
foreclosure of this Agency Deed of Trust, upon the occurrence of any such material non-monetary
default; and
29. Rights and Remedies on Default. Upon the occurrence of any Default or
Event of Default under this Agency Deed of Trust and at any time thereafter,Trustee or Beneficiary
may exercise any one or more of the following rights and remedies:
(a) Loan Remedies. Beneficiary may exercise any right or remedy provided for
in the Promissory Note, the City Section 108 Loan Agreement or this Agency Deed of Trust;
(b) Acceleration. Beneficiary may declare the Promissory Note and all other
performances or sums secured by this Agency Deed of Trust immediately due and payable;
(c) Foreclosure Rights. Beneficiary may declare all performances or sums
secured hereby immediately due and payable either by commencing an action to foreclose this
Agency Deed of Trust as a mortgage,or by the delivery to Trustee of a written declaration of default
and demand for sale and of written notice of default and of election to cause the Mortgaged Property
to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by
exercise of the power of sale herein. Should Beneficiary elect to foreclose by exercise of the power
of sale herein,Beneficiary shall also deposit with Trustee this Agency Deed of Trust,the documents
evidencing Loan and any receipts and evidence of expenditures made and secured hereby as Trustee
may require, and notice of sale having been given as then required by law and after lapse of such
time as may then be required by law after recordation of such notice of default, Trustee, without
demand on Trustor,shall sell the Mortgaged Property at the time and place of sale fixed by it in said
notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at
public auction to the highest bidder upon any terms and conditions specified by Beneficiary and
permitted by applicable law. Trustee may postpone sale of all or any portion of the Mortgaged
Property by public announcement at such time and place of sale, and from time to time thereafter
may postpone such sale by public announcement at the time fixed by the preceding postponement.
Trustee shall deliver to any purchaser its deed or deeds conveying the Mortgaged Property, or any
portion thereof, so sold,but without any covenant or warranty, express or implied. The recitals in
such deed or deeds of any matters or facts,shall be conclusive proof of the truthfulness thereof. Any
person,including Trustor,Trustee or Beneficiary,may purchase all or any portion of the Mortgaged
Property, as applicable,at sale.
(d) Right to Rescind. Beneficiary,from time to time before Trustee's sale,may
rescind any such notice of breach or default and of election to cause the Mortgaged Property to be
sold by executing and delivering to Trustee a written notice of such rescission,which notice,when
recorded,shall also constitute a cancellation of any prior declaration of default and demand for sale.
The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or
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default then existing or subsequently occurring, or impair the right of Beneficiary to execute and
deliver to Trustee,as above provided,other declarations of default and demand for sale, and notices
of breach or default, and of election to cause the Mortgaged Property to be sold to satisfy the
obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the
Promissory Note,the City Section 108 Loan Agreement and/or of this Agency Deed of Trust or any
of the rights, obligations or remedies of the parties hereunder.
(e) UCC Remedies. Beneficiary shall have all the rights and remedies of a
secured party under the California Uniform Commercial Code,including,without limitation,Section
9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to
Beneficiary at a place to be designated by Beneficiary that is reasonably convenient to both parties.
Upon repossession, Beneficiary may propose to retain the collateral in partial satisfaction of the
Promissory Note or sell the collateral at public or private sale in accordance with the Uniform
Commercial Code as adopted in the state where the Mortgaged Property is situated or any other
applicable statute. Such sale may be held as a part of,distinctive from or without a trustee's sale or
foreclosure of the real property secured by this Agency Deed of Trust. If any notification of
disposition of all or any portion of the collateral is required by law,such notification shall be deemed
reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If
Beneficiary disposes of all or any part of the collateral after default,the proceeds of disposition shall
be applied in the following order:
(i) to the reasonable expenses of retaking, holding, preparing for sale,
selling the collateral, and the like;
(ii) to the reasonable attorneys' fees and legal expenses incurred by
Beneficiary, and
(iii) to the satisfaction of the indebtedness secured by this Agency Deed of
Trust.
(f) Remedial Advances. Should Trustor fail to make any payment or to do any
act as herein provided,then Beneficiary or Trustee,without obligation so to do and without demand
upon Trustor and without releasing Trustor from any obligation hereof,may(i)make or do the same
in such manner and to such extent as either may deem necessary to protect the security hereof,
Beneficiary or Trustee being authorized to enter upon the Mortgaged Property for such purposes;(ii)
commence,appear in and defend any action or proceeding purporting to affect the security hereof or
the rights or powers of Beneficiary or Trustee, (iii) pay, purchase, contest or compromise any
encumbrance; charge, lien,tax or assessment,or the premium for any policy of insurance required
herein; and in exercising any such power, incur any liability, expend whatever amounts in its
absolute discretion it may deem necessary therefor, including cost of evidence of title, employ
counsel and pay such counsel's fees. Beneficiary shall be subrogated to the rights and lien interests
of any person who is paid by Beneficiary pursuant to the terms of this paragraph. Trustor shall repay
immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf
of Beneficiary, with interest from the date of such advance or expenditure at the rate of 10% per
annum, and the repayment thereof shall be secured hereby.
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(g) Summary Possession. Beneficiary may, at its option, either in person or by
agent, employee or court-appointed receiver, enter upon and take possession of the Mortgaged
Property and continue any work of improvement, repair or renovation thereof at Trustor's expense
and lease the same or any part thereof, making such alterations as it finds necessary, and may
terminate in any lawful manner any lease(s) of the Mortgaged Property, exercising with respect
thereto any right or option available to the Trustor. The entering upon and taking possession of the
Mortgaged Property, the collection of rents, issues and profits, or the proceeds of fire and other
insurance policies or compensation or awards for any taking or damage to the Mortgaged Property,
and the application or release thereof shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(h) Collection of Rents. Beneficiary may require any tenant or other user of the
Mortgaged Property to make payments of rent or use fees directly to Beneficiary, regardless of
whether Beneficiary has taken possession of the Mortgaged Property. If any rents are collected by
Beneficiary, then Trustor hereby irrevocably designates Beneficiary as Trustor's attorney-in-fact to
endorse instruments received in payment thereof in the name of Trustor and to negotiate the same
and collect the proceeds. Payments by tenants or other users to Beneficiary in response%to
Beneficiary's demand shall satisfy the obligation for which the payments are made, whether or not
any proper grounds for the demand existed.Beneficiary may exercise its rights under this paragraph
either in person,by agent or through a receiver.
(i) Beneficiary's Enforcement of Leases. Beneficiary is hereby vested'with full
power to use all measures, legal and equitable,deemed by it necessary or proper to collect the rents
assigned in this Agency Deed of Trust,including the right,in person or by agent,employee or court-
appointed receiver, to enter upon the Mortgaged Property, or any part thereof, and take possession
thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as
lessor in any leases or upon Trustor's default under the Promissory Note or the City Section 108
Loan Agreement. Trustor hereby grants to Beneficiary full power and authority to exercise all rights,
privileges and powers herein granted at any and all times hereafter, without notice to Trustor,
including the right to operate and manage the Mortgaged Property, make and amend leases and
perform any other acts reasonably necessary to protect the value, priority or enforceability of any
security for the obligations of the Trustor under the Promissory Note or the City Section 108 Loan
Agreement and use and apply all of the rents and other income herein assigned to the payment of the
costs of exercising such remedies, of managing and operating the Mortgaged Property, and of any
indebtedness or liability of Trustor to Beneficiary,including but not limited to the payment of taxes,
special assessments, insurance premiums, damage claims, the costs of maintaining, repairing,
rebuilding and restoring any improvements on the Mortgaged Property or of making the same
rentable, attorneys' fees incurred in connection with the enforcement of this Agency Deed of Trust,
and any principal and interest payments due from Trustor to Beneficiary under the Promissory Note
and this Agency Deed of Trust,all in such order as Beneficiary may determine. Beneficiary shall be
under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or
carry out any of the obligations of the lessor under any leases and does not assume any of the
liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in
any leases. It is further understood that this Agency Deed of Trust shall not operate to place
responsibility for the control,care,management or repair of the Mortgaged Property,or parts thereof,
upon Beneficiary nor shall it operate to make Beneficiary liable for the carrying out of any of the
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11/6/06 imn
terms and conditions of any leases, or for any waste of the Mortgaged Property by the lessee under
any leases or by any other party, or for any dangerous or defective condition of the Mortgaged
Property or for any negligence in the management, upkeep, repair or control of the Mortgaged
Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger,
except as may result from the gross negligence or willful misconduct of Beneficiary after taking
possession of the Mortgaged Property hereunder.
0) Beneficiary's Enforcement of Contracts. Beneficiary shall have the right to
enforce Trustor's rights under all architect, engineering, construction and related contracts and to
bring an action for the breach thereof in the name of Beneficiary or, at Beneficiary's option, in the
name of Trustor, in the event any architect, engineer, contractor or other party breaches their
respective contract or contracts,regardless of whether Beneficiary acquires or retains any interest in
the Mortgaged Property. Trustor hereby irrevocably appoints Beneficiary as its attorney-in-fact for
the purposes of the foregoing, which power shall be durable and coupled with an interest.
Beneficiary does not assume and shall not be obligated to perform any of Trustor's obligations under
said contracts nor shall Beneficiary be required to enforce such contracts or bring action for the
breach thereof,provided;however,any performance of the respective contracts specifically required
by the Beneficiary in writing, following any default by Trustor under the Promissory Note,the City
Section 108 Loan Agreement or the contracts, and which is properly and timely undertaken by the
contractor, engineer or architect, shall be paid for by the Beneficiary in accordance with the terms
and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by
Trustor to the Beneficiary under the Promissory Note and secured by this Agency Deed of Trust and
shall bear interest at the rate of 10%per annum from the date of advance to and including the date of
full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents,
security agreement and other documents granted to secure the Promissory Note.
(k) Appointment of Receiver. Beneficiary has the right to have a receiver
appointed to take possession of any or all of the Mortgaged Property,with the power to protect and
preserve the Mortgaged Property,to operate the Mortgaged Property preceding foreclosure or sale,to
collect the income from the Mortgaged Property and apply the proceeds,over and above the cost of
the receivership,against the Promissory Note. The receiver may serve without bond,if permitted by
law.Beneficiary's right to the appointment of a receiver shall exist whether or not the apparent value
of the Mortgaged Property exceeds the indebtedness secured hereby by a substantial amount.
Employment by Beneficiary shall not disqualify a person from serving as a receiver. Upon taking
possession of all or any part of the Mortgaged Property, the receiver or Beneficiary may: (i) use,
operate,manage,control and conduct business on the Mortgaged Property and make expenditures for
all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the
income from the Mortgaged Property and apply such sums to the expenses of use, operation and
management; and (iii) at Beneficiary's option, complete any construction in progress on the
Mortgaged Property, and in that connection pay bills,borrow funds, employ contractors and make
any changes in plans or specifications as Beneficiary deems reasonably necessary or appropriate. If
the revenues produced by the Mortgaged Property are insufficient to pay expenses,the receiver may
borrow, from Beneficiary or otherwise, as Beneficiary may deem reasonably necessary for the
purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand
and bear interest from the date of expenditure until repaid at the rate of 10%per annum. Such sums
shall become a part of the debt secured by this Agency Deed of Trust.
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(1) Specific Enforcement. Beneficiary may specifically enforce any covenant in
this Agency Deed of Trust or the Trustor's compliance with its warranties herein and may restrain
and enjoin the breach or prospective breach of any such covenant or the noncompliance with any
condition and Trustor waives any requirement of the posting of any bond in connection therewith.
(m) General Creditors' Remedies. Beneficiary shall have such other rights and
remedies as are available under any statute or at law or in equity, generally, and the delineation of
certain remedies in this Agency Deed of Trust shall not be deemed in limitation thereof
30. Application of Sale Proceeds. After deducting all costs and expenses of
Trustee and of this Agency Deed of Trust, including cost of evidence of title and reasonable
attorneys' fees in connection with sale,as above set forth,Trustee shall apply the proceeds of sale to
payment of all sums expended under the terms hereof, not then repaid,with accrued interest at the
rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the
Beneficiary and any other person or persons legally entitled thereto.
4
31. Remedies Cumulative. No remedy herein conferred upon or reserved to
Trustee or Beneficiary is intended to be exclusive of any other remedy provided herein or under the
Promissory Note,the City Section 108 Loan Agreement or this Agency Deed of Trust,or otherwise
by law provided or permitted,or provided in any guaranty given in connection with the Promissory
Note, but each shall be cumulative and shall be in addition to every other remedy. Every power or
remedy given by this instrument to Trustee or Beneficiary or to which either of them may be
otherwise entitled,maybe exercised concurrently or independently,from time to time and as often as
may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent
remedies.
32. No Waiver. No waiver of any default or failure or delay to exercise any right
or remedy by Beneficiary shall operate as a waiver of any other default or of the same default in the
future or a preclusion of any right or remedy with respect to the same or any other occurrence.
33. Marshaling. In case of a sale under this Agency Deed of Trust, the
Mortgaged Property,real,personal and mixed,may be sold in one or more parcels.Neither Trustee
nor Beneficiary shall be required to marshal Trustor's assets.
34. SUBMISSION TO JURISDICTION.
TRUSTOR,TO THE FULLEST EXTENT PERMITTED BY LAW,HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVICE OF COMPETENT COUNSEL,(A)SUBMITS TO PERSONAL JURISDICTION IN
THE STATE OF CALIFORNIA OVER ANY SUIT,ACTION OR PROCEEDING BY ANY
PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES
THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN SAN
BERNARDINO COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF
SUCH COURTS,AND,(D)TO THE FULLEST EXTENT PERMITTED BY LAW,AGREES
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THAT IT WILL NOT BRING ANY ACTION,SUIT OR PROCEEDING IN ANY FORUM
OTHER THAN SAN BERNARDINO COUNTY,CALIFORNIA(BUT NOTHING HEREIN
SHALL AFFECT THE RIGHT OF BENEFICIARY TO BRING ANY ACTION, SUIT OR
PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND
AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS
FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE
SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR
EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW).
35. Trustor's Indemnification. Trustor agrees to indemnify and hold harmless
Trustee and Beneficiary from and against any and all losses, liabilities, penalties, claims, charges,
costs and expenses(including attorneys' fees and disbursements)(the"Losses")that may be imposed
on,incurred or paid by or asserted against Trustoe and/or Beneficiary by reason or on account of,or
in connection with: (a) any default by Trustor hereunder or under the Promissory Note or the City
Section 108 Loan Agreement; (b) Trustee's and/or Beneficiary's good faith and commercially
reasonable exercise of any of their rights and remedies or the performance of any of their duties
hereunder or under any other documents to which Trustor is a party; (c) the construction,
reconstruction or alteration of the Mortgaged Property; (d) any negligence, willful misconduct or
failure to act of Trustor, or any negligence,willful misconduct or failure to act of any lessee of the
Mortgaged Property, or any of their respective agents, contractors, subcontractors, servants,
employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or
property occurring in, on or about the Mortgaged Property or any street, drive, sidewalk, curb or
passageway adjacent thereto, except for the willful misconduct or gross negligence of the
indemnified person; or(f) any failure of Trustor to file any tax reports or returns referred to in this
Agency Deed of Trust. The indemnity provided under subsection (f) of this paragraph shall also
extend to counsel for the Beneficiary. Any amount payable to Trustee,Beneficiary or counsel for
Beneficiary under this paragraph shall be due and payable within ten(10)days after demand therefor
and receipt by Trustor of a statement from Trustee,Beneficiary and/or counsel for Beneficiary setting
forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear
interest at the rate of 10%per annum from and after the date such amounts are paid by Beneficiary,
Trustee or counsel for Beneficiary, until paid in full by Trustor. Trustor's obligations under this
paragraph shall not be affected by the absence or unavailability of insurance covering the same or by
the failure or refusal by any insurance carrier to perform any obligation on its part under any such
policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or
Beneficiary that is subject to the indemnity set forth in this paragraph,Trustor shall resist or defend
against the same,if necessary,in the name of Trustee and/or Beneficiary,with attorneys for Trustor's
insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by
Beneficiary. Notwithstanding the foregoing,Trustee and Beneficiary,in their reasonable discretion,
may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on
demand, shall reimburse Trustee and Beneficiary for the payment of the reasonable fees and
disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's
performance of the obligations secured by this Agency Deed of Trust and foreclosure,whether by
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judicial foreclosure, power of sale pursuant to this Agency Deed of Trust or by deed in lieu of
foreclosure.
36. Attorneys' Fees;Costs. Trustor agrees to reimburse Beneficiary for all costs,
expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiary incurs in
connection with the realization or enforcement of any obligation or remedy contained in this Agency
Deed of Trust, the Promissory Note or the City Section 108 Loan Agreement, with or without
litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in
any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or
postpone the exercise of any remedy in which Beneficiary prevails; (d)in any bankruptcy,probate,
receivership or other proceeding involving Trustor; and (e) in connection with all negotiations,
documentation,and other actions relating to any work-out,compromise,settlement or satisfaction of
the debt secured hereby or settlement of any covenants and obligations secured by this Agency Deed
of Trust or set forth in the Promissory Note or the City Section 108 Loan Agreement. For the
purposes hereof, the words "reasonable attorneys' fees" shall mean and include the salaries and
fringe benefits of the City Attorney and lawyers employed by the City of Attorney of the City of San
Bernardino, computed on a hourly basis, who may provide legal services to the Beneficiary in
connection with the exercise by the Beneficiary of any of its remedies hereunder. All such costs,
expenses and fees shall be due and payable upon demand,shall bear interest from the date incurred
through the date of collection at the rate of 10%per annum, and shall be secured by this Agency
Deed of Trust.
37. Acceptance by Trustee. Trustee accepts this Trust when this Agency Deed of
Trust, duly executed and acknowledged, is made a public record, as provided by law.
38. Successor Trustee. Trustee may resign by an instrument in writing addressed
to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in
writing executed by Beneficiary and duly recorded. In case of the death, resignation, removal or
disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a
substitute or successor trustee to act instead of Trustee herein named or any substitute or successor
trustee,then Beneficiary shall have the right and is hereby authorized and empowered to appoint a
successor trustee,or a substitute trustee,without other formality than appointment and designation in
writing executed and acknowledged by Beneficiary and the recordation of such writing in the office
where this Agency Deed of Trust is recorded,and the authority hereby conferred shall extend to the
appointment of other successor and substitute trustees successively. Such appointment and
designation by Beneficiary shall be full evidence of the right and authority to make the same and of
all facts therein recited. If such appointment is executed on behalf of Beneficiary by an officer of
Beneficiary, such appointments shall be conclusively presumed to be executed with authority and
shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiary.
Upon the making of such appointment and designation, all of the estate and title of Trustee in the
Mortgaged Property shall vest in the named successor or substitute trustee and it shall thereupon
succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and
duties herein conferred upon Trustee;but,nevertheless,upon the written request of Beneficiary or of
the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to
such successor or substitute trustee all of the estate and title in the Mortgaged Property of the trustee
so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein
4821-4420-8640.2 28
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conferred upon Trustee,and shall duly assign,transfer and deliver any of the properties and moneys
held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee
shall be deemed to refer to any trustee (including any successor or substitute, appointed and
designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and
confirms any and all acts that Trustee herein named or its successor or successors, substitute or
substitutes, in this Agency Deed of Trust, shall do lawfully by virtue hereof.
39. Reconveyance Pursuant to the Terms of Section 10 of the Collateral
Assignment. Trustee shall reconvey,without warranty,the Mortgaged Property then held hereunder:
(i) written request of Beneficiary,stating that all performances and sums secured hereby have been
satisfied and paid, and upon surrender of this Agency Deed of Trust to Trustee for cancellation and
retention,and upon payment of its fees,or(ii)in accordance with the provisions of Section 10 of the
Collateral Assignment of Deed of Trust executed by the Beneficiary in favor of the Secretary of
HUD concurrently with this Agency Deed of Trust. The recitals in any reconveyance executed under
this Agency Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness
thereof. The grantee in such reconveyance may be described as "the person or persons legally
entitled thereto." %
40. No Releases. The Mortgaged Property shall not be released from the lien of
this Agency Deed of Trust and no person shall be released from liability under the Promissory Note
or any other obligation secured hereby,except in the manner herein specified. Without affecting the
liability of any other person for the payment and performance of any obligation herein mentioned
(including Trustor should it convey said Mortgaged Property) and without affecting the lien or
priority hereof upon any Mortgaged Property not released,Beneficiary may,without notice,release
any person so liable, extend the maturity or modify the terms of any such obligation, grant other
indulgences,make future or other advances to Trustor or any one or more parties comprising Trustor,
assign or in any manner transfer this Agency Deed of Trust, release or reconvey or cause to be
released or reconveyed at any time all or part ofthe said Mortgaged Property described herein, take
or release any other security or make compositions or other arrangements with debtors. Beneficiary
may also accept additional security, either concurrently herewith or thereafter, and sell same or
otherwise realize thereon, either before,concurrently with,or after sale hereunder.
41. Beneficiary's Consents. At any time, upon written request of Trustor,
Trustor's payment of Beneficiary's fees and presentation of this Agency Deed of Trust(in case of
full reconveyance,for cancellation and retention),without affecting the liability of any person for the
payment of the indebtedness, Beneficiary may: (a)consent to the making of any map or plat of said
Mortgaged Property;(b)join in granting any easement or creating any restriction thereon,(c)join in
any other agreement affecting this Agency Deed of Trust or the lien or charge thereof, and (d)
reconvey, without warranty, all or any part of the Mortgaged Property.
42. RESERVED—NO TEXT.
43. Further Assurances. Trustor,from time to time,within fifteen(15)days after
request by Beneficiary, shall execute, acknowledge and deliver to Beneficiary, such chattel
mortgages, security agreements or other similar security instruments, in form and substance
reasonably satisfactory to Beneficiary, covering all property of any kind whatsoever owned by
48214420-8640.2 29
11/6/06 jmm
Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiary, is
essential to the operation of the Mortgaged Property covered by this Agency Deed of Trust.Trustor
shall further, from time to time, within fifteen (15) days after request by Beneficiary, execute,
acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation
statement or other document as Beneficiary may reasonably request in order to perfect, preserve,
continue, extend or maintain the security interest under, and the priority of, this Agency Deed of
Trust and the priority of each such chattel mortgage or other security instrument. Trustor further
agrees to pay to Beneficiary on demand all reasonable costs and expenses incurred by Beneficiary in
connection with the preparation, execution,recording, filing and refiling of any such instrument or
document,including the charges for examining title and the attorneys' fees for rendering an opinion
as to priority of this Agency Deed of Trust and of such chattel mortgage or other security instrument
as a valid and subsisting lien. However,neither a request so made by Beneficiary,nor the failure of
Beneficiary to make such request shall be construed as a release of such Mortgaged Property,or any
part thereof,from the conveyance of title under this Agency Deed of Trust, it being understood and
agreed that this covenant and any such chattel mortgage,security agreement or other similar security
instrument delivered to Beneficiary are cumulative and given as additional security.
a
44. Time of Performance. Time is of the essence hereof in connection with all
obligations of the Trustor herein and under the Promissory Note.
45. Notices. The undersigned Trustor requests that a copy of any Notice of
Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any
notices to be given to Trustor by Beneficiary hereunder shall be sufficient,if personally delivered or
mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address
that Trustor has requested in writing to Beneficiary. Any time period provided in the giving of any
notice hereunder shall commence upon the date such notice is delivered or deposited with the United
States Postal Service for delivery by regular first-class postage pre-paid mail,as officially recorded
on the certified mail receipt..
46. Beneficiary's Right to Inspect. Beneficiary and its agents and representatives
may enter upon the Mortgaged Property at all reasonable times to attend to Beneficiary's interest and
to inspect the Mortgaged Property.
47. Reports and Statements. Trustor shall deliver to Beneficiary, within ninety
(90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after
Beneficiary's request, following an Event of Default,reasonably detailed operating statements and
occupancy reports in a form satisfactory to Beneficiary covering the Mortgaged Property, both
certified as correct by Trustor. At Beneficiary's option, after an Event of Default, such operating
statements shall be prepared by an independent certified public accountant at Trustor's expense. If
Beneficiary so requests,such statements shall specify,in addition to other information requested by
Beneficiary,the rents and profits received from the Mortgaged Property,the disbursements made for
such period,the names of the tenants of the Mortgaged Property and a summary of the terms of the
respective leases or the rental arrangements. Trustor shall permit Beneficiary or its representative to
examine all books and records pertaining to the Mortgaged Property,and shall deliver to Beneficiary
all financial statements,credit reports,and other documents pertaining to the financial condition and
48214420-8640.2 30
11/6/06 imm
obligations of Trustor and any tenants of the Mortgaged Property, and rental, income, and expense
statements, audits, and tax returns relating to the Mortgaged Property.
48. Assignment by Beneficiary; Participation. Beneficiary may assign this
Agency Deed of Trust in whole or in part to any person, including without limitation the United
States Secretary of the Department of Housing and Urban Development and may grant participations
in any of its rights under this Agency Deed of Trust, without notice and without affecting Trustor's
liability under this Agency Deed of Trust. In connection with any proposed assignment,participation
or similar arrangement, Beneficiary may make available to any person all credit and financial data
furnished or to be furnished to Beneficiary by Trustor. Trustor agrees to provide to the person
designated by Beneficiary any information as such person may reasonably require to form a decision
regarding the proposed assignment, participation or other arrangement.
49. RESERVED—NO TEXT.
50. Legal Relationships. The relationship between Beneficiary and Trustor is
similar to that of lender and borrower,and no partnership,joint venture,or other similar relationship
shall be inferred from this Agency Deed of Trust. Trustor shall not have the right or authority to
make representations, to act,or to incur debts or liabilities on behalf of Beneficiary. Trustor is not
executing this Agency Deed of Trust as an agent or nominee for an undisclosed principal, and no
third party beneficiaries are or shall be created by the execution of this Agency Deed of Trust,other
than by the assignment by Beneficiary of this Agency Deed of Trust.
51. Trustor Certification of Approval. Trustor hereby covenants and certifies that
by executing this Agency Deed of Trust, Trustor has obtained the approval of any existing Senior
Lender to execute and deliver the Promissory Note and this Agency Deed of Trust.
52. Modification. This Agency Deed of Trust may be amended, modified,
changed or varied only by a written agreement signed by all of the parties hereto.No requirement of
this Agency Deed of Trust may be waived,at any time,except in a writing signed by Beneficiary and
any such waiver shall be effective only as to its terms and on a single occasion. Neither,
Beneficiary's delay or omission in exercising any right,power or remedy under this Agency Deed of
Trust upon default of Trustor nor Beneficiary's failure to insist upon strict performance of any of the
covenants or agreements contained in this Agency Deed of Trust shall be construed as a waiver of
any such right,power,remedy, covenant or agreement or as an acquiescence in Trustor's breach or
default.
53. Successors. Subject to the prohibitions against Trustor's assignments herein,
this Agency Deed of Trust shall inure to the benefit of and bind all of the parties,their successors,
estates,heirs,personal representatives and assigns.
54. Partial Invalidity. If a court of competent jurisdiction finally determines that
any provision of this Agency Deed of Trust is invalid or unenforceable, the court's determination
shall not affect the validity or enforceability of the remaining provisions of this Agency Deed of
Trust. In such event, this Agency Deed of Trust shall be construed as if it did not contain the
particular provision that was determined to be invalid or unenforceable. No such determination shall
482113420-8640.2 31
11/6/06 jmm
affect any provision of this Agency Deed of Trust to the extent that it is otherwise enforceable under
the laws of any other applicable jurisdiction.
55. Mutual Negotiation. Beneficiary and Trustor confirm that they have mutually
negotiated this Agency Deed of Trust and that none of the terms or provisions of this Agency Deed
of Trust shall be construed against either party.
56. Paragraph Headings. The paragraph headings are for convenience only and in
no way define, limit, extend, or describe the scope or intent of this Agency Deed of Trust or any of
its provisions.
57. Applicable Law. This Agency Deed of Trust and the rights of the parties
hereunder shall be governed by,construed and enforced in accordance with the laws of the State of
California.
58, Entire Agreement. This Agency Deed of Trust, including any exhibits or
addenda, contains the entire agreement of the parties with respect to the subject matter hereof
59. Counterparts. This Agency Deed of Trust may be executed in two or more
counterparts, all of which together shall constitute one and the same instrument and lien. The
signature pages of exact copies of this Agency Deed of Trust may be attached to one copy to form
one complete document. Additional copies of this Agency Deed of Trust may be executed in
counterparts and recorded in two or more counties, all of which shall constitute one and the same
instrument and lien.
60. Fixture Filing and Recording. This Agency Deed of Trust constitutes a
financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as
amended or recodified from time to time. This Agency Deed of Trust is to be recorded in the real
estate records of San Bernardino County, California, and covers goods that are, or are to become,
fixtures.
61. Survival of Representations and Warranties. All of Trustor's representations
and warranties contained in this Agency Deed of Trust shall be true and correct at all times during
the term of the Promissory Note secured hereby,until performance of all obligations set forth in the
Promissory Note and in the City Section 108 Loan Agreement or,alternatively,full repayment of the
Promissory Note and release and reconveyance of this Agency Deed of Trust.
62. Conflicting Provisions. To the extent that the provisions of this Agency Deed
of Trust conflict with any provisions of the City Section 108 Loan Agreement,the provisions of this
Agency Deed of Trust shall control.
63. RIGHTS OF THE SECRETARY OF HUD. This Agency Deed of Trust is
part of the"City Section 108 Loan Collateral"as this term is defined in the City Section 108 Loan
Agreement. Pursuant to the provisions of paragraph 15(f) of that certain Contract for Loan
Guarantee assistance under Section 108 of the Housing and Community Development Act,of 1974,
as amended (the "HUD Section 108 Loan Agreement') by and between the Beneficiary and the
4821-4420-8640.2 32
11/6/06 jmm
United States Secretary of Housing and Urban Development(the"Secretary"),the Beneficiary shall
make a collateral assignment in favor of the Secretary,or its assignee, in this Agency Deed of Trust
to the "Custodian"(as this term is defined in the HUD Section 108 Loan Agreement).
Paragraph 15(1) of the HUD Section 108 Loan Agreement provides in relevant part:
"The Secretary may complete the endorsement of the Subrecipient Note[e.g.:the Promissory
Note from Trustor to Beneficiary] and record the assignments referred to in paragraph 15(e)
and thereby effectuate tfie transfer of the documents referenced and underlying indebtedness
[e.g.,the City Section 108 Loan Collateral including without limitation this Agency Deed of
Trust] from the Borrower[e.g.:the Beneficiary]to the Secretary or the Secretary's assignee."
Paragraph 15(i)of the HUD Section 108 Loan Agreement further provides:
"The Borrower[e.g.,the City/Beneficiary] agrees that it shall promptly notify the Secretary
[of HUD] in writing upon the occurrence of any event which constitutes a default(an"Event
of Default") under (and as defined in) any of the Security Documents, as defined in
paragraph 15(d)[e.g.,the City Section 108 Loan Collateral,including without limitation this
Agency Deed of Trust]. Notification of an Event of Default shall be delivered to the
Secretary[of HUD] as directed in paragraph 12(f)above. Upon the occurrence of an Event
of Default, the Secretary [of HUD] may(without prior notice or hearing, which Borrower
[e.g.,the Beneficiary]hereby expressly waives),in,addition to(and not in lieu of)exercising
any and all remedies that may be available under the Security Documents [ e.g., the City
Section 108 Loan Collateral] declare the [HUD] Note in Default and exercise any and all
remedies available under paragraph 12. This paragraph shall not affect the right of the
Secretary [of HUD] to declare the [HUD] Note in default pursuant to paragraph 11 and to
exercise in connection therewith any and all remedies available under paragraph 12."
The Trustor acknowledges and agrees that this Agency Deed of Trust is and shall be
enforceable by the Secretary of HUD upon the completion of the endorsement by the Secretary of
HUD of the Promissory Note.
4821-4420-8640.2 33
11/6/06 imm
IN WITNESS WHEREOF,Trustor hereby duly executes this Agency Deed of Trust
as of the day and year first above written.
TRUSTOR
Redevelopment Agency of the City of San
Bernardino, a public body corporate and politic
By:
Chairperson of the Community
Development Commission of the City of
San Bernardino, its governing body
[NOTARY ACKNOWLEDGMENT ATTACHED]
4821-4420-8640.2 34
11/6/06 imm
EXHIBIT"A"
LEGAL DESCRIPTION OF PROPERTY
[INSERT COMPOSITE LEGAL DESCRIPTION OF EACH
AGENCY-OWNED PARCEL OF LAND INCLUDED IN
THE ARDEN-GUTHRIE NEIGHBORHOOD]
4821-4420-8640.2 35
11/6/06 jmm
EXHIBIT "F"
HUD Section 108 Loan Covenants Applicable to the Project
(24 CFR Part 570 conditions and assurances)
48154167-0656.3 23
11/6/06 jmm
EXHIBIT'W'
■ 2006
CITY OF SAN BERNARDINO AND
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
REDEVELOPMENT COOPERATION LOAN AGREEMENT
(Arden-Guthrie Neighborhood Redevelopment Project)
COMMUNITY DEVELOPMENT BLOCK GRANT FUNDED
PROGRAM AND ACTIVITY REGULATIONS APPLICABLE
TO THE LOAN,AND THE AGENCY AND THE DEVELOPER
Section 1. Definitions and List of Exhibits.
a. As used in this Exhibit"F", the terms and phrases set forth below shall mean:
• "Agency" means and refers to the Redevelopment Agency of the City of San
Bernardino.
• "Agency Project" means and refers to the "Project", as this term is defined in the
Redevelopment Cooperation Loan Agreement, dated as of July 1, 2006, by and between
the City and the Agency.
• "City" means and refers to the City of San Bernardino.
• "Contractor" means and refers to any third party service provider or general contracting
firm which is either retained by the Agency in the case of the "Agency Project" or
retained by the Developer in the case of the"Developer Project".
• "Developer Grant Agreement" means and refers to the project grant development
agreement by and between the Developer and the Agency, as referenced in the
Redevelopment Cooperation Loan Agreement, dated as of July 1, 2006, by and between
the City and the Agency.
• "Developer Project" means and refers to the commercial/retail development project to
be undertaken on the Project Site by the Developer in accordance with and subject to
the terms and conditions of the Developer Grant Agreement.
• "HUD" means and refers to the United States Secretary of the Department of Housing
and Urban Development.
• "HUD Program Regulations" means and refers to the Untied States Secretary of the
Department of Housing and Urban Development Section 108 Loan program regulations
of HUD(24 CFR Part 570,et seq).
4827-8318-4640.1 1
• "Loan" means and refers to "Loan-A" as this term is defined in the Redevelopment
Loan Cooperation Agreement, dated as of July 1, 2006, by and between the City and the
Agency.
• "Program Income" has the meaning ascribed to such term under the HUD Program
Regulations.
• "Redevelopment Loan Cooperation Agreement" means and refers to the loan agreement
by and between the City and the Agency, dated as of July 1, 2006, pursuant to which the
City shall provide the proceeds of a HUD Section 108 Loan to the Agency in a principal
amount not to exceed $7,500,000 in support of the Agency Project. The Agency is the
"Agency" under the Redevelopment Loan Cooperation Agreement. The Developer is
(or shall be) a"subrecipient"of the proceeds of the HUD Section 108 Loan.
b. The following is an index to the caption of the twelve (12) individual exhibits attached
to this Exhibit"F":
(1) Exhibit"F-1" Federal Labor Standards Provisions
(2) Exhibit"F-2" Material Covered at Preconstruction Conference
(3) Exhibit"F-3" Standards for Financial Management Systems
(4) Exhibit"174" Disclosure of Lobbying Activities
(5) Exhibit"F-5" Training Employment and Business Opportunity
(6) Exhibit"F-6" Utilization of Small Business Concerns
(7) Exhibit"F-7" Small Business Subcontracting Plan
(8) Exhibit"F-8" City of San Bernardino Disadvantaged Business Enterprise
Program Policies for Federally Assisted Activities
(9) Exhibit"F-9" Affirmative Action for Workers with Disabilities
(10) Exhibit"F-10" Affirmative Action for Disabled Veterans and Veterans of the
Vietnam Era
(11) Exhibit"F-11" Clean Air and Water
(12) Exhibit"F-12" Clean Air and Water Certification
Section 2. Agency's Obligations.
In addition to the Agency's obligations as set forth in other sections of the Agreement, the
Agency agrees to perform the following specific obligations and duties:
a. The Agency shall include covenants enforceable by the City and HUD, in the Developer
Agreement which ensure that the Developer shall be responsible for implementation of the Developer
Project. Implementation of the Developer Project shall include preparation of specification documents
4827-8318-4640.1 2
and plans if necessary for the construction of the Developer Project; solicitation and hiring of
contractors; construction engineering and inspection; and contract administration and HUD compliance
monitoring services.
b. The Agency agrees that the City may terminate, suspend and/or reduce the amount of
Loan funding provided for in the Agreement if all work performed by the Agency is not completed
satisfactorily and within the budgetary limits and time schedule milestones provided for in the
Agreement. The length of any suspension or of the amount of Loan reduction shall be at the City's
sole option. The City agrees that delays in completion of the work subject to the Agreement may
result for reasons outside the control of the Agency, and agrees that the City will extend the time for
completion of the work for unavoidable delays for a reasonable period, as determined solely by the
City. However the City shall not be obligated to pay or to otherwise reimburse the Agency for work
performed subject to the Agreement if HUD Program/Section 108 Loan funding for the Agency
Project or the Developer Project, as applicable, is revoked or suspended by HUD due in part or whole
to the delay in the completion of the work contemplated by the Agreement.
C. The City shall be responsible for complying with all applicable local, state, and federal
regulations, including, but not limited to, the monitoring%of construction for compliance with the
federal labor standards contract requirements set forth in the "Preconstruction Checklist for
Contractors," attached hereto as Exhibit"F-1". If the Agency with respect to the Agency Project or the
Developer with respect to the Developer Project hire a consultant to provide compliance monitoring
required to ensure, to the satisfaction of HUD and the City, that all applicable regulations are met
during the implementation of the Agency Project and/or the Developer Project, as applicable, the
Agency with respect to the Agency Project or the Developer with respect to the Developer Project shall
monitor the consultant's compliance efforts and shall remain responsible to the City for providing
compliance monitoring records in a form acceptable to the City. The Agency agrees to become
familiar with the applicable statutes, regulations and guidelines governing the HUD Program
Regulations. All applicable statutes, regulations, guidelines, codes, rules and executive orders referred
to in the Agreement are as from time to time amended.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project shall be solely responsible for its actions in complying with applicable local, state
and federal requirements. Should the City become subject to any claims, causes of action, costs or
sanctions due to any failure by the Agency with respect to the Agency Project and the Developer with
respect to the Developer Project to comply with all applicable federal, state, and local laws and
regulations, the Agency hereby agrees to be solely liable for any such expenses, costs, damages and
sanctions and shall fully reimburse, hold harmless, and indemnify the City for any payments made or
funding lost by the City and the City's expenses related thereto, including the City's costs and
attorney's fees.
d. The Agency with respect to the Agency Project and the Developer with respect to the
Developer Projector any general contractors hired by the Agency to perform work on the
Improvements shall obtain any and all permits necessary to implement the Agency Project and/or the
Developer Project, as applicable, from appropriate agencies.
e. The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project (in collaboration with the City) shall conduct a prebid and a preconstruction
conference for the purposes stated within the document, "Material Covered at Preconstruction
Conference" (Exhibit"F-2").
4827-83184640.1 3
■ f. The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project shall cooperate fully with the City in undertaking, monitoring and completing the
Agency Project and the Developer Project, as applicable.
g. The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project shall, as part of its contract administration responsibility, publish in a newspaper of
general circulation, in trade journal publications and in minority oriented publications, a notice
soliciting economically disadvantaged, small, and Section 3 business participation.
h. In the event that The Agency with respect to the Agency Project and the Developer with
respect to the Developer Project cannot or -fails to utilize the subject improvements for the purpose
described in the Agreement, the Agency shall immediately reimburse the City in an amount equal to
the Loan plus accrued interest expended for the Agency Project and/or the Developer Project, as
applicable.
Section 3. Records and Administration.
a. The Agency shall arrange at its own expense for performance of a"Single Audit" of its
entire operation by an independent auditor. Such audit shall comply with the requirements and
standards of OMB Circular A-133, "Audits of States, Local Governments and Non-Profit
Organizations"; Public Law 98-502, "Single Audit Act of 1984", as amended; 24 CFR 85.26, "Non-
Federal Audit", OMB Circular A-87, "Principles for Determining Costs Applicable to Grants and
Contracts with State, Local and Federally Recognized Indian Tribal Government"; and the "Office of
Management and Budget Compliance Supplement", all of which are incorporated herein by this
reference as if set forth in full.
The results of the audit must be submitted to the City within thirty (30) days of completion.
Acceptance of the Agency's audit reports by the City does not prohibit the City from performing any
additional audit work required to follow up on findings, as deemed necessary by the City, or as
necessary for the City to comply with any administrative or audit requirements imposed by the federal
or state government.
b. As a condition of receiving federal financial assistance under the Agreement, the
Agency agrees to comply with 24 CFR 85.42,"Retention and Access Requirements for Records." It is
further agreed by the Agency that any agreement between Agency and its independent auditor shall
provide for access during normal business hours to the independent auditor's work papers by federal,
state and the City's auditors, or their authorized agents, as may be deemed necessary to carry out their
audit responsibilities. The audit agreement must also require the Agency's independent auditor to
retain for review purposes said audit work papers for three (3) years from date of audit completion or
until all related audit issues are resolved, whichever should occur later.
C. The Agency agrees to maintain a financial management system which complies with 24
CFR 85.20, "Standards for Financial Management Systems". Particular reports and records that may
be applicable to the Agency Project and the Developer Project are described in and attached hereto as
Exhibit"17-3".
d. The Agency agrees to comply with the methods and procedures for payment as outlined
in 24 CFR 85.2 1, "Payment".
4827-8318-4640-1 4
e. The Agency agrees to comply with the standards and requirements of 24 CFR 85.33,
"Supplies," and 24 CFR 85.32, "Equipment," with the exception that in all cases in which the
equipment is sold, the proceeds shall be considered to be Program Income and be immediately
refundable to the City.
f. The Agency agrees to comply with the requirements and standards of 24 CFR 85.36,
"Procurement,"except paragraph(a), and 24 CFR 85.22, "Allowable Costs."
g. The Agency agrees to comply with the standards and requirements of 24 CFR 85.35,
"Subawards to Debarred and Suspended Parties," and 24 CFR 85.40, "Monitoring and Reporting
Program Performance," except paragraphs (b) through (d) and paragraph (f) thereof and that such
standards and requirements shall also be applicable to the Developer. The Agency further agrees that
the City has the right to monitor and supervise the administration and/or implementation of the
Developer Improvements to be completed pursuant to the Agency Grant Agreement to help insure
compliance with the requirements of the HUD Program regulations as now or hereinafter amended as
relate to the Agency Project and the Developer Improvements, as applicable, or any other statute, rule,
regulation or guideline applicable to the administration and/or implementation of the Grant program.
4
h. The Agency agrees to comply with the standards and requirements of 24 CFR 85.43,
"Enforcement," and 24 CFR 85.44, "Fermination for Convenience" as relate to the receipt of Loan
proceeds from the City.
i. The Agency shall be accountable to the City for any and all Loan funds expended by the
Agency or any officer,,employee, agent or representative thereof, whether or not such officer,
employee, agent or representative thereof was acting within the scope of his employment. The Agency
shall repay the City the full amount of any improperly expended Loan funds upon demand and shall
comply with the requirements of 24 CFR 85.5 1, "Later Disallowances and Adjustment." The City may
retain any funds of the Agency in the City's possession as an offset against the debt resulting from
such improper expenditure.
j. The Agency agrees to comply with the standards and requirements of 24 CFR 85.52,
"Collection of Amounts Due."
k. The Agency shall return to the City, within forty-five (45) days of receipt, all Program
Income which is directly generated by the Loan or which may be payable to the Agency under the
Agency Grant Agreement activities during the term of the Loan.
1. At the City's sole option, the City may either terminate the Agreement upon three (3)
days' written notice to Agency or withhold disbursement of Loan funds if the Agency is not complying
with HUD Program Regulations, the terms of the City Section 108 Loan from the federal government
to the City, the regulations of the City to facilitate the administration of the Loan, the terms of the
Agreement, or any other statute or regulation applicable to the HUD Program Regulations, as
determined solely by the City. Should the City become subject to any claims, causes of action, costs or
sanctions due to any failure by the Agency or the Developer to comply with all applicable federal,
state, and local laws and regulations, the Agency hereby agrees to be solely liable for any such
expenses, costs, damages and sanctions of the City and shall fully reimburse, hold harmless, and
indemnify the City for any payments made or funding lost by the City and the City's expenses related
thereto, including the City's costs and reasonable attorney's fees.
4827-8318-4640.1 5
Section 4. Use Restriction Monitoring.
Beginning approximately one year after the date of completion of the Agency Project, the City
shall conduct on-site monitoring of real property purchased and/or improvements constructed with
Loan funds pursuant to the Agreement for compliance with HUD Program Regulations applicable to
the Loan. The purpose of the monitoring visit is to insure that the Loan funded real property and/or
improvements continue to be utilized for their original eligible use or for another use approved by the
City in accordance with applicable regulations found at 24 CFR Part 570.201, and/or that the
beneficiaries continue to qualify pursuant to the national objectives of the HUD Program Regulations.
Monitoring visits shall consist of interviews with the operator and key members of the staff of Agency,
and if applicable, the Developer, an examination of relevant data and application forms regarding the
use of the Loan funded real property or improvements and clientele served, and, at the discretion of the
City, interviews with persons served by the Developer Project. The City shall notify the Agency at
least two(2) weeks in advance of each monitoring visit.
In order to assist the City in monitoring the continued use of the real property purchased and/or
the improvements constructed pursuant to the Agreement, the Agency shall maintain appropriate
records regarding the achievement of the national objectives by the Agency Project and the Developer
Project, as applicable.
Section 5. Prohibited Use of Federal Funds for Lobbying.
The Agency certifies, to the best of its knowledge and belief, that no federally appropriated
funds have been paid or will be paid, by or on behalf of the Agency or the Develoepr, to any person for
influencing or attempting to influence an officer or employee of any agency, a Member of Congress,
an officer or employee of Congress, or an employee of a Member of Congress in connection with the
awarding,of any federal contract, the making of any federal grant, the making of any federal loan, the
entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or
modification of any federal contract, grant, loan, or cooperative agreement.
If any funds, other than federally appropriated funds, have been paid or will be paid to any
person for influencing or attempting to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection
with this federal contract, grant, loan, or cooperative agreement, the Agency shall complete and submit
(or cause the Developer to complete and submit, if applicable), a HUD Program Regulation, Standard
Form-LLL, "Disclosure of Lobbying Activities," in the form attached as Exhibit"F-4".
Section 6. "Section 3" Compliance in the Provision of Training, Employment, and
Business Opportunities for Lower-Income Persons.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project, are both subject to the requirements of Section 3 of the Housing and Urban
Development Act of 1968 (12 USC 1701u), as amended, the HUD regulations issued pursuant thereto
at 24 CFR Part 135, and any applicable rules and orders of HUD issued thereunder. The purpose of
Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance
or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low
and very low income persons.
4827-8318-4640.1 6
The Agency shall cause or require (or cause the Developer to so cause and require) to be
inserted in full in all contracts and subcontracts for work financed, in whole or in part, with assistance
provided under the Agreement, the Section 3 clause entitled, "Training, Employment and Business
Opportunity", and set forth in Exhibit"F-5", attached hereto.
The Agency for itself, and for the Developer during the construction of the Developer Project
shall, to the greatest extent feasible, seek out and attempt to award contracts (and cause the Developer
to attempt to so award contracts as relate to the Developer Project) to Section 3 business concerns for
the business opportunities generated on this federally funded project.
The Agency and the Developer, as applicable, shall provide such copies of 24 CFR Part 135 as
may be necessary for the information of the parties to contracts required to contain the Section 3
clause.
Section 7. Small Business Concerns.
The Agency is subject to the requirements of the Small Business Act (15 USC 631 et seq.), as
amended, the HUD applicable regulations issued pursuant thereto at 48 CFR, Part 19, and any
applicable rules and orders of HUD issued thereunder requiring aid, counseling, assistance, and
protection, insofar as possible, with, for, or of the interests of small business concerns in order to
preserve free competitive enterprise; and placement with small business concerns of a fair proportion
of the total federally funded purchases and contracts for property and services.
The Agency shall implement the specific small business policies as set forth hereinbelow with
respect to the Agency Project and shall cause the Developer to so implement these specific small
business policies with respect to the Developer Project in order to further applicable requirements of
the Small Business Act:
a. Small business concerns shall be afforded an equal opportunity to compete for prime
contracts and subcontracts. The "Utilization of Small Business Concerns" clause (48 CFR 52.219-8)
set forth in Exhibit "F-6", attached hereto and incorporated herein by this reference as if set forth in
full, shall be included by Agency in all contracts in connection with this Project in amounts which may
exceed TEN THOUSAND DOLLARS ($10,000) except(i) contracts which, including all subcontracts
thereunder, are to be performed entirely outside the United States, and(ii)contracts for services which
are personal in nature. The "Small Business Subcontracting Plan" clause (48 CFR 52.219-9) set forth
in Exhibit "F-7", attached hereto shall be included by the Agency/Developer in all contracts in
connection with the Agency Project/Developer Project which may exceed FIVE HUNDRED
THOUSAND DOLLARS ($500,000) and which, in the opinion of the City, offer substantial
subcontracting possibilities.
b. Bidders' mailing lists shall include established and potential qualified small business
concerns.
C. Invitations for bids or requests for proposals shall be sent to all firms on the appropriate
mailing list except that where use of less than a complete list is appropriate, a pro rata number of small
business concerns shall be solicited.
4827-8318-4W.1 7
d. Proposed procurements and contract awards shall be publicized in accordance with
these policies.
e. Procurement of property and services shall be divided into reasonably small lots (not
less than economic production runs) in order to permit bidding on quantities less than the total
requirements.
f. The maximum amount of time practical shall be allowed for preparation and submission
of bids and proposals.
g. Delivery schedules shall be established on a realistic basis which will encourage small
business participation to the extent consistent with the actual requirements of the Small Business Act.
h. Applicable specifications, plans, and drawings either shall be furnished with invitations
for bids and requests for proposals or, when not so furnished, information as to locations where they
may be obtained or examined shall be furnished.
i. In the event of equal low bids, awards shall be in accordance with 48 CFR Subpart
14.408-6, "Equal Low Bids."
j. Subcontracting to enroll small business concerns shall be encouraged.
k. Placement of small purchases (amounts under TWENTY FIVE THOUSAND
DOLLARS [$25,0001) with small business concerns shall be encouraged.
1. Small business concerns seeking Federal contracts, but found to lack qualifications as
prime contractors, should be referred to the City and the Small Business Administration for assistance
as may be appropriate.
m. Offers from small business concerns otherwise qualified to perform specific federal
contracts but ineligible under Walsh-Healey Public Contract Act, 41 USC 35 et seq., shall be referred
to the City and Small Business Administration for possible certification of eligibility to receive and
perform the contract.
n. To the extent practicable, work to be performed which exceeds the maximum amount of
any contract for which a surety may be guaranteed against loss shall be placed so that more than one
small business concern may perform the work.
o. A small business concern otherwise qualified to receive and perform specific federal
contracts but determined to be nonresponsible may be certified to be competent by the Small Business
Administration under the provisions of the Small Business Act.
Section 8. Disadvantaged Business Enterprises.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project are both subject to the applicable rules and orders of HUD issued with respect to
Disadvantaged Business Enterprises requiring that the maximum practicable opportunity to participate
in the performance of contracts funded in whole or in part with federal funds be provided to
economically disadvantaged business enterprises as subcontractors and suppliers to contractors
performing work or rendering services as prime contractors or subcontractors under federally funded
procurement contracts.
4827-8318-4W.1 8
For purposes of the Loan, the Agency and the Developer shall be deemed to be in compliance
with the Disadvantaged Business Enterprise regulations of the HUD Program Regulations provided
that the Agency and the Developer each implement the Disadvantaged Business Enterprise program
policies and goals of the City. The Disadvantaged Business Enterprise program policies and goals of
the City are set forth in Exhibit"F-8".
Section 9. Nondiscrimination on the Basis of Age.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project are both subject to the Age Discrimination Act of 1975, as amended, (Title III
Public Law 94-135) and attendant regulations at 24 CFR Part 146, which prohibits, except as otherwise
provided, that any person in the United States shall, on the basis of age, be excluded from participation
in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving
federal financial assistance. The Agency with respect to the Agency Project and the Developer with
respect to the Developer Project are both also subject to the Age Discrimination in Employment Act of
1967 addressing age discrimination in employment for persons between the ages of forty (40) and
seventy (70) years.
Section 10. Rehabilitation Act of 1973 and Nondiscrimination Based on Handicap.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project subject to the provisions of Sections 503 and 504 of the Rehabilitation Act of 1973
(P.L. 93-112), 29 USC 794 and attendant regulations at 48 CFR Chapter 1, Subpart 22.14 and 41 CFR
60-741.5, "Affirmative Action Clause", and 24 CFR 8, "Nondiscrimination Based on Handicap in
Federally Assisted Programs and Activities of HUD", which provide that no otherwise qualified
individual with a disability shall, solely by reason of his disability, be excluded from the participation
in, be denied the benefits of, or be subjected to, discrimination under any program or activity receiving
federal financial assistance. Agency shall cause or require to be inserted in full, in all such contracts
® subject to such regulations, the clauses, or any modifications thereof, set out in 48 CFR 52.222-36,
attached hereto as Exhibit"F-9".
Section 11. Americans with Disabilities Act of 1990.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project agree to abide by the requirements of the Americans with Disabilities Act of 1990,
Public Law 101-336, and any regulations issued pursuant thereto, which prohibits, at Title I thereof,
discrimination by any employer, employment agency, or labor organization against any qualified
individual with a disability in regard to any term, condition, or privilege of employment; makes
applicable, at Title H thereof, the prohibition against discrimination on the basis of disability to all
programs, activities and services provided or made available by state and local agencies or
instrumentalities or agencies thereof, or by public entities that provide public transportation; prohibits,
at Title III thereof, discrimination against disabled persons by privately operated public
accommodations and in public transportation services provided by private entities; and which, at Titles
IV and V thereof, makes further provisions against discrimination against disabled persons.
4827-8318-4640.1 9
Section 12. Architectural Barriers Act of 1968.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project are bothsubject to the requirements of the Architectural Barriers Act of 1968, as
amended (42 USC 4151, et seq.), and the regulations issued pursuant thereto (41 CFR Subpart 101-
19.6), which require, except as otherwise provided, that every building be designed, constructed or
altered to meet the minimum requirements of the Uniform Federal Accessibility Standards developed
by the General Services Administration, the Department of Defense, HUD and the United States Postal
Service, in consultation with the Department of Health and Human Services. The Agency with respect
to the Agency Project and the Developer with respect to the Developer Project are both responsible for
compliance with the requirements of the Act during the design and construction and for the life of any
improvements to be constructed as part of the Developer Project. The City shall have the right, at all
reasonable times, to review construction plans and conduct inspections of the Agency Project and the
Developer Project to confirm compliance with these specifications.
Section 13. Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project shall comply with 48 CFR, Chapter 1, Part 22, Subpart 22.13 and shall take
affirmative action to employ, advance in employment and otherwise treat qualified disabled veterans
and veterans of the Vietnam era without discrimination based on their disability or veterans status in all
employment practices such as the following: employment, upgrading, demotion or transfer,
recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, and
selection for training, including apprenticeship. In all contracts or agreements of TEN THOUSAND
DOLLARS ($10,000) or more relating to the Agency Project and the Developer Project, the Agency
and/or the Developer, as applicable, shall include or cause to be included the "Affirmative Action for
Disabled Veterans and Veterans of the Vietnam Era" and the "Employment Reports on Disabled
Veterans and Veterans of the Vietnam Era" clauses set out in Exhibit"F-10".
Section 14. Environmental Considerations.
In order to assure that the policies of the National Environmental Policy Act of 1969 (NEPA),
as amended, and the California Environmental Quality Act of 1970 (CEQA), as amended, are most
effectively implemented, the City shall comply with HUD Environmental Review Procedures (24 CFR
Part 58) leading to environmental clearance for particular projects, and the CEQA review procedures
(Title 14, Section 15000 et seq. of the California Code of Regulations) in connection with the Agency
Project and the Developer Project, as applicable. In order to assure that the policies of NEPA and
CEQA are carried out, the Agency and the Developer, as applicable, shall be responsible for
complying with all mitigation measures specified during the environmental review process, if any.
Section 15. Compliance with Clean Air and Water Acts.
The Agency with respect to the Agency Project and the Developer with respect to the
Developer Project are both subject to the requirements of the Clean Air Act, as amended,42 USC 7401
et seq., the Federal Water Pollution Control Act, as amended, 33 USC 1251 et seq., Executive Order
11738, dated September 10, 1973, and the regulations of the Environmental Protection Agency with
respect thereto at 40 CFR,as amended.
4827-8318-4640.1 10
The Agency and the Developer, as applicable, shall cause or require to be inserted in full in all
contracts and subcontracts in connection with the Agency Project and the Developer Project, as
applicable (with respect to any nonexempt transaction), the "Clean Air and Water" clause set out in
Exhibit "F-11", attached hereto and incorporated herein by this reference as if set forth in full. For
purposes of this provision, a "nonexempt transaction' is one which exceeds ONE HUNDRED
THOUSAND DOLLARS ($100,000), or involves a facility the subject of a conviction under the Clean
Air Act, or the Federal Waste Pollution Control Act, and listed by the Environmental Protection
Agency, or not otherwise exempt.
Furthermore, the Agency and the Developer, as applicable, shall cause or require to be inserted
in full the provisions of the "Clean Air and Water Certification' set forth in Exhibit "F-12", attached
hereto and herein incorporated as if set forth in full, in each solicitation and resulting contract and
contracts awarded without reference to a solicitation.
In no event shall any amount of assistance provided under this Agreement be utilized with
respect to a facility which has given rise to a conviction under Section 113(c)(1) of the Clean Air Act
or Section 309(c)of the Federal Water Pollution Control Act.
4827-8318-4640.1 1 1
EXHIBIT"F-1"
FEDERAL LABOR STANDARDS PROVISIONS
(HUD DOCUMENT 40 10)
Applicability
The Developer Project to which the construction work covered by the Loan pertains is
being assisted by the United States of America and the following Federal Labor Standards
Provisions are included as part of the terms and conditions of the Loan pursuant to the provisions
applicable to such federal assistance.
A. 1. (i) Minimum Wages. All laborers and mechanics employed or working
upon the site of the work (or under the United States Housing Act of 1937
or under the Housing Act of 1949 in the construction or development of
the project), will be paid unconditionally and not less often than once a
week, and without subsequent deduction or rebate on any account (except
such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR Part 3), the full
' amount of wages and bona fide fringe benefits (or cash equivalents
thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which will
be attached to and made a part of the project bid specifications regardless
of any contractual relationship which may be alleged to exist between the
contractor and such laborers and mechanics. Contributions made or costs
reasonably anticipated for bona fide fringe benefits under Section l(b)(2)
® of the Davis-Bacon Act on behalf of laborers or mechanics are considered
wages paid to such laborers or mechanics, subject to the provisions of 9
CFR 5.5(a)(1)(iv); also, regular contributions made or costs incurred for
more than a weekly period (but less often than quarterly) under plans,
funds, or programs, which cover the particular weekly period, are deemed
to be constructively made or incurred during such weekly period.
Such laborers and mechanics shall be paid the appropriate wage rate and
fringe benefits on the wage determination for the classification of work
actually performed, without regard to skill, except as provided in 29 CFR
Part 5.5(a)(4). Laborers or mechanics performing work in more than one
classification may be compensated at the rate specified for each
classification for the time actually worked therein: Provided, that the
employer's payroll records accurately set forth the time spent in each
classification in which work is performed. The wage determination
(including any additional classification and wage rates conformed under
29 CFR Part 5.5(a)(i)(ii) and the Davis-Bacon poster (WH-1321) shall be
posted at all times by the contractor and its subcontractors at the site of the
work in a prominent and accessible place where it can be easily seen by
the workers.
4827-8318-4640.1 12
(ii) (a) Any class of laborers or mechanics which is not listed in the wage
determination and which is to be employed under the contract shall
be classified in conformance with the wage determination. HUD
shall approve an additional classification and wage rate and fringe
benefits therefore only when the following criteria have been met.
(1) The work to be performed by the classification requested is
not performed by a classification in the wage
determination; and
(2) The classification is utilized in the area by the construction
industry; and
(3) The proposed wage rate, including any bona fide fringe
benefits, bears a reasonable relationship to the wage rates
contained in the wage determination.
(b) If the contractor and the laborers and mechanics to be employed in
the classification (if known), or their representatives, and HUD or
its designee agree on the classification and wage rate(including the
amount designated for fringe benefits where appropriate), a report
of the action taken shall be sent by HUD or its designee to the
Administrator of the Wage and Hour Division, Employment
Standards Administration, U. S. Department of Labor,
Washington, D. C. 20210. The Administrator, or an authorized
representative, will approve, modify, or disapprove every
additional classification action within 30 days of receipt and so
advise HUD or its designee or will notify HUD or its designee
within the 30-day period that additional time is necessary.
(Approved by the Office of Management and Budget under OMB
Control Number 1215-0140.)
(c) In the event the contractor, the laborers or mechanics to be
employed in the classification or their representatives, and HUD or
its designee do not agree on the proposed classification and wage
rate (including the amount designated for fringe benefits, where
appropriate), HUD or its designee shall refer the questions,
including the views of all interested parties and . the
recommendation of HUD or its designee, to the Administrator for
determination. The Administrator, or an authorized representative,
will issue a determination within 30 days of receipt and so advise
HUD or its designee or will notify HUD or its designee within the
30-day period that additional time is necessary. (Approved by the
Office of Management and Budget under OMB Control Number
1215-0140.)
4=-s3i8.4w.1 13
(d) The wage rate (including fringe benefits where appropriate)
determined pursuant to subparagraphs (1)(b) or (c) of this
paragraph, shall be paid to all workers performing work in the
classification under this contract from the first day on which work
is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of
laborers or mechanics includes a fringe benefit which is not expressed as
an hourly wage rate, the contractor shall either pay the benefit as stated in
the wage determination or shall pay another bona fide benefit or an hourly
cash equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person,
the contractor may consider as part of the wages of any laborer or
mechanic the amount of any cost reasonably anticipated in providing bona
fide fringe benefits under a plan or program, provided that the Secretary of
Labor has found, upon the written request of the contractor, that the
applicable standards of the Davis-Bacon Act have beeh met. The
Secretary of Labor may require the contractor to set aside in a separate
account assets for the meeting of obligations under the plan or program.
(Approved by the Office of Management and Budget under OMB Control
Number 1215-0140.)
2. Withholding. HUD or its designee shall, upon its own action or upon written
request of an authorized representative of the Department of Labor, withhold or
cause to be withheld from the contractor under this contract or any other federal
contract with the same prime contractor, or any other federally,-assisted contract
subject to Davis-Bacon prevailing wage requirements, which is held by the same
prime contractor so much of the accrued payments or advances as may be
considered necessary to pay laborers and mechanics, including apprentices,
trainees and helpers, employed by the contractor or any subcontractor the full
amount of wages required by the contract. In the event of failure to pay any
laborer or mechanic, including any apprentice, trainee or helper, employed or
working on the site of the work (or under the United States Housing Act of 1937
or under the Housing Act of 1949 in the construction or development of the
project), all or part of the wages required by the contract, HUD or its designee
may, after written notice to the contractor, sponsor, applicant, or owner, take such
action as may be necessary to cause the suspension of any further payment,
advance, or guarantee of funds until such violations have ceased. HUD or its
designee may, after written notice to the contractor, disburse such amounts
withheld for and on account of the contractor or subcontractor to the respective
employees to whom they are due. The Comptroller General shall make such
disbursements in the case of direct Davis-Bacon Act contracts.
3. (i) Payrolls and Basic Records. Payrolls and basic records relating thereto
shall be maintained during the course of the work and preserved for a
4827-8318 46 14
40.1
period of three years thereafter for all laborers and mechanics working at
the site of the work, or under the United States Housing Act of 1937, (or
under the Housing Act of 1949, in the construction or development of the
project). Such records shall contain the name, address and social security
number of each such worker, his or her correct classification, hourly rates
of wages paid (including rates of contributions or costs anticipated for
bona fide fringe benefits or cash equivalents thereof of the types described
in Section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number
of hours worked, deductions made and actual wages paid. Whenever the
Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of
any laborer or mechanic include the amount of any costs reasonably
anticipated in providing benefits under a plan or program described in
Section l(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain
records which show that the commitment to provide such benefits is
enforceable, that the plan or program is financially responsible, and that
the plan or program has been communicated in writing to the laborers or
mechanics affected, and maintain records which show the costs anticipated
or the actual cost incurred in providing esuch benefits. Contractors
employing apprentices or trainees under approved programs shall maintain
written evidence of the registration of apprenticeship programs and
certification of trainee programs, the registration of the apprentices and
trainees, and the ratios and wage rates prescribed in the applicable
program. (Approved by the Office of Management and Budget under
OMB Control Numbers 1215-0140 and 1215-0017.)
(ii) (a) The contractor will submit weekly for each week in which any
contract work is performed a copy of all payrolls to HUD or its
designee if the agency is a party to the contract, but if the agency is
not such a party, the contractor will submit the payrolls to the
applicant, sponsor, or owner, as the case may be, for transmission
to HUD or its designee. The payrolls submitted shall set out
accurately and completely all of the information required to be
maintained under 29 CFR Part 5.5(a)(3)(i). This information may
be submitted in any form desired. Optional Form WH-347 is
available for this purpose and may be purchased from the
Superintendent of Documents (Federal Stock Number 029-005-
00014-1), U. S. Government Printing Office, Washington, D.C.
20402. The prime contractor is responsible for the submission of
copies of payrolls by all subcontractors. (Approved by the Office
of Management and Budget under OMB Control Number 1215-
0149.)
(b) Each payroll submitted shall be accompanied by a "Statement of
Compliance," signed by the contractor or subcontractor for his or
her agent who pays or supervises the payment of the persons
employed under the contract and shall certify the following:
4827-8318-4640.1 15
(1) That the payroll for the payroll period contains the
information required to be maintained under 29 CFR Part
5.5(a)(3)(i) and that such information is correct and
complete;
(2) That each laborer or mechanic (including each helper,
apprentice, and trainee) employed on the contract during
the payroll period has been paid the full weekly wages
earned, without rebate, either directly or indirectly from the
full wages earned, other than permissible deductions as set
forth in 29 CFR Part 3;
(3) That each laborer or mechanic has been paid not less than
the applicable wage rate and fringe benefits or cash
equivalents for the classification of work performed, as
specified in the applicable wage determination incorporated
into the contract.
4
(c) The weekly submission of a properly executed certification set
forth on the reverse side of Optional Form WH-347 shall satisfy
the requirement for submission of the "Statement of Compliance"
required by paragraph A.3.(ii)(b)of this section.
(d) The falsification of any of the above certifications may subject the
contractor or subcontractor to civil or criminal prosecution under
Section 1001 of Title 18 and Section 231 of Title 31 of the United
States Code.
(iii) The contractor or subcontractor shall make the records required under
paragraph A.3.(i) of this section available for inspection copying, or
transcription by authorized representatives of HUD or its designee or the
Department of Labor, and shall permit such representatives to interview
employees during working hours on the job. If the contractor or
subcontractor fails to submit the required records or to make them
available, HUD or its designee may, after written notice to the contractor,
sponsor, applicant, or owner, take such action as may be necessary to
cause the suspension or any further payment, advance, or guarantee of
funds. Furthermore, failure to submit the required records upon request or
to make such records available may be grounds for debarment action
pursuant to 29 CFR Part 5.12.
4. Apprentices and Trainees.
(i) Apprentices. Apprentices will be permitted to work at less than the
predetermined rate for the work they perform when they are employed
pursuant to and individually registered in a bona fide apprenticeship
4827-831814640.1 16
program registered with the U.S. Department of Labor, Employment and
Training Administration, Bureau of Apprenticeship and Training, or with
a State Apprenticeship Agency recognized by the Bureau, or if a person is
employed in his or her first 90 days of probationary employment as an
apprentice in such an apprenticeship program, who is not individually
registered in the program, but who has been certified by the Bureau of
Apprenticeship and Training or a State Apprenticeship Agency (where
appropriate) to be eligible for probationary employment as an apprentice.
The allowable ratio of apprentices to journeymen on the job site in any
craft classification shall not be greater than the ratio permitted to the
contractor as to his entire work force under the registered program. Any
worker listed on a payroll at an apprentice wage rate who is not registered
or otherwise employed as stated above, shall be paid not less than the
applicable wage rate on the wage determination for the classification of
work actually performed. In addition, any apprentice performing work on
the job site in excess of the ratio permitted under the registered program
shall be paid not less than the applicable wage rate on the wage
determination for the work actually performed. Where a contractor is
performing construction on a project in a locality other than that in which
its program is registered, the ratios and wage rates (expressed in
percentages of the journeyman's hourly rate) specified in the contractor's
or subcontractor's registered program shall be observed. Every apprentice
must be paid at not less than the rate specified in the registered program
for the apprentice's level of progress, expressed as a percentage of the
journeyman hourly rate specified in the applicable wage determination.
Apprentices shall be paid fringe benefits in accordance with the provisions
of the apprenticeship program. If the apprenticeship program does not
specify fringe benefits, apprentices must be paid the full amount of fringe
benefits listed on the wage determination for the applicable classification.
If the Administrator determines that a dilferent practice prevails for the
applicable apprentice classification, fringes shall be paid in accordance
with that determination. In the event the Bureau of Apprenticeship and
Training, or a State Apprenticeship Agency recognized by the Bureau,
withdraws approval of an apprenticeship program, the contractor will no
longer be permitted to utilize apprentices at less than the applicable
predetermined rate for the work performed until a program is approved.
(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be
permitted to work at less than the predetermined rate for the work
performed unless they are employed pursuant to and individually
registered in a program which has received prior approval, evidenced by
formal certification by the U. S. Department of Labor, Employment and
Training Administration. The ratio of trainees to journeymen on the job
shall not be greater than permitted under the plan approved by the
Employment and Training Administration. Every trainee must be paid not
less than the rate specified in the approved program for the trainee's level
4827-8318-4640.1 17
of progress, expressed as a percentage of the journeyman's hourly rate
specified in the applicable wage determination. Trainees shall be paid
fringe benefits in accordance with the provisions of the trainee program.
If the trainee program does not mention fringe benefits, trainees shall be
paid the full amount of fringe benefits listed on the wage determination
unless the Administrator of the Wage and Hour Division determines that
there is an apprenticeship program associated with the corresponding
journeyman wage rate on the wage determination which provides for less
than full fringe benefits for apprentices. Any employee listed on the
payroll at trainee rate who is not registered and participating in a training
plan approved by the Employment and Training Administration shall be
paid not less than the applicable wage rate on the wage determination for
the work actually performed. In addition, any trainee performing work on
the job site in excess of the ratio permitted under the registered program
shall be paid not less than the applicable wage rate on the wage
determination for the work actually performed. In the event the
Employment and Training Administration withdraws approval of a
training program, the contractor will no longer be permitted to utilize
trainees at less than the applicable predetermined rate for the work
performed until an acceptable program is approved.
(iii) Equal Employment Opportunity. The utilization of apprentices,
trainees and journeymen under this part shall be in conformity with the
equal employment opportunity requirements of Executive Order 11246, as
amended, and 29 CFR Part 30.
5. Compliance with Copeland Act Regulations. The contractor shall comply with
the requirements of 29 CFR part 3 which are incorporated by reference in this
contract.
6. Subcontracts. The contractor or subcontractor will insert in any subcontracts the
clauses contained in 29 CFR 5.5(a) (1) through (10) and such other clauses as
HUD or its designee may deem appropriate instructions require, and also a clause
requiring the subcontractors to include these clauses in any lower tier
subcontracts. The prime contractor shall be responsible for the compliance by
any subcontractor or lower tier subcontractor with all the contract clauses in 29
CFR Part 5.5.
7. Contract termination; debarment. A breach of the contract clauses in 29 CFR
5.5 may be grounds for termination of the contact, and for debarment as a
contractor and a subcontractor as provided in 29 CFR 5.12.
8. Compliance with Davis-Bacon and Related Act Requirements. All rulings
and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR
Parts 1, 3, and 5 are herein incorporated by reference in this contract.
4827-8318-4640.1 18
9. Disputes concerning labor standards. Disputes arising out of the labor
standards provisions of this contract shall not be subject to the general disputes
clause of this contract. Such disputes shall be resolved in accordance with the
procedures of the Department of Labor set forth in 29 CFR Parts 5, 6, and 7.
Disputes within the meaning of this clause include disputes between the
contractor (or any of its subcontractors) and HUD or its designee, the U. S.
Department of Labor, or the employees or their representatives.
10. (i) Certification of Eligibility. By entering into this contract, the contractor
certifies that neither it (nor he or she) nor any person or firm who has an
interest in the contractor's firm is a person or firm ineligible to be awarded
Government contracts by virtue of Section 3(a) of the Davis-Bacon Act or
29 CFR 5.12(a)(1) or to be awarded HUD contracts or participate in HUD
programs pursuant to 24 CFR Part 24.
(ii) No part of this contract shall be subcontracted to any person or firm
ineligible for award of a Government contract by virtue of Section 3(a) of
a the Davis-Bacon Act or 29 CFR 5.12(a)(1) or to be awarded HUD
contracts or participate in HUD programs pursuant to 24 CFR Part 24.
(iii) The penalty for making false statements is prescribed in the U. S. Criminal
Code, 18 U. S. C. 1001. Additionally, U. S. Criminal Code, Section 1010,
Title 18, U. S. C., "Federal Housing Administration transactions,"
provides in part "Whoever, for the purpose of. . . influencing in any way
the action of such Administration . . . makes, utters or publishes any
statement, knowing the same to be false . . . shall be fined not more than
$5,000 or imprisoned not more than two years,or both."
11. Complaints, Proceedings, or Testimony by Employees. No laborer or
mechanic to whom the wage, salary, or other labor standards provisions of this
Contract are applicable shall be discharged, or in any other manner discriminated
against by the contractor or any subcontractor because such employee has filed
any complaint or instituted or caused to be instituted any proceeding, or has
testified, or is about to testify in any proceeding under or relating to the labor
standards applicable under this Contract to his employer.
B. 1. Contract Work Hours and Safety Standards Act. As used in this paragraph,
the term"laborers" and mechanics" include watchmen and guards.
2. Overtime requirements. No contractor or subcontractor contracting for any part
of the contract work which may require or involve the employment of laborers or
mechanics shall require or permit any laborer or mechanic in any workweek in
which he or she is employed on such work to work in excess of eight hours in any
calendar day or in excess of forty hours in such workweek unless such laborer or
mechanic receives compensation at a rate not less than one and one-half times the
basic rate of pay for all hours worked in excess of eight hours in any calendar day
or in excess of forty hours in such workweek, whichever is greater.
4827-8318-4MO.1 19
3. Violation; liability for unpaid wages, liquidated damages. In the event of any
violation of the clause set forth in subparagraph (1) of this paragraph, the
contractor and any subcontractor responsible therefore shall be liable for the
unpaid wages. In addition, such contractor and subcontractor shall be liable to the
United States (in the case of work done under contract for the District of
Columbia or a territory, to such District or to such territory), for liquidated
damages. Such liquidated damages shall be computed with respect to each
individual laborer or mechanic, including watchmen and guards, employed in
violation of the clause set forth in subparagraph (1) of this paragraph, in the sum
of $10 for each calendar day on which such employee was required or permitted
to work in excess of eight hours or in excess of the standard workweek of forty
hours without payment of the overtime wages required by the clause set forth in
subparagraph (1).
4. Withholding for unpaid wages and liquidated damages. HUD or its designee
shall upon its own action or upon written request of an authorized representative
of the Department of Labor withhold or cause to be withheld, from any moneys
payable on account of work performed by the contractor or subcontractor under
any such contract or any other federal contract with the same prime contract, or
any other federally-assisted contract subject to the Contract Work Hours and
Safety Standards Act, which is held by the same prime contractor such sums as
may be determined to be necessary to satisfy any liabilities of such contractor or
subcontractor for unpaid wages and liquidated damages as provided in the clause
set forth in subparagraph (2) of this paragraph.
5. Subcontracts. The contractor or subcontractor shall insert in any subcontracts
the clauses set forth in subparagraphs (1) through (4) of this paragraph and also a
clause requiring the subcontractors to include these clauses in any lower tier
subcontracts. The prime contractor shall be responsible for compliance by any
subcontractor or lower tier subcontractor with the clauses set forth in
subparagraphs (1) through (4)of this paragraph.
C. Health and Safety
1. No laborer or mechanic shall be required to work in surroundings or under
working conditions which are unsanitary, hazardous, or dangerous to his health
and safety as determined under construction safety and health standards
promulgated by the Secretary of Labor by regulation.
2. The Contractor shall comply with all regulations issued by the Secretary of Labor
pursuant to Title 29 Part 1926 (formerly part 1518) and failure to comply may
result in imposition of sanctions pursuant to the Contract Work Hours and Safety
Standards Act(Public Law 91-54,83 Stat. 96).
3. The Contractor shall include the provisions of this Article in every subcontract so
that such provisions will be binding on each subcontractor. The Contractor shall
take such action with respect to any subcontract as the Secretary of Housing and
Urban Development or the Secretary of Labor shall direct as a means of enforcing
such provisions.
4827-831814640.1 20
EXHIBIT"F-1"
MEETING LABOR STANDARDS CONTRACT REQUIREMENTS
PRECONSTRUCTION CHECKLIST FOR CONTRACTORS
A. Introduction
The following checklist has been prepared to assist contractors and subcontractors in meeting
their contractual labor standards responsibilities under federally assisted construction projects.
All major administrative and procedural activities have been covered in the sequence they will
occur as the construction project proceeds. Careful attention to and use of the checklist should
result in a minimum number of problems with respect to labor standards.
B. Explanatory Notes
The word "Agency" means in the case of the Agency Project, the Redevelopment Agency of the
City of San Bernardino, and the word "Agency", in the case of the Developer Project means the
Developer.
The word "employer" as used below refers to the project contractor (e.g. the Agency in the case
of the Agency Project or the Developer in the case of the Developer project), each subcontractor,
or each lower-tier subcontractor. Payrolls and other documentary evidence of compliance are
required to be delivered to the responsible City department for review. This delivery procedure
is as follows:
1. Each lower-tier subcontractor, after careful review, delivers required documents to
his/her respective subcontractor.
2. Each subcontractor, after checking his/her own and those of each lower-tier
subcontractor, delivers required documents to the project prime contractor.
3. The prime contractor, after reviewing all weekly payrolls and other required
documentation, including his/her own, and correcting violations where necessary,
delivers all to the City.
NOTE:All employers should check each of the following statements as being true. If any
statement is not true, the contractor should contact the City for special guidance.
C. Before construction begins, each employer has:
1. Not been debarred or otherwise made ineligible to participate in any Federal or
Federally assisted project.
2. Received appropriate contract provisions covering labor standards requirements.
3. Reviewed and understands all labor standards contract provisions.
4827-8318-4640.1 Exhibit"F-1"
1
4. Received the Wage Decision which pertains to the contract.
5. Requested through the City and received the minimum wage for each
classification to be working on the project and which was not included on the
wage decision. Has not allowed any such trade classification to work on the
project before receiving the requested minimum wage.
6. Requested and received certification on his apprentice program from the State's
Bureau of Apprenticeship and Training (recognized by USBAT) and delivered a
copy thereof to the City prior to employment on the project. Likewise, "trainee"
program certification from USBAT, if applicable, must be so delivered.
D. At Construction Start, the Employer Has:
1. Notified the City of the proposed construction start date in writing.
2. Has received written Notice to Proceed from the City.
3. Has placed each of the following on a bulletin board prominently located on the
project site which can be easily seen by the workers (and to be replaced if lost or
unreadable any time during construction):
Wage Decision
Notice to Employee (WH 1321)
Equal Employment Opportunity is the Law
Safety and Health Protection on the Job
4. Before assigning each project worker to work, has obtained the worker's name,
mailing address, and Social Security Number for payroll purposes.
5. Has obtained a copy of each apprentice's individual registration certificate with
that apprentice's registration number and his year of apprenticeship from the State
Bureau of Apprenticeship and Training.
6. Has informed each worker of:
a. His work classification as it will appear on the weekly payroll and on the
project Wage Decision.
b. His duties of work.
C. The U. S. Department of Labor's requirement on this project that the
worker is either a journeyman, apprentice, or laborer:
4827-8318-4640.1 Exhibit"F-1"
2
If a journeyman, he/she is to be paid a journeyman's minimum project
wage decision rate, or more;
If an apprentice, he/she is to be paid not less than the apprentice's rate for
the trade based on his year of apprenticeship; or
If a laborer, he/she is to do a laborer's work only (not use any tool or tools
of a trade) and not perform any part of a journeyman's work and is to be
paid the laborer's minimum project wage decision rate or more.
7. Understands the requirements that each laborer or mechanic who performs work
on the project in more than one classification within the same work week shall be
classified and paid at the highest wage rate applicable to any of the work which he
performs unless the following requirements are met:
a. Accurate daily time records shall be maintained. These records must show
the time worked in each classification and the rate of pay for each
classification, and must be signed by the workman.
b. The payroll shall show the hours worked in each classification and the
wage rate paid for each classification.
C. The payroll shall be signed by the workmen or a signed copy of the daily
time record shall be attached thereto.
8. Has informed each worker of his/her hourly wages (not less than the minimum
wage rate for his work which is stated in the project Wage Decision), explaining
provisions for:
a. time and a half for all hours worked in excess of 8 in a day or 40 in a
calendar week as provided for in the Contract Work Hours Safety
Standards Act and in the State Labor Code,
b. fringe benefits, if any(see project Wage Decision for any required), and
C. deduction from his/her pay.
9. Has informed each worker that he/she is subject to being interviewed on the job
by the responsible City department or HUD, Department of Labor, or other U. S.
Government Inspector, to confirm that his/her employer is complying with all
labor requirements.
10. Has informed each journeyman and each apprentice that a journeyman must be on
the job at all times when an apprentice is working.
4827-8318-4640.1 Exhibit"F-1"
3
E. During Construction
1. Each employer:
a. Has not selected, assigned, paid different pay rates to, transferred,
upgraded, demoted, laid off, nor dismissed any project worker because of
race, color, religion, sex, or national origin.
b. Has employed all registered apprentices referred to him/her through
normal channels up to the applicable ratio of apprentices to journeymen in
each trade used by the employer.
C. Will maintain basic employment records accessible to inspection by the
City or U. S. Government representative.
d. Is complying with all health and safety standards.
e. Has paid all workers weekly.
f. Has submitted weekly payrolls --
1) prepared on recommended Form WH-347: available from:
Superintendent of Documents
Government Printing Office
Washington, D. C. 20402
Contractor who wish to purchase these forms shall be urged to
enter their orders promptly because the Superintendent of
Documents take six weeks to fill orders. It is permissible for
contractors to reproduce the forms.
NOTE: Any alternate payroll form used should be cleared with the City before the
employer started work on a project. A project payroll computer printout, for
example, is acceptable provided all data shown and required on the front and back
of Payroll Form WH-347 is on, or included with, payrolls delivered to the City.
NOTE: Some employers place all project workers on Payroll Form WH-347. The City
does not review those project workers listed on the payroll who perform work
which is descriptive of any of the following job titles which are exempt from
labor requirements, for example:
project superintendents
project engineers
supervisory foremen(less than 20% of time as working foreman)
messenger
clerical workers (timekeepers, payroll clerks, bookkeepers)
4a2 M184CA0.1 Exhibit"F-1"
4
2) Front page of payroll (Form WH-347) Heading (6 "blocks" of
information)
a. Name of Employer. Name of employer is stated, showing whether prime
or subcontractor.
b. Address. Street address or P. O. Box, City, State, and Zip Code of
Employer.
C. Payroll Number. Each weekly payroll is numbered in sequential order
starting with Payroll No. "1".
Payroll for final work week is marked"Final."
d. For Week Ending. The last date of the work week is stated in this
"block."
e. Project and Location. Name of project and community in which located. ;
f. Project or Contract No. Contractor and/or CD Project Number.
g. Internal Revenue Service (IRS) Employer Identification Number. The
initial payroll submission from each contractor and subcontractor shall
contain the applicable IRS-Employer's Identification Number.
h. Column 1 - Worker's Name. Stated as it appears on actual pay check.
Worker's best mailing address and social security number is stated on
Payroll No. I or the payroll on which the worker's name first appears.
If worker changes address while working on the project, that worker's new
address is stated on next applicable payroll.
If any two or more workers have the same name, their social security
numbers are included on each weekly payroll to denote separate
identification.
i. Column 2 - Number of Withholding Exemptions. For employer's
convenience -not required by the City to be completed.
j. Column 3 - The Work Classification. Must be included as it appears on
the project Wage Decision (with Group Number, if any), denotes the work
which the worker actually performed.
NOTEX the applicable classification is not included in the Wage Decision,
contractor should call the responsible City department immediately, and
request classification by Additional Classification.
4827-8318-4640.1 Exhibit"F-1"
5
Process via HUD.
Apprentice. If worker is an apprentice, his State BAT registration number
and year of apprenticeship is included in this column the first time the
apprentice's name appears on a weekly payroll,
Split Classification. If worker has performed more than one class of work
during the work week, such as carpenter and laborer, the division of work
will be shown on separate lines of the payroll. An accurate daily time
record must show the exact hours of work performed daily in each class of
work, and must he signed by the affected workman,
Each class of work he performed is stated in Column 3 in separate
"blocks." His name is repeated in corresponding "blocks" in Column 1,
The breakdown of hours worked daily under each work classification is
stated in Column 4, and total for week in Column 5,
The applicable wage rate for each classification of work is stated in
Column 6,
The payroll is signed by the workman in the related "blocks" or a signed
copy of the daily time records are attached to the payroll,
If the above is not done, the worker must be paid at least the highest
minimum wage rate of all the classes of work performed for all hours
worked.
NOTES:
Average Pay of Two Classes of Work is Not Acceptable. The employer
shall not pay a "semi journeyman" or semi-skilled laborer the average of
journeyman's and laborer's rates. The actual hours each worker uses tools
of trade (journeyman) and each hour he does not use tools of the trade
(laborer) must be recorded in separate "blocks" in Column 3 of the
payroll.
Helper. The work classification of "helper" is not accepted by the
Department of HUD, unless included in the Wage Decision issued by the
Secretary of Labor for the project. Any employee listed as "helper" in
absence of such classification in Wage Decision must be paid the
journeyman's rate for hours he uses tools of the trade.
k. Column 4- Hours Worked, Each Day and Date, for work week are stated.
Overtime Hours ("O"), if any, are stated separately from straight hours
("S")=over S hours any day or over 40 hours in any calendar week.
4827-8318-4640.1 Exhibit"F-1"
6
1. Column 5 - Total Hours worked during the work week are stated (the sum
of subcolumns in Column 4) - straight and overtime hours recorded
separately.
m. Column 6 - Rate of Pay, not less than the minimum wage rate for the work
classification (see Wage Decision) is stated.
The Overtime Rate of Pay, is not less than 1-1/2 times the worker's basic
(straight) hourly rate of pay(State Labor Code).
Apprentices. If a copy of the apprentice's registration certificate from the
State BAT has not been submitted to City by employer(through the prime
contractor), apprentice must be paid journeyman's rate.
Piece Worker. Piece work must be stated in Column 6 at an hourly rate
computed as the gross pay for the work week (work on the project)
divided by the total number of hours worked on the project during the
work week.
Column 7 - Gross Amount Earned equals straight hours shown in Column
5 times straight rate of pay shown in Column 6, plus overtime hours (if
any) shown in Column 5 times overtime rate of pay shown in Column 6.
n. Column 8 - Deductions. Each deduction made is required by law, or
voluntarily authorized by the worker in writing before the work week
began, or provided in a bargaining agreement to be deducted from the
respective worker's pay.
o. Column 9 - Net Wages stated are Column 7 minus total deductions shown
in Column 8.
3. Back of Payroll(Form WH-347)
a) Each Employer has:
completed all blank spaces and understands the penalties for
falsification,
checked Item 4 if fringe benefits are included in the Wage
Decision for any of his workers -
4(a) - if fringe benefits are paid to
approved fund(s), or
4(b) - paid directly to each affected worker-
included in paycheck for the work week-
4827-8318-4644.1 Exhibit"F-1"
7
his paycheck representing at least the
pay of the applicable minimum wage rate
plus the amount of required fringe
benefits.
manually signed the payroll in ink in the "blocks" marked signature, and
stated his title.
The persons who signed the payroll is the employer or an official of the
employer who legally is authorized to act for the employer.
4. Weekly Payroll Review. Each employer has promptly reviewed the weekly
payroll for compliance with all labor requirements (using this checklist) and made
necessary corrections.
Each Lower-tier Subcontractor has delivered his/her weekly payroll to the
respective subcontractor for the subcontractor to have received it within
■ three (3) calendar days from the last date of the work week. Each
subcontractor has received a payroll from each of his/her lower-tier
subcontractors, reviewed each and his/her own payroll, required necessary
corrections, and delivered all of such payrolls to the prime contractor to
have it received within five (5) calendar days from the last date of the
work week.
Contractor has received a payroll from each subcontractor and each lower-
tier subcontractor, monitored each including his/her own payroll, required
necessary corrections, and collectively,delivered them to the City within
seven (7) work days of the last date of the respective work week.
F. After Project Completion:
Each Employer will:
keep all weekly payrolls on the project for three (3) years after the contractor's
project completion date or until all project audit issues are resolved, whichever
comes last.
4827-8318-4640.1 Exhibit"F-1"
8
EXHIBIT"F-2"
MATERIAL COVERED AT
PRECONSTRUCTION CONFERENCE
NOTE:This package is hereby included in this HUD Project/City Section 108 Loan project Bid
Specification as notice to prospective contractors of those items to be covered at the
project preconstruction conference scheduled to be held after construction contract
award.
I �
4827-8318-4640.1 Exhibit"F-2"
1
MATERIAL COVERED AT PRECONSTRUCTION CONFERENCE
PURPOSE
AGENDA
I. Contractor/Subcontractor Information Sheet Form CDA-100
R. Section 3 - Action Plan
III. Executive Order No. 11246, amended by Executive Order No. 11375, Equal
Employment Opportunity
IV. Contractor's Ratio of Apprentices to Journeymen
V. Project Wage Determination
a
VI. U.S. Department of Labor Form WH-347, Weekly Payroll Sheet
VII. U.S. Department of Labor Form WH-348, Statement of Compliance
VIII. Record of Employee interview, Form HUD 11
4827-8318-4W.1 Exhibit"F-2"
2
PRECONSTRUCTION CONFERENCE
PURPOSE
HUD requires that CDBG recipients (including the recipients or subrecipients of HUD
Section 108 Loan proceeds) hold a conference with the principal project contractor and all
available subcontractors prior to the actual start of project construction. Seven days lead notice
of conference date is required by HUD. The purpose of the conference is to inform project
contractors of their responsibilities relating to Equal Employment Opportunity, Federal Labor
Standards, and general contract compliance.
AGENDA
I. Contractor/Subcontractor Information Sheet, Form CDA-100
4
A. Required for completion of City's Contract and Subcontract Activity Report to
HUD.
B. This form is used to document whether the contractor/subcontractor is a:
1. Disadvantaged Business Contractor
2. Contractor whose contract was procured by Competitive Bidding
C. Submission is required prior to issuance of"NOTICE TO PROCEED."
D. Construction cannot start until proper review and approval by the City.
II. Section 3 - Action Plan
A. Purpose of this Program Plan is to ensure that employment and other economic
opportunities generated by the HUD financial assistance on this project shall, to
the greatest extent feasible, and consistent with existing federal, state and local
laws and regulations, be directed to low- and very low-income persons,
particularly those who are recipients of government assistance for housing, and to
business concerns which provide economic opportunities to low- and very low-
income persons.
B. Section 3 applies to HUD funded housing and community development projects
which receive federal financial assistance exceeding $200,000 and for which
contract or subcontract amounts exceed$100,000.
4827-8318-4640.1 Exhibit"F-2"
3
C. Please consult the Section 3 - Affirmative Action Plan contained in the project
specification manual for more details regarding project Section 3 compliance.
III. Executive Order No. 11246, amended by Executive Order No. 11375, Equal Employment
Opportunity.
A. The purpose of Executive Order No. 11246, as amended by Executive Order No.
11375, is to assure that project contractors and subcontractors will not
discriminate against project employees in regard to their race, color, religion, sex
or national origin.
B. For federally funded construction contracts in excess of$10,000, contractors and
subcontractors are required to make a good faith effort to ensure that % of all
work hours are performed by Disadvantaged Business Enterprises.
C. Written Affirmative Action Plans are required for federally funded construction
prime contracts of$1,000,000 or more and for subcontracts of$100,000 or more.
a
D. All contractors and subcontractors working on federally-assisted construction
projects are required, by the U.S. Department of Labor, Employment Standards
Administration, Office of Federal Contract Compliance Programs (OFFCP) to
collect race and gender information on construction employees, classified by
trade. This information must be maintained not only for this project, but for all
work your firm is performing, whether it is federally funded or not. The U.S.
Department of Labor reserves the right to review this information in the future.
E. HUD may impose sanctions such as contract suspension or termination and/or
debarment in future federally funded construction projects in cases of
noncompliance®
W. Contractor's Ratio of Apprentices to Journeymen
A. The purpose of the Contractor's Ratio of Apprentices to Journeymen is to comply
with the California Labor Code regarding employment of apprentices on public
works projects.
B. The contractor or subcontractor shall apply for a certificate from the local craft
Joint Apprenticeship Council, approving the contractor's or subcontractor's
participation in an apprenticeship program.
C. The ratio of apprentices to journeymen in any craft or trade employed on a public
works project is to be no less than one apprentice to each five Journeymen.
D. Noncompliance requires withholding of fifty dollars ($50.00) from progress
payments for each day of noncompliance.
4827-8318-4W.1 Exhibit"F-2"
4
V. Project Wage Determination
A. The Wage Determination lists the minimum wages to be paid all nonsupervisory
employees.
B. Listed are the different Hourly Rates of Pay for all employees depending upon
each employee's Labor Classification and Group Number.
C. All employees listed on any project payrolls are to be listed by their proper Labor
Classification Title and Group Number as found in the project Wage
Determination for the type of work they actually perform.
VI. U. S. Department of Labor Form WH-347, Weekly Payroll Sheet
A. The purpose of Form WH-347 is to verify that all project employees are being
paid weekly and correctly. The use of any other payroll form will be acceptable
only if its format includes all the information needed to meet HUD requirements.
B. The Weekly Payroll Sheet is to be submitted to the City/Agency/Architect or
■ Engineer once a week, each week, that work was done on this project.
C. Weekly Payroll Computations will be checked for both mathematical accuracy
and for any non-permissible deductions.
D. Untimely submittal or submittal with errors will require holding up of progress
payments, until this form is received.
E. Prime Contractors and subcontractors must retain their basic payroll records
(payroll register, individual earning cards, check stubs, etc.) for a three year
`period after completion of the project.
F. If requested, contractors shall make their Superintendent's log book available to
the payroll reviewer for payroll compliance review purposes.
VII. U.S. Department of Labor Form WH-348, Statement of Compliance
A. The purpose of Form WH-348 is to certify that payrolls submitted for this project
are correct and complete. The use of any other compliance statement form will be
acceptable only if its format substantially includes all the language and citations
required by the U.S. Department of Labor WH-348 form.
B. The Statement of Compliance is to be submitted to the City/Agency/Architect or
Engineer with the Weekly Payroll once a week, each week, that work was done
on this project.
4827-8318-4640.1 Exhibit"F-2"
5
C. The Statement of Compliance is to be submitted no later than seven work days
after the end of the week being reported, as is the case with Form WH-347,
Weekly Payroll Sheet.
D. Untimely submittal or submittal with errors or omissions will require holding up
progress payments until this form is received.
E. Fringe benefit payments to plans, funds or programs will be verified by the
City/Agency/Architect or Engineer.
VIII. Record of Employee Interview, Form HUD-11
A. Interviews will be conducted by City/Agency/Architect or Engineer staff or their
designee.
B. Required to document the confirmation that:
1. Project Employees are working in the correct classification; and
2. For the correct pay.
C. Random samples of each contractor/subcontractor(s) workforce will be
interviewed throughout the course of the project.
D. Comparisons of interview forms with the Weekly Payroll Sheets and Prevailing
Wage Decision will assure proper payment to project workforce.
E. Failure to resolve discrepancies within a reasonable period of time will cause
future progress payments to be held up.
F. City/Agency/Architect or Engineer staff who administer the HUD-11 forms are
hereby reminded that they are to indicate "None" in the Remarks sections of the
form when there is nothing additional to report from the actual interview or the
comparison of the HUD-11 form to the payroll and the project wage decision.
The HUD-11 interviewer and payroll examiner are each to sign and date the form
in the spaces provided when they have completed the interview and examination.
4827-8318-4W.1 Exhibit"F-2"
6
EXHIBIT 64F-3"
STANDARDS FOR FINANCIAL MANAGEMENT SYSTEMS
(CDBG Fund Regulations at 24 CFR 84.21[b])
Subrecipients' financial management systems shall provide for the following:
(1) Accurate, current and complete disclosure of the financial results of each
federally-sponsored project or program in accordance with the reporting requirements set forth in
§84.52. If a subrecipient maintains its records on other than an accrual basis, the subrecipient
shall not be required to establish an accrual accounting system. These subrecipients may
develop such accrual data for their reports on the basis of an analysis of the documentation on
hand.
(2) Records that identify adequately the source and application of funds for federally-
sponsored activities. These records shall contain information pertaining to Federal awards,
authorizations, obligations, unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds, property and other assets.
Subrecipients shall adequately safeguard all such assets and assure they are used solely for
authorized purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever
appropriate, financial information should be related to performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the transfer of funds to
the subrecipient from the recipient and the issuance or redemption of checks, warrants or
payments by other means for program purposes by the subrecipient. To the extent that the
provisions of the Cash Management Improvement Act (CMIA) (Pub.L. 101-453) govern,
payment methods of State agencies, instrumentalities, and fiscal agents shall be consistent with
CMIA Treasury-State Agreements or the CMIA default procedures codified at 31 CFR part 205,
`Withdrawal of Cash from the Treasury for Advances under Federal Grant and Other Programs.'
(6) Written procedures for determining the reasonableness, allocability and
allowability of costs in accordance with the provisions of the applicable Federal cost principles
and the terms and conditions of the award.
(7) Accounting records including cost accounting records that are supported by
source documentation.
4827-8318-4W.1 Exhibit"F-3"
1
EXHIBIT"F-4"
DISCLOSURE OF LOBBYING ACTIVITIES
Complete this form to disclose lobbying activities pursuant to 31 U.S.C. 1352
(See reverse for public burden disclosure.)
1.Type of Federal Action: 2. Status of Federal Action: 3. Report Type:
a. contract a. bid/offer/application a. initial/filing
b. grant b. initial award b. material change
c.cooperative agreement c. post-award
d. loan
e. loan guarantee year
f. loan insurance quarter
date of last report
4. Name and Address of Reporting Entity: 5. If Reporting Entity in No. 4 is
Subawardee,Enter Name and Address of
❑ Prime ❑ Subawardee Prime:
Tier , if known:
Congressional District, if known: Congressional District, if known:
6. Federal Department/Agency: 7.Federal Program Name/Description:
CFDA Number, if applicable:
8. Federal Action Number,if known: 9. Award Amount,if known:
10.a.Name and Address of Lobbying b. Individuals Performing Services (including
Registrant address if different from No. 10.a.)
(if individual, last name,first name, Ml): (Last name,first name; MI):
[ITEMS 11-15 REMOVED]
16. Information requested through this form is Signature:
authorized by title 31 U.S.C. section 1352. This Print Name:
disclosure of lobbying activities is a material Title:
representation of fact upon which reliance was placed Telephone No.:
by tier above when this transaction was made or Date:
entered into. This disclosure is required pursuant to
31 U.S.C. 1352. This information will be reported to Authorized for Local Reproduction
the Congress semi-annually and will be available for
4827-8318-44540.1 Exhibit"F-4"
1
public inspection. Any person who fails to file the Standard Form-LLL
required disclosure shall be subject to a civil penalty
of not less than$10,000 and not more than$100,000
for each such failure.
Federal Use Only:
■
4827-8318-4640.1 Exhibit"F-4"
2
INSTRUCTIONS FOR COMPLETION OF SF-LLL,DISCLOSURE OF LOBBYING
ACTIVITIES
This disclosure form shall be completed by the reporting entity, whether subawardee or prime
federal recipient, at the initiation or receipt of a covered federal action, or a material change to a
previous filing, pursuant to title 31 U.S.C. section 1352. The filing of a form is required for each
payment or agreement to make payment to any lobbying entity for influencing or attempting to
influence an officer or employee of any agency, a member of Congress, an officer or employee
of Congress, or an employee of a member of Congress in connection with a covered federal
action. Complete all Items that apply for both the initial filing and material change report. Refer
to the implementing guidance published by the Office of Management and Budget for.additional
information.
X. Identify the type of covered federal action for which lobbying activity is and/or has been
secured to influence the outcome of a covered federal action.
xi. Identify the status of the covered federal action.
xii. Identify the appropriate classification of this report. If this is a follow up report caused
by a material change to the information previously reported, enter the year and quarter in
which the change occurred. Enter the date of the last previously submitted report by this
reporting entity for this covered federal action.
xiii. Enter the full name, address, city, state and zip code of the reporting entity. Include
congressional district, if known. Check the appropriate classification of the reporting
entity that designates if it is, or expects to be, a prime or subaward recipient. Identify the
tier of the subawardee, e.g., the first subawardee of the prime is the lst tier. Subawards
include but are not limited to subcontracts, subgrants and contract awards under grants.
xiv. If the organization filing the report in item 4 checks "Subawardee", then enter the full
name, address, city, state and zip code of the prime federal recipient. Include
congressional district, if known.
xv. Enter the name of the federal agency making the award or loan commitment. Include at
least one organizational level below agency name, if known. For example, Department
of Transportation, United States Coast Guard.
xvi. Enter the federal program name or description for the covered federal action (item 1). If
known,enter the full Catalog of Federal Domestic Assistance(CFDA) number for grants,
cooperative agreements, loans, and loan commitments.
xvii. Enter the most appropriate federal Identifying number available for the federal action
identified in item 1 (e.g., Request for Proposal (RFP) number; Invitation for Bid (IFB)
number; grant announcement number; the contract, grant, or loan award number; the
application/proposal control number assigned by the federal agency). Include prefixes,
e.g., "RFP-DE-90-001."
4827-8318-4W.1 Exhibit"F-4"
3
xviii. For a covered federal action where there has been an award or loan commitment by the
federal agency, enter the federal amount of the award/ loan commitment for the prime
entity identified in item 4 or 5.
xix. (a) Enter the full name, address, city, state and zip code of the registrant under the
Lobbying Disclosure Act of 1995 engaged by the reporting entity identified in item 4 to
influence the covered federal action.
xx. Enter the full names of the individual(s) performing services, and include full address if
different from 10(a). Enter Last Name, First Name, and Middle Initial (MI).
[ITEMS 11-15 REMOVED]
16. The certifying official shall sign and date the form, print his/her name, title, and
telephone number.
Public reporting burden for this collection of information is estimated to average 30 minutes per
response, including time for reviewing instructions, searching existing data sources, gathering
and maintaining the data needed, and completing and reviewing the collection of information.
Send comments regarding the burden estimate or any other aspect of this collection of
information, including suggestions for reducing this burden, to the Office of Management and
Budget, Paperwork Reduction Project(0348-0046), Washington, D.C. 20503.
4827-8318-4640.1 Exhibit"F-4"
4
EXHIBIT"F-5"
TRAINING EMPLOYMENT AND BUSINESS OPPORTUNITY
A. The work to be performed under this contract is subject to the requirements of
section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(section 3). The purpose of section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by section 3, shall,
to the greatest extent feasible, be directed to low-and very low-income persons, particularly
persons who are recipients of HUD assistance for housing.
B. The parties to this contract agree to comply with HUD's regulations in 24 CFR
part 135, which implement section 3. As evidenced by their execution of this contract, the
parties to this contract certify that they are under no contractual or other impediment that would
prevent them from complying with the part 135 regulations.
C. The contractor agrees to send to each labor organization or representative of
workers with which the contractor has a collective bargaining agreement or other understanding,
if any, a notice advising the labor organization or workers' representative of the contractor's
commitments under this section 3 clause, and will post copies of the notice in conspicuous places
at the work site where both employees and applicants for training and employment positions can
see the notice. The notice shall describe the section 3 preference, shall set forth minimum
number and job titles subject to hire, availability of apprenticeship and training positions, the
qualifications for each; and the name and location of the person(s) taking applications for each of
the positions; and the anticipated date the work shall begin.
D. The contractor agrees to include this section 3 clause in every subcontract subject
to compliance with regulations in 24 CFR part 135, and agrees to take appropriate action, as
provided in an applicable provision of the subcontract or in this section 3 clause, upon a finding °
that the subcontractor is in violation of the regulations in 24 CFR part 135. The contractor will
not subcontract with any subcontractor where the contractor has notice or knowledge that the
subcontractor has been found in violation of the regulations in 24 CFR part 135.
E. The contractor will certify that any vacant employment positions, including
training positions, that are filled (1) after the contractor is selected but before the contract is
executed, and (2) with persons other than those to whom the regulations of 24 CFR part 135
require employment opportunities to be directed, were not filled to circumvent the contractor's
obligations under 24 CFR part 135.
F. Noncompliance with HUD's regulations in 24 CFR part 135 may result in
sanctions, termination of this contract for default, and debarment or suspension from future HUD
assisted contracts.
4827-8318-4W.t Exhibit"F-5"
1
G. With respect to work performed in connection with section 3 covered Indian
housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b)
requires that to the greatest extent feasible (i) preference and opportunities for training and
employment shall be given to Indians, and (ii) preference in the award of contracts and
subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises.
Parties to this contract that are subject to the provisions of section 3 and section 7(b) agree to
comply with section 3 to the maximum extent feasible, but not in derogation of compliance with
section 7(b).
8
4827-8318-4W.1 Exhibit"F-5"
2
EXHIBIT"F-6"
UTILIZATION OF SMALL BUSINESS CONCERNS
(48 CFR 52.219-8)
(a) It is the policy of the United States that small business concerns, HUBZone small
business concerns, small business concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns owned and controlled by women shall
have the maximum practicable opportunity to participate in performing contracts let by any
Federal agency, including contracts and subcontracts for subsystems, assemblies, components,
and related services for major systems. It is further the policy of the United States that its prime
contractors establish procedures to ensure the timely payment of amounts due pursuant to the
terms of their subcontracts with small business concerns, HUBZone small business concerns,
small business concerns owned and controlled by socially and economically disadvantaged
individuals, and small business concerns owned and controlled by women.
a
(b) The Contractor hereby agrees to carry out this policy in the awarding of
subcontracts to the fullest extent consistent with efficient contract performance. The Contractor
further agrees to cooperate in any studies or surveys as may be conducted by the United States
Small Business Administration or the awarding agency of the United States as may be necessary
to determine the extent of the Contractor's compliance with this clause.
(c) As used in this clause, the term `small business concern' shall mean a small
business as defined pursuant to section 3 of the Small Business Act and relevant regulations
promulgated pursuant thereto. The term `small business concern owned and controlled by
socially and economically disadvantaged individuals' shall mean a small business concern that
represents, as part of its offer, that it meets the definition of a small disadvantaged business
concern in 13 CFR 124.1002. Pursuant to this section a small disadvantaged business concern is
a concern:
(1) which qualifies as small under 13 CFR 121 for the size standard
corresponding to the applicable four digit Standard Industrial Classification (SIC)code;
(2) which is at least 51 percent unconditionally owned by one or more socially
and economically disadvantaged individuals, such as: Black Americans, Hispanic Americans,
Native Americans, Asian Pacific Americans, Subcontinent Asian Americans and members of
other groups designated from time to time by SBA according to the procedures set forth at 13
CFR 124.103 (d), whose ability to compete in the free enterprise system has been impaired due
to diminished capital and credit opportunities as compared to others in the same or similar line of
business who are not socially disadvantaged; and,
(3) whose management and daily business operations are controlled by one or
more socially and economically disadvantaged individuals who;
4827-8318-4640.1 Exhibit"F-6"
1
(i) are citizens of the United States; and,
(ii) who have an individual net worth of less than $750,000 after
taking into account the exclusions set forth 13 CFR 124.104(c)(2).
(d Contractors acting in good faith may rely on written representations by their
subcontractors regarding their status as a small business concern, a HUBZone small business
concern, a small business concern owned and controlled by socially and economically
disadvantaged individuals, or a small business concern owned and controlled by women.
[48 FR 42478, September 19, 1983, as amended at 50 FR 27563,July 3, 1985]
4
4827-8318-4W.1 Exhibit"F-6"
2
EXHIBIT"F-7"
SMALL BUSINESS SUBCONTRACTING PLAN
(48 CFR 52.219-9)
(a) This clause does not apply to small business concerns.
(b) Definitions. As used in this clause--
Commercial item means a product or service that satisfies the definition of commercial
item in section 2.101 of the Federal Acquisition Regulation.
Commercial plan means a subcontracting plan (including goals) that covers the offeror's
fiscal year and that applies to the entire production of commercial items sold by either the entire
company or a portion thereof(e.g., division, plant, or product line).
Individual contract plan means a subcontracting plan that covers the entire contract
period (including option periods), applies to a specific contract, and has goals that are based on
the offeror's planned subcontracting in support of the specific contract, except that indirect costs
incurred for common or joint purposes may be allocated on a prorated basis to the contract.
Master plan means a subcontracting plan that contains all the required elements of an
individual contract plan, except goals, and may be incorporated into individual contract plans,
provided the master plan has been approved.
Subcontract means any agreement (other than one involving an employer-employee
relationship) entered into by a Federal Government prime Contractor or subcontractor calling for
supplies or services required for performance of the contract or subcontract.
(c) The apparent low bidder, upon request by the Contracting Officer, shall submit a
subcontracting plan, where applicable, that separately addresses subcontracting with small
business, HUBZone small business, small disadvantaged business, and women-owned small
business concerns. If the bidder is submitting an individual contract plan, the plan must
separately address subcontracting with small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns, with a separate part for the
basic contract and separate parts for each option (if any). The plan shall be included in and made
a part of the resultant contract. The subcontracting plan shall be submitted within the time
specified by the Contracting Officer. Failure to submit the subcontracting plan shall make the
bidder ineligible for the award of a contract.
(d) The offeror's subcontracting plan shall include the following:
(1) Goals, expressed in terms of percentages of total planned subcontracting
dollars, for the use of small business, HUBZone small business, small disadvantaged business,
4827-8318-4640.1 Exhibit"F-7"
1
and women-owned small business concerns as subcontractors. The offeror shall include all
subcontracts that contribute to contract performance, and may include a proportionate share of
products and services that are normally allocated as indirect costs.
(2) A statement of-
(i) Total dollars planned to be subcontracted for an individual contract
plan; or the offeror's total projected sales, expressed in dollars, and the total value of projected
subcontracts to support the sales for a commercial plan;
(ii) Total dollars planned to be subcontracted to small business
concerns;
(iii) Total dollars planned to be subcontracted to HUBZone small
business concerns;
(iv) Total dollars planned to be subcontracted to small disadvantaged
business concerns; and
(v) Total dollars planned to be subcontracted to women-owned small
business concerns.
(3) A description of the principal types of supplies and services to be
subcontracted, and an identification of the types planned for subcontracting to--
(i) Small business concerns;
(ii) HUBZone small business concerns;
(iii) Small disadvantaged business concerns; and
(iv) Women-owned small business concerns.
(4) A description of the method used to develop the subcontracting goals in
paragraph(d)(1)of this clause.
(5) A description of the method used to identify potential sources for
solicitation purposes (e.g., existing company source lists, the Procurement Marketing and Access
Network (PRO-Net) of the Small Business Administration (SBA), the National Minority
Purchasing Council Vendor Information Service, the Research and Information Division of the
Minority Business Development Agency in the Department of Commerce, or small, HUBZone,
small disadvantaged, and women-owned small business trade associations). A film may rely on
the information contained in PRO-Net as an accurate representation of a concern's size and
ownership characteristics for the purposes of maintaining a small, HUBZone, small
disadvantaged and women-owned small business source list. Use of PRO-Net as its source list
4827-8318-4644.1 Exhibit"F-7"
2
does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, or publicizing
subcontracting opportunities) in this clause.
(6) A statement as to whether or not the offeror included indirect costs in
establishing subcontracting goals, and a description of the method used to determine the
proportionate share of indirect costs to be incurred with--
(i) Small business concerns;
(ii) HUBZone small business concerns;
(iii) Small disadvantaged business concerns; and
(iv) Women-owned small business concerns.
(7) The name of the individual employed by the offeror who will administer
the offeror's subcontracting program, and a description of the duties of the individual.
(8) A description of the efforts the offeror will make to assure that small
business, HUBZone small business, small disadvantaged business, and women-owned small
business concerns have an equitable opportunity to compete for subcontracts.
(9) Assurances that the offeror will include the clause of this contract entitled
`Utilization of Small Business Concerns' in all subcontracts that offer further subcontracting
opportunities, and that the offeror will require all subcontractors (except small business
concerns) that receive subcontracts in excess of $500,000 ($1,000,000 for construction of any
public facility) to adopt a subcontracting plan that complies with the requirements of this clause.
® (10) Assurances that the offeror will-
(i) Cooperate in any studies or surveys as may be required;
(ii) Submit periodic reports so that the Government can determine the
extent of compliance by the offeror with the subcontracting plan;
(iii) As applicable, submit Standard Form (SF) 294, Subcontracting
Report for Individual Contracts, and/or SF 295, Summary Subcontract Report, in accordance
with the instructions on the forms or as provided in agency regulations and in paragraph 0) of
this clause; and
(iv) Ensure that, as applicable, its subcontractors agree to submit SF
294 and SF 295.
(11) A description of the types of records that will be maintained concerning
procedures that have been adopted to comply with the requirements and goals in the plan,
including establishing source lists; and a description of the offeror's efforts to locate small
4827-8318-4W i Exhibit"F-7"
3
business, HUBZone small business, small disadvantaged business, and women-owned small
business concerns and award subcontracts to them. The records shall include at least the
following(on a plant-wide or company-wide basis, unless otherwise indicated):
(i) Source lists (e.g., PRO-Net), guides, and other data that identify
small business, HUBZone small business, small disadvantaged business, and women-owned
small business concerns.
(ii) Organizations contacted in an attempt to locate sources that are
small business, HUBZone small business, small disadvantaged business, or women-owned small
business concerns.
(iii) Records on each subcontract solicitation resulting in an award of
more than $100,000, indicating--
(A) Whether small business concerns were solicited and, if not,
why not;
(B) Whether HUBZone small business concerns were solicited
and, if not, why not;
(C) Whether small disadvantaged business concerns were
solicited and, if not, why not;
(D) Whether women-owned small business concerns were
solicited and, if not, why not; and
(E) If applicable, the reason award was not made to a small
business concern.
(iv) Records of any outreach efforts to contact--
(A) Trade associations;
(B) Business development organizations; and
(C) Conferences and trade fairs to locate small, HUBZone
small, small disadvantaged, and women-owned small business sources.
(v) Records of internal guidance and encouragement provided to buyers
through--
(A) Workshops, seminars, training, etc.; and
(B) Monitoring performance to evaluate compliance with the
program's requirements.
4827-8318-4640.1 Exhibit"F-7"
4
(vi) On a contract-by-contract basis, records to support award data
submitted by the offeror to the Government, including the name, address, and business size of
each subcontractor. Contractors having commercial plans need not comply with this
requirement.
(e) In order to effectively implement this plan to the extent consistent with efficient
contract performance, the Contractor shall perform the following functions:
(1) Assist small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns by arranging solicitations, time for the
preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the
participation by such concerns. Where the Contractor's lists of potential small business,
HUBZone small business, small disadvantaged business, and women-owned small business
subcontractors are excessively long, reasonable effort shall be made to give all such small
business concerns an opportunity to compete over a period of time.
(2) Provide adequate and timely consideration of the potentialities of small
business, HUBZone small business, small disadvantaged business, and women-owned small
business concerns in all `make-or-buy' decisions.
(3) Counsel and discuss subcontracting opportunities with representatives of
small business, HUBZone small business, small disadvantaged business, and women-owned
small business firms.
(4) Provide notice to subcontractors concerning penalties and remedies for
misrepresentations of business status as small, HUBZone small, small disadvantaged, or women-
owned small business for the purpose of obtaining a subcontract that is to be included as part or
all of a goal contained in the Contractor's subcontracting plan.
(f) A master plan on a plant or division-wide basis that contains all the elements
required by paragraph (d) of this clause, except goals, may be incorporated by reference as a part
of the subcontracting plan required of the offeror by this clause; provided--
(1) The master plan has been approved,
(2) The offeror ensures that the master plan is updated as necessary and
provides copies of the approved master plan, including evidence of its approval, to the
Contracting Officer, and
(3) Goals and any deviations from the master plan deemed necessary by the
Contracting Officer to satisfy the requirements of this contract are set forth in the individual
subcontracting plan.
(g) A commercial plan is the preferred type of subcontracting plan for contractors
furnishing commercial items. The commercial plan shall relate to the offeror's planned
subcontracting generally, for both commercial and Government business, rather than solely to
4827-83184640.1 Exhibit"F-7"
5
the Government contract. Commercial plans are also preferred for subcontractors that provide
commercial items under a prime contract, whether or not the prime contractor is supplying a
commercial item.
(h) Prior compliance of the offeror with other such subcontracting plans under
previous contracts will be considered by the Contracting Officer in determining the responsibility
of the offeror for award of the contract.
(i) The failure of the Contractor or subcontractor to comply in good faith with (1) the
clause of this contract entitled `Utilization Of Small Business Concerns,' or(2) an approved plan
required by this clause, shall be a material breach of the contract.
(j) As applicable, the Contractor shall submit the following reports:
(1) Standard Form 294, Subcontracting Report for Individual Contracts. This
report shall be submitted to the Contracting Officer semiannually and at contract completion.
The report covers subcontract award data related to this contract. This report is not required for
commercial plans.
(2) Standard Form 295, Summary Subcontract Report. This report
encompasses all the contracts with the awarding agency. It must be submitted semi-annually for
contracts with the Department of Defense and annually for contracts with civilian agencies. If
the reporting activity is covered by a commercial plan, the reporting activity must report
annually all subcontract awards under that plan. All reports submitted at the close of each fiscal
year (both individual and commercial plans) shall include a breakout, in the Contractor's format,
of subcontract awards, in whole dollars, to small disadvantaged business concerns by Standard
Industrial Classification (SIC) Major Group. For a commercial plan, the Contractor may obtain
from each of its subcontractors a predominant SIC Major Group and report all awards to that
subcontractor under its predominant SIC Major Group.
4827-8318-4640.1 Exhibit"F-7"
6
EXHIBIT "F-8"
CITY OF SAN BERNARDINO DISADVANTAGED BUSINESS ENTERPRISE
PROGRAM POLICIES FOR FEDERALLY ASSISTED ACTIVITIES
4827-8318-4640.1 Exhibit"F-S"
1
EXHIBIT"F-9"
AFFIRMATIVE ACTION FOR WORKERS WITH DISABILITIES
(48 CFR 52.222-36)
As used in this Exhibit, the word "Contractor" refers to any third party retained by either the
Agency or the Developer to perform work or provide services as relate to the Agency Project or
the Developer Project, as applicable.
(a) General.
(1) Regarding any position for which the employee or applicant for employment is
qualified, the Contractor shall not discriminate against any employee or applicant
because of physical or mental disability. The Contractor agrees to take
affirmative action to employ, advance in employment, and otherwise treat
qualified individuals with disabilities without discrimination based upon their a
physical or mental disability in all employment practices such as -
(i) Recruitment, advertising, and job application procedures;
(ii) Hiring, upgrading, promotion, award of tenure, demotion, transfer, layoff,
termination, right of return from layoff, and rehiring;
(iii) Rates of pay or any other form of compensation and changes in
compensation;
(iv) Job assignments, job classifications, organizational structures, position
descriptions, lines of progression, and seniority lists;
(v) Leaves of absence, sick leave, or any other leave;
(vi) Fringe benefits available by virtue of employment, whether or not
administered by the Contractor;
(vii) Selection and financial support for training, including apprenticeships,
professional meetings, conferences, and other related activities, and
selection for leaves of absence to pursue training;
(viii) Activities sponsored by the Contractor, including social or recreational
programs; and
(ix) Any other term, condition, or privilege of employment.
4827-8318-4640.1 Exhibit"F-9"
1
(2) The Contractor agrees to comply with the rules, regulations, and relevant orders
of the Secretary of Labor (Secretary) issued under the Rehabilitation Act of 1973
(29 U.S.C. 793) (the Act), as amended.
(b) Postings.
(1) The Contractor agrees to post employment notices stating-
(i) The Contractor's obligation under the law to take affirmative action to
employ and advance in employment qualified individuals with disabilities;
and
(ii) The rights of applicants and employees.
(2) These notices shall be posted in conspicuous places that are available to
employees and applicants for employment. The Contractor shall ensure that
applicants and employees with disabilities are informed of the contents of the
notice (e.g., Contractor may have the notice read to a visually disabled individual,
or may lower the posted notice so that it might be read by a person in a
wheelchair). The notices shall be in a form prescribed by the Deputy Assistant
Secretary for Federal Contract Compliance of the U.S. Department of Labor
(Deputy Assistant Secretary) and shall be provided by or through the Contracting
Officer.
(3) The Contractor shall notify each labor union or representative of workers with
which it has a collective bargaining agreement or other contract understanding,
that the Contractor is bound by the terms of Section 503 of the Act and is
committed to take affirmative action to employ, and advance in employment,
qualified individuals with physical or mental disabilities.
(c) Noncompliance. If the Contractor does not comply with the requirements of this clause,
appropriate actions may be taken under the rules, regulations, and relevant orders of the
Secretary issued pursuant to the Act.
(d) Subcontracts. The Contractor shall include the terms of this clause in every subcontract
or purchase order in excess of$10,000 unless exempted by rules,regulations, or orders of
the Secretary. The Contractor shall act as specified by the Deputy Assistant Secretary to
enforce the terms, including action for noncompliance.
4827-8318-4640.1 Exhibit"F-9"
2
EXHIBIT"F-10"
AFFIRMATIVE ACTION FOR DISABLED VETERANS AND
VETERANS OF THE VIETNAM ERA
(48 CFR 52.222-35)
(A) Definitions. As used in this clause-
"All employment openings" includes all positions except executive and top management,
those positions that will be filled from within the contractor's organization, and positions
lasting 3 days or less. This term includes full-time employment, temporary employment
of more than 3 days' duration, and part-time employment.
"Appropriate office of the State employment service system" means the local office of
the Federal-State national system of public employment offices with assigned
responsibility to serve the area where the employment opening is to be filled, including
the District of Columbia, Guam, the Commonwealth of Puerto Rico, and the Virgin
Islands.
"Positions that will be filled from within the Contractor's organization" means
employment openings for which no consideration will•be given to persons outside the
Contractor's organization (including any affiliates, subsidiaries, and parent companies)
and includes any openings that the Contractor proposes to fill from regularly established
`recall' lists. The exception does not apply to a particular opening once an employer
decides to consider applicants outside of its organization.
"Veteran of the Vietnam era" means a person who--
(1) Served on active duty for a period of more than 180 days, any part of
which occurred between August 5, 1964, and May 7, 1975, and was
discharged or released therefrom with other than a dishonorable discharge;
or
(2) Was discharged or released from active duty for a service-connected
disability if any part of such active duty was performed between August 5,
1964, and May 7, 1975.
(B) General.
(1) Regarding any position for which the employee or applicant for
employment is qualified, the Contractor shall not discriminate against the
individual because the individual is a disabled veteran or a veteran of the
Vietnam era. The Contractor agrees to take affirmative action to employ,
advance in employment, and otherwise treat qualified disabled veterans
4827-8318-4640.1 Exhibit"F-10"
1
and veterans of the Vietnam era without discrimination based upon their
disability or veterans' status in all employment practices such as--
(i) Employment;
(ii) Upgrading;
(iii) Demotion or transfer;
(iv) Recruitment;
(v) Advertising;
(vi) Layoff or termination;
(vii) Rates of pay or other forms of compensation; and
(viii) Selection for training, including apprenticeship.
(2) The Contractor agrees to comply with the rules,
regulations, and relevant orders of the Secretary of Labor (Secretary)
issued under the Vietnam Era Veterans' Readjustment Assistance Act of
1972 (tile Act), as amended.
(C) Listing openings.
(1) The Contractor agrees to list all employment openings existing at contract
award or occurring during contract performance, at an appropriate office
of the State employment service system in the locality where the opening
occurs. These openings include those occurring at any Contractor facility,
including one not connected with performing this contract. An
independent corporate affiliate is exempt from this requirement.
(2) State and local government agencies holding Federal contracts of$10,000
or more shall also list all employment openings with the appropriate office
of the State employment service.
(3) The listing of employment openings with the State employment service
system is required at least concurrently with using any other recruitment
source or effort and involves the obligations of placing a bona fide job
order, including accepting referrals of veterans and nonveterans. This
listing does not require hiring any particular job applicant or hiring from
any particular group of job applicants and is not intended to relieve the
Contractor from any requirements of Executive Orders or regulations
concerning nondiscrimination in employment.
(4) Whenever the Contractor becomes contractually bound to the listing terms
of this clause, it shall advise the State employment service system, in each
State where it has establishments, of the name and location of each hiring
location in the State. As long as the Contractor is contractually bound to
these terms and has so advised the State system, it need not advise the
State system of subsequent contracts. The Contractor may advise the State
system when it is no longer bound by this contract clause.
4827-8318-4640.1 Exhibit"F-10"
2
(D) Applicability. This clause does not apply to the listing of employment openings
that occur and are filled outside the 50 States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, and the Virgin Islands.
(E) Postings.
(1) The Contractor agrees to post employment notices stating
(i) the Contractor's obligation under the law to take affirmative action
to employ and advance in employment qualified disabled veterans
and veterans of the Vietnam era, and
(ii) the rights of applicants and employees.
(2) These notices shall be posted in conspicuous places that are available to
employees and applicants for employment. They shall be in a form
prescribed by the Deputy Assistant Secretary for Federal Contract
Compliance Programs, Department of Labor(Deputy Assistant Secretary),
and provided by or through the Contracting Officer.
(3) The Contractor shall notify each labor union or representative of workers
with which it has a collective bargaining agreement or other contract
understanding, that the Contractor is bound by the terms of the Act, and is
committed to take affirmative action to employ, and advance in
employment, qualified disabled veterans and veterans of the Vietnam era.
(F) Noncompliance. If the Contractor does not comply with the requirements of this
clause, appropriate actions may be taken under the rules, regulations, and relevant orders of the
Secretary issued pursuant to the Act.
(G) Subcontracts. The Contractor shall include the terms of this clause in every
subcontract or purchase order of $10,000 or more unless exempted by rules, regulations, or
orders of the Secretary. The Contractor shall act as specified by the Deputy Assistant Secretary
to enforce the terms,including action for noncompliance.
4827-8318-4640.1 Exhibit"F-10"
3
EMPLOYMENT REPORTS ON DISABLED VETERANS AND
VETERANS OF THE VIETNAM ERA
(48 CFR 52.222-37)
(A) Unless the Contractor is a State or local government agency, the Contractor shall
report at least annually, as required by the Secretary of Labor, on--
(1) The number of disabled veterans and the number of veterans of the
Vietnam era in the workplace of the contractor by job category and hiring location; and
(2) The total number of new employees hired during the period covered by the
report, and of that total, the number of disabled veterans, and the number of veterans of the
Vietnam era.
(B) The above items shall be reported by completing the form entitled `Federal
Contractor Veterans Employment Report VETS-100.'
(C) Reports shall be submitted no later than September 30 of each year beginning
September 30, 1988.
(D) 'The employment activity report required by paragraph (a)(2) of this clause shall
reflect total hires during the most recent 12-month period as of the ending date selected for the
employment profile report required by paragraph (a)(1) of this clause. Contractors may select an
ending date: (1) As of the end of any pay period during the period January through March 1 of
the year the report is due, or (2) as of December 31, if the contractor has previous written
approval from the Equal Employment Opportunity Commission to do so for purposes of
submitting the Employer Information Report EEO-1 (Standard Form 100).
(E) The count of veterans reported according to paragraph (a) of this clause shall be
based on voluntary disclosure. Each Contractor subject to the reporting requirements
at38USCAS4212 38 U.S. C. 4212 shall invite all disabled veterans and veterans of the Vietnam
era who wish to benefit under the affirmative action program at 38USCAS421238 U.S.C. 4212
to identify themselves to the Contractor. The invitation shall state that the information is
voluntarily provided; that the information will be kept confidential; that disclosure or refusal to
provide the information will not subject the applicant or employee to any adverse treatment; and
that the information will be used only in accordance with the regulations promulgated under 38
U.S.C.4212.38USCAS4212
(F) Subcontracts. The Contractor shall include the terms of this clause in every
subcontract or purchase order or $10,000 or more unless exempted by rules, regulations, or
orders of the Secretary.
4827-8318-4W.1 Exhibit"F-10"
4
EXHIBIT"F-11"
CLEAN AIR AND WATER
(48 CFR 52.223-2)
(a) "Air Act," as used in this clause, means the Clean Air Act (42 U.S.C. 7401 et
seq.).
"Clean air standards," as used in this clause, means-
(1) Any enforceable rules, regulations, guidelines, standards, limitations, orders,
controls, prohibitions, work practices, or other requirements contained in, issued under, or
otherwise adopted under the Air Act or Executive Order 11738;
(2) An applicable implementation plan as described in section 110(d) of the Air Act
[42 U.S.C. 741(d)];
(3) An approved implementation procedure or plan under section 111(c) or section
111(d)of the Air Act [42 U.S.C. 7411(c) or(d)]; or
(4) An approved implementation procedure under section 112(d) of the Air Act [42
U.S.C. 7412(d)].
"Clean water standards," as used in this clause, means any enforceable limitation, control,
condition, prohibition, standard, or other requirement promulgated under the Water Act or
contained in an issue to a discharger by the Environmental Protection Agency or by a State under
an approved program, as authorized by Section 402 of the Water Act (33 U.S.C. 1342), or by
local government to ensure compliance with pretreatment regulations as required by Section 307
of the Water Act(33 U.S.C. 1317).
"Compliance," as used in this clause, means compliance with-
(1) Clean air or water standards; or
(2) A schedule or plan ordered or approved by a court of competent
jurisdiction, the Environmental Protection Agency, or an air or water pollution control agency
under the requirements of the Air Act or a Water Act and related regulations.
"Facility," as used in this clause, means any building, plant, installation, structure, mine
vessel or other floating craft, location, or site of operations, owned, leased, or supervised by a
Contractor or subcontractor, used in the performance of a contract or subcontract. When a
.location or site of operations includes more than one building,plant, installation, or structure, the
entire location or site shall be deemed a facility except when the Administrator, or a designed, of
4827-8318-4W.1 Exhibit"F-11"
1
the Environmental protection Agency, determines that independent facilities are collocated in
one geographical area.
"Water Act," as used in this clause, means Clean Water Act(33 U.S.X. 1251 et seq.).
(b) The Contractor agrees -
(1) To comply with all requirements of section 114 of the Clean Air Act, (42
U.S.C. 7414) and Section 308 of the Clean Water Act (33 U.S.C. 1318) relating to inspection,
monitoring, entry, reports, and information, as well as other requirements specified in section
114 and section 308 of the Air Act and the Water Act, and all regulations and guidelines issued
to implement those acts before award of this contract;
(2) That no portion of the work required by this prime contract will be
performed in a facility listed on the Environmental Protection Agency List of Violating Facilities
on the date when this contract was awarded unless and until the EPA eliminates the name of such
facility or facilities from such listing;
a
(3) To use best efforts to comply with the clean air standards and clean water
standards at the facility in which the contract is being performed; and
(4) To insert the substance of this clause into any nonexempt subcontract,
including this subparagraph (b) (4).
4827-8318-4W.1 Exhibit"F-11"
2
EXHIBIT"F-12"
CLEAN AIR AND WATER CERTIFICATION
(48 CFR 52.223-1)
(October 1985)
The Contractor or Offeror certifies as follows:
(a) Any facility to be utilized in the performance of this proposed contract is O, is
not( ) listed on the Environmental Protection Agency List of Violating Facilities.
(b) The Contractor will immediately notify the Contracting Officer, before award, of
the receipt of any communication from the Administrator, or a designee, of the Environmental
Protection Agency, indicating that any facility the Contractor proposes to use for the
performance of the contract is under consideration to be listed on the EPA List of Violating
Facilities; and
(c) The Contractor will include a certification substantially the same as this
certification, including this paragraph(c), in every nonexempt subcontract.
4827-8318-4640.1 Exhibit"F-12"
1
EQUAL OPPORTUNITY
(48 CFR 52.222-26)
(a) If, during any 12-month period (including the 12 months preceding the award of
this contract), the Contractor has been or is awarded nonexempt Federal contracts and/or
subcontracts that have an aggregate value in excess of$10,000, the Contractor shall comply with
subparagraphs (b)(1) through (11) of this clause. Upon request, the Contractor shall provide
information necessary to determine the applicability of this clause.
(b) During performance of this contract, the Contractor agrees as follows:
1. The Contractor shall not discriminate against any employee or applicant
for employment because of race, color, religion, sex, or national origin. However, it shall not be
a violation of this clause for the Contractor to extend a publicly announced preference in
employment to Indians living on or near an Indian reservation, in connection with employment
opportunities on or near an Indian reservation, as permitted by 41 CFR 60-1.5.
2. The Contractor shall take affirmative action to ensure that applicants are
employed, and that employees are treated during employment without regard to their race, color,
religion, sex, or national origin. This shall include, but not be limited to (i) employment, (ii)
upgrading, (iii) demotion, (iv) transfer, (v) recruitment or recruitment advertising, (vi) layoff or
termination, (vii) rates of pay or other forms of compensation, and (viii) selection for training,
including apprenticeship.
3. The Contractor shall post in conspicuous places available to employees
and applicants for employment, the notices to be provided by the Contracting Officer that
explain this clause.
4. The Contractor shall, in all solicitations or advertisement for employees
placed by or on behalf of the Contractor, state that all qualified applicants will receive
consideration for employment without regard to race,color, religion, sex, or national origin.
5. The Contractor shall send, to each labor union or representative of workers
with which it has a collective bargaining agreement or other contract or understanding, the notice
to be provided by the Contracting Officer advising the labor union or workers' representative of
the Contractor's commitments under this clause, and post copies of the notice in conspicuous
places available to employees and applicants for employment.
6. The Contractor shall comply with Executive Order 11246, as amended,
and the rules, regulations, and orders of the Secretary of Labor.
7. The Contractor shall furnish to the contracting agency all information
required by Executive Order 11246, as amended, and by the rules, regulations, and orders of the
4827-8318-4540.1 Exhibit"F-12"
2
Secretary of Labor. The Contractor shall also file Standard Form 100 (EEO-1), or any successor
form, as prescribed in 41 CFR part 60-1. Unless the Contractor has filed within the 12 months
preceding the date of contract award, the Contractor shall, within 30 days after contract award,
apply to either the regional Office of Federal Contract Compliance Programs (OFCCP) or the
local office of the Equal Employment Opportunity Commission for the necessary forms.
8. The Contractor shall permit access to its books, records, and accounts by
the contracting agency or the Office of Federal Contract Compliance Programs (OFCCP) for the
purpose of conducting on-site compliance evaluations and complaint investigations. The
Contractor shall permit the Government to inspect and copy any books, accounts, records
(including computerized records), and other material that may be relevant to the matter under
investigation and pertinent to compliance with Executive Order 11246, as amended, and rules
and regulations that implement the Executive Order.
9. If the OFCCP determines that the Contractor is not in compliance with this
clause or any rule, regulation, or order of the Secretary of Labor, this contract may be canceled,
terminated, or suspended in whole or in part and the Contractor may be declared ineligible for
further Government contracts, under the procedures authorized in Executive Order 11246, as
amended. In addition, sanctions may be imposed and remedies invoked against the Contractor as
provided in Executive Order 11246, as amended; in the rules, regulations, and orders of the
Secretary of Labor; or as otherwise provided by law.
10. The Contractor shall include the terms and conditions of subparagraphs
(b)(1) through (11) of this clause in every subcontract or purchase order that is not exempted by
the rules, regulations, or orders of the Secretary of Labor issued under Executive Order 11246, as
amended, so that these items and conditions will be binding upon each subcontractor or vendor.
11. The Contractor shall take such action with respect to any subcontract or
purchase order as the contracting agency may direct as a means of enforcing these terms and
conditions, including sanctions for noncompliance; provided, that if the Contractor becomes
involved in, or is threatened with, litigation with a subcontractor or vendor as a result of any
direction, the Contractor may request the United States to enter into the litigation to protect the
interests of the United States.
(c) Notwithstanding any other clause in this contract, disputes relative to this clause
will be governed by the procedures in 41 CFR 60-1.1.
4827-8318-4640.1 Exhibit"F-12"
3
EXHIBIT"G-l"
Collateral Assignment By the Agency to the City of the Developer
Grant Agreement Security Documents
4815-4167-0656.3 24
11/6/06 jmm
EXHIBIT "GI"
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
COLLATERAL ASSIGNMENT OF INTERESTS IN DEVELOPER COMPLETION
SURETY PURSUANT TO CONTRACT FOR LOAN GUARANTEE ASSISTANCE
UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED,42 U.S.C. SECTION 5308
(HUD SECTION 108 LOAN CONTRACT NO. B-03-MC-06-0539)
SERIES HUD 2006-A CERTIFICATES
Arden-Guthrie Project of the Redevelopment Agency of the City of San Bernardino
THIS COLLATERAL ASSIGNMENT OF INTERESTS IN DEVELOPER
COMPLETION SURETY PURSUANT TO CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY
DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C. SECTION 5308 (this a
"Agreement") is dated as of , 2006, by the Redevelopment Agency of the City of
San Bernardino (the "Agency") in favor of the City of San Bernardino and the Secretary of the
United States Department of Housing and Urban Development (the "Secretary of HUD"), and is
entered into in light of the facts set forth in the following Recital paragraphs:
RECITALS
A. The Secretary of HUD and the City are parties to that certain Contract For Loan
Guarantee Assistance for the HUD Series 2006-A Certificates (the "HUD Section 108 Loan
Contract"), as dated by the Secretary of HUD upon acceptance, pursuant to which the City is
authorized to loan up to Seven Million Five Hundred Thousand Dollars ($7,500,000) of
Community Development Block Grant Program Section 108 monies to the Redevelopment
Agency of the City of San Bernardino, a public body corporate and politic (the "Agency") in
support of the Arden-Guthrie Project (the "Project') to. be undertaken by
(the "Developer") in accordance with a Developer Grant
Assistance Agreement, dated as of , 2006 (the "Developer Grant Agreement') by
and between the Developer and the Agency, in connection with the development of that certain
property referred to by the Agency as the Arden-Guthrie Neighborhood Improvement Area (the
"Site"). Descriptions of the Site and the Project are more particularly set forth in the Developer
Grant Agreement.
[EDITOR'S NOTE: FOLLOWING TEXT TO CONFORM TO DEVELOPER GRANT
AGREEMENT]
B. Pursuant to the Developer Grant Agreement, the Developer shall deliver to the
Agency various instruments and documents, including without limitation the following:
Irrevocable and Unconditional Standby Letter of Credit No. in the principal
sum of$
4823-7296-3585.1 1
11/7/06 jmm
Project Completion Guaranty of ;
Real Property Tax Minimum Assessment Valuation Covenant and Covenant to Pay
Property Taxes;
Evidence of property casualty insurance naming the Agency, the City and the Secretary
of HUD as additional insureds; and
[EDITOR'S NOTE: LIST OTHER ITEMS OF DEVELOPER COMPLETION
SURETY]
Collectively, each of the items identified above in this Recital Paragraph B, are referred
to in the HUD Section 108 Loan Contract as the "Developer Completion Surety".
C. The City and the Agency have entered into that certain Redevelopment
Cooperation Loan Agreement (2006 Arden-Guthrie Project) dated as of July 1, 2006 (the
"Redevelopment Loan Cooperation Agreement").
D. Pursuant to the HUD Section 108 Loan Contract, the Agency is required to make
a collateral assignment of each item of the Developer Completion Surety to the City, and
pursuant to Section 4(e) of the Redevelopment Loan Cooperation Agreement, the Agency is
authorized to consent to an assignment by the City of the City's beneficial interest in the
Developer Grant Agreement and the Developer Completion Surety to HUD as collateral for the
repayment of the "Loan-A" as described in the Redevelopment Loan Cooperation Agreement
and the Agency is further authorized to execute in favor of the City any and all documents and/or
security agreements necessary to effectuate the collateral assignment by the City to HUD-of the
instruments and contracts as may relate to the Developer Completion Surety which are the
subject matter of this Agreement.
E. The HUD Section 108 Loan Agreement requires the City to deliver to the
"Custodian" (as that term is defined in the Section 108 Loan) for the benefit of the Secretary of
HUD an assignment of each of the documents which comprise the Developer Completion Surety.
NOW, THEREFORE, WITH REFERENCE TO THE ABOVE RECITALS AND IN
RELIANCE THEREON, AND FOR SUCH OTHER GOOD AND VALUABLE
CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, THE AGENCY AGREES AS FOLLOWS:
Section 1. This Agreement is delivered to the City by the Agency in furtherance of
the satisfaction of certain requirements set forth in paragraph 15(a) of the HUD Section 108
Loan Contract, which amends paragraph 5(c), thereof, to provide for this "Borrower Security
Agreement", as this term is defined in the HUD Section 108 Loan Contract.
Section 2. The Agency hereby grants, assigns and transfers to the City as collateral
for the obligation of the Agency to repay Loan-A to the City under the terms of the
4823-7296-3585.1 2
11/7/06 jmm
Redevelopment Loan Cooperation Agreement, the Developer Completion Surety. The Agency
intends and declares that by this Agreement, the City and the Secretary of HUD, and the
successors and assigns of each of them, shall have the rights and powers of the Agency under
the Developer Completion Surety and that the City and the Secretary of HUD, as applicable,
shall be entitled to all of the benefits of the Agency under the Developer Completion Surety, to
the same degree and extent as though the Developer Completion Surety had been originally
made between the Developer and the City, in the case of such documents and instruments as
provided for under the Developer Grant Agreement.
True and correct original copies of each of the Developer Completion Surety instruments
and documents are attached to this Agreement.
Section 3. For so long as: (i) no breach by the Developer has occurred under the
Developer Grant Agreement and each of the documents and instruments which comprise the
Developer Completion Surety; and (ii) no breach by the Agency has occurred under the
Redevelopment Loan Cooperation Agreement, the Agency reserves the right to consent to or
make necessary or appropriate amendments and/or revisions to certain, of the Developer
Completion Surety documents as set forth in the subparagraph below; provided, however, that
the Agency shall not make or consent to any such amendment or revision which materially
diminishes the value of any of such documents as security under the HUD Section 108 Loan
Contract without first obtaining the written consent of the Secretary of HUD:
Section 4. The Agency represents and warrants to' the City and to the
Secretary of HUD that the Agency is (and as to any other Developer Completion Surety
documents and instruments acquired by the Agency after the date of this Agreement), and the
Agency shall remain, the sole owner of the Developer Completion Surety documents and
instruments, excepting only the security interest of the City therein as granted by the Agency
under this Agreement and as may be further assigned by the City to the Secretary of HUD, and
further excepting the senior security interest of the "Construction Lender" in the Site as may
hereafter be permitted under the Developer Grant Agreement.
Section 5. This Agreement shall be a conditional assignment of the Developer
Completion Surety by the Agency to the City, and neither the City or the Secretary of HUD shall
exercise any right hereunder unless the City and/or the Secretary of HUD shall have first given
the Agency written notice that there has been a default under the Redevelopment Loan
Cooperation Agreement, or the HUD Section 108 Loan Contract, as applicable, beyond any
applicable cure period.
Section 6. Upon the delivery to the Agency by the City or the Secretary of
HUD, as applicable, of a notice of default as provided in Section 5 of this Agreement, the
Agency shall not have any further interest in or with respect to the Developer Completion
Surety; provided however, that if the Agency repays in full its obligations under the
4823-7296-3585.1 3
1 1 mint:_.._
Redevelopment Loan Cooperation Agreement, then the rights and interests of the Agency under
the Developer Completion Surety shall be reinstated and the rights and interests of the City or the
Secretary of HUD, as applicable, in the Developer Completion Surety shall be releases and
discharged.
Section 7. In the event of any default by the Developer under the Developer
Grant Agreement and/or any document or instrument of the Developer Completion Surety, the
Agency shall have the right, but not the obligation, upon written notice to the City and the
Secretary of HUD, to cure any such default of the Developer and take any action under the
Developer Grant Agreement and/or the Developer Completion Surety, as then applicable, to
preserve the Agency's rights under the Developer Grant Agreement and/or such Developer
Completion Surety.
Section 8. The Agency agrees to provide prompt written notice to the City
and to the Secretary of HUD of any default by the Developer under the Developer Grant
agreement and/or any of the Developer Completion Surety.
Section 9. The City agrees that the Secretary of HUD shall not be obligated to
perform or discharge any obligation, duty or liability under the Developer Grant Agreement
and/or the Developer Completion Surety by reason of this Agreement until such time as the
Secretary of HUD may exercise its election as provided in Section 5 hereof, and that neither this
Agreement, or the Secretary of HUD's performance,under this Agreement or the Developer
Grant Agreement or any document or instrument of the Developer Completion Surety, shall have
the effect of releasing the City from any liability to 'the Secretary of HUD under the HUD
Section 108 Loan Contract,
Section 10. Until the City pays HUD iri full under the HUD Section 108 Loan
Contract, the Agency agrees not to do, or suffer to be done, any of the following acts without
obtaining the prior written consent of the Secretary of HUD: (i) cancel, release or surrender any
document or instrument of the Developer Completion Surety except upon full satisfaction of the
obligation of the Developer as secured thereby, (ii) further assign any document or instrument of
Developer Completion Surety except to the City or to the Secretary of HUD; (iii) modify any of
the Developer Completion Surety, except as set forth in Section 3, without the consent of the
Secretary of HUD which consent shall not be unreasonably withheld, conditioned or denied; or
(iii) fail to perform any obligation of the Agency under the Developer Grant Agreement or any
document or instrument of the Developer Completion Surety.
Section 11. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given(a) on the date of
service if served personally to the party to whom notice is to be given, (b) on the day of
transmission if sent by facsimile transmission to the facsimile number given below, and
telephonic confirmation or receipt is obtained promptly after completion of transmission,(c) on
the day after delivery to Federal Express or similar overnight courier service or the Express Mail
service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if
mailed to the party to whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed, return receipt requested, to the party as follows:
4823-7296-3585.1 4
__
If to Agency: Redevelopment Agency of the
City of San Bernardino
Attn: Executive Director
201 North"E" Street, Suite 301
San Bernardino, California 92401
If to City: City of San Bernardino
Attn: Mayor
c/o Economic Development Agency of the City of
San Bernardino
201 North"E" Street, Suite 301
San Bernardino, California 92401
If to the Secretary of HUD: Secretary of the United States Department of
Housing and Urban Development
Attn: Director, Financial Management
Division
451 Seventh Street, S.W., Room 7180
Washington, DC 20410
Section 12. From and after a default by the City under the HUD Section 108
Loan Contract, the City hereby irrevocably appoints the Secretary of HUD as the City's attorney-
in-fact to exercise any and all of the City's rights in and or under the Developer Grant
Agreement and/or any of the Developer Completion Surety as hereby assigned by the Agency to
the City, to give appropriate receipts, releases and satisfactions on behalf of the City to the
Agency in connection with the City's rights or delegations under the Developer Grant
Agreement and/or any of the Developer Completion Surety, and to do any and all other acts in
the name of the City or in its own name with the same force and effect as-if this Agreement had
not been made. This power of attorney is coupled with an interest.
(signature page to follow)
4823-7296-3585.1 5
„/1-1,
THIS REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
COLLATERAL ASSIGNMENT OF INTERESTS IN DEVELOPER COMPLETION SURETY
PURSUANT TO CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION
108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS
AMENDED, 42 U.S.C. SECTION 5308 is dated as of , 2007, and is
executed on behalf of the Agency by its authorized officers whose signatures appear below.
AGENCY
Redevelopment Agency of the City of San
Bernardino
Date: By:
Chair of the Community
Development Commission of the
q City of San Bernardino
APPROVED AS TO FORM:
Agency Counsel
CONSENT AND APPROVAL OF AGENCY COLLATERAL ASSIGNMENT OF INTEREST
UNDER THE DEVELOPER GRANT AGREEMENT AND DEVELOPER COMPLETION
SURETY TO THE CITY'AND THE SECRETARY OF HUD UNDER THIS AGREEMENT:
The Developer hereby acknowledges and consents-to each of the terms and provisions of
this Agreement.
DEVELOPER
Date: By:
By:
4823-7296-3585.1 6
1 inlo6 imm
EXHIBIT"G-2"
Borrower Security Agreement and Collateral Assignment of Documents
48154167-0656.3 25
11/6/06 jnun
BORROWER SECURITY AGREEMENT
AND
COLLATERAL ASSIGNMENT OF DOCUMENTS
PURSUANT TO CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED,42 U.S.C. SECTION 5308
(HUD SECTION 108 LOAN CONTRACT NO. B-03-MC-06-0539)
SERIES HUD 2006-A CERTIFICATES
Arden-Guthrie Project of the Redevelopment Agency of the City of San Bernardino
THIS BORROWER SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT
OF DOCUMENTS PURSUANT TO CONTRACT FOR LOAN GUARANTEE ASSISTANCE
UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF
1974, AS AMENDED, 42 U.S.C. SECTION 5308 (this "Agreement") is dated as of
_, 2006, by the City of San Bernardino (the "City") in favor of the Secretary of
the United States Department of Housing and Urban Development(the "Secretary of HUD").
RECITALS
A. The Secretary of HUD and the City are parties to that certain Contract For Loan
Guarantee Assistance for the HUD Series 2006-A Certificates (the "HUD Section 108 Loan
Contract Agreement"), as dated by the Secretary of HUD upon acceptance, pursuant to which the
City is authorized to loan up to Seven Million Five Hundred Thousand Dollars ($7,500,000) of
Community Development Block Grant Program Section 108 monies to the Redevelopment
Agency of the City of San Bernardino, a public body corporate and politic (the "Agency") in
support of the Arden-Guthrie Project (the "Project") to be undertaken by
(the "Developer") in accordance with a Developer Grant
Assistance Agreement, dated as of , 2006 (the "Developer Grant Agreement") by
and between the Developer and the Agency, in connection with the development of that certain
property referred to by the Agency as the Arden-Guthrie Neighborhood Improvement Area (the
"Site"). Descriptions of the Site and the Project are more particularly set forth in the Developer
Grant Agreement.
B. Pursuant to the Developer Grant Agreement, the Developer shall deliver to the
Agency various instruments and documents, including without limitation the following:
Irrevocable and Unconditional Standby Letter of Credit No. in the principal
sum of$ ;
Project Completion Guaranty of ;
Real Property Tax Minimum Assessment Valuation Covenant and Covenant to Pay
Property Taxes;
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Evidence of property casualty insurance naming the Agency, the City and the Secretary
of HUD as additional insureds.
C. The City and the Agency have entered into that certain Redevelopment
Cooperation Loan Agreement (2006 Arden-Guthrie Project) dated as of July 1, 2006 (the
"Redevelopment Loan Cooperation Agreement"). Pursuant to Section 4(e) of the
Redevelopment Loan Cooperation Agreement the Agency is authorized to consent to an
assignment by the City of the City's beneficial interest in the Developer Grant Agreement to
HUD as collateral for the repayment of the "Lean-A" as described in the Redevelopment Loan
Cooperation Agreement and to execute any and all documents and/or security agreements
necessary to effectuate the collateral assignment by the City to HUD of the instruments and
contracts which is the subject matter of this Agreement. A true and correct copy of the
Redevelopment Loan Cooperation Agreement is attached to this Agreement.
D. The HUD Section 108 Loan Agreement requires the City to deliver to the
"Custodian" (as that term is defined in the Section 108 Loan Agreement) for the benefit of the
Secretary of HUD each of the "Security Documents", as this term is defined in the Section 108
Loan Agreement, together with an assignment thereof to the Secretary of HUD as provided in
this Agreement.
NOW, THEREFORE, WITH REFERENCE TO THE ABOVE RECITALS AND IN
RELIANCE THEREON, AND FOR SUCH OTHER GOOD AND VALUABLE
CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED,THE CITY AGREES AS FOLLOWS:
Section 1.. This Agreement is delivered to HUD in satisfaction of certain
requirements set forth in paragraph 15(a) of the HUD Section 108 Loan Contract, which amends
paragraph 5(c), thereof,to provide for this "Borrower Security Agreement".
Section 2. The City hereby grants, assigns and transfers to the Secretary of HUD as
collateral for the payment by the City of the obligation as arise in favor of the Secretary of HUD
under the HUD Section 108 Loan Contract, each of the Security Documents subject to the terms
of this Agreement. The City intends and declares that by this Agreement, the Secretary of HUD,
and its successors and assigns, shall have the rights and powers and shall be entitled to all of the
benefits under the Security-Documents, to the same degree and extent as though the Security
Documents had been originally made between: (A) the Developer and the Secretary of HUD, in
the case of such documents as provided for under the Developer Grant Agreement; and (B) the
Agency and the Secretary of HUD, in the case of such documents as provided for under the
Redevelopment Loan Cooperation Agreement.
(i) The Security Documents which arise under the Developer Grant Agreement and
which are hereby assigned to the Secretary of HUD are more particularly
identified as follows:
(1) Project Completion Guaranty of ;
4834-`7498-1120.2 2
(2) Notice of Collateral Assignment of Real Property Tax Minimum Assessed
Valuation Covenant by the Agency to the City (Recorded Instrument No.
(3) Cash draws by the Agency, if any, under Standby Letter of Credit No.
(4) Notice of Collateral Assignment of Project Participation Fee by the
Agency to the City(Recorded Instrument No. ).
(ii) The Security Documents which arise under the Redevelopment Loan Cooperation
Agreement and which either have been previously assigned by the City to the
Secretary of HUD or which are hereby assigned to the Secretary of HUD are more
particularly identified as follows:
(1) Note-A, dated , 2006, endorsed in favor of the Secretary
of HUD, or order by the City in the allonge attached to Note-A;
(2) Collateral Assignment of"Site Tax Increment," as this term is defined in
Section 4 of the IVDA Redevelopment Loan Cooperation Agreement, by
the Agency to the City.
True and correct original copies of each of the instruments and documents described in
the preceding subparagraphs (i) and(ii), above, are attached to this Agreement.
Section 3. For so long as no breach by the City has occurred under the HUD Section
108 Loan Contract, the City reserves the right to consent to or make necessary or appropriate
amendments and/or revisions to certain of the Security Documents as set forth in the
subparagraph below; provided, however, that the City shall not make or consent to any
amendment or revision which materially diminishes the value of any of such documents as
security under the HUD Section 108 Loan Contract:
the Developer Grant Agreement by and between the Agency and the Developer;
and
the IVDA Redevelopment Cooperation Agreement but only in so far as the
provisions of Section 4 thereof (assignment of IVDA tax increment to the
Agency) are not affected without the consent of the Secretary of HUD.
Section 4. The City represents and warrants to the Secretary of HUD that the
City is(and as to any other Security Documents acquired by the City hereafter) and the City shall
remain the sole owner of the Security Documents, excepting only the security interest of the
Secretary of HUD therein as granted by this Agreement and further excepting the senior security
interest of the "Construction Lender" in the Site as may hereafter be permitted under the
Developer Grant Agreement.
4834-7498-1120.2 3
Section 5. This Agreement shall be a conditional assignment of the Security
Documents and the Secretary of HUD shall not exercise its rights hereunder unless the Secretary
of HUD shall give and serve upon the City written notice that there has been a default under the
HUD Section 108 Loan Contract beyond any applicable cure period. The City expressly
acknowledges and agrees that the Secretary of HUD may exercise its rights hereunder with or
without either the City's or the Secretary of HUD's receipt of the proceeds of the Developer
Guaranty as assigned by the Agency to the City, and without either the City's or the Secretary of
HUD's receipt of the proceeds of any other security provided by the Agency to the City under
the Redevelopment Loan Cooperation Agreement as collateral for the repayment of the HUD
Section 108 Loan Contract.
Section 6. Upon the delivery to the City by the Secretary of HUD of a notice
of default as provided in Section 5, the City shall not have any further interest in or with respect
to the Security Documents; provided however, that if the City: (i) repays in full its obligations
under the HUD Section 108 Loan Contract; or (ii) if the Secretary of HUD elects to permit the
City to cure a default under the HUD Section 108 Loan Contract, then in either such case, the
rights and interests of the City under the Security Documents shall be reinstated.
Section 7. In the event of any default by the Developer or the Agency, as
applicable, under the Security Documents, the City shall have the right, but not the obligation,
upon written notice to the Secretary of HUD, to cure any such default of the applicable debtor
and take any action under Security Documents to preserve the City's and the Agency's rights
under such Security Documents.
Section 8. The City agrees to provide prompt written notice to the Secretary
of HUD of any default by the Developer or the Agency, as applicable, under any of the Security
Documents.
Section 9. The City agrees that the Secretary of HUD shall not be obligated to
perform or discharge any obligation, duty or liability under the Security Documents by reason of
this Agreement until such time as the Secretary of HUD may exercise its election as provided in
Section 5 hereof, and that neither this Agreement, or the Secretary of HUD's performance under
this Agreement or the Security Documents, shall have the effect of releasing the City from any
liability under the HUD Section 108 Loan Contract.
Section 10. Until the City pays HUD in full under the HUD Section 108 Loan
Contract, the City agrees not to do, or suffer to be done, any of the following acts without
obtaining the prior written consent of the Secretary of HUD: (i) cancel any of the Security
Documents; (ii) surrender of the Security Documents, except for the Developer's letter of credit;
(iii) waive or forgive any Security Documents; (iv) further assign any Security Documents; (v)
modify any of the Security Documents, except as set forth in Section 3, without the consent of
the Secretary of HUD which consent shall not be unreasonably withheld, conditioned or denied;
or(vi) fail to perform any obligation of the City under the Security Documents.
Section 11. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given(a) on the date of
4834-7498-1120.2 4
service if served personally to the party to whom notice is to be given, (b) on the day of
transmission if sent by facsimile transmission to the facsimile number given below, and
telephonic confirmation or receipt is obtained promptly after completion of transmission, (c) on
the day after delivery to Federal Express or similar overnight courier service or the Express Mail
service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if
mailed to the party to whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed, return receipt requested, to the party as follows:
If to City: City of San Bernardino
Attn: Mayor
c/o Economic Development Agency of the City of
San Bernardino
201 North"E" Street, Suite 301
San Bernardino, California 92401
If to the Secretary of HUD: Secretary of the United States Department of
Housing and Urban Development
Attn: Director, Financial Management
Division
451 Seventh Street, S.W., Room 7180
Washington, DC 20410
Section 12. At such time as the proceeds of the HUD Section 108 Loan are
disbursed by the City to the Agency as the "Subrecipient" as this term is defined in the HUD
Section 108 Loan Contract, the City shall promptly cause to be delivered to the "Custodian"
within five (5) business days thereafter, each of the documents described in paragraph 15(e) of
the HUD Section 108 Loan Contract.
Section 13. From and after a default by the City under the HUD Section 108
Loan Contract,the City hereby irrevocably appoints the Secretary of HUD as the City's attorney-
in-fact to exercise any and all of the City's rights in and or under any of the Security Documents,
to give appropriate receipts, releases and satisfactions on behalf of the City in connection with
the City's rights or delegations under any of the Security Documents, and to do any and all other
acts in the name of the City or in its own name with the same force and effect as if this
Agreement had not been made. This power of attorney is coupled with an interest.
(signature page to follow)
4834-7498-1120.2 5
THIS BORROWER SECURITY AGREEMENT AND COLLATERAL
ASSIGNMENT OF DOCUMENTS PURSUANT TO CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY
DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C. SECTION 5308 is dated as of
2007, and is executed on behalf of the City by its authorized officers
whose signatures appear below.
CITY
City of San Bernardino
Date: By:
Mayor
APPROVED AS TO FORM:
City Attorney
CONSENT AND APPROVAL OF COLLATERAL ASSIGNMENT TO HUD UNDER THIS
AGREEMENT:
Redevelopment Agency of the City of San
Bernardino, a public body corporate and
politic
Date: By:
Chair of the Community
Development Commission of the
City of San Bernardino
APPROVED AS TO FORM:
Agency Counsel
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