HomeMy WebLinkAboutOrd 06-04 GrndLeaseSrPartnershp ORDINANCE NO. 06 - 04
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF DUBLIN --
AUTHORIZING A GROUND LEASE BETWEEN THE CITY OF DUBLIN
AND DUBLIN SENIOR LIMITED PARTNERSHIP
WHEREAS, the citizens of Dublin are experiencing a housing shortage for very low-income
senior households;
WHEREAS, a goal of the Housing Element of the City's General Plan is to achieve a balanced
community with housing available for households of a range of income levels;
WHEREAS, persons with very low incomes who currently live and/or work in the City are
increasingly unable to locate housing at prices they can afford and often become excluded from living in
the City;
WHEREAS, it is a public purpose of the City, and a public policy of the State as mandated by the
requirement for a housing.element of the City's General Plan, to make available an adequate supply of
housing for persons of all economic segments of the community;
WHEREAS, the City is the owner of certain real property ("Property") described in the attached
Ground Lease, which is attached hereto as Exhibit A;
WHEREAS, pursuant to a Memorandum of Understanding ("MOU") with the County of
Alameda, the City acquired the Property and agreed to use the Property solely for public purposes for a
minimum of fifty (50) years;
WHEREAS, the City invited several non-profit organizations to submit proposals for the
development of affordable senior housing on the Property, and following an evaluation of proposals and a
public hearing, the City selected Eden Housing, Inc., a California non-profit public benefit corporation
("Eden"), to construct, own and operate a 54-unit affordable senior housing development on the Property
(the "Project");
WHEREAS, in June 2003, the City Council approved the execution of an Option to Lease giving
Eden the right to lease the Property, contingent upon Eden obtaining construction financing
commitments;
WHEREAS, Eden is the general partner of Dublin Senior Limited Partnership, a California
limited partnership ("Partnership"), which was formed to develop, own and operate low-income housing
for seniors;
WHEREAS, Eden and the Partnership have received construction financing commitments and
now plan to exercise the option in order to move forward with the construction of the Project;
WHEREAS, in order to make the Project affordable to very low-income households, the Project
is also being financed with loW-income housing tax credits;
WHEREAS, in order for financing to close and construction to commence, the City must first
lease the Property to the Partnership;
WHEREAS, uffder California Government Code Section 37380, the Ground Lease muSt be
authorized by ordinance;
WHEREAS, City loan documents and the attached Ground Lease will both impose affordability
and occupancy requirements and will require periodic monitoring of such requirements, in accordance
with Government Code Section 37380;
WHEREAS, the lease of the Property to the Partnership will further the public purpose of the City
and the public policy of the State, and will fulfill the requirements of the MOU; and
WHEREAS, execution of the Ground Lease will allow for the construction and operation of
affordable senior housing for very low-income households, which will benefit the residents of the City
and encourage the preservation of the public peace, health and safety.
NOW THEREFORE, THE CITY COUNCIL ORDAINS AS FOLLOWS:
l) Lease Authorized. The City Council of the City of Dublin hereby authorizes and directs
the Mayor or her designee to execute the Ground Lease substantially in the form attached hereto as
Exhibit A.
2) Compliance with California Environmental Quality Act. The City prepared an Initial
Study for the Project, which led to a finding that all potential environmental impacts could be reduced to a
less-than-significant level. Therefore, the City adopted a Mitigated Negative Declaration for the Project.
3) Severability. In the event any section or portion of this Ordinance shall be determined
invalid or unconstitutional, such section or portion shall be deemed severable and all other sections or
portions hereof shall remain in full force and effect.
4) Effective Date and Posting. In accordance with Section 36937 of the Government Code
of the State of California, this Ordinance shall take effect and be in force thirty (30) days from and after
the date of its passage. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at
least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government
Code of the State of California.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Dublin this 17TM day
of February, 2004, by the following vote:
AYES: Councilmembers McCormick, Oravetz, Sbranti and Zika and Mayor Lockhart
NOES: None
ABSTAIN: None
//
Mayor
ATTEST: ~'
K2/G/2-17-04/ordl- o~hdlease.doc (Item 6.2) 674974v2
GROUND LEASE
by and between
the CITY OF DUBLIN, a municipal corporation
as Landlord,
and
DUBLIN SENIOR LIMITED pARTNERSHIP,
a California limited partnership,
as Tenant
Dated as of February 1, 2004
675831-2 EXHIBIT A
THIS GROUND LEASE (the "Lease") dated as of February 1, 2004 ("Effective Date")
is entered into by and between the City of Dublin, a municipal corporation (hereafter "City" or
"Landlord") and Dublin Senior Limited Partnership, a California limited partnership
("Tenant").
RECITALS
A. City is the owner of fee title to the unimproved land located at 7606 Amador
Valley Boulevard, Dublin, California, and more particularly described on Exhibit A attached
hereto, including all appurtenances, easements, rights-of-way, and other interests appurtenant
thereto (the "Land").
B. Tenant is a California limited partnership which was formed to develop, own and
operate affordable housing for very low- income senior households and to provide related
services.
C. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord the
Land, upon the terms and provisions set forth in this Lease, for the development by Tenant of a
multi-family rental housing project for very Iow-income seniors and related improvements.
AGREEMENT
NOW, THEREFORE, for and in consideration of the covenants and agreements
hereinafter set forth, and for other good and valuable cOnsideration, the receipt and sufficiency of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows.
ARTICLE I
DEMISE OF PREMISES
1.1. Demise. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Land for the Term (as defined in Section 2.1 below) and on the terms and
conditions set forth in this Lease. All oil, gas, geothermal and mineral rights are expressly
reserved from this Lease. Landlord shall have no rights of entry or surface rights for the purpose
of extraction of oil, gas, mineral, geothermal or similar resources, nor shall Landlord have the
right to excavate any oil, gas, geothermal, mineral or similar resources above a depth of 500 feet
during the Term of this Lease.
1.2. Condition of Title. Landlord leases the Land to Tenant subject to all easements,
covenants, conditions, restrictions and other title matters of record existing as of the Effective
Date, and all matters that would be apparent from an inspection of the Land on the Effective
Date.
1.3. Condition of Land. Landlord leases the Land to Tenant in its "as-is" condition
existing on the Effective Date, and Tenant acknowledges that, except as otherwise expressly set
forth in this Lease, Landlord makes no representations or warranties to Tenant with regard to the
condition of the Land or the fitness or suitability thereof for Tenant's purposes, including but not
limited to, matters pertaining to topography, utilities, soil, subsoil, presence or absence of fill,
presence or absence of hazardous materials, drainage, flood zone designation, access to public
roads, or environmental laws, rules, or regulations. Tenant has relied on its investigation and
judgxnent as to all matters relating to the Land. Tenant represents that it has, prior to the
execution of this Lease, made investigations of the Land, including without limitation such
inquiries of governmental agencies, soils testing, tests and inspections as Tenant has deemed
necessary to determine the condition of the Land and that Tenant, by execution hereof, accepts
the Land in its current "as-is" condition and state.
1.4 Definitions.
1'.4.1 Improvements. For purposes of this Lease, the term "Improvements"
shall mean all buildings, structures, fixtures, fences, walls, paving, parking improvements,
driveways, walkways, plazas, landscaping, permanently affixed utility systems and equipment,
and other improvements now or hereafter located on the Land.
1.4.2 Prqiect. For purposes of this Lease, the term "Project" shall mean the
Land and all Improvements.
ARTICLE II
TERM OF LEASE
2.1 Term. The term of this Lease (the "Term") shall commence on the date of
recordation of a memorandum of this Lease (the "Commencement Date") and, unless sooner
terminated under the provisions hereof, shall expire on the day preceding the ninety-ninth (99th)
anniversary of the Commencement Date (the "Expiration Date"). The expiration or sooner
termination of the Term shall be referred to as "Lease Termination."
2.2 Lease Year. For purposes of this Lease, "Lease Year" shall mean each calendar
year, or partial calendar year during the Term.
ARTICLE III
RENT
3.1 Rent. Tenant shall pay to Landlord, rent for the Land ("Rent") in the amount of
One Dollar ($1.00) per Lease Year (or portion thereof for the first and last Lease Year of the
Term) prepaid on the Commencement Date to Landlord at the address shown in Section 17.6.2
or such other place as Landlord may designate in writing. Provided that the Project is, and shall
pursuant to an enforceable regulatory agreement remain, in compliance with the affordability
requirements set forth in Section 6.3 ("Affordability Requirements"), there shall be no
increase in Rent during the Term. No later than 90 days prior to the expiration of the
Affordability Requirements, Tenant shall provide written notice to Landlord informing Landlord
of whether or not Tenant desires to extend the term of the Affordability Requirements and the
desired term of any such extension. If Tenant elects to extend the Affordability Requirements,
Tenant and City shall execute an amendment to this Lease and shall execute and record an
amendment to the Affordable Housing Regulatory Agreement for the Project, each of which
675831 2
amendments shall set forth the new term of the Affordability Requirements. If Tenant elects not
to extend the Affordability Requirements, Landlord shall have the right to charge additional Rent
during the portion of the Term remaining after the expiration of the Affordability Requirements.
Landlord and Tenant agree to negotiate in good faith to establish the amount of such additional
Rent and the terms of payment and shall execute an amendment to this Lease setting forth such
terms. In no event shall the additional rent exceed market rate for comparable leased properties.
ARTICLE IV
TAXES~ ASSESSMENTS AND OTHER ~CHARGES
4.1 Impositions. Tenant covenants and agrees to pay prior to delinquency, all real
property taxes, P°ssessory interest taxes, license and permit fees, sales, use or occupancy taxes,
assessments whether general or special, ordinary or extraordinary, unforeseen, as well as
foreseen, of any kind or nature whatsoever, pertaining to the Project, including, but not limited to
(i) any assessment, levy, imposition or charge, in lieu of or substitution for real estate taxes, and
(ii) any assessment for public improvements or benefits which is assessed, levied, or imposed
upon or which becomes due and payable and a lien upon (a) the Project or any part thereof or
any personal property, equipment or other facility used in the operation thereof, (b) the rent or
income received by Tenant from subtenants or licensees, (c) any use or occupancy of the Project,
or (d) this transaction or, subject to the exclusions specified below, any document to which
Tenant is a party creating or transferring an estate or interest in the Project. All of the foregoing
are hereinafter referred to as "Impositions."
4.1.1 Exclusions. Impositions specifically shall exclude (i) any income,
franchise, gross receipts, estate, inheritance, transfer or gift tax imposed on Landlord, and (ii)
any transfer tax or increase in assessments, property tax, or possessory interest tax that is
attributable to Landlord's sale or other transfer of the Land. ~
4.1.2 Installments. If, by law, any such Imposition is payable, or may at the
option of the taxpayer be paid, in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition), Tenant may pay the same together with any accrued interest on the
unpaid balance of such Imposition in installments as the same respectively become due and
before any fine or penalty may be added thereto for the nonpayment of any such installment and
interest. Any Impositions relating to tax years that are only partially included in the Term of this
Lease shall be prorated between Tenant and Landlord.
4.1.3 'Evidence of Payment. Upon request by Landlord, Tenant shall furnish, in
form satisfactory to Landlord, evidence of payment prior to delinquency of all Impositions
payable by Tenant.
4.2 Tenant Right to Contest. Tenant shall have the fight before any delinquency
occurs to contest or object to the amount or validity of any such Imposition by appropriate legal
proceedings, but such right shall not be deemed or construed in any way as relieving, modifying
or extending Tenant's covenant to pay any such Imposition at the time and in the manner
required by law. Any such contest shall be conducted in accordance with and subject to the
requirements of Applicable Law (as defined in Section 5.3.1) and otherwise in a manner that
675831 3
does not subject Landlord's title to the Land to foreclosure or forfeiture. Tenant shall indemnify,
defend, protect and hold Landlord harmless from and against all claims, damages, losses,
liabilities, costs and expenses (including without limitation attorneys' fees) incurred by Landlord
as a result of any such contest brought by Tenant. During any contest of an Imposition, Tenant
shall (by payment of disputed sums, if necessary) prevent any advertisement of tax sale,
foreclosure of, or any divesting of Lessor's title, reversion or other interest in the Land or the
Project.
4.3 Tenant Duty to File. Tenant shall have the duty of making or filing any
declaration, statement br report which may be necessary or advisable in connection with the
determination, equalization, reduction or payment of any Imposition which is or which may
become payable by Tenant under the provisions of this Article 4, and Landlord shall not be
responsible for the contents of any such declaration, statement or report; provided, however
Landlord shall cooperate with Tenant in connection with the foregoing, including joinder in any
application pertaining thereto to the extent required under applicable law, all at no cost to
Landlord.
4.4 Utilities. Tenant agrees to pay, or cause to be paid, all charges which are incurred
by Tenant or which are otherwise a charge or lien against the Project during the Term, for gas,
water, electricity, light, heat or power, telephone or other communication service use, or other
utility use, rendered or supplied upon or in connection with the Project. Tenant shall also obtain,
or cause to be obtained, without cost to Landlord, any and all necessary permits, licenses or other
authorizations required for the lawful and proper installation and maintenance upon the Land of
wires, pipes, conduits and other equipment for the supply of utilities to the Project. In no event
shall Landlord have any liability to Tenant, and Tenant hereby releases Landlord, from any and
all claimS,'including but not limited to conseqUential damages, lost profits and similar damages
that Tenant may incur as a result of any interruption, curtailment or diminishment of such
utilities, other than for the active negligence or willful misconduct of Landlord. Notwithstanding
the foregoing, Tenant shall have the right to challenge the amount or validity of the foregoing
charges, provided that doing so does not result in the Land being subjected to any lien or other
encumbrance. Landlord shall cooperate, within reasonable limits, to assist Tenant in securing
utility services for the Project.
ARTICLE V
DEVELOPMENT OF THE LAND
5.1 Construction of Improvements. Tenant agrees to construct on the Land a 54-unit,
multi-family residential rental project for seniors, together with related improvements (the
"Development"), in accordance with plans and specifications approved by the City of Dublin
and any other applicable governmental agency or authority. The Development shall include 53
one-bedroom units and one two-bedroom resident manager's unit, together with a community
room and 31 parking spaces.
5.2 Construction Schedule. Tenant agrees to use diligent efforts to complete
construction of the Development within twenty-four (24) months after the Commencement Date,
subject to Unavoidable Delays incurred by Tenant. ("Unavoidable Delays" means delays due to
675831 4
strikes, acts of God, acts of the elements, inability to obtain labor, materials or utilities,
governmental restrictions or moratoria, enemy action, earthquakes, civil commotion, war,
unavoidable casualty or similar causes beyond the reasonable control of Tenant, but financial
inability of Tenant to perform shall not be an Unavoidable Delay or an excusing cause.
5.3 Construction Standards.
5.3.1 General Construction Standards. All work done in connection with
construction of Improvements on the Land, including any subsequent improvement, alternation
or replacement, shall be conducted in a first class and workmanlike fashion in accordance with
plans and specifications approved by Landlord and in compliance with all applicable local, state
and federal statutes, codes, ordinances, laws and regulations (collectively, "Applicable Laws").
Tenant shall take all reasonably necessary measures to minimize any damage, disruption or
inconvenience caused by such work and make adequate provision for the safety of all persons
affected thereby. Tenant shall have the sole responsibility for obtaining all necessary
governmental permits and approvals for the construction of the Improvements, at Tenant's sole
cost and expense. Landlord shall cooperate with Tenant in connection with.obtaining any such
governmental permits and approvals. Tenant shall pay (or cause to be paid) all costs and
expenses associated with the Improvements constructed by Tenant on the Land and shall
indemnify, defend and hold Landlord harmless from and against all claims, liabilities, losses,
costs and expenses (including reasonable attorneys, fees) incurred by or brought against
Landlord for the failure of Tenant to pay for the cost of such work, any mechanics' or other liens
filed against the Land in connection therewith, or the failure of Tenant to comply with
Applicable Laws including without limitation, California Labor Code Section 1770 et seq.
("Prevailing Wage Laws") as and to the extent applicable.
5.3.2 Inspection During Construction. Tenant agrees to allow Landlord's
authorized representatives, agents or employees reasonable access, upon 24 hours prior notice to
inspect any construction Tenant undertakes on the Land.
5.3.3 Easements. From time to time at Tenant's request, Landlord shall, in its
capacity as fee title owner to the Land, join in the grant of easements to public or private utility
companies for utility service to and for the benefit of the Project. Landlord agrees to join in
granting or dedicating such public or private utility or other easements as may be reasonably
required for the development of the Land in accordance with this Lease. Landlord and Tenant
acknowledge that it will be necessary to grant and receive certain reciprocal access, drainage,
and other easements to and from the parcel owned by Landlord located adjacent to the Land.
The parties agree to cooperate in determining the description, nature and extent of such
easements and shall execute and record documents evidencing the same which are reasonably
acceptable to both Landlord and Tenant. Without limiting the generality of the foregoing,
Landlord and Tenant agree to the following: (i) Landlord shall have a parking easement in
Tenant's parking lot in the location and of the dimensions designated as "Parking Easement" on
Parcel Map 8144 ("Parcel Map") (attached hereto as Exhibit C) providing Landlord with
exclusive rights to use such Parking Easement for senior center use; (ii) Landlord shall be
entitled to install lighting in Tenant's parking lot in the locations designated as "PUE 1" and
"PUE 2" on the Parcel Map, provided that Landlord shall be responsible for the maintenance of
such lighting and for payment of all utility charges incurred for such lighting; (iii) Landlord shall
675831 5
provide Tenant shall with an ingress/egress/access easement across Landlord's adjacent property
in the location designated as "PIEE" on the Parcel Map; and (iv) Landlord and Tenant shall
provide storm drain easements to each other in the locations designated as "PSDE" on the Parcel
Map, the use and maintenance of which shall be more particularly described in a separate
easement agreement executed by the parties.
5.3.4 Protection of Landlord. Nothing in this Lease shall be construed as
constituting the consent of the Landlord, express or implied, to the performance of any labor or
services, or the furnishing of any materials or any specific improvements, alterations of or repairs
to the Project or any part thereof, by any contractor, subcontractor, laborer or materialman such
as to give rise to any right of any such contractor, subcontractor, laborer or materialman to file a
mechanic's lien or other claim against the fee title to the Land. Landlord shall have the right at
all reasonable times to post, and keep posted, on the Land any notices which Landlord may deem
necessary for the protection of Landlord and the Land from mechanic's liens or other claims.
Tenant shall give Landlord ten (10) days' prior written notice of the commencement of any work
to be done on the Project to enable Landlord to post such notices. In addition, Tenant shall
make; or cause to be made, timely payment of all monies due and legally owing to all persons
doing any work or furnishing any materials or supplies to Tenant or any of its contractors or
subcontractors in connection with the Project.
5.3.5 Mechanic's Liens. Subject to Tenant's right to contest the same prior to
payment, Tenant shall keep the Land and the Project free and clear of all mechanic's liens and
other liens on account of work done by or for Tenant. Tenant agrees to and shall indemnify,
defend and hold Landlord harmless from and against liability, loss, damages, costs and expenses
(including reasonable attorney's fees) incurred by or brought against Landlord for claims of lien
of laborers or materialmen or others for work performed or materials or supplies furnished to
Tenant or persons claiming under it. In the event any lien is recorded, Tenant shall, within thirty
(30) days after written request from Landlord, cause such lien to be removed of record by
bonding or otherwise.
5.3.6 Notice of Completion. Upon completion of construction of any
Improvement, Tenant shall file or cause to be filed in the Official Records of Alameda County a
Notice of Completion (the "Notice of Completion") with respect to the subject work. Upon
request of Landlord, Tenant shall make available to Landlord following the completion of the
Improvements a full set of as-built plans for the Improvements.
5.3.7 Use of Plans. The contracts relating to design and construction of the
Project executed by and between Tenant (or Tenant's general partner or other Tenant Affiliate as
defined in Section 15.1) and any architect, other design professional or any general contractor
shall provide, in form and substance reasonably satisfactory to Landlord, for the assignment
thereof to Landlord as security to Landlord for Tenant's performance hereunder, and Landlord
shall be furnished with any such contract, together with the further agreement of the parties
thereto, that if this Lease is terminated due to Tenant's default, Landlord may, at its election, use
any plans and specifications to which Tenant is then entitled pursuant to any such contract upon
the paYment of any sums due to any party thereto. The Landlord's right to elect to use such
plans and specifications shall be subordinate to and shall not defeat the rights of the Leasehold
675831 6
Mortgagee, and Landlord shall execute such agreements as the Leasehold Mortgagee may
reasonably require to confirm such subordination.
5.3.8 Performance and Surety Bonds. Prior to the commencement of
-' construction of any portion of the Improvements, Tenant shall purchase or cause Tenant's
contractor to purchase: (A) in form reasonably satisfactory to Landlord and issued by a
corporate surety reasonably acceptable to Landlord both a performance bond in an amount of not
less than 100% of the cost of construction, naming Landlord and Leasehold Mortgagee as
additional insureds and a payment bond in an amount of not less than 100% of the costs for labor
and materials, naming Landlord and Leasehold Mortgagee as additional insureds; or (B) a letter
of credit in an amount not less than 10% of the cost of construction, the form and substance of
which shall be subject to Landlord's approval; or (C) such other form of assurance of completion
the form and substance of which shall be subject to Landlord approval. "Leasehold Mortgagee"
means the mortgagee or beneficiary of any Leasehold Mortgage, and in the event of a transfer of
such Leasehold Mortgage, the successor Leasehold Mortgagee, upon delivery of written notice
of the transfer to Landlord, who thereupon shall be deemed to be the Leasehold Mortgagee.
"Leasehold Mortgage" means a mortgage secured by the leasehold estate created by this Lease
and held by a Leasehold Mortgagee.
ARTICLE VI
USE OF THE PROPERTY
6.1 Permitted Uses. Tenant may use the Land for the development and operation of a
· 54-unit multi-family residential rental project for seniors, and related ancillary facilities
· consistent and compatible with a multi-family residential rental project for seniors, and for no
other purposes without the prior written consent of Landlord.
6.2 Occupancy Restrictions. For the full Term, no fewer than fifty-three (53) of the
dwelling units in the Project shall be restricted for occupancy by households in which at least one
member is a person 62 years of age or older. Residency by other persons in such dwelling units
shall be in compliance with Section 51.3 of the California Civil Code.
6.3 Affordability Requirements. Subject to Tenant's option to extend as set
forth in Section 3.1 hereof, for a period of fifty-five (55) years commencing upon the Effective
Date, no fewer than twenty-six (26) of the dwelling units in the Project (49% of the total) shall
be both rent-restricted and occupied (or if vacant, available for occupancy) by households whose
income does not exceed fifty percent (50%) of Area Median Income as adjusted for actual
household size. The term "Area Median Income" shall mean the median gross annual income
· for households in Alameda County, adjusted for household size, as determined by the U.S.
Department of Housing and Urban Development. A dwelling unit shall qualify as
"rent-restricted" if the gross rent charged for such unit does not exceed thirty percent (30%) of
fifty percent (50%) of Area Median Income as adjusted for assumed household size in
accordance with California Tax Credit Allocation Committee ("TCAC") guidelines. As of the
Effective Date, such guidelines provide that assumed household size is 1-1/2 persons for a studio
apartment and 2 persons for a one-bedroom apartment.
675831 7
6.4 Manager's Unit. One dwelling unit in the Project may be used as a resident
manager's unit, and shall be exempt from the occupancy and rent restrictions set forth in Section
6.2 and 6.3 of this Lease.
6.5 No Condominium Conversion. Tenant shall not convert the Project to condominium
or cooperative ownership or sell condominium or cooperative conversion fights to the Project
during the Term of this Lease.
6.6 Nondiscrimihation. There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, religion, creed, sex, sexual orientation,
marital status, familial status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Land or the Project, nor shall Tenant or any person
claiming under or through Tenant establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Project. Tenant shall
include such provision in all deeds, leases, contracts and other instruments executed by Tenant,
and shall enforce the same diligently and in good faith.
6.7 Binding on Successors; No Subordination. The restrictions set forth in this
Article VI shall be binding upon Tenant and its successors and assigns for the full Term of this
Lease, and shall not be subordinated to any interest, lien, or mortgage; provided however, the
affordability restrictions specified in Section 6.2 shall be effective for a term of fifty-five (55)
years commencing upon the Effective Date unless extended pursuant to Section 3.1.
'6.8 Management and Operation of the Project; Compliance with Laws. Tenant agrees
to use its best efforts to operate, maintain and manage the Project in first-class manner, subject to
incidental wear and tear. Tenant, at its sole cost and expense, shall comply with all Applicable
Laws pertaining to the use, operation, occupancy and management of the Project. Tenant shall
not itself, and shall not permit any subtenant to use the Land or the Improvements for any
unlawful purpose and shall not itself, and shall not permit any subtenant to, perform, permit or
suffer any act of omission or commission upon or about the Land or the Improvements which
would result in a nuisance or a violation of Applicable Law.
6.9 Tenant Right to Contest. Tenant shall have the fight to contest by appropriate
proceedings, in the name of Tenant, and without cost or expense to Landlord, the validity or
application of any Applicable Law. If compliance with any Applicable Law may legally be
delayed pending the prosecution of any such proceeding without the incurrence of any lien,
charge or liability against the Land or Tenant's interest therein, and without subjecting Tenant or
Landlord to any liability, civil or criminal, for failure so to comply therewith, Tenant may delay
compliance therewith until the final determination of such proceeding. Tenant shall indenmify,
defend, protect and hold Landlord harmless from and against all claims, damages, losses,
liabilities, costs and expenses (including without limitation attorneys' fees) incurred by Landlord
as a result of any such contest brought by Tenant.
6.10 Hazardous Materials.
675831
6.10.1 Obligations of Tenant. Tenant shall not cause or permit any Hazardous
Material (as defined below) other than materials commonly used in the construction, operation
and maintenance of the Project, Provided such materials are used and disposed of in compliance
with all applicable laws and regulations, to be brought upon, kept or used in or about the Land or
the Project in violation of Applicable Law. If Tenant breaches the covenant set forth in the
preceding sentence, then Tenant shall indemnify, defend, protect and hold Landlord harmless
from and against all claims, demands, liabilities, losses, damages, fines, penalties, remediation
orders, costs or expenses (including attorney's fees) incurred by or brought against Landlord as a
result of such breach by Tenant. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any federal, state or local governmental
agency or political subdivision because of the breach by Tenant of the terms and provisions of
this Section 6.10.1. Without limiting the foregoing, if the presence of any Hazardous Material at
the Project that was not in existence as of the Effective Date results in any contamination of the
Project in violation of Applicable Law, Tenant shall promptly take all actions at its sole expense
as are necessary to return the Project to the condition existing prior to the introduction of any
such Hazardous Material to the Project, Provided that Landlord's approval of Such actions shall
first be obtained, which approval may be withheld in Landlord's sole discretion. During such
time that City is the owner of improvements located at 7600 Amador Valley Boulevard
(including without limitation, the senior center under construction as of the date hereof),
Tenant's obligations under this Section shall not apply to Hazardous Material released from such
improvements.
6.10.2 Definition of Hazardous Material. As used in this Lease, the term
"Hazardous Material" means any hazardous, explosive or toxic substance, material or waste
which is or becomes regulated by any local governmental authority, the State of California or the
United State~ Government. The term "Hazardous Material'' includes, without limitation, any
material or substance which is (a) defined as a "hazardous waste," "extremely hazardous waste'
or "restricted hazardous waste" under Sections 25115, 25117 or 15122.7, or is listed pursuant to
Section 25140, of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous
Waste Control Law), (b) defined as a "haZardous substance" under Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner
HazardOus Substance Account Act), (c) defined as "hazardous material," "hazardous substance,"
or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division
20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (d) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety Code, DivisiOn
20, Chapter 6.7 (Underground Storage of Hazardous Substances), (e) petroleum, (f) asbestos, (g)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant to Article 11 of
Title 22 of the California Administrative Code, Division 4, Chapter 30, (h) designated as a
"hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33
U.S.C. § 1317), (i) defined as a "hazardous waste" pursuant to Section 1004 of the Federal
Resource Conservation and Recovery Act, 41 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), or (j)
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 41 U.S.C. § 9601 et seq. (42 U.S.C.
§ 9601).
675831 9
ARTICLE VII
SURRENDER AND RIGHT TO REMOVE
7.1 Ownership During Term.
7.1.1 Improvements. During the Term of this Lease, all Improvements
constructed on the Land by Tenant as permitted or required by this Lease shall, subject to the
terms of this Lease, be and remain the property of Tenant.
7.1.2 PersOnal Property. All personal property, furnishings, trade fixtures and
equipment installed by Tenant in, on or around the Project which (i) are attached to the Land so
as not to cause substantial damage upon removal, and (ii) are not necessary for the normal
operation and occupancy of the Project, shall be the personal property of Tenant (the "Personal
Property"). At any time during the Term, Tenant shall have the right to remove the Personal
Property provided Tenant shall repair any damage caused by the removal of such Personal
Property. Personal Property shall not include any portion or part of major building components
or fixtures necessary for the operation of the basic building systems (such as carpeting, elevators,
escalators, chillers, boilers, plumbing, electrical systems, lighting, sanitary fixtures and HVAC
systems) which shall be deemed a part of the Improvements.
7.2 Ownership at Lease Termination.
7.2.1 Improvements. Upon the expiration or earlier termination of the Lease
("Lease Termination") the Improvements shall Unconditionally be and become the property
solely of Landlord, and no compensation therefor shall be due or paid by Landlord to Tenant for
any part thereof, and this Lease shall operate as a conveyance and assignment thereof. Upon
Lease Termination, Tenant shall surrender to Landlord the Land and the Improvements in good
order, condition and repair, reasonable wear and tear excepted, free and clear of all liens, claims
and encumbrances, subleases, other than those matters existing prior to the Effective Date or
matters subsequently created or consented to by Landlord. Upon Lease Termination, at
Landlord's request Tenant agrees to execute, acknowledge and deliver to Landlord such
recordable instruments as are necessary or desirable to confirm the termination of the Lease and
all Tenant's rights hereunder and to perfect Landlord's right, title and interest in and to the Land
and the Improvements.
7.2.2 Personal Property. Any Personal Property may be removed prior to Lease
Termination by Tenant; provided, however, the removal shall be with due diligence, and without
expense to Landlord, and any part of the Land damaged by such removal shall be promptly
repaired. Any Personal Property which remains on the Land for thirty (30) days after the Lease
Termination may, at the option of Landlord, be deemed to have been abandoned and either may
be retained by Landlord as its property or may be disposed of in accordance with Applicable
Law. If requested by Landlord within a reasonable time prior to the termination of this Lease,
upon Lease Termination Tenant shall, at Tenant's sole cost and expense, remove all Personal
Property, or portions thereof designated by Landlord.
7.3 Condition of Improvements at Lease Termination. Landlord has entered this
Lease in reliance on the fact that, at Lease Termination, Landlord will receive from Tenant the
675831 10
Improvements in good condition and repair, reasonable wear and tear excepted and reflecting the
age of the Improvements at such time and Landlord's willingness during the Term of this Lease
to consent to the encumbrance of Tenant's interest in the Land and Improvements for
rehabilitation financing. At any time during the Term, upon reasonable advance notice and
during normal business hours, Landlord may inspect the Development to confirm that it is being
properly maintained as required herein. Following its inspection, Landlord may deliver to
Tenant written notification of any portions of the Development which Landlord has determined
is not being properly maintained and Tenant shall promptly comply with the provisions of this
Lease regarding such items; provided, the failure of Landlord to inspect or to notify Tenant of
any default hereunder shall not be a waiver of Landlord's right to enforce Tenant's maintenance
and repair obligations hereunder.
7.4 Survival The provisions of this Article 7 shall survive Lease Termination.
ARTICLE VIII
INSURANCE
8.1 Insurance. Tenant, at its sole cost and expense, during the Term hereof shall keep
and maintain the policies of insurance set forth in Exhibit B, attached hereto and incorporated
herein and shall comply with all other requirements set forth in such Exhibit.
ARTICLE IX
INDEMNIFICATION BY TENANT
Tenant shall indemnify, defend, protect and save Landlord and Landlord's elected and
appointed officials, employees, officers and agents (collectively hereafter the "Indemnitees")
harmless from and against any and all claims, liabilities, losses, damages, fines, penalties, claims,
demands, suits, actions, causes of action, judgments, costs and expenses (including without
limitation reasonable attorneys' fees and court costs) (collectively "Claims") arising during the
Term from conduct or management of or from any work or thing whatsoever done in or on the
Land or Improvements, and will further indemnify and save Indemnitees harmless from and
against any and all Claims arising during the Term from any condition of any Improvement
constructed by Tenant on the Land, or arising from any breach or default on the part of Tenant in
the performance of any covenant or agreement on the part of Tenant to be performed pursuant to
the terms of this Lease, or arising from any negligence of Tenant, or any of its agents,
contractors, servants, employees, sublessees or licensees, or arising from any accident, injury or
damage whatsoever caused to any person occurring during the Term in or on the Land or the
Improvements, . or from the furnishing of labor or materials by Tenant, and from and against all
costs, attorney's fees, expenses and liabilities incurred in or about any such claim or action or
proceeding brought thereon. In the event any such action or proceeding is brought against
Landlord by reason of any such claim, Tenant, upon notice from Landlord, covenants to defend
such action or proceeding by counsel reasonably satisfactory to Landlord. If an insurer under
insurance required to be maintained by Tenant hereunder shall undertake to defend the Landlord
under a reservation of rights with respect to ultimate coverage and Landlord shall reasonably
675831 1 1
deem it necessary to retain independent counsel with respect to such matter, Tenant shall pay the
reasonable fees of such counsel. The obligations of Tenant under this Article 9 shall not apply to
any claims or other matters resulting from the breach or default by Landlord under this Lease, or
from the gross negligence or willful misconduct of Landlord, its agents, employees or
consultants.
ARTICLE X
DAMAGE AND DESTRUCTION
10.1 Damage or Destruction. In the event of any damage to or destruction of the
Improvements during the Term, Tenant shall restore and rebuild the Improvements as nearly as
possible to their condition immediately prior to such damage or destruction, subject to any
restrictions imposed by changes in Applicable Law and the consent of Leasehold Mortgagee, and
provided that insurance proceeds are made available for the restoration or rebuilding and the
restoration or rebuilding is financially feasible. Tenant shall commence diligently and
continuously to carry out such rebuilding to full completion as soon as possible. Unless LesSor
agrees otherwise in writing, Tenant shall commence reconstruction of the Improvements within
sixty (60) days following the occurrence of the damage or destruction. Upon the oCcurrence of
damage or destruction, all insurance proceeds paid in respect of such damage or destruction shall
be applied to the payment of the costs of the restoration and rebuilding required to be performed
by Tenant pursuant to this Lease. The insurance proceeds shall be held in trust by the senior
Leasehold Mortgagee or a financial institution agreed upon by Landlord, Leasehold Mortgagee
and Tenant (the "Insurance Trustee"), with the costs of such trust to be a first charge against the
insurance proceeds. After the completion of the restoration and rebuilding of the Improvements,
any remaining insurance proceeds shall be paid to Tenant and Tenant shall be entitled to retain
the same.
10.2 Rebuilding by Tenant. The funds held by the Insurance Trustee shall be held in
trust and shall be applied to the cost of rebuilding. Any funds held by the Insurance Trustee
following final completion of rebuilding and payment of all costs and expenses thereof and
removal of any liens related thereto, shall be paid to Tenant, subject to the rights of any
Leasehold Mortgagee.
10.3 Disbursement of Funds~ The Insurance Trustee shall disburse funds only on a
periodic basis approved by Landlord and Tenant and only upon receipt of invoices and other
documentation, certified as correct by Tenant's architect, if an architect is required for the repair,
evidencing satisfactory completion of the work for which payment is requested (a "Payment
Request"). Further, the Insurance Trustee shall not disburse any funds unless the payment
request is accompanied by (a) an executed conditional lien release in form complying with
California law relating to all labor and materials described in the Payment Request and (b) an
executed final lien release in form complying with Califomia law releasing all claims for labor
and materials described in the immediately preceding Payment Request and such other terms as
are required by any Leasehold Mortgagee.
10.4 Notice Required. In the event of material damage to or destruction of the
Improvements, or any part thereof, Tenant shall promptly give Landlord notice of such
675831 12
occurrence and take all actions reasonably required to protect against hazards caused by such
damage or destruction. For purposes of this Article I 0, damage or destruction shall be deemed to
be material if the estimated cost to repair equals or exceeds One Hundred Thousand Dollars
($100,000).
10.5 Removal of Debris. If this Lease shall terminate following the occurrence of
damage to or destruction of the Impro. vements and at a time when Tenant shall not have restored
and rebuilt the Improvements, then Tenant shall, at its cost and expense after the use of any
insurance proceeds released for such purpose, remove the debris and damaged portion of
Improvements (including without limitation all foundations) and restore the Land or the
applicable portion thereof to a neat, clean and safe condition.
10.6 Tenant's Right to Terminate. Notwithstanding any contrary provision of this
Article 10, Tenant Shall have the option to terminate this Lease and be relieved of the obligation
to restore the Improvements where all or substantially all of the Improvements are substantially
damaged or destroyed and such damage or destruction resulted from a cause not insured against
by Tenant nor required to be insured against by Tenant under this Lease (an "Uninsured Loss"),
and where all of the following occur:
10.6.1 No more than one hundred twenty (120) days following the Uninsured
Loss, Tenant shall notify Landlord of its election to terminate this Lease; to be effective, such
notice must include both a copy of Tenant's notification to the Leasehold Mortgagee, if any, of
Tenant's intention to exercise the option to terminate set forth in this Section 10.6, and Tenant's
certification under penalty of perjury that Tenant has delivered or mailed such notification to the
Leasehold Mortgagee in accordance with this Section 10.6.1. Landlord shall be entitled to rely
upon the:foregoing notice and certification as conclusive evidence that Tenant has notified the. .
Leasehold Mortgagee regarding Tenant's desire to terminate this Lease.
10.6.2 No more than sixty (60) days following the giving of the notice required
by Section' 10.6.1 or such longer time as may be reasonable under the circumstances, Tenant
shall, at Tenant's expense after the use of any insurance proceeds released for such purpose,
remove all debris and other rubble from the Land, secure the Land against trespassers, and at
Landlord's election, remove all remaining Improvements on the Land.
10.6.3 No more than thirty (30) days following Tenant's termination notice,
Tenant shall deliver to Landlord a quitclaim deed to the Land in recordable form, in form and
content satisfactory to Landlord and/or with such other documentation as may be reasonably
requested by Landlord or any title company on behalf of Landlord, terminating Tenant's interest
in the Land.
10.6.4 Within ten (10) days following Landlord's receipt of the notice referred to
Section 10.6.1, Landlord has not received both written notice from the Leasehold Mortgagee, if
any, objecting to such termination and an agreement containing an effective assignment of
Tenant's interest in this Lease to such Leasehold Mortgagee whereby 'such Leasehold Mortgagee
expressly assumes and agrees to be 'bound by and perform all of Tenant's obligations under this
Lease.
675831 13
ARTICLE XI
LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
If Tenant shall at any time fail to pay any Imposition or other charge payable by Tenant
to a third party as required by this Lease within the time permitted, or to pay for or maintain any
of the insurance policies provided for in'Article 8 hereof within the time therein permitted, or to
make any other payment or perform any other act on its part to be made or performed hereunder
within the time permitted by this Lease, then Landlord, after thirty (30) days' written notice to
Tenant and without waiving or releasing Tenant from any obligation of Tenant hereunder, may.
(but shall not be required to): (i) pay such Imposition or other charge payable by Tenant; (ii)
pay for and maintain such insurance policies provided for in Article 8 hereof; or (iii) make such
other payment or perform such other act on Tenant's part to be made or performed under this
Lease; and Landlord may enter upon the Land and the Improvements for such purpose and take
all such action thereon as may be reasonably necessary therefor.
All sums paid by Landlord and all costs and expense incurred by LandlOrd in connection
with the performance of any such act (together with interest thereon'at the Default Rate from the
respective dates of Landlord's making of each such payment) shall constitute additional Rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand. The
"Default Rate" shall mean interest calculated at an annual rate equal to the rate of interest most
recently announced by the senior Leasehold Mortgagee at its San Francisco office as its
"reference rate" but in no event more than the maximum rate of interest permitted by law. If the
senior Leasehold Mortgagee or its successor no longer issues a "reference rate," the most
comparable rate of the largest bank with its corporate headquarters in California shall be used. If
there is no such bank or comparable rate, then the Default Rate shall be the highest legal rate of
interest that may be charged at that time.
ARTICLE XII
REPAIRS~ CHANGES, ALTERATIONS AND NEW cONSTRUCTION;
REPLACEMENT RESERVE
12.1 Repairs and Maintenance. Tenant covenants and agrees, throughout the Term,
without cost to Landlord, to take good care of the Land and Improvements and to keep the same
in good order and condition. Tenant shall promptly, at Tenant's own cost and expense, make all
necessary repairs, interior and exterior, structural and nonstrucmral, ordinary as well as
extraordinary, whether contemplated or not contemplated at the time of execution of this Lease,
and shall keep the Project in a well maintained, safe, clean and sanitary condition. The term
"repairs" shall include replacements or renewals when necessary, and all such repairs made by
Tenant shall be at least equal in quality and class to the original work. Tenant shall keep and
maintain all portions of the Project and the sidewalks adjoining the same in a clean and orderly
condition, free of accumulation of dirt, rubbish, and graffiti. From time to time during the Term,
upon not less than three (3) days prior notice from Landlord, Landlord may enter the Project, or
portions thereof, to determine if Tenant is properly maintaining the Project. If, following any
such inspection by Landlord, Landlord delivers notice of any deficiency to Tenant, Tenant shall
promptly prepare and deliver to Landlord Tenant's proposed plan for remedying the indicated
675831 1 4
deficiencies. Tenant's failure to deliver a remedial plan and to complete, within a reasonable
time, remedial work shall be a default under this Lease. Landlord's failure to deliver, following
any Landlord's inspection, any notice of deficiency to Tenant, shall not be a waiver of any
default by Tenant under this .Article 12. Tenant shall defend, indemnify and hold Landlord
harmless from and against any claim, loss, expense, cost, or liability incurred by Landlord arising
out of Tenant's failure to fully and timely fulfill its obligations to maintain and repair the Land
and the Improvements as required hereunder.
12.2 Changes and Alterations. Tenant shall not during the Term make any changes or
alterations in, to or of the Improvements, without the prior written consent of Landlord, which
Landlord shall not unreasonably withhold, so long as all the following are complied with by
Tenant at Tenant's sole cost and expense:
(a) The change or alteration shall be in harmony with neighboring buildings
and shall not materially impair the value or structural integrity of the Improvements.
(b) The change or alteration shall be for a use which is permitted hereunder.
(c) No change, alteration or addition shall be undertaken until Tenant shall
have obtained and paid for, so far as the same may be required from time to time, all permits and
authorizations of any federal, state or municipal government or departments or subdivisions of
any of them, having jurisdiction. Landlord shall join in the application for such permits or
authorizations whenever such action is necessary; provided, however, that Landlord shall incur
no liability or expense in connection therewith.
(d) Any change, alteration or addition shall be made in a good and workmanlike
manner and in accordance with all apPliCable permits and all Applicable LaWs.
(e) During the period of initial construction of, or of construction of any
change, alteration or addition in, to or of, the Improvements or of any permitted demolition or
new construction or of any restoration, Tenant shall maintain or cause to be maintained fire or
other applicable insurance provided for in Article 8, which policy or policies.by endorsement
thereto, if not then covered, shall also insure any change, alteration or addition or new
construction, including all materials and equipment incorporated in, on or about the Project
(including excavations, foundations and footings) under a broad form all risks builders' risk form
or equivalent thereof.
(f) Tenant shall comply with the provisions of Section 5.3.
(g) At Landlord's request, Tenant shall provide Landlord with a copy of any
as-built drawings for the Improvements within sixty (60) days following the completion of the
Improvements.
12.3 Exceptions to Requirement for Consent. The foregoing notwithstanding, Tenant
shall not be required to obtain Landlord's prior written consent to any changes, alterations or
improvements so long as all the following requirements are met:
(a) The change, alteration or improvement is nonstmctural.
675831 1 5
(b) The change, alteration or improvement is not visible from the exterior of any
building on the Land.
(c) The change, alteration or improvement has a cost of less than One Hundred
Thousand Dollars ($100,000).
(d) The provisions of Section 5.3 are satisfied.
Notwithstanding the foregoing, Tenant shall deliver to Landlord not later than ten (10) days prior
to commencement of any construction, change, alteration or repair, written notice of the
proposed work, a general description of the proposed work and sufficient information to permit
Landlord to post a notice of nonresponsibility on the Land.
12.4. No Right to Demolish. Notwithstanding any other provisions of this Article 12,
Tenant shall have no right to demolish any Improvement, once built, unless Tenant shall have
received the prior written consent of Landlord which Landlord may withhold in its sole
discretion.
12.5 Replacement Reserve Fund.- Commencing with the completion by Tenant of the
construction of the Development, and continuing during the remaining Term of the Lease,
Tenant shall establish and maintain a reserve fund (the "Replacement Reserve Fund") for the
cost of capital repairs and replacements to the Development. Tenant shall have the right to use
the Replacement Reserve Fund for the cost of capital repairs, replacements, renovations,
upgrades, additions or other improvements to the Development during the Term ("Permitted
Capital Expenditures"). During any period during which the requirements of a Leasehold
Mortgagee are. in effect with regard to the Development, the amount, timing' and other terms and
provisions with respect to the Replacement Reserve Fund contributions, and the administration
of the Replacement Reserve Fund (including, without limitation, the permitted investments in
which the Replacement Reserve Fund may be invested), shall be in accordance with the
requirements imposed by such Leasehold-Mortgagee.
During any period during which no Leasehold Mortgagee requirements are in effect for
the Development, the amount, timing and other terms and provisions with respect to the
Replacement Reserve Fund contributions, and the administration of the Replacement Reserve
Fund, shall be consistent with the replacement reserve requirements of the last senior Leasehold
Mortgagee or as otherwise agreed upon by Landlord and Tenant. The Replacement Reserve
Fund shall be held in an account established with a reputable financial institution reasonably
acceptable to Landlord (or to the Leasehold Mortgagee during any portion of the Term during
which a Leasehold Mortgage is outstanding for the Development). Tenant shall have the right to
satisfy (whether fully or partly) the Replacement Reserve Fund obligations under this Section
12.5 with replacement reserves required by a Leasehold Mortgagee, as long as such replacement
,reserve funds are in all materials respects administered in accordance with the requirements of
this Section 12.5, Tenant shall receive credit against required Replacement Reserve Fund
contributions for any Permitted Capital Expenditures incurred by Tenant for the Development.
675831 16
ARTICLE XIII
EMINENT DOMAIN
13.1 Eminent Domain.
13. t. 1 Definitions. The following definitions shall apply in construing the
provisions of this Article 13:
(a) "Award" means all compensation, damages or interest, or any
combination thereof, paid or awarded for the taking, whether pursuant to judgment, by
agreement, or otherwise.
(b) "Notice of intended taking" means any notice or notification on which a
reasonably prudent person would rely and would interpret as expressing an existing intention of
taking as distinguished from a mere preliminary inquiry or proposal. It includes, but is not
limited to, the service of a condemnation summons and complaint on a party to this Lease. The
notice is considered to have been received when a party to this Lease receives from the
condemning agency or entity a written notice of intent to take.
(c) "Partial taking" means any taking that is not a total taking, a substantial
taking, or a temporary taking.
(d) "Substantial taking" means the taking of so much of the Project that the
remaining portion thereof would not be economically and feasibly usable by Tenant for the then
existing uses and purposes of the Project, but shall exclude a temporary taking.
(e) "Taking" means any taking of or damage, including severance damage, to
all or any part of the Project or any interest therein by the exercise of the power of eminent
domain, or by inverse condemnation, or a voluntary sale, transfer or conveyance under threat of
condemnation in avoidance of the exercise of the power of eminent domain or while
condemnation proceedings are pending.
(f) "Temporary taking" means the taking of any interest in the Project for a
period of less than one (1) year.
(g) "Total taking" means the taking of all or substantially all of the Project,
but shall exclude a temporary taking.
13.1.2 Notice. The party receiving any notice of the kind specified below shall
promptly give the other party written notice of the receipt, contents and date of the notice
received:
(a) notice of intended taking;
(b) service of any legal process relating to condemnation of all or any
portion of the Project;
675831 17
(c) notice in connection with any proceedings or negotiations with respect
to such a condemnation; or
(d) notice of intent or willingness to make or negotiate a' private purchase,
sale or transfer in lieu of condemnation.
Landlord and Tenant, and any Leasehold Mortgagee, each shall have the right to represent its
respective interest in each proceeding or negotiation with respect to a taking or intended taking
and to make full proof of their respective claims. No agreement, settlement, sale or transfer to or
with the condemning authority shall be made without the mutual agreement of Landlord and
Tenant and any Leasehold Mortgagee. Landlord and Tenant each agree to execute, acknowledge
and deliver to the other any instruments that may be reasonably required to effectuate or
facilitate the provisions of this Lease relating to condemnation.
1 3.1.3 Total or Substantial Taking. In the event of a total or substantial taking of
fee title to the Land, Tenant's interest in this Lease and all obligations of Tenant subsequently
accruing hereunder shall cease as of the date of the vesting of title in the condemning authority;
provided, however, that if actual physical possession of all or part of the Project is taken by the
condemning authority prior to such date of vesting of title, Tenant's obligations to pay rent and
other sums under this Lease shall terminate as of such earlier date. In the event of a total or
substantial taking of an interest in the Project other than fee title, at Tenant's option (exercisable
by written notice to Landlord), Tenant's interest in this Lease and all obligations of Tenant
subseqUently accruing hereunder shall cease as aforesaid.
1 3.1.4 Award. In the event of a total or substantial taking, the award shall be
apportioned as follows: ~
(a) Landlord shall receive from the award a sum equal to the fair market value of
the Land taken, in an unimproved condition, but as encumbered by this Lease.
(b) Tenant shall receive that portion of the award equal to the fair market value of
the leasehold estate created by this Lease and the Improvements (subject to Landlord's
reversionary interest).
(c) The balance, if any, shall be allocated between Landlord and Tenant
respectively in that proportion in which (i) the fair market value of the Land and Landlord's
reversionary interest in the Improvements bears to (ii) the fair market value of the leasehold
estate created by this Lease and the Improvements, exclusive of Landlord's reversionary interest.
1 3.1.5 TemPorary Taking. In the event of a temporary taking, Tenant shall be
entitled to the whole award, and this Lease shall remain in full force and effect.
13.1.6 Partial Taking. In the event of a partial taking, this Lease shall remain in
full force and effect, covering the remainder of the Project, and Tenant shall repair and restore
any damage to the Improvements caused by such partial taking consistent with and subject to the
provisions applicable to a restoration in the event of an insured casualty under Article 1 0, so that
after completion of the restoration the Improvements shall be, as nearly as possible, in a
condition as good as the condition immediately preceding the partial taking. The award for any
675831 1 8
partial taking shall be deposited and disbursed in the same manner as insurance proceeds are
disbursed for restoration pursuant to Article 10 (unless the Leasehold Mortgagee elects to apply
such proceeds to pay the indebtedness secured by the Leasehold Mortgage), and upon
completion of the restoration, any remaining portion of the award shall be allocated as set forth
in Section 13.1.6.1.
13.1.6.1 Award on Partial Taking. In the event of a partial taking,
the award shall be apportioned as follows:
(a) Landlord shall receive from the award the fair market value of the
portion of the Land taken in an unimproved condition, as encumbered by this Lease.
(b) Tenant shall be entitled to that portion of the award attributable to the
fair market value of the leasehold estate created by this Lease and the ImProvements, but
only to the extent that the proceeds of the award are not used for restoration of the
Improvements.
(c) The balance, if any, shall be allocated between Landlord and Tenant
respectively in that proportion in which (i) the fair market value of the Land as
encumbered by this Lease and Landlord's reversionary interest in the Improvements
bears to (ii) the fair market value of the leasehold estate created by this Lease and the
Improvements exclusive of the reversionary interest of Landlord.
(d) Any severance damages awarded or payable because only a portion of
the Project is taken by eminent domain shall be (a) paid to Tenant during the first 35
years of this Lease, (b) equally divided between Tenant and Landlord during the next 35 ,
years of this Lease (except to the extent needed to replace any Improvements taken by
eminent domain with equivalent Improvements on the remainder of the Land) and (c)
paid to Landlord during the remainder of the Term of this Lease.
No payments shall be made to Tenant pursuant to this Section if anY default by Tenant
hereunder has occurred and is continuing unless and until such default is cured.
13.1.6.2 Partial Taking in Last Five Years. If a partial taking occurs
during the last five (5) years of Term and the reasonably estimated cost of reconstruction work
exceeds twenty-five percent (25%) of the replacement value of the Improvements, Tenant shall
have the right and option to treat the same as a substantial taking by giving written notice thereof
to Landlord no later than the earlier off (a) the date of vesting of title in the condemning
authority of the portion of the Project taken, or (b) the date upon which the condemning authority
takes physical possession of such portion of the Project. If Tenant does give such notice the
partial taking shall be considered as a substantial taking and the taking shall be subject to the
provisions of Section 13.1.3.
13.1.7 Lease Provisions Controlling. The provisions of this Lease shall
determine the rights and obligations of the parties in connection with any condemnation, but as
between Tenant and any Leasehold Mortgagee the Leasehold Mortgage shall control.
675831 19
ARTICLE XIV
MORTGAGES
14.1 Leasehold Mortgages. Tenant shall have the right, at any time and from time to
time during the Term, to encumber its leasehold interest hereunder with a Leasehold Mortgage or
Mortgages, provided that (a) no Leasehold Mortgage shall in any way impair (except as
otherwise stated herein or as provided by law) the enforcement of Landlord's right and remedies
herein and by law provided, (b) any such Leasehold Mortgage shall at all times be subject and
subordinate to, and shall not affect or become a lien upon Landlord's right, title or estate in the
Land or in this Lease, and (c) Tenant shall give Landlord prior written notice of any such
Leasehold Mortgage, and shall accompany such notice with a true and correct copy of any such
Leasehold Mortgage. Any Leasehold Mortgage shall be subjeCt to the terms and conditions set
forth in this Article 14,
14.2 Rights of Leasehold Mortgagee.
14.2.1 Notices. If Landlord shall have been provided with written notice of the
address of any Leasehold Mortgagee, Landlord shall mail to such Leasehold Mortgagee a copy
of any notice under this Lease at the time of giving such notice to Tenant, and no such notice
shall be effective against such Leasehold Mortgagee, and no termination of this Lease or
termination of Tenant's right of possession of the Land or reletting of the Land by Landlord
predicated on the giving by Landlord of any notice shall be effective, unless Landlord gives to
such Leasehold Mortgagee written notice or a copy of its notice to Tenant of such default or
termination, as the case may be.
· · 14.2.2 Right to Cure.
(i) In the event of any default by Tenant under the provisions of this Lease, the
Leasehold Mortgagee shall have the right to remedy or cause to be remedied such default within
the same cure period as afforded Tenant hereunder, extended by an additional ninety (90) days,
which cure period shall commence as against the Leasehold Mortgagee upon the receipt by the
Leasehold Mortgagee of the notice of default. Landlord shall accept such performance by the
Leasehold Mortgagee as if the same had been done by Tenant.
(ii) The term "incurable default" as used herein means any default which cannot
be reasonably cured by a Leasehold Mortgagee. The term "curable default" means any default
under this Lease which is not an incurable default. Any failure to pay monetary sums shall at all
times be deemed a curable default. In the event of any curable default under this Lease, and if
prior to the expiration of the applicable grace period specified in Section 14.2.2 (i) the Leasehold
Mortgagee shall give Landlord written notice that it intends to undertake the curing of such
default, or to caUse the same to be cured, or to exercise its rights to acquire the leasehold interest
of Tenant by foreclosure or otherwise, and shall immediately commence and then proceed with
diligence to do so, whether by performance on behalf of Tenant of its obligations under this
Lease, by foreclosure or otherwise, then Landlord will not terminate or take any action to effect a
termination of this Lease or re-enter, take possession of or relet the Land or similarly enforce
performance of this Lease so long as the Leasehold Mortgagee is diligently and in good faith
675831 20
engaged in the curing of such default or effecting such foreclosure. The foregoing sentence shall
not be deemed to extend the time period within which a default in the payment of money must be
cured under other applicable Lease provisions. The Leasehold Mortgagee shall not be required
to continue such possession or continue such foreclosure proceedings. Nothing herein shall
preclude Landlord from terminating this Lease with respect to any additional default which shall
occur during any period of forbearance and not be remedied within the cure period, if any,
applicable to any such additional default, except that Leasehold Mortgagee shall have the same
rights specified in this Article 14 with respect to any additional defaults.
(iii) If the default by Tenant pertains to the failure of Tenant to complete the
construction of the Development within the time period required under Section 5.2 of this Lease,
and if within one hundred twenty (120) days following written notice to Leasehold Mortgagee of
such default Leasehold Mortgagee shall give Landlord written notice that it intends to undertake
the curing of such default, or to cause the same to be cured, and to exercise its rights to acquire
the leasehold interest of Tenant by foreclosure or otherwise in order to effectuate such cure, and
shall immediately commence and then proceed with diligence to do so, then Landlord will not
terminate or take any action to effect a termination of this Lease or re-enter, take possession of or
relet the Land or similarly enforce performance of this Lease so long as the Leasehold
Mortgagee is diligently and in good faith engaged in the completion of the construction of the
Development or effecting such foreclosure; provided, however, Landlord shall not be obligated
to forebear from a termination or other enforcement of its rights under the Lease in response to
such default beyond that date which is thirty (30) months following the date of Landlord's initial
default notice to the Leasehold Mortgagee under this Section 14.2.2 (iii), subject to extension
due to Unavoidable Delays incurred by Leasehold Mortgagee in the completion of the
construction of the Development, and subject to extension for any delay incurred by Leasehold
Mortgagee as a result of legal limitations on its ability to foreclose upon the Tenant's leasehold
interest.
14.2.3 Execution of New Lease. If this Lease is terminated by Tenant's trustee in
bankruptcy, receiver, liquidator or other similar person on account of a default or if Tenant's ·
interest under this LeaSe shall be sold, assigned or transferred pursuant to the exercise of any
remedy of the Leasehold Mortgagee, or pursuant to judicial proceedings, and if (i) all monetary
defaults of Tenant have been cured, and (ii) the Leasehold Mortgagee shall, have arranged to the
reasonable satisfaction of Landlord to cure any other curable default of Tenant under this Lease,
then Landlord, within thirty (30) days (or such period as may reasonably be necessary to enable
Landlord to comply with statutory requirements applicable to Landlord's lease of real property)
after receiving a written request therefor, which shall be given within sixty (60) days after such
termination or transfer and upon payment to it of all expenses, including attorneys' fees, incident
thereto, will execute and deliver a new lease of the Land to the Leasehold Mortgagee or its
affiliate or other nominee or to the purchaser, assignee or transferee, as the case may be, for the
remainder of the Term, containing the same covenants, agreements, terms, provisions and
limitations, as are contained herein.
(i) Upon the execution and delivery of a new lease, the new tenant, in its own
name or in the name of Landlord may take all appropriate steps as shall be necessary to remove
Tenant from the Land, but Landlord shall not be subject to any liability for the payment of fees,
including attorneys' fees, costs or expenses in connection therewith, and the new tenant shall pay
675831 2 1
all such fees, including attorneys' fees, costs and expenses, on demand, and shall make
reimbursement to Landlord of all such fees, including attorneys' fees, costs and expenses,
incurred by Landlord. The new tenant shall indemnify and hold Landlord harmless from any
claim, liability or damage (including attorney's fees) as a result of the action against Tenant.
(ii) Upon execution of any new lease, the new tenant named therein shall cure all
uncured breaches hereunder, except that with respect to any breach which cannot be cured by the
new tenant until it obtains possession, the new tenant shall not have to make such cure before it
has a right to obtain possession. Any nonmonetary cure required of the new tenant shall be
commenced within ten (10) days following the date the new tenant executes the new lease or the
date the new tenant has a right to obtain possession, whichever is applicable (the "Starting
Date"), and thereafter shall be diligently prosecuted to completion. All monetary defaults shall~
have been cured prior to the execution of the new lease and any monetary defaults occurring
thereafter shall be cured within ten (10) days following the Starting Date. Any failure to comply
with any of the foregoing requirements shall constitute a default under the new lease.
(iii) Upon the Starting Date, the ownership of all Improvements shall be deemed
to have been transferred directly to such transferee of Tenant's interest in this Lease and the
provisions of Section 7.2.1 causing such ImProvements to become the property of Landlord in
the event of a termination of this Lease shall be ineffective as applied to any such termination.
Landlord shall execute such quitclaim deed Or other instrument of conveyance as may be
reasonably requested, provided such instrument shall be expressly without warranty of any kind
whatsoever and Landlord shall have no responsibility with regard to the state of title so
conveyed.
14.2.4 Tenant Default Under Leasehold Mortgage. If Tenant defaults under a
LeasehOld Mortgage, the Leasehold Mortgagee may exercise with respect to the Project any
right, power or remedy under the Leasehold Mortgage which is not in conflict with the
provisions of this Lease.
14.2.5 No Merger. There shall be no merger of this Lease or any interest in this
Lease, nor of the leasehold estate 'created hereby, with the fee estate in the Land, by reason of the
fact that this Lease or such interest therein, or such leasehold estate may be directly or indirectly
held by or for the account of any person who shall hold the fee estate in the Land, or any interest
in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the
leasehold estate created hereby may be conveyed or mortgaged in a Leasehold Mortgage to a
Leasehold Mortgagee who shall hold the fee estate in the Land or any interest of the Landlord
under this Lease.
14.2.6 Assumption of Obligations. For the purpose of this Article 14, the making
of a LeasehOld Mortgage shall not be deemed to constitute an assignment or transfer of this
Lease or of the leasehold estate hereby created, nor shall any Leasehold Mortgagee, as such, be
deemed an assignee or transferee of this Lease or of the leasehold estate hereby created so as to
require such Leasehold Mortgagee, as such, to assume the performance of any of the terms,
covenants or conditions on the part of Tenant to be performed hereunder. The purchaser at any
sale of this Lease and of the leasehold estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignee or transferee of this Lease and of the
675831 22
leasehold estate hereby created under any instrument or assignment or transfer in lieu of the
foreclosure of any Leasehold Mortgage, in order to be deemed to be an assignee or transferee
and before the same shall be binding on Landlord, must assume in writing the performance of all
of the terms, covenants, and conditions on the part of Tenant to be performed hereunder by an
instrument, in recordable form, satisfactory to Landlord; provided however, that nothing
contained herein-shall be construed to require the purchaser, assignee or transferee as described
above to be obligated to cure any default by Tenant. Although a purchaser, assignee or
transferee shall not be obligated to cure any default, if any default is not cured, Landlord may
exercise any remedy available under this Lease, including the termination of this Lease, if the
default is not cured after the expiration of any applicable cure period.
14.2.6.1 Limitation of Leasehold Mortgagee Liability for Tenant
Defaults. Notwithstanding any contrary provision hereof: (i) no Leasehold Mortgagee shall be
required to pay any liens or charges that are extinguished by the foreclosure of its Leasehold
Mortgage; (ii) any incurable default shall be, and shall be deemed to have been waived by
Landlord upon completion of foreclosure proceedings or acquisition of Tenant's interest in this
Lease by any purchaser at a foreclosure sale, or any entity who otherwise acquires Tenant's
interest from the Leasehold Mortgagee. Any entity acquiring the interest of Tenant in the Project
and in this Lease as a result of the foreclosure of a Leasehold Mortgage (or an assignment or
deed in lieu thereof) shall be liable to perform the obligations of Tenant under this Lease only
during the period such entity retains ownership of the interest of Tenant in the ProjeCt and in this
Lease.
14.3 Non-Subordination of Fee. Nothing in this Lease shall be construed as an
agreement by Landlord to subordinate its fee interest in the Land or iRS right to rent payments
hereunder or any other right of Landlord herein~ Except as exPressly set forth in this Article 14,
no Leasehold Mortgage shall impair Landlord's ability to enforce its rights and remedies under
this Lease or provided by law. Landlord shall have no obligation to encumber or otherwise
subordinate its fee interest in the Land or in this Lease to the interest of any Leasehold
Mortgagee in this Lease or in Tenant's leasehold estate.
14.4 Institutional Lender. Leasehold Mortgages are to be originated only by
Institutional Lenders. As used in this Lease the term "Institutional Lender" shall mean any one
or combination of the following: (a) Citibank; (b) a commercial or savings bank, trust company,
insurance company, savings and loan association, building and loan association, pension,
retirement or welfare fund, endowment fund or foundation, investment banking firm, or real
estate investment trust; (c) any other institutional lender reasonably satisfactory to Landlord, or
(d) any federal, state or local government entity Or agency.
14.5 Landlord's Rights Under Leasehold Mortgages.
14.5.1 Notice of Tenant's Default. Tenant shall use best efforts to ensure that
every Leasehold Mortgage secured by a deed of trust on Tenant's leasehold estate in the Land
shall expressly provide that:
(a) the lender shall give Landlord contemporaneous notice of any default
by Tenant thereunder, if the failure to cure such default might result in acceleration of the
675831 23
maturity of the debt secured by the Leasehold Mortgage; provided however, that lender's failure
to give notice shall not affect the lender's rights or ability to timely pursue all applicable
remedies. In addition, within three (3) business days following Tenant's receipt of any notice of
default under any financing' document affecting the Property or the Project, Tenant shall provide
Landlord with a copy of such notice.
(b) Landlord shall have the reasonable right, but not the obligation, to
cure any default by Tenant (but without obligation to do so); and
(c) If Landlord shall tender payment in full of all sums required to be paid
under the Leasehold Mortgage or the note secured thereby (disregarding any acceleration of
maturity thereunder, but including any costs or expenses arising as a result of such default) on or
before ninety (90) calendar days from the date of such notice of default from the lender to
Tenant, then the lender shall accept such payment and rescind the acceleration, if any. Any sums
paid by Landlord pursuant to this Section 14.5.1 shall become immediately due and payable from
Tenant to Landlord as Rent due under this Lease.
14.6 Purchase by Landlord. Landlord shall haVe the right and option (but not the
obligation), during the period described in the last sentence of this Section 14.6, by notice in
writing to the lender, to purchase any Leasehold Mortgage, the note secured thereby, and any
other instrmnents securing or guaranteeing such note or otherwise evidencing any obligation
secured by the Leasehold Mortgage. The purchase price therefor shall be the full amount due
and owing to the lender thereunder, including any costs, expenses, and penalties payable in
accordance with the terms thereof. The sale and assignment by the lender shall be without
recourse or warranty by the lender, except that such lender has good title to the note (or is
authorized t0 obtain payment or acceptance on behalf of one who has good title) and that the
transfer to Landlord vests in Landlord good title to the note or notes and in all security interests
securing the same, free and clear of all claims and interests of third parties. The right granted by
this Section 14.6 may be exercised by Landlord at any time after the lender has declared the
entire sum secured by any Leasehold Mortgage to be due and payable or has commenced
proceedings to foreclose an5; Leasehold Mortgage or, has requested a new Lease, whichever shal1
first occur, and such right shall terminate ninety (90) days following receipt by Landlord of a
request that Landlord exercise such right given in writing from the lender after the date such
right shall first arise as above provided.
14.7 No Voluntary Surrender/Modification.
14.7.1 No Modification. So long as any Leasehold Mortgage encumbers
Tenants' leasehold interest in the Land, this Lease shall not be modified by Landlord and Tenant
without the consent of the holders of such Leasehold Mortgages.
14.7.2 No Voluntary Surrender. So long as Tenant is not in default hereunder,
Landlord shall not accept a voluntary surrender of the Tenant's leasehold estate without the prior
written consent of all holders of any Leasehold Mortgage then in effect.
675831 24
ARTICLE XV
ASSIGNMENT~ TRANSFER~ SUBLETTING
15.1 Restrictions on Transfer or Assignment by Tenant. Except as permitted pursuant
to this Article XV, Tenant shall not sell, transfer, assign, or otherwise convey ("Transfer") all or
any portion of its interest in the Land, the Project or this Lease voluntarily, involuntarily, by
operation of law, or otherwise, without Landlord's prior written consent, which shall not be
unreasonably withheld. Each Transfer shall comply with all requirements therefor set forth
elsewhere in this Lease, and Tenant shall have no right to hypothecate or encumber its interest in
this Lease or sublet all or any portion of the Land and/or the Improvements except as expressly
provided under the terms of this Lease. No voluntary or involuntary assignee, sublessee, or
successor in interest of Tenant shall acquire any rights or powers under this Lease except as
expressly set forth herein.
15.1.1 Exceptions. Notwithstanding any contrary provision of this Lease,
Landlord's consent shall not be required, and the provisions of Section 15.2 below shall not be
applicable, with respect to the following Transfers: (A) the foreclosure of a Leasehold Mortgage
or the acquisition of Tenant's interest in this Lease by an assignment or deed in lieu of
foreclosure; (B) the first Transfer following any event described in clause (A) of this sentence;
provided, however, that in connection with such a first Transfer following an event described in
clause (A) above, the transferee must be experienced in the ownership, operation and
management of affordable rental housing projects for seniors without a record of material
violations of discrimination restrictions or other applicable state or federal laws pertaining
thereto, or if such transferee does not have the experience required above, the transferee must
retain a property management firm with such experience; and (C) any Transfer of Tenant!s .
interest in the Land, the Project; or any portion thereof, or any sublease of the Land, Or portion
thereof, to a Tenant Affiliate. For purposes hereof, a "Tenant Affiliate" shall mean a person or
entity that controls, is controlled by, or is under common control with Eden Housing, Inc., a
California nonprofit public benefit corporation ("Eden"). For purposes of defining a Tenant
Affiliate, "control" shall mean the ownership of fifty percent (50%) or more of the ownership
interests in an entity, or in the case of a not-for-profit entity, the right to appoint fifty percent
(50%) or more of such entity's board of directors.
15.2 Landlord's First Right to Acquire Leasehold Interest. Prior to any Transfer by
Tenant of its interest in the Land, the Project, or any portion thereOf (the "Tenant Interest")
other than to Eden, Tenant shall notify Landlord in writing of its desire to consider such a
Transfer (a "Transfer' Notice"). Tenant shall have the right, but not the obligation, to send a
Transfer Notice to Landlord prior to or concurrently with a Transfer Consent Request under
Section 15.3 below; provided, however, Tenant shall not be required to have received an offer
for the Tenant Interest prior, or as a condition, to sending a Transfer Notice to Landlord. Tenant
shall include in the Transfer Notice the purchase price for which Tenant would be willing to sell
the Tenant Interest to Landlord. Within thirty (30) days after receipt of a Transfer Notice from
Tenant, Landlord shall notify Tenant in writing ("Landlord's Response Notice") as to whether
(i) Landlord is not interested in acquiring the Tenant Interest described in the Transfer Notice;
(ii) Landlord is interested in acquiring the Tenant Interest described in the Transfer Notice, but is
willing to do so only on the revised purchase price set forth in Landlord's Response Notice; or
675831 25
(iii) Landlord agrees to acquire the Tenant Interest on the purchase price and other terms and
conditions set forth in the Transfer Notice.
If Landlord fails to deliver Landlord's Response Notice as required above within such
'thirty (30) day period, or if Landlord timely delivers Landlord's Response Notice and elects
clause (i) described above, then for the twelve (12) month period following the date of delivery
of Landlord's Response Notice (or the required delivery date thereof i~ Landlord fails to deliver
Landlord's Response Notice) Tenant shall be free to Transfer the Tenant Interest described in the
Transfer Notice on whatever purchase price and other terms and conditions as Tenant thereafter
elects in its sole discretion, subject to compliance by Tenant with the remaining provisions of
this Article 15 with respect to obtaining the Landlord's consent to such Transfer. Any Transfer
by Tenant of the Tenant Interest after such twelve (12) month period shall require a new Transfer
Notice from Tenant and compliance with the provisions of this Section 15.2. Notwithstanding
the 12-month periods set forth in this Section 15.2, each 12-month period shall be subject to
three 60-day extensions if such time is necessary to complete the closing Under a purchase and
sale agreement or other transfer agreement or contract entered into within the initial 12-month
period.
If Landlord timely delivers Landlord's Response Notice and elects clause (ii) above, then
Tenant shall have the right, within twenty (20) days after Tenant's receipt of Landlord's
Response Notice, to either accept the revised purchase price set forth in Landlord's Response
Notice or decline to accept such revised purchase price. If Tenant fails to respond to Landlord's
Response Notice within such tWenty (20) dayperiod, then Tenant shall be deemed to have
declined to accept the revised purchase price set forth in Landlord's Response Notice. If Tenant
declines (or is deemed to have declined) to accept the revised purchase price set forth in
Landlord's Response Notice, then Tenant shall thereafter be free, for the twelve (12)month
Period follOwing the date of delivery of Landlord's Response Notice, to Transfer the Tenant
Interest on such purchase price and other terms and conditions as Tenant thereafter elects,
subject to compliance by Tenant with the remaining provisions of this Article 15 with respect to
obtaining the Landlord's consent to such Transfer, except that the purchase price accepted by
Tenant shall not be more than $50,000 more favorable to the buyer than the purchase price
offered by Landlord in Landlord's Response Notice. Any Transfer by Tenant of the Tenant
Interest after such twelve (12) month period shall require a new Transfer Notice from Tenant and
compliance with the provisions of this Section 15.2.
If Landlord timely accepts the purchase price set forth in the Transfer Notice or Tenant
timely accepts the purchase price set forth in Landlord's Response Notice, then during the thirty
(30) day period after such acceptance, the parties shall in good faith negotiate and execute a
definitive agreement that incorporates the accepted purchase price and the other terms and
conditions set forth in the Transfer Notice. If despite the parties' good faith efforts the parties
are unable to complete the negotiation and execution of such definitive agreement within such
thirty (30) days period, then neither party shall be obligated to proceed with the Transfer of the
Tenant Interest to Landlord, and Tenant shall have the right, for the twelve (12) month period
thereafter, to Transfer the Tenant Interest to another third party on such purchase price and other
terms and conditions as elected by Tenant, subject to compliance by Tenant with the remaining
provisions of this .Article 15 with respect to the obtaining of Landlord's written consent to such
Transfer. If Tenant and Landlord shall execute a definitive agreement for the Transfer of the
675831 26
Tenant Interest to Landlord and Landlord shall thereafter default in the performance of its
obligations under such agreement, then the terms and provisions of this Section 15.2 shall
thereafter be of no further force Or effect and Tenant shall have the right to consummate
Transfers of Tenant Interests without the application of this Section 15.2, subject to compliance
by Tenant with the remaining provisions of this Article 15 with respect to the obtaining of
Landlord's written consent to such Transfer.
Upon any Transfer by Tenant to Landlord of its leasehold interest under this Lease, or
any portion thereof, pursuant to this Section 15.2, Tenant shall be released from any further
liability or obligations under this Lease with respect to the transferred leasehold interest, to the
extent such liability or obligations arises after the date of the Transfer, 'unless the transfer
agreement or purchase and sale agreement between Tenant and Landlord provide otherwise.
15.3 Procedure for Obtaining Landlord's Consent.
(a) Transfer Request. With respect to each Transfer requiring the Landlord's
consent under Section 15.1, Tenant shall send to Landlord written request for Landlord's
approval of the Transfer (a "Transfer Consent Reqnest") specifying the name and address of
the proposed transferee and its legal composition (if applicable). Each Transfer Request shall be
accompanied by all of the following:
(i) An audited or certified financial statement of the proposed
transferee for the two most recent calendar or fiscal years prepared in accordance with generally
accepted accounting procedures by a nationally recognized certified Public accounting firm
sufficiently current and detailed to evaluate the proposed transferee's assets, liabilities and net
worth and certified as true and correct by the proposed transferee;
(ii) a description of the nature of the interest proposed to be
transferred, the portion or portions of the Project affected by the Transfer, and the proposed
effective date of such Transfer;
(iii) a true and complete copy of the proposed assumption agreement
described in Section 15.6;
(iv) a complete history of the proposed transferee describing its
background, its current real estate projects and location thereof, and the background of the
principals or personnel to be involved in the development or operation of the portion of the
Project subject to the Transfer and stating whether the proposed transferee ever filed for
bankruptcy or had projects that were foreclosed;
(v) a description of all projects of the proposed transferee which
during the past five (5) years have been the subject of substantial litigation; and
(vi) any such other information as reasonably requested by Landlord
within fifteen (15) days folloWing the reCeipt of the above information, in order to make an
informed decision whether or not to approve or disapprove the Transfer.
675831 27
-(b) Approval of Landlord. Within thirty (30) days following receipt of all the
information referred to in Section 15.3 (a), Landlord shall approve or disapprove a proposed
transferee with respect to the information supplied. If Landlord fails to give Tenant written
notice of its approval or disapproval of the transferee within such thirty (30) day period, it shall
be deemed to have approved the transferee.
i5.4 Limitations.
(a) Non-Transfer Period. In no event shall Tenant request Landlord to
approve any Transfer prior to the date that all of the following shall have occurred:
(i) construction of the Development and related Improvements shall
be complete and a certificate(s) of occupancy shall be issued with respect to the Development;
(ii) all costs and expenses with regard to the construction of the
Development and related Improvements shall be paid in full, all lien periods shall have expired
and there shall be no liens on the Land, the Improvements, the Landlord's fee title or any portion
thereof; and
(iii) ninety percent (90%) of the Development shall have been occupied
by tenants for not less than twenty-four (24) consecutive calendar months.
The provisions of this Section 15.4 (a) shall not be applicable to, or after, the foreclosure of a
Leasehold Mortgage or the acquisition of Tenant's interest in this Lease by assignment or deed
in lieu of foreclosure.
(b) No Relief from Liability. No Transfer will limit, diminish or otherwise
relieve Tenant of any liability described herein. The provisions of this Section 15.4 (b) shall not
be applicable to any Transfer following the foreclosure of a Leasehold Mortgage or following the
acquisition of Tenants' interest in this Lease by assignment or deed in lieu of foreclosure.
(c) No Consent If Bankruptcy. In no event shall Landlord be required to
consent or be deemed to consent to a Transfer to a party then subject to any proceedings under
any insolvency, bankruptcy or similar laws.
(d) Criteria for Transfer. Landlord shall be deemed to be reasonable in
withholding its consent to a proposed Transfer unless both of the following shall be the case:
(i) Tenant delivers to Landlord an audited financial statement of the
proposed transferee for the two most recent calendar or fiscal years prepared in accordance with
generally accepted accounting principles by a recognized certified accounting firm
demonstrating that the proposed transferee is a viable, going concern with sufficient financial
ability to own, operate and manage the Project; and
(ii) the proposed transferee shall have comparable reputation and
experience operating and managing properties similar to the Development as the reputation and
experience of the original Tenant.
675831 28
15.5 Involuntary and Other Transfers. Without limiting any other restrictions on
transfer contained in this Lease, no interest of Tenant in this Lease, the Land or the
Improvements shall be assignable in the following manner:
(a) under an order of relief filed, or a plan of reorganization confirmed, for or
conceming Tenant by a bankruptcy court of competent jurisdiction under the federal bankruptcy
act or the laws of the State of California, whereby any interest in this Lease, the Land or the
Improvements is assigned to any party which does not qualify as an approved transferee pursuant
to this Lease unless such order is filed or such plan is confirmed in connection with an
involuntary proceeding brought against Tenant and Tenant reacquires such transferred interest
within sixty (60) days after the date such order is filed or such plan is confirmed;
(b) if Tenant assigns substantially all of its assets for the benefit of its creditors; or
(c) if an order of attachment is issue~t by a court of competent jurisdiction,
whereby any interest in this Lease, the Land or the Improvements or substantially all of Tenant's
assets are attached by its creditors and such order of attachment is not stayed within sixty (60)
days after the date it is issued.
The transfers described in this Section 15.5 shall constitute a breach under this Lease by
Tenant and Landlord shall have the right to terminate this Lease pursuant to Article 16 as a result
of any such transfer taking place, in which case this Lease shall not be treated as-an asset of
Tenant.
15.6 Assumption Agreement and Release. No permitted Transfer shall be effective
until any curable default hereunder shall have been cured and there shall have been delivered to
Landlord an assumption agreement, executed by the transferor and the proposed transferee,
whereby such transferee expressly assumes such obligations as arise and/or accrue at any time
after such Transfer takes place; and whereby such transferee assumes liability for the lease
obligations. The parties agree that as a condition to any Transfer taking place the transferee shall
deliver to Landlord representations and warranties confirming the accuracy of the information
delivered to Landlord concerning its current financial condition and its outstanding or pending
liabilities.
15.7 Change in General Partner of Tenant. In addition to the restrictions on Transfers
as set forth in this Article 15, Landlord shall have the right to approve any change in the identity
of the general partner of Tenant, including without limitation, any admission of any new general
partner or withdrawal of any existing general partner. Such approval right of Landlord shall also
apply to the transfer of a majority of the ownership interest in a general partner of Tenant.
Landlord shall not unreasonably withhold, delay or condition its approval under this Section
15.7. Notwithstanding any contrary provision of this Section 15.7, Landlord's approval shall not
be required with respect to (i) any change in the identity or ownership of the general partner of
Tenant as long as following such change the general partner of Tenant continues to be an entity
which controls, is controlled by, or is under common control with Eden; or (ii) any change in the
general partner of Tenant to Tenant's tax credit investor, any entity that controls, is controlled
by, or is under common control with, Tenant's tax credit investor, or any successor general
partner selected by Tenant's tax credit investor after a default by Tenant's general partner. For
675831 29
purposes of this Article 15, "control" shall mean the right to direct the management and affairs of
an entity, whether by virtue of the ownership of ownership interests, by contract, or by
appointment of directors.
15.8 Sale by Landlord. Nothing contained in this Lease shall be deemed in any way to
limit; restrict or otherwise affect the right of Landlord to sell, transfer, assign or convey all or any
portion of the right, title and estate of Landlord in the Land and in this Lease; provided, however,
that in each such instance any such sale, transfer, assignment or conveyance shall be subject to
this Lease, and Tenant's other rights arising out of this Lease shall not be affected or disturbed in
any way by any such sale, transfer, assignment or conveyance. Any other provision of this Lease
to the contrary notwithstanding, each covenant, agreement or obligation of Landlord under this
Lease relating to the ownership or use of the Project is intended to and shall constitute a
covenant running with the title to the Land and shall be binding upon the owner from time to
time of the Land. At such time as Landlord shall sell, transfer, assign or convey the entire right,
title and estate of Landlord in the Land and in this Lease, all obligations and liability on the part
of Landlord arising under this Lease after the effective date of such sale, transfer, assignment or
conveyance shall terminate as to Landlord, and thereupon all such liabilities and obligations shall
be binding upon the transferee. Subject to compliance with applicable law, any sale or transfer
of Landlord's interest in the Land and this Lease other than to a governmental entity or agenCy,
shall be subject to Tenant's right of first refusal on the same terms and conditions set forth in
Section 15.2 above, provided that as a condition of such sale or transfer to Tenant, the
affordability restrictions set forth in Section 6.3 shall be extended to continue in effect pursuant
to an enforceable regulatory agreement which shall be recorded as a covenant running with the
land at least until the 99th anniversary of the Effective Date.
ARTICLE XVI
BREACHES~ REMEDIES AND TERMINATION
16.1 Event of Default. Tenant shall be in default under this Lease upon the occurrence
of any of the following ("Events of Default"):
(i) Monetary Obligation. Tenant at any time is in default hereunder or
under any Loan Document (as defined in the Loan Agreement of even date herewith by and
between Landlord and Tenant) as to any monetary obligation (including without limitation,
Tenant's obligation to pay taxes and assessments due on the Property or the Project, subject to
Tenant's rights to contest such charges pursuant to Section 4.2), and such default continues' for
twenty-five (25) days after Tenant receives Notice of Breach (as defined in Section 16.2.1.);
(ii) Insurance. Tenant fails to obtain and maintain any policy of
insurance required pursuant to this Lease, and Tenant fails to cure such default within twenty-
five (25) days following receipt of Notice of Breach;
(iii) Abandonment. Tenant abandons the Project;
(i,v) Bankruptcy. Tenant files a voluntary petition in bankruptcy or
files any petition or answer seeking or acquiescing in 'any reorganization, arrangement,
675831 30
composition, readjustment, liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors; or seeks or consents to or acquiesces in the appointment of any trustee,
receiver or liquidator of Tenant or of all or any substantial part of its property, or of any or all of
the royalties, revenues, rents, issues or profits thereof, or makes any general assignment for the
benefit of creditors, or admits in writing its inability to pay its debts generally as they become
due;
(v) Reorganization. A court of competent jurisdiction enters an order,
judgment or decree approving a petition filed against Tenant seeking any reorganization,
dissolution or similar relief under any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for debtors, and such order, judgment
or decree remains unvacated and unstayed for an aggregate of sixty (60) days from the first date
of entry thereof, or any trustee receiver or liquidator of Tenant or of all or any substantial part of
its property, or of any or all of the royalties, revenues, rents, issues or profits thereof is appointed
without the consent or acquiescence of Tenant and such appointment remains unvacated and
unstayed for an aggregate of sixty (60) days, such sixty (60) day period to be extended in all
cases during any period of a bona fide appeal diligently pursued by Tenant;
(vi) Attachment. A writ of execution or attachment or any similar
process is issued or levied against all or any part of the interest of Tenant in the Project and such
execution, attachment or similar process is not released, bonded, satisfied, or vacated or stayed
within sixty (60) days after its entry or levy, such sixty (60) day period to be extended during any
period of a bona fide appeal diligently pursued by Tenant;
(vii) Transfer. Tenant Transfers all or any portion of Tenant's interest
in the Land, the Improvements or in this Lease in violation of the provisions of Article 15 and
fails to rescind such Transfer within thirty (30) days after written notice from Landlord or such
longer period of time as Landlord may agree;
(viii) Default Under Mortgages. An event of default has been declared
by the holder of any debt instrument secured by a mortgage or deed of trust on the Project or
Borrower's interest in the Property and such holder exercises a right to declare all amounts due
under that debt instrument immediately due and payable, subject to the expiration of any
applicable cure period set forth in such holder's documents;
(ix) Nonmonetary Obligations. Tenant is in default in any other of its
promises, covenants or agreements contained herein or in any other Loan Document, and such
default shall continue for sixty (60) days after Tenant receives Notice of Breach specifying the
particulars of such default (or such longer time as Landlord may agree upon in writing), provided
that Tenant commences to cure the default within twenty-five (25) days and thereafter prosecutes
the curing of such default with due diligence and in good faith.
16.2 Notice and Opportunity to Cure.
16.2.1 Notice of Breach. Unless expressly provided otherwise in this Lease, no
breach by a party shall be deemed to have occurred under this Lease unless another party first
675831 3 1
delivers to the nonperforming party a written request to perform or remedy (the "Notice of
Breach"), stating clearly the nature of the obligation which such nonperforming party has failed
to perform, and stating the applicable period of time, if any, permitted to cure the default.
16.212 Failure to Give Notice of Breach. Failure to give, or delay in giving,
Notice of Breach shall not constitute a waiver of any obligation, requirement or covenant
required to be performed hereunder. Except as otherwise expressly provided in this Lease, any
failure or delay by either party in asserting any rights and remedies as to any breach shall not
operate as a waiver of any breach or of any such rights or remedies. Delay by either party in
asserting any of its rights and remedies shall not deprive such party of the right to institute and
maintain any action or proceeding which it may deem appropriate to protect, assert or enforce
any such rights or remedies.
16.2.3 Limited Parmers.' Right to Cure. The limited pagtners of Tenant
("Limited Partners") shall have the right to cure any default of Tenant hereunder upon the same
terms and conditions afforded to Leasehold Mortgagees pursuant to Section 14.2.2 hereof.
Provided Landlord has been given written notice of the address for delivery of notices to the
Limited Parmers, Landlord shall deliver notice of default to the Limited Partners in accordance
with Section 14.2.1. The references to "Leasehold Mortgagee" in Sections 14.2.1, 14.2.2, and
16.3 shall be deemed to include the Limited Partners.
16.3 Remedies Upon Default.
16.3.1 Landlord's Remedies. Upon the occurrence of any Event of Default and
in addition to any and all other rights or remedies of Landlord hereunder and/or provided by law,
but subject in all events to the rights and remedies of Leasehold Mortgagees under Article I4
hereof, Landlord shall have the right to terminate this Lease and/or Tenant's possessory rights
hereunder, in accordance with applicable law to re-enter the Land and take possession thereof
and of the Improvements, and except as otherwise provided herein, to remove all persons and
property therefrom, and to store such property at Tenant's risk and for Tenant's account, and
Tenant shall have no further claim thereon or hereunder. In no event shall this Lease be treated
as an asset of Tenant after any final adjudication in bankruptcy except at Landlord's option so to
treat the same but no trustee, receiver, or liquidator of Tenant shall have any right to disaffirm
this Lease.
16.3.2 Remedies UpOn Abandonment. If Tenant should breach this Lease and
abandon the Project, Landlord may, at its option, enforce all of its rights and remedies under this
Lease, including the right to recover the rent as it becomes due hereunder. Additionally,
Landlord shall be entitled to recover from Tenant all costs of maintenance and preservation of
the Project, and all costs, including attorneys' and receiver's fees incurred in connection with the
appointment of and performance by a receiver to protect the Project and Landlord's interest
under this Lease.
· 16.3.3 Landlord Right to Continue Lease. In the event 'of any default under this
Lease by Tenant (and regardless of whether or not Tenant has abandoned the Project), this Lease
shall not terminate (except by an exercise of Landlord's right to terminate under Section 16.3.1.)
unless Landlord, at Landlord's option, elects to terminate Tenant's right to possession or, at
675831 32
Landlord's further option, by the giving of any notice (including, without limitation, any notice
preliminary or prerequisite to the bringing of legal proceedings in unlawful detainer) to terminate
Tenant's right to possession. For so long as this Lease continues in effect, Landlord may enforce
all of Landlord's rights and remedies under this Lease, including, without limitation, the right to
recover all rent and other monetary payments as they become due hereunder. For the purposes
of this Lease, the following shall not constitute termination of Tenant's right to possession: (a)
acts of maintenance or preservation or efforts to relet the Project; or (b) the appointment of a
receiver upon initiative of Landlord to protect Landlord's interest under this Lease.
16.3.4 Right to Injunction; Specific Performance. In the event of a default by
Tenant under this Lease, Landlord shall have the right to commence an action against Tenant for
damages, injunction and/or specific performance. Tenant's failure, for any reason, to comply
with a court-ordered injunction or order for specific performance shall constitute a breach under
this Lease.
16.4 Assignment of Subrents and Other Sums. Subject to the rights of any Leasehold
Mortgagee, Tenant irrevocably .assigns to Landlord the subrents and other sUms due from Project
tenants, licensees or concessionaires for the purposes and upon the terms and conditions set forth
below. This assignment shall not impose upon Landlord any duty to produce rents from the
Project, or cause Landlord to be (a) a "mortgagee in possession" for any purpose, (b) responsible
for performing any of the obligations of the sublessor under any sublease, or (c) responsible for
any waste committed by subtenants or any other parties, for any dangerous or defective condition
of the Project, or for any negligence in the management, upkeep, repair or control of the Project.
This is an absolute assignment (subject to the rights of any and all Leasehold Mortgagees), not
an assignment for security only; and Landlord's right to subrents is not contingent upon, and may
be exercised without possession of, the Project. · Tenant hereby authorizes Landlord, at the
election of Landlord tO file a UCC-1 Financing Statement reflecting this assignment with the
California Secretary of State. Landlord shall provide all Leasehold Mortgagees for which
Landlord has been given an address for notice purposes with not less than twenty (20) days' prior
written notice preceding any enforcement by Landlord of its rights to subrents.
16.4.1 License. Landlord confers upon Tenant a license ("License") to collect
and retain the subrents, issues and profits of the Project as they become due and payable, until
the occurrence of an Event of Default. Upon the occurrence of an Event of Default, the License
shall be automatically revoked and, subject to any rights of any Leasehold Mortgagee, Landlord
may collect and retain the subrents, issues and profits without notice and without taking
possession of the Project. This right to collect subrents, issues and profits shall not grant to
Landlord the right to possession, except as hereinafter provided, and neither said right, nor
termination of the License, shall impose upon Landlord the duty to produce subrents, issues or
profits or to maintain all or any part of the Project.
16.4.2 Right to Receiver. Following the occurrence of an Event of Default, if
Tenant fails after receipt of a Notice of Breach to cure the default within the time period set forth
in this Lease, Landlord, at its option, may have a receiver appointed to take possession of
Tenant's interest in the Land, the Improvements and the Project with power in the receiver (a) to
administer Tenant's interest in the Land, the Improvements and the Project, (b) to collect all
funds available in connection with the operation of the Land, the Improvements and the Project,
675831 33
and (c) to perform all other acts consistent with Tenant'.s obligations under this Lease, as the
court deems proper. Landlord's rights under this Section 16.4.3 shall be subject to the rights of
all Leasehold Mortgagees.
'16.5 Remedies Cumulative. No remedy in this Article 16 shall be considered
exclusive of any other remedy, but the same shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or by statute, and
every power and remedy given by this Lease may be exercised from time to time and as often as
occasion may arise or as may be deemed expedient, subject to any limitations hereinabove
referred to.
16.6 No Election of Remedies. The rights given inthis Article 16 to receive, collect or
sue for any rent or rents, moneys or payments, or to enforce the terms, provisions and conditions
of this Lease, or to prevent the breach or nonobservance thereof, or the exercise of any such right
or of any other right or remedy hereunder or otherwise granted or arising, shall not in any way
affect or impair or toll the right or power of Landlord upon the conditions and subject to the
provisions in this Lease to terminate Tenant's right of possession because of any default in or
breach of any of the covenants, provisions or conditions of this Lease beyond the applicable cure
period.
16.7 Survival of Obligations. Nothing herein shall be deemed to affect the right of
Landlord under Article 9 of this Lease to indemnification for liability arising prior to the
termination of the Lease for personal injuries or property damage, nor shall anything herein be
deemed to affect the right of Landlord to equitable relief where such relief is appropriate. No
expiration or termination of the Term by operation of law, or otherwise, and no repossession of
the Land or any part thereof shall relieve Tenant of its previously accrued liabilities and
.obligations hereunder, all of which shall survive isuch expiration, termination or repossession.
16.8 No Waiver. Except to the extent that Landlord may have agreed in writing, no
waiver by Landlord of any breach by Tenant of any of its obligations, agreements or covenants
hereunder shall be deemed to be a waiver of any subsequent breach of the same or any other
covenant, agreement or obligation, nor shall any forbearance by Landlord to seek a remedy for
any breach by Tenant be deemed a waiver by Landlord of its rights or remedies with respect to
such breach.
ARTICLE XVII
GENERAL PROVISIONS
17'.1 Estoppel Certificates. At any time and from time to time, either party, on at least
twenty (20) days' prior written request by the other party, shall deliver to the party requesting
same a statement in writing certifying that this Lease is unmodified and in full force and effect
(or if there shall have been modifications that the same is in full force and effect as modified and
stating the m.odifications) and the dates to which the Rent has been paid and stating whether or
not, to the best knowledge of the certifying party, the other party is in default in the performance
of any covenant, agreement or condition contained in this Lease and, if so, specifying each such
675831 34
default of which the certifying party may have knowledge. A' prospective purchaser or
mortgagee shall be entitled to rely on a statement delivered hereunder.
17.2 Quiet Enjoyment. Landlord covenants and agrees that Tenant, upon paying the
Rent and all other charges herein provided for and observing and keeping all covenants,
agreements and conditions of this Lease on its part to be observed and kept, shall quietly have
and enjoy the Land during the Term of this Lease without hindrance or molestation by anyone
claiming by or through Landlord, subject, however, to the exceptions, reservations and
conditions of this Lease.
17.3 Landlord's Right to Enter the Land. Landlord and its agents may enter the Land
or the Improvements from time to time with reasonable notice, except for emergencies in which
case no notice shall be required, to inspect the same, to post notices of nonresponsibility and
similar notices, and to discharge Tenant's obligations hereunder when Tenant has failed to do so
within a reasonable time after written notice from Landlord.
17.4 Representations of Landlord and Tenant.
17.4.1 Tenant hereby represents and warrants that all of the following are true
and correct as of the Effective Date:
(a) Tenant is a limited partnership, duly organized, validly existing and in
good standing under the laws of the State of California;
(b) Tenant has taken all requisite action in connection with the execution
of this Lease and the undertaking of the obligations set forth herein. This Lease
- ....~ constitUtes the legally valid and binding obligation of Tenant, enforceable against
Tenant in accordance with its terms, except as it may be affected by bankruptcy,
insolvency or similar laws or by legal or equitable principles relating to or
limiting the rights of contracting parties generally; and
(c) The execution of this Lease and the acceptance of the obligations set
forth herein do not violate any court order or ruling binding upon Tenant or any
provision of any indenture, agreement or other instrument to which Tenant is a
party or may be bound. Neither the entry into nor the performance of this Lease
will violate, be in conflict with or constitute a default under any charter, bylaw,
partnership agreement, trust agreement, mortgage, deed of trust, indenture,
contract, judgment, order or other agreement, charge, right or interest applicable
to Tenant.
17.4.2 Landlord hereby represents and warrants that all of the following are true
and correct as of the Effective Date:
(a) Landlord has taken all requisite action in connection with the
execution of this Lease and the undertaking of the obligations set forth herein.
This Lease constitutes the legally valid and binding obligation of Landlord,
enforceable against Landlord in accordance with its terms, except as it may be
675831 35
affected by bankruptcy, insolvency or similar laws or by legal or equitable
principles relating to or limiting the rights of contracting parties generally.
(b) The execution of this Lease and the acceptance of the obligations set
forth herein do not violate any court order or ruling binding upon Landlord or any
provision of any indenture, agreement or other instrument to which Landlord is a
party or may be bound. Neither the entry into nor the performance of this Lease
will violate, be in conflict with or constitute a default under any charter, bylaw,
partnership agreement, trust agreement, mortgage, deed of trust, indenture,
contract, judgment, order or other agreement, charge, right or interest applicable
to Landlord.
17.5 Miscellaneous.
17,5.1 Severability. If any term or provision of this Lease or the'application
thereof tO any person or circumstance shall, to any extent, be held by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of this Lease, or the application of such
term or provision to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
17.5.2 Notices. Except as otherwise specified herein, all notices to be sent
pursuant to this Lease shall be made in writing, and sent to the Parties at their respective
addresses specified below or to such other address as a Party may designate by written notice
deliVered to ~he Other Parties in accordance with this SectiOn. All such notices shall be sent by:.
(i) personal delivery, in which case notice is effective upon delivery;
(ii) certified or registered mail, return receipt requested, in which case notice shall
be deemed delivered on receipt if delivery is confirmed by a return receipt;
(iii) nationally recognized overnight courier, with charges prepaid Or charged to
the sender's account, in which case notice is effective on delivery if delivery is confirmed
by the delivery service;
(iv) facsimile transmission, in which case notice shall be deemed delivered upon
transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-
class or certified mail or by overnight delivery, or (b) a transmission report is generated
reflecting the accurate transmission thereof. Any notice given by facsimile shall be
considered to have been received on the next business day if it is received after 5:00 p.m.
· recipient's time or on a nonbusiness day.
Landlord:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
675831 36
Attention: Community Development Director
Tenant:
Dublin Senior Limited Partnership
c/o Eden Housing, Inc., general partner
409 Jackson Street
Hayward, CA 94544-'1567
Attention: Executive Director
With copy to: (Investor Limited Parmer)
Peoples Benefit Life Insurance Company
c/o AEGON USA Realty Advisors, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499
Attn: Michael Sheehy, Counsel
Facsimile: (319) 369-2188
With copy to: (Leasehold Mortgagee) Citibank (West), F.S.B
Facsimile:
17.5.3 Captions; Construction. The captions used for the sections and articles of
this Lease are inserted for convenience only and shall not be used to construe this Lease. The
language in all parts of this Lease shall be construed as a whole, according to its fair meaning
and not strictly for or against Landlord or Tenant.
17.5.4 Successors and Assigns. Subject to the provisions hereof, this Lease shall
be binding upon and shall inure to the benefit of the parties hereto and their respective successors
and assigns, and wherever a reference in this Lease is made to either of the parties hereto such
reference shall be deemed to include, wherever applicable, a reference to the successors and
assigns of such party, as if in every case so expressed.
17.5.5 Short Form of Lease. A memorandum of lease referring to this Lease
shall be executed by Landlord and Tenant and recorded in the Office of the Alameda County
Recorder.
17.5.6 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
17.5.7 Attorney's Fees. Should either party hereto commence an action against
the other to enforce any obligation contained herein, the prevailing party shall be entitled to
675831 37
recover from the other party reasonable counsel fees and costs and necessary disbursements, as
determined by the court having jurisdiction over the action.
17.5.8 Indemnity Includes Defense Costs. In any case where either party is
obligated under an express provision of this Lease, to indemnify and to save the other party
harmless from any damage or liability, the same shall be deemed to include defense of the
indemnitee by the indemnitor, such defense to be through legal counsel reasonably acceptable to
the indemnitee.
17.5.9 No Brokers; No Third-Party Beneficiaries~ Landlord represents that it has
not engaged any broker or agent to represent Landlord in this transaction. Tenant represents that
it has not engaged any broker or agent to represent Tenant in this transaction. Each party agrees
to indemnify and hold the other harmless from and against any and all liabilities or expenses,
including attorneys' fees and costs, arising out of, or in connection with claims made by any
broker or individual for commissions or fees as a result of the acts of the indemnifying party.
There shall be no third-party beneficiaries to this Lease.
17.5.10 Disclaimer of Partnership, Lender/Borrower Relationship. The.
relationship of the parties under this Lease is solely that of landlord and tenant, and it is
expressly understood and agreed that Landlord does not as a result of this Lease in any way nor
for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of
Tenant's business or otherwise. This Lease is not intended to, and shall not be construed to,
c~reate the relationship of principal and agent, partnership, joint venture, association, or seller
and buyer as between Landlord and Tenant. It is further expressly understood and agreed that
this Lease is not intended to, and shall not be construed to create the relationship of lender and
borrower, and Landlord does not, solely as a result of this Lease, become a lender to Tenant.
17.5.11 Entire Agreement; Amendments. This Lease contains the entire
agreement between the parties relative to the leasing transaction covered hereby. All previous
correspondence, communications, discussions, agreements, understandings or proposals and
acceptances thereof between the parties or their representatives, whether oral or written, are
deemed to have been integrated into and superseded by this Lease and are of no further force and
effect except as expressly provided in this Lease. No amendment or modification hereof shall be
effective for any purpose unless in writing signed by Landlord and Tenant.
17.5.12 Time is of the Essence. Time is of the essence of this Lease and of each
provision hereof.
17.5.13 Counterparts. This Lease may be executed in one or more counterparts,
each of which shall be an original and all of which together shall constitute one and the same
instrument.
17.5.!4 Action by the City. Except as may be otherwise specifically provided
herein, whenever any approval, notice, direction, consent or request by the City of Dublin in its
capacity as Landlord hereunder is required or permitted under this Lease, such action shall be in
writing, and such action may be given, made or taken by the City Manager or by any person who
shall have been designated by the City Manager, without further approval by the City Council.
675831 38
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of the
Effective Date.
LANDLORD:
CITY OF DUBLIN
By:
Richard C. Ambrose,
City Manager
Attest:
City Clerk
Approved as to form:
Elizabeth H. Silver,
City Attorney
TENANT:
DUBLIN SENIOR LIMITED PARTNERSHIP
By: Eden Housing, Inc., a California nonprofit public benefit corporation
Its: General Partner
By:
Linda Mandolini,
Executive Director
675831 39
Exhibit A
LAND
(Attach legal description.)
675831 40
Exhibit B
INSURANCE REQUIREMENTS
(Attach insurance requirements.)
675831 41