Loading...
HomeMy WebLinkAbout2004-05-10 City Council (4)City of Palo Alto C ty Manager’s Report TO: FROM: HONORABLE CITY COUNCIL "~O CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE:MAY 10, 2004 CMR: 229:04 SUBJECT:APPROVAL OF AMENDMENT NO. 1 TO AGREEMENT NO. C04100297 BETWEEN THE CITY OF PALO ALTO AND ADOLESCENT COUNSELING SERVICES, INC. CONCERNING THE CITY’S FUNDING OF THE REHABILITATION OF THE CARAVAN HOUSE FACILITY AT 2361 HIGH STREET RECOMMENDATION Staff recommends that the City Council approve and authorize the Mayor to execute the attached amendment to the agreement with Adolescent Counseling Services, Inc. (ACS) to extend the term of the agreement until June 30, 2005 and reallocate unexpended funds in the amount of $10,000 to ACS for the completion of its Caravan House rehabilitation project, anO approve and authorize the City Manager to execute the Modification of Note and Deed of Trust and other Loan documents to effectuate the amendment. BACKGROUND ACS was allocated $111,197 in CDBG funding during fiscal year 2003/04 for rehabilitating the exterior and the interior of the Caravan House, located at 2361 High Street (Attachment B). After conducting lead testing at the site, it was discovered that lead abatement activities would need to be undertaken in order to comply with federal lead-based paint regulations. The ACS project was not able to proceed until March 2004 because the impacts of lead-based paint on the site had to be thoroughly analyzed before any work could begin. The lead testing and abatement at the site were costlier than originally anticipated and increased project costs by almost $10,000. CMR: 229:04 Page 1 of 3 DISCUSSION In order to offset the additional cost of lead abatement for the Caravan House rehabilitation project, staff is proposing to reallocate $10,000 in unexpended funds from the CDBG Housing Development fund to ACS for the completion of its project. The City CDBG Housing Development fund has a current balance of approximately $228,000. In fiscal year 2003/04, funds were set aside for the acquisition of a future affordable housing site in the City; however, a site has yet to be identified and the funds need to be expended in a timely manner pursuant to the Department of Housing and Urban Development (HUD) requirements. Staff has consulted with HUD and was informed that reallocating funds from one project to another is permissible under HUD regulations if the funds for both projects were allocated in the same fiscal year and are in the same project category. Both projects were allocated funding in fiscal year 2003/04 and are under the capital projects category. RESOURCE IMPACT The proposed section will not impact the City’s General Fund. The amendment will involve the shift from one project to another of previously allocated CDBG funds provided through the U.S. Department of Housing and Urban Development. POLICY IMPLICATION The recommendation in this staff report is consistent with HUD policies and does not represent any change to City policies. PREPARED BY: Eloiza Planner-CDBG APPROVED BY: , Director of Planning & Community Environment CITY MANAGER APPROVAL: SON, Assistant City Manager CMR::04 Page 2 of 3 Attachments: A - Amendment No. 1 to Agreement No. C04100297 Between the City of Palo Alto and Adolescent Counseling Services, Inc. For Funds Allocated During the Fiscal Year 2003/04 Under the Community Development Block Grant Program B - CMR: 458:03: Approval of an Agreement in the Amount of $111,197 with Adolescent Counseling Services, Inc. for Funds Allocated During the Fiscal Year 2003/04 Under the Community Development Block Grant Program Cc:Adolescent Counseling Services, Inc. CMR: 229:04 Page 3 of 3 ATTACHMENT A AMENDMENT NO. ONE TO AGREEMENT NO. C04100297 BETWEEN THE CITY OF PALO ALTO AND ADOLESCENT COUNSELING SERVICES, INC. This Amendment No.One to Agreement No. C04100297 ("Agreement") is entered into , by and between the CITY OF PALO ALTO ("CITY"), and ADOLESCENT COUNSELING SERVICES, INC., a corporation duly organized and existing under the Nonprofit Corporation Law of the State of California ("BORROWER"). RECITALS: WHEREAS, the Agreement was entered into between the parties for the provision of funds to rehabilitate the exterior and interior of the Caravan House located at 2361 High Street, Palo Alto, California; and WHEREAS, the parties wish to amend the Agreement to provide additional time to BORROWER to perform the rehabilitation to the exterior and interior at the Caravan House; and WHEREAS, the parties wish to increase the amount of funding by Ten Thousand Dollars ($i0,000) in order to hire perform lead abatement activities to comply with HUD regulations; and WHEREAS, the parties wish to modify the Promissory Note and Deed of Trust to include this additional amount. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION i. The time of performance specified in Section 1 is extended to June 30, 2005. SECTION 2. The funds to be provided as described in Articles 3 and 4 shall be One Hundred Twenty-One Thousand One Hundred Ninety-Seven Dollars ($121,197). SECTION 3. The Promissory Note and Deed of Trust and Assignment of Rents previously executed in favor of CITY and BORROWER shal! be modified as necessary to effect this increase in the amount of the Promissory Note in substantially the form set forth herein as Exhibit "A". 040504 syn 8250038 SECTION 4. The City Manager is designated to sign all documents to effectuate this Amendment. SECTION 5. Except as herein modified, all other provisions of the Agreement, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. ATTEST:CITY OF PALO ALTO City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney APPROVED: Mayor ADOLESCENT COUNSELING SERVICES, INC., a corporation duly organized and existing under the Nonprofit Corpora- tion Law of the State of California Assistant City Manager Director of Administrative Services By: Name: Title: By: Name: Title: Taxpayer Identification No. 51-0192551 Director of Planning & Community Environment Insurance Review (Compliance with Corp. Code § 313 is required if the entity on whose behalf this contract is signed is a corporation. In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) 040504 syn 8250038 2 CERTIFICATE OF ACKNOWLEDGMENT Civil Code § 1189) STATE OF COUNTY OF ) On , before me, the undersigned, a notary public in and for said County, personally appeared personally known to me ’ (or proved, to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public 040504 syn 8250038 CERTIFICATE OF ACKNOWLEDGMENT (Civil Code § 1189) STATE OF COUNTY OF ) ) ) On notary public in , before me, the undersigned, a and for said County, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public 040504 syn 8250038 RECORDING REQUESTED BY AND WHEN RECORDED MAlL TO: EXHIBIT "A" SPACE ABOVE THIS LINE FOR RECORDER’S USE MODIFICATION OF NOTE, DEED OF TRUST AND OTHER LOAN DOCUMENTS THIS MODIFICATION OF NOTE, DEED OF TRUST AND OTHER LOAN DOCUMENTS (this "Agreement") is executed as of ,2004 by and between ("Lender") and , a ("Borrower"). RECITALS A. Bori’ower has executed that certain Promissory Note dated, ~, in the original principal amount of $ (the "Note"), payable to Lender. The Note is secured by, among other documents, (i) a Deed of Trust and Security Agreement with A,ssignment of Rents and Fixture Filing of even date therewith (the "Deed of Trust"), executed by Borrower, as Trustor, to , a , as Trustee, for the benefit of Lender, as Beneficiary, recorded __, ~ as Instrument No. of the Official Records of County, California (the "Official Records") and (ii) an Assignment of Leases of even date therewith (the "Assignment of Leases") executed by Borrower, as assignor, to Lender, as assignee, recorded , ~ as Instrument No. of the Official Records of said county, and (iii) a Security Agreement of even date therewith (the "Security Agreement"), executed by Borrower in favor of Lender, and recorded , ~ as Instrument No. of the Official Records of said county. The Deed of Trust encumbers a fee estate in certain real property located in County, California, more particularly described therein, together with certain other personal property and other property as set forth therein (collectively, the "Property"). B. The Note, the Deed of Trust, the Assignment of Leases, the Security Agreement, the Unsecured Indemnity Agreement (the "Indemnity Agreement") executed by Borrower in favor of Lender dated of even date with the Note, and the other Loan DOcuments (as such term is defined in the Deed of Trust), as each of the same may be modified and amended hereby, are referred to herein as the "Loan Documents." 040504 syn 8250047 C. Borrower has represented to Lender that indefeasible fee simple title to the Property is owned exclusively by Borrower. Do respects.. The parties hereto now wish to amend and modify the Loan Documents in certain NOW, THEREFORE, the parties hereto agree as follows: M-1. Outstanding Balance. As of the execution and delivery hereof, after giving effect to a payment of principal in the amount of $.on such date, the outstanding principal balance on the Note is $. Borrower acknowledges that it has no existing and asserted (and no basis for any unasserted) claims, counterclaims, defenses or fights of setoff whatsoever with respect to any payment obligations under the Note or any other obligations under any of the Loan Documents, and any such claims, counterclaims, defenses and rights of setoff are hereby waived and relinquished. M-2. Representations of Borrower. A. Title to the Property. Borrower hereby represents and warrants to Lender that (i) indefeasible fee simple title to the Property is owned exclusively by Borrower, and all beneficial and equitable interests in the Property are owned exclusively by Borrower, (ii) the Deed of Trust is a first and prior lien on all of the Property which is real property, (iii) all of the Personal Property (as defined in the Deed of Trust) is so owned free and clear of any security agreements, reservations of title and conditional sales contracts, and (iv) there is no financing statement affecting any such Personal Property on file in any public office other than financing statements in favor of Lender and in favor of (....) which is being subordinated to the interests of Lender concurrently herewith. B. Absence of Defaults. Borrower represents and warrants to Lender that there are no defaults, and no events which with notice or the lapse of time, or both, would constitute a default, under the Note, the Deedof Trust, or any of the other Loan Documents. C.Compliance with Conditions. Borrower represents and warrants that all of the conditions set forth in that certain letter dated __, __ from Lender to Borrower are and have been satisfied continuously from said date through and including the date hereof. Borrower covenants that all of such conditions shall be satisfied continuously hereafter. M-3. Modification of Note and Deed of Trust. [EXAMPLE ONLY] A. Interest Rate, Payment Terms, Maturity. The heading, first paragraph .and [Section 1] of the Note are deleted and replaced by the following: 040504 syn 8250047 2 PROMISSORY NOTE FOR VALUE RECEIVED, at the times and in the manner hereinafter stated, the undersigned, , a , ("Maker"), promises to pay to the order of ("Holder"), at such place, either within or without the State of California, as Holder may from time to time designate in writing, in legal tender of the United States of America, the principal sum of ($.) with interest on the unpaid principal from time to time outstanding at a rate of (i) percent (..__~%) per annum from the Advance Date (as defined below) through and including __, __ and (ii) percent (.__~%) per annum thereafter. 1. Payment of Principal and Interest. Principal and interest under this Note shall be payable as follows: Accrued interest only from the date funds are first disbursed to Maker hereunder (the "Advance Date") shall be due and payable on the first day of the first calendar month immediately following the Advance Date, and thereafter interest only shall be due and payable on the first day of each succeeding calendar month through and including the first day of the (___th) calendar month following the Advance Date, in equal monthly installments of dollars ($.). Monthly installments of principal and interest in the amount of dollars ($.) each shall be due and payable on the first day of each and every calendar month thereafter to and including , ~ Monthly installments of principal and interest in the amount of dollars ($. .) each shall be due and payable on the first day of each and every calendar month thereafter to andincluding __, ~ The entire amount of all principal outstanding hereunder, together with all interest thereon and all other amounts owing hereunder, shall be finally due and payable in full on __, ~ (the "Maturity Date"). Maker hereby acknowledges and understands that a substantial portion of the original principal balance of this Note (unless earlier prepaid) shall be payable at such time. Each payment shall, when made, be credited first to late charges and other expenses payable to Holder, then to accrued interest, and, subject to the prohibition upon prepayment set forth herein, the remainder shall be credited to principal, and interest shall thereupon cease upon the principal so credited. M-4. Conforming Modifications. The Note, the Deed of Trust and the other Loan Documents are each hereby modified m~ t-nr""m° .................. thnt al! ,-e~,,--nco~ therein to the .... Note, tho~... "Deed of Trust" or any other Loan Document shal! be deemed to .refer to the Note, the Deed of 040504syn 8250047 Trust and any such other Loan Document as amended hereby. The Deed of Trust is hereby modified to provide that the Deed of Trust secures the Note, as amended hereby, in addition to and not in limitation of all other indebtedness and obligations stated in the Deed of Trust to be secured thereby. It is the intention of the parties hereto that this Agreement shall be deemed to form a part of the Loan Documents that it amends, and shall constitute a "Loan Document" as referred to herein as therein. Except as specifically supplemented and amended hereby, the Loan Documents shall each remain in full force and effect. The Deed of Trust as amended shall remain one deed of trust with one power of sale. M-5. Confirmation of Obligations. Borrower hereby confirms each of the covenants, agreements and obligations of Borrower set forth in the Loan Documents, as modified and amended hereby. Borrower acknowledges and agrees that, if and to the extent that Lender has not heretofore required strict compliance with the performance of such covenants, agreements and obligations, such action or inaction shall not constitute a waiver of, or otherwise affect in any manner, Lender’s rights and remedies under the Loan Documents, as amended hereby, including the right to require performance of such covenants, agreements and obligations strictly in accordance with the terms and provisions thereof. Lender reserves all rights which it has against any guarantor or endorser of the Note. M-6. Counterparts. This Agreement may be executed in any number of counterparts, each of which when executed and delivered to Lender will be deemed to be an original, and all of which, taken together, will be deemed to be one and the same instrument. M-7. Prior Agreements. The Loan Documents, including this Agreement (i) integrate all the terms and conditions mentioned in or incidental to the Loan Documents, (ii) supersede all oral negotiations and prior and other writings with respect to the subject matter thereof, and (iii) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in the Loan Documents and as the complete and exclusive statement of the terms agreed to by the parties. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any of the Loan Documents, the terms, conditions and provisions of this Agreement shall prevail. M-8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. If any court of competent jurisdiction determines any provision of this Agreement or any of the Loan Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part hereof or of the Loan Documents. 040504 syn 8250047 4 IN W!TNESS WI-IEREOF, the parties have executed this Agreement as of the date first set forth above. [Borrower Signature Block] [Lender Signature Block] 040504 syn 8250047 STATE OF CAL~ORNIA COUNTY OF ) ) ) On , __.before me,, a Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. SIGNATURE OF NOTARY STATE OF CALIFORNIA COUNTY OF ) ) ) On , __before me,, a Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. SIGNATURE OF NOTARY 040504syn8250047 6 ATTACHMENT B City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM: DATE: CITY MANAGER OCTOBER 14, 2003 DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT CMR: 458:03 SUBJECT:APPROVAL OF AN AGREEMENT IN THE AMOUNT OF $111,197 WITH ADOLESCENT COUNSELING SERVICES, INC. FOR FUNDS ALLOCATED DURING FISCAL YEAR 2003/04 UNDER THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or his designee to execute the attached agreement in the amount of $111,197 with Adolescent Counseling Services (ACS) for the rehabilitation of the Caravan House facility at 2361 High Street. BACKGROUND ACS owns and operates a group home for teenage girls at the Caravan House site. ACS applied for.fiscal year 2003/04 Community Development Block Grant (CDBG) funding to assist in rehabilitating the Caravan House site. On May 12, 2003, the Palo Alto City Council approved allocating $111,197 in fiscal year 2003/04 CDBG funds toward the Caravan House rehabilitation project. DISCUSSION The Caravan House is the only group home of its kind in the City. The house has been owned and operated by ACS since 1977 and has never had a major rehabilitation. The rehabilitation will include the replacing the roof, adding a staff bathroom, painting the exterior, and replacing a gate and fence. RESOURCE IMPACT The $111,197 of the agreement will be funded with federal CDBG funds provided through the U.S. Department of Housing and Urban Development. Repayment of the loan ClVlR: 458:03 Page 1 of 2 will not be required unless the property is sold or the program terminated or changed to a use prior to July 1, 2043 that has not been approved by the City. POLICY IMPLICATION The recommendation in this staff report does not represent any change to City policies. ENVIRONMENTAL REVIEW HUD environmental regulations for the CDBG program are contained in 24 CFR 58 "Environmental Review Procedures for Title I Community Development Block Grant Programs." The Caravan House rehabilitation project meets the conditions specified for exemption under 24 CFR Part 58.34. ATTACHMENTS Attachment A:Agreement Between the City of Palo Alto and Adolescent Counseling Services, Inc. Concerning the City’s Funding of the Rehabilitation of the Caravan House Facility at 2361 High Street, Palo Alto Eloiza N~arillo-Garcia, Associate Planner-CDBG APPROVED BY: STEPHEN EMSLIE, Director of Planning and Community Environment CITY MANAGER APPROV EMILY ~SON, Assistant City Manager Cc:Adolescent Counseling Services Citizens Advisow Committee CIVIR: 458:03 Page 2 of 2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO : City of Palo Alto Office of City Attorney 250 Hamilton Avenue Palo Alto, CA 94301 RECORDED WITHOUT CHA!~GE. GOVERNMENT CODE §§ 6103, 27383 SPACE ABOVE.THIS LINE FOR RECORDER’S USE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ADOLESCENT COUNSELING SERVICES,INC. CONCERNING THE C!TY’S FUNDING OF THE REHABILITATION OF THE CARAVAN HOUSE FACILITY AT 2361 HIGH STREET, PALO ALTO THIS AGREEMENT is made and entered into on 2003, by and between the CITY OF PALO ALTO, a California municipal corporation ("CITY"), and the ADOLESCENT COUNSELING SERVICES, INC., a California non-profit public benefit corporation, with offices at 4000 Middlefield Road, Room FH, Palo Alto, California 94301 ("ACS") in reference to the following facts and circumstances: I. Since 1977, ACS has owned and operated, the house located at 2361 High Street, Palo Alto ("Property"), the legal description of which is more specifically described in Exhibit ’~A", as shared rental housing facility for ACS teenage girls who have been removed from their families because of child abuse and neglect. ACS has applied for a loan from CITY to cover the rehabilitation expenses that ACS will incur in rehabilitating the Property. 2. There is a severe shortage of group homes in Palo Alto, and nearby areas, and available for use by lower income teenagers. 3. The expenditure of funds for rehabilitational costs of existing lower income housing is an eligible activity under the CDBG Program. The existing and proposed use of the Property is consistent with CITY’s affordable housing objectives as outlined in CITY’s United States Department of Housing and Urban Development ("HUD") Consolidated Plan. 4. Pursuant to the provisions of Title I of the Housing and Community Development Act of 1974, as amended, CITY appropriated CDBG funds under its fiscal year 2003-2004 budget to 1 030922 s.~ 0091309 ACS for the purpose of preserving, through rehabilitation, the existing use of the~Property. IN CONSIDERATION OF the mutual covenants and agreements specified herein, and subject to its ter~s and provisions, the parties to this Agreement hereby agree as fol!ows: ARTICLE 1 - AGREEMENT COORDINATION 1. ! CITY C!TY’s city manager shall represent CITY, for all purposes under this Agreement. CITY’s director of planning and community environment is designated by the city manager as the project manager, and his designee shall supervise the progress and execution of this Agreement. 1.2 ACS The executive director of ACS shall represent ACS for all purposes under this Agreement and, as the project director for ACS, shall supervise the progress and execution of this Agreement. ARTICLE 2 -PURPOSE OF AGREEMENT The purpose of this Agreement is to set forth the respective duties and responsibilities of CITY and ACS regarding .the CDBG Program funds to be provided by CITY to ACS hereunder for ACS’s rehabilitation of the Property. ARTICLE 3 - PROVISION OF FUNDS 3.1 Payment of funds for rehabilitation expenses 3.1.1 CITY shall loan to ACS the sum of One Hundred Eleven Thousand One-Hundred Ninety-Seven Dollars ($i!I, !97), to be used in accordance with the terms, covenants, provisions and conditions of this Agreement and the CDBG Program as further described in Ex~ibit "B", "Scope of Services" ACSACS shall execute and deliver a promissor3~ note in favor of C!TY ("Note"), as set forth in Exhibit"C", in the amount of One Hundred Eleven Thousand One hundred Ninety-Seven Dollars ($!!!, !97),~ to secure the performance of all terms, covenants, provisions and conditions of this Agreement. Execution thereof shall occur prior to any disbursement of funds under this Agreement. The Note shall bear interest at the rate of three percent per annum. Except as provided in Article 4.5 herein, no payments of principa! and interest are required during the term of this Agreement. The Note shall be secured by a deed o~ trust ("Deed o~_ Trust ) on ~h_ Property the benefit of CITY, as set forth in Exhibit "D". Zf ACS at any time fails to comply with the terms, covenants, provisions and 030922 syn 0091309 2 conditions of this Agreement or the Note, the Note shall become immediately due and payable by ACS. 3.2 Additional acquisition expenses The maximum amount payable under this Agreement for acquisition and related transaction expenses shal! be One Hundred Eleven Thousand One Hundred Ninety-Seven Dollars ($111,197). In the event, for any reason, the amount payable by ACS to any and all sources for rehabilitation and related expenses exceeds One Hundred Eleven Thousand One Hundred Ninety-Seven ($111,197), ACS shall be solely responsible to pay all such excess expenses. ARTICLE 4 -ACS’s STATEMENT OF WORK 4.1 General As express conditions of acceptance of the loan of $111,197 in CDBG funds from CITY under this Agreement, ACS agrees to rehabilitate the Property located at 2361 High Street, Palo Alto. 4.2 Budget, eligible uses of CITY funds Eligible uses of CDBG Program funds are the costs of rehabilitation. If CITY determines that the entire $111,197 of funding authorized by CITY under this Agreement is not needed to pay for reasonable, necessary and eligible Property rehabilitation costs as described herein and as approved in advance by the project manager, then CITY is obligated to disburse only the amount needed by ACS to complete the rehabilitation of the Property. 4.3 Use, occupancy and rent restrictions ACS shall operate and maintain the Property as a shared rental housing facility for occupancy by up to six (6) very low- and low-income children, ages 12-18. Preference for occupancy shall be accorded to children who have been removed from their families. ACS acknowledges that ACS’s covenant to comply with and its actual compliance with the provisions of this Section 4.3 hereof is the sole inducement by which CITY is making the Loan to ACS. in the event of any breach of this Section 4.3 or of any other covenant or restriction set forth in this Agreement by ACS, CITY shall have the right to exercise all of its rights and remedies, and to maintain any action at law or suits in equity or other real property proceedings, including, without limitation, specific performance, to enforce the covenants and restrictions and the curing of any breach or violation hereof. 030922 syn 0091309 4.4 Records and reports ACS shall maintain on a current basis complete records, including books o.f origina! entry, source documents supporting accounting transactions, service records, a general ledger, canceled checks, rent rolls, and related documents and records to assure the proper accounting of fundsand performance of the terms of this Agreement. ACS shall furnish any and all information and reports which may be required by CITY and HUD in connection with this Agreement. ACS shall further pe_~-mit access to its books, records and accounts by the~representatives and employees of CITY and HUD during regular business hours, for the purpose of investigation or audit to ascertain compliance with al! applicable laws, regulations, rules and orders and for the purpose of evaluating and monitoring ACS’s compliance with the~provisions of this Agreement. All such records sha~i be retained by ACS and made available to CiTY and HUD upon request for review or audit for a period of at !east five (5) years following the expiration or termination of this Agreement. 4.5 ~rogram income - CDBG funds Progra~n income is defined under the laws and regulations governing the CDBG Program, including the provisions set forth in 24 CFR 570.500(a). ACS shal! maintain accounting records for each of its fisca! years to determine the amount of any CDBG Program income generated under this Agreement from rental and use of the Property. ACS shall report and return all CDBG Program income generated under this Agreement from the Property to CITY in accordance with all CDBG and HUD laws and regulations, including, without limitation, those set forth in 24 CFR 570.504, as amended. Any payments of Program income shall be credited first to outstanding interest and then to principal owed on the CITY note. 4.5.1. Any Program income remaining after the payment of operating, ~intenance and repair expenses and the funding of replacement reserve and operating reserve account deposits as re.c!uired under the SUHRP Agreement shall be used, first, to pay any deferred interest on the SUHRP note and, then, to pay accrued interest on the Note made payable to the order of the CITY. 4.6 Unifo_~m administrative re_c!uirements - CDBG funds ACS, as a private non-profit organization receiving CDBG Program funds as a subrecipient, shall comply with the Uniform Administrative Requirements as set forth in 24 CFR 570.502(b). 030~.2 syn 0091309 4.7 Additional requirements and federal assurances - C~G funds ACSshall comply with the additional terms and conditions o2 this Agreement and the federal assurances as set forth in Exhibit 4.8 Insurance ~:7 ACS, at its sole cost and expense, shall obtain and maintain during the term of this Agreement, insurance provided by responsible companies authorized to engage in the offering of insurance services in California in such amounts and against such risks as shall be satisfactory to CITY’s risk manager, including, without limitation, worker’s compensation, employer’s liability, commercial general liability, comprehensive automobile liability, personal injury and property damage insurance, as set forth in Exhibit "E", as appropriate, insuring against all liability of ACS and its directors, officers, employees, agents, and representatives arising out of or in connection with the acquisition and operation of the Property or ACS’s performance or nonperformance under this Agreement. ARTICLE 5 -TERM AND TERMINATION OF AGREEMENT This Agreement shall commence and be effective on the date of its execution by CITY, and shall continue for a term of forty (40) years unless earlier terminated as provided in this Agreement. If rehabilitation of the Property does not occur on or before June 30, 2004, including any extension thereof approved by the project manager, this Agreement may be terminated by CITY. Prior to the start of construction, either party may terminate this Agreement for convenience in accordance with 24 CFR 85.44, as amended. CITY may immediately suspend orterminate this Agreement, in whole or in part, if CONTRACTOR materially fails to comply with any term, provision, covenant or condition of this Agreement, or with any of the rules or regulations referred to herein. In such event, CITY may also pursue any otherremedies provided by law, including those specified under 24 CFR 85.43, as amended. In the event that this Agreement is terminated for convenience or for cause, all funds provided to ACS, at the sole option of the project manager and notwithstanding any other provisions of this Agreement, the Note or Deed of Trust, shall become due and payable to CITY upon demand of CITY. ARTICLE 6 -CONFLICT OF INTEP~ST ACS covenants that it shall comply with the provisions of 24 CFR 570.611, as amended, concerning conflicts of interest. Specifically, except for the use of CDBG funds to pay salaries and other related administrative or personne! costs, no person who is 5 030922 syn 0091309 an employee, agent, consultant, officer or official of ACS who exercises or has exercised any functions or responsibilities concerning the activities-under this Agreement, or who is in a posihion to participate in a decision making process or gain inside information with regard to such activities, may obtain a personal or finaz~cial interest or benefit from any such activity, or have an interest in any contract, subcontract, or agreement with respect thereto, or the proceeds thereunder, either for him or herself or for those with whom he or she has family or business ties, during his or her.tenure or for one year thereafter. ACS further covenants that it presently has no interest and shall not acquire any interest, direct or indirect, financia! or otherwise, which would conflict in any manner or degree with the performance of the services hereunder. ACS also covenants that, in the performance of this Agreement, no subcontractor or person having such interest shal! be employed by ACS. In addition, ACS certifies that no one who has or will have any financial interest under this Agreement is an officer or employee of CITY. ARTICLE 7 -ASSIGhTMENT This Agreement is for the personal services of ACS and shal! not be assigned without the ek~ress prior written consent of CITY. Any assignment or attempted assignment shall be void and, at the sole discretion of CITY, shal~ be deemed a material default of this Agreement by ACS, and the outstanding balance of the Note may be declared by CITY to be immediately due and payable. ARTICLE 8 -DEFAULT; REMEDIES FOR DEFAULT 8.1 Events of Default !n addition to any action or inaction which is expressly declared to be a default under this Agreement, the occurrence of any of the following shall constitute a default by ACS, provided ACS has received written notice of default from CITY, and ACS has failed to cure such default within sixty (60) days of the occurrence of the same, or, if the default cannot be completely cured within such period of time, ACS has failed to commence efforts to cure and continue such efforts to cure within a reasonable period of time, or where CITY receives notice of ACS’s default under any other agreemen~ in connection with the financing of the Property: (a) A failure by ACS to payl when duel the unpaid principal amount, and accrued interest, if any, and any other sums payable by ACS under this Agreement, ~he Note, or the Deed of 030922 syn 0091309 (b) A failure by ACS to perform any non-financial obligation required to be performed by ACS under this Agreement, the Note or the Deed of Trust; or (c) ACS makes a representation in this Agreement which shall prove to have been false in any material respect; or (d) ACS applies for or consents to the appointment of a receiver, trustee, or liquidator, or is unable, or admits, in writing, its inability to pay its debts as they fall due, or makes a general assignment for the benefit of its creditors, or is adjudicated a bankrupt or insolvent, or files a voluntary petition in bankruptcy; or (e) ACS is subject to the entry of an order, decree, or judgment approving the reorganization of ACS, and such order, decree, or judgment is not stayed for a period of more than sixty (60) days, or such period as may be permitted by law; or (f) ACS sells, assigns, transfers or encumbers the Property in a manner inconsistent with the terms of this Agreement or applicable law, including, without limitation, a sale at a judicial foreclosure or nonjudicial foreclosure, or a transfer in lieu of foreclosure; or (g) ACS fails to comply with the covenants, terms and conditions of the Agreement, including, without limitation, the failure of ACS to abide by the low-income and very low-income restrictions set forth in A~ticle 4 of the Agreement; or (h) ACS terminates the Agreement without cause; or (i) ACS defaults under its agreement with one or more lenders, if any, or other agreement for private financing of the Property, which may be secured by a deed of trust or any other encumbrance or lien which is senior in priority to the Deed of Trust. 8.2 Remedies for Default Upon the occurrence of a default by ACS, CITY shall have the following rights and remedies, in addition to all other rights and remedies provided by law, to which CITY may resort cumulatively, or in the alternative: (a) Declare the outstanding principal amount of the Note immediately due and payable to CITY; (b) Compel ACS’s performance of its obligations under this Agreement, or perform ACS’s obligations on its behalf; 030922 syn 0091309 7 (c)Cure any default-:bf--ACS on the behalf-of and at its cost ; and ~ (d)Notwithstanding any other provision of law relating to the acquisition, management or disposal of real property in the State of California, to engage in the following: (i) Possess, operate, complete, lease, rent, renovate, modernize, insure, or sell for cash or credit, the Property; (ii) Pursue to final collection by way of compromise or otherwise all claims against ACS which are assigned by ACS to CITY; and (iii) Convey and execute in the name of CITY all deeds of conveyance, deeds of release, assignments and satisfactions of the deeds of trust, and any other written instrument relating to real or persona! property, or any interest of ACS therein subsequently acquired by CITY. ARTICLE 9 -NOTICES All Notices to CITY or ACS shall be made in writing and shall be deemed to have been given or .made if personal!y delivered, placed in the United States certified mai!, return receipt requested, postage prepaid, or delivered by courier service addressed as fol!ows: To CITY:City of Pa!o Alto Office of City Clerk 250 Hamilton Avenue Pa!o A!to, CA 94301 Copy to:City of Palo Alto Director, Department of Plaruning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 To ACS:ADOLESCENT COUNSELING SERVICES, INC. 4000 Middiefield Road, Room FH Pa!o Alto, CA 94303 Attention: Executive Director ARTICLE 10 -SPECIAL COb~!TIONS !0.I Com_m!iance with Federal Re_cruiations. ACS agrees to comply with the re~airements Of the Housing and Urban Development regulations concerning Community Development Block Grants (24 CFR Part 570) and a!! federal regulations and policies issued pursuant to these Regulations. ACS further agrees to utilize Funds 030922 syn 0091309 available under this Agreement to supplement rather than supplant Funds otherwise available. 10.2. National Objectives. ACS certifies that the activities carried out with funds provided under this Agreement will meet the CDBG Program’s National Objective of benefiting low/moderate income persons as~defined in 24 CFR, Part 570.208. 10.3 ACS shall procure all subcontractors, consistent with Federal procurement requirements. All bid documents must be reviewed and approved by the City or its designee before being made available to the public. ACS shall sign a written agreement(s) with selected subcontractor(s), and shall direct, manage and reimburse all project subcontractors. ARTICLE Ii -GENERAL CONDITIONS ll.l General Compliance. ACS agrees to comply with all applicable federal, state, county, and municipal laws, ordinances, resolutions, rules,, policies, and regulations (~Laws") governing the Funds provided under this ~greement. 11.2 Independent Contractor. Nothing contained in this Agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer and employee between the parties. ACS shall at all times remain an independent contractor with respect to the services to be performed under this Agreement. The City shall be exempt from payment of all unemployment compensation, FICA, retirement, life and/or medical insurance and workers’compensation insurance as ACS is an independent contractor. 11.3 Hold Harmless. ACS shall hold harmless, defend and indemnify the City, its council members, officers and employees from any~and all claims, actions, suits, charges and judgments whatsoever that arise out of ACS’s perfo.~mance or nonperformance of the Services or subject matter called for in this Agreement. 11.4 Insurance and Bonding. ACS, at its sole cost and expense, shall obtain and maintain during the term of this Agreement, insurance as more fully described in Exhibit ~C" which is incorporated herein by reference and made a part of this Agreement. ACS shall comply with the bonding, and insurance requirements of Attachment B of 0MB Circular A-I!0, Bonding and Insurance. 11.5 Funding Recognition. ACS shall ensure recognition of the role of the City in providing services through this Agreement. All activities, facilities and items utilized pursuar~t to this Agreement shall be prominently labeled as to funding source. In addition, ACS will include a reference to the support 030922 syn 0091309 9 provided herein in all publications made possible with Funds made available under thisAgre~ement. . 11.6 Amendments. The parties may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, and are executed in writing, and signed by their duly authorized representatives. Such amendmentsshall not invalidate this Agreement, nor relieve or release any.par~y from its obligations under this Agreement. At any time during the terra of this Agreement, the City, in its discretion, may amend this Agreement to conform with federa!, state or local governmenta! guidelines, policies and available funding amounts, or for any other reasons. If such amendments result in a change in the funding, the scope of Services, or schedule of, the activities to be undertaken as part of this Agreement, such modifications will be incorporated only by written amendment signed by the parties. 11.7 Suspension or Termination. !1.7.1 Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least 30 days before the effective date of such termination. !f ACS terminates the Agreement, all sums transferred to ACS pursuant to this Agreement and the Note shall become immediately due and payable to City. ~Partia! termination of the scope of Services described in Exhibit ~A" may only be undertaken with the prior approval of the CITY. 11.7.2 The CITY may also suspend or terminate this Agreement, in whole or in part, if ACS materially fails to comply with any covenant, term, condition, or provision of this Agreement, or with any of the ~-u!es, regulations or provision referred to herein; and the CITY may declare ACS ineligible for any further participation in CITY contracts, in addition to other remedies as provided by Law. In the event there is probable cause to believe ACS is in noncompliance with any applicable rules or regulations, the CITY may withhold up to fifteen percent (15%) of the Funds unti! such time as ACS is found to be in compliance by the City, or is otherwise adjudicated to be in compliance. ARTICLE 12.ADMINISTRATIVE REQUIREMENTS i2.1 Financial Management. !2.1.1 Accounting Standards. ACS agrees to comply with Attachment F of OI~B Circular A-l!0 and agrees to adhere to the accounting principles and procedures required therein, utilize adequate internal controls and maintain necessa~--y source documentation for al! costs incurred. 030922 syn 0091309 12.1.2 Cost Principles. ACS shall administer its program in conformance with OMB Circulars A-122., ~Cost Principles for Non-Profit Organizations," or A-21, ~Cost Principles for Educational Institutions," as applicable. These principles shall be applied for all costs incurred whether charged on a direct or indirect basis. 12.2 Documentation and Record-Keeping¯ 12.2.1 Records to be Maintained. ACS shall maintain all records required by the federal regulations specified in 24 CFR Section 570.506, and that are pertinent to the activities to be funded under this Agreement. Such records shall include, but are not limited to: a o Records providing a full description of each activity undertaken; Records demonstrating that each activity undertaken meets a National Objective of the CDBG Program; C ¯Records required to determine the eligibility of activities; .Records required to document the acquisition, improvement, use or disposition of real property acquired or improved with CDBG assistance; Records documenting compliance with the fair housing and equal opportunity component of the CDBG Program; Financial records as required by 24 CFR Section 570.502, and OMB Circular A-If0; and Other records necessary to document compliance with Subpart K of 24 CFR Part 570. 12.2.2 Retention. ACS shall retain all records pertinent to expenditures incurred under this Agreement for a period of five (5) years after the termination of all activities funded under this Agreement, or after the resolution of all federal audit findings, whichever occurs later. Records for non-expendable property acquired with Funds under this Agreement shall be retained for five (5) years after final disposition of such property. Records for any displaced person must be kept for fi~e (5) years after he or she has received final payment. Notwithstanding the above, if there is litigation, claims, audits, negotiations or other actions that involve any of the records cited and that have started before the expiration of the five-year period, then such II 030922 syn 0091309 records must be retained until completion of the actions and resolution of all issues, or the expiration of the five-year period, whichever occurs later. !2.2.3 Client Data. ACS shall maintain confidential records of client data demonstrating client eligibility for housing. Such data shall include, but not be limited to, client name, address, income level or other basis for determining eligibility, and ethnicity. Such info~-mation shall be made available to the City’s monitors or their designees for review u.Don request in order to determine compliance with the Agreement. 12.2.4 Disclosure. ACS understands that client info~.~-mation collected under this Agreement is private and the use or disclosure of such information, when not directly connected with the administration of the City’s or ACS’s responsibilities with respect to Services provided under this Agreement, is prohibited by the laws of the State of California, ~n!ess written consent is obtained from such person receiving the se.~vice and, in the case of a minor, that of a responsible parent or guardian. 12.2.5 Property Records. ACS shall maintain real property inventory records which clearly identify properties purchased, improved or sold. Properties retained shall continue to meet eligibility criteria and shall conform with the "changes in use" restrictions specified in 24 CFR Section 570.503(b) (8),. as applicable. !2.2.6 National Objectives. ACS agrees to maintain documentation that demonstrates that the activities carried out with Funds provided under this Agreement meet the CDBG Program’s national objective of benefiting low and moderate income persons, as defined in 24 CFR Section 570.208. 12.2.7 C!ose-Outs. ACS’s obligation to the City shall not end until all close-out requirements are completed. Activities during this close-out period shall include, but are not limited to, making final payments, disposing of CDBG Program assets (including the return of a!l unused materials, equipment, unspent cash advances, program income balances, and receivable accountsto the City), and dete~-mining the custodianship of records. 12.2.8 Audits and Inspections. All of ACS’s records with respect to any matters covered by this Agre=_ment shall be made available to the City, grantor agency, their designees or the Government of the United States, at any time during no_~ma! business hours, as often as ~he City or grantor agency deems necessa_~y, to audit, examine, and make excerpts or transcripts of al! relevant data. Any deficiencies noted in audit reports must be fully cleared by ACS within 30 days after receipt by A~S. Failure of ACS to comply with the above audit requirements wi!l constitute a violation of ~his Agreement and may result in the withholding of !2 030922 syn 0091309 future payments. ACS agrees to have an annual agency audit conducted in accordance with current City policy concerning ACS’s audits, and as applicable, OMB Circular A-133. 12.3 Procedures Concerning Reporting and Payments. 12.3.1 Budgets. ACS shall submit a detailed budget of a form and content prescribed by the City for its approval. The parties may agree to revise the budget from time to time in accordance with existing City policies. 12.3.2 Program Income. ACS shall report on a monthly basis all program income, as defined at 24 CFR Section 570.500(a), generated by activities carried out with the Funds made available under this Agreement. The use of program income by ACS shall comply with the requirements set forth at 24 CFR Section 570.504. By way of further limitations, ACS may use such program income during the term of this Agreement for activities permitted under this Agreement and shall reduce requests for additiona! Funds by the amount of any such program income balances on hand. All unused program income shall be returned to the City at the end of the term of this Agreement. Any interest earned on cash advances from the United States Treasury is not Program Income and shall be remitted promptly to the City. 12.3.3 Indirect Costs. If indirect costs are charged, ACS shall develop an indirect cost allocation plan for determining the appropriate City share of administrative costs and shall submit such plan to the City for approval, in a form specified by the City. 12.3.4 Payment Procedures. The City will pay to ACS Funds available under this Agreement based upon information submitted by ACS and consistent with any approved budget and City policy concerning payments. With the exception of certain advances, payments will be made for eligible expenses actually incurred by ACS, and not to exceed actual cash requirements. Payments will be adjusted by the City in accordance with advance fund and program income balances available in ACS accounts. In addition, the City reserves the right to liquidate Funds available under this Agreement for costs incurred by the City on behalf of ACS. 12.3.5 Progress Reports. ACS shall be responsible for filing periodic reports, including but not limited to monthly activity reports and weekly certified wage payment reports which evaluate the manner in ~nich the project is achieving its goals and objectives according to standards established by City. The report shall be on forms approved by City and shall be filed within five (5) days of the request by the City. 030922 syn 0091309 12.4 Procurement. 13 12.4.1 Compliance. ACS ~shall comply with current City policy concerning the~ purchase of e.c!uipment and shall maintain inventory records of a!l ~non-expendable personal property as defined by such policy as may be-procured with Funds provided herein. All program assets, including, without limitation, unexpended program income, property, and equipment, shall revert to the City upon termination of this Agreement. 12.4.20I~B Standards. ACS shall procure materials in accordance with the requirements of Attachment 0 of OMB Circular A- ll0, Procurement. Standards, :and shall subsequently follow Attachment N of OFiBCircular A-I!0, Property Management Standards, as modified by 24 CFR 470.502(b)(6) covering util±zation and disposal of property. 12.4.3 Travel. ACS shall obtain written approval from the City for any travel, outside the metropolitan area with Funds provided under this Agreement. 12.4.4 Relocation. ACS agrees to comply with (a) the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (UPS.), and implementing regulations at 49 CFR Part 24 and 24 CFR 570.606(b); (b) the requirements of 24 CFR 570.606(c) governing the Residential Antidisplacement and Relocation Assistance Plan under section 104(d) of the HCD Act; and (c) the requirements in CFR 570.606(d> governing optional relocation policies. ACS shall provide relocation assistance to persons (families, individuals, businesses, nonprofit organizations and farms) that are displaced as a direct result of acquisition, rehabi!ita~ion, demolition or conversion for a CDBG-assisted project. ACS also agrees to comply with applicable City ordinances, resolutions and policies concerning the displacement of persons from their residences. ARTICLE 13 - PERSONNEL AND PARTICIPANT CONDITIONS 13.1~Civil Rights. 13.1.1 Compliance. ACS agrees to comply with all federa!, state, and local laws, including, without limitation, Title VI of the Civil Rights Act of 1964, as amended, Title VII! of the Civil Rights Act of 1968, as amended, Section !04(b) and Section i09 of Title I of the Housin~ and Community Development Act of !974, as amended, Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990~ the Age Discrimination Act of 1975, Executive Order 11063, and Executive Order 11246, as amended by Executive Orders 1!375 and 12086. 13.1.2 Nondiscrimination. ACS will not discriminate against any employee or applicant for employment because of race, co!or, creed, religion, ancestry, national origin, sex, disability, 14 030922 syn 0091309 age, marital status, family ’status, status with regard to public assistance or sexual preference. ACS will take affirmative action to ensure that al! employment practices are free from such discrimination and in compliance with all Federal, State and local directives and executive orders regarding nondiscrimination in employment. Such employment practices include, but are not limited ¯ to the following: hiring., upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. ACS agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting agency setting forth the provision of this nondiscrimination clause. 13.1.3 Land Covenants. This Agreement is subject to the ~requirements of Title VI of the Civil Rights Act of 1964, as amended, and 24 CFR Part 570.601 and 602. in regard to the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Agreement, ACS shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination as herein defined, in the sale, lease or rental, or in the use or occupancy of such land, or in any improvements erected or to be erected thereon, providing that the City and the United States are benefiziaries of and entitled to enforce such covenants. ACS, in undertaking its obligation to carry out the CDBG Program assisted hereunder, agrees to take such measures as are necessary to enforce such covenant, and will not itself so discriminate. !3.1~.4 Section 504. ACS agrees to comply with any federal regulations issued pursuant to and in compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 706), as amended, which prohibits discrimination against the disabled in any federally assisted program. The City shall provide ACS with any guidelines necessary for compliance with that portion of the regulations in force during the term of this Agreement. 13.2 Affirmative Action. 13.2.1 Compliance With California Constitution. Article I, Section 31 of the California Constitution, adopted by the People of the State of California as Proposition 209 in 1996, prohibits the Cizy from discrimination or the grant of preferential treatment on the basis of race, sex, color, ethnicity or national origin in public employment, public education, and public contracting. Article I, Section 31 (e) provides that nothing in Section 31 shall be interpreted as prohibiting actions which must be taken to establish or maintain eligibility for any federa! program where ineligibility would result in a loss of federal funds to the City. The provisions of this Section 13.2 are those necessary to establish and maintain eligibility for federal funds. At such time as any provision of this Section 13.2 is not required to establish i5 030922 syn 0091309 and maintain such eligibility, that provision shall be waived by City. If ACS believes any provision of this Section 13.2 should be waived under this Section 13.2.1, ACS shall provide notice to City in writing, identifying the provision for which awaiver is sought and the legal basis for the waiver. City shal! respond to the request for waiver within thirty days after notice is received. 13.2.2 Approved Plan. ACS agrees that it shall be committed to carry out pursuant to the City’s specifications an affi~-mative action program in keeping with the principles as provided in Executive Order 11246 (September 24, 1965). The City shall provide affirmative action guidelines to ACS to assist in the formulation of such program. ACS shall submit a plan for an affirmative action program for approval prior to the award of Funds. 13.2.3 Women and Minority Business Enterprises. ACS will use its best efforts to afford minority and women-owned business enterprises the maximum practicable opportunity participate in the performance of this Agreement. As used in this Agreement, the term ~minority and female business enterprise" means a business at least fifty-one percent (51%) owned and controlled by minority group members or women. For the purpose of this definition, "minority group members" are Afro-Americans, Spanish- speaking, Spanish surname or Spanish-heritage Americans, Asian- Americans, and American Indians. ACS may rely on written representations by businesses regarding their status as minority -and female business enterprises in lieu of an independent investigation. 13.2.4 Access to Records~ ACS sha!l~ furnish and cause each of ins contractors or subcontractors to furnish all infoznnation and reports required hereunder and wi!l permit access to its books, records and accounts by the City] HUD or its agent., or other authorized federal officials for purposes of investigation to ascertain compliance with rules, regulations and provisions stated herein. !3.2.5 Notifications. ACS will send to each labor union or representative of workers with which it may have a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or worker’s representative of ACS’s commitments hereunder, and shallpost copies of the notice in conspicuous places available to employees and applicants for employment. 13.2.6 EE0/AA Statement. ACS wil!, in all solicitations or advertisements for employees placed by or on behalf of ACS, state that it is an Equal Opportunity ~ or Affi_~mative Action Employer. 030922 sy~ 0091309 16 13.2.7 Subcontract Provisions. ACS will include the provisions of Sections 8.1 and 8.2 in every subcontract or purchase order, specifically or by reference, so that such provisions will ~e binding upon each contractor or subcontractor or vendor. 13.3 Employment Restrictions. 13.3.1 Prohibited Activity. ACS is prohibited from using Funds provided herein or personnel employed in the administration of the CDBG Program for political activities, sectarian or religious activities, or lobbying, political patronage, and nepotism activities. 13.3.2 Labor Standards. ACS agrees to comply with the requirements of the Secretary of Labor in accordance with the Davis-Bacon Act, as amended, the provisions of Contract Work Hours, the Safety Standards Act, the Copeland ~Anti-Kickback" Act (40 U.S.C. 276a-276a-5; 40 U.S.C. 327 and 40 U.S.C. 276c and all other applicable Laws pertaining to labor standards insofar as those acts apply to the performance of this.Agreement. ACS shall maintain documentation which demonstrates compliance with the hour and age requirements of this part. Such documentation shall be made available to the City for review upon request. ACS agrees that, except with respect to the rehabilitation or construction of residential property containing less than eight (8) units, all contractors engaged under contracts in excess of $2,000 for construction, renovation or repair of any building or work financed, in whole or in part, with assistance provided under this Agreement, shall comply with the federal requirements adopted by the City pertaining to such contracts and with the applicable requirements of the regulations of the Department of Labor, under 29 CFR Parts i, 3, 5 and 7 governing the payment of wages and ratio of apprentices and trainees to journeymen; provided, that if wage rates higher than those required under the regulations are imposed by state or local laws, nothing hereunder is intended to relieve ACS of its obligation, if any, to require payment of the higher wage. ACS shall cause or require to be inserted in full, in all such contracts subject to such regulations, provisions meeting the requirements of this paragraph. 13.3.3 "Section 3" Clause. 030922 syn ~13~ Compliance with the provisions of "Section .3= regulations set forth in 24 CFR Part 135, and all applicable rules and orders issued hereunder prior to the execution of this Agreement, shall be a condition of the federal financial assistance provided under this Agreement and binding upon the City, the ACS and any contractor or subcontractor. Failure to fulfill these requirements shall subject the City, ACS and any contractor or subcontractor, 17 their successors and assigns, to those sanctions specified by the agreement through which federal assistance is provided. ACS certifies and agrees that no- contractual or other disability exists which would prevent compliance with these requirements. ACS further agrees to comply with these "Section 3" requirements and to include the following language in all subcontracts executed under this Agreement: ~The work to be performed under this agreement is a project assisted under a program providing direct federal financial assistance from HUD and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701. ~Section 3" requires that to the greatest extent feasible opportunities for training and employment be given to !ow and very low income residents of the project area and contracts for work in connection with the project be awarded to business concerns that provide economic opportunities for low and very low income persons residing in the metropolitan area in which the project is located." ACS further agrees to ensure that opportunities for training and employment arising in connection with a housing rehabilitation (including reduction and abatement of lead-based paint hazards), housing construction, or other public construction project are given to low and very low income persons residing within the metropolitan area in which the CDBG-funded project is located; where feasible, priority should be given to low and very low income persons within the service area of the project or the neighborhood in which the project is located, and to !ow and very !ow income participants in other HUD programs; and award contracts for work undertaken in connection with a housing rehabilitation (including reduction and abatement of !ead-based paint hazards), housing construction, or other public construction project are given to business concerns that provide economic ¯ opportunities for low and very low income persons residing within the metropolitan area in ~,~hich the CDBG-funded project is located; where feasible priority should be given to business conce_~ns ~nich provide economic opportunities to low and very low income residents within the service area of the neighborhood in which the project is located, and 030922 syn 0091309 2.8 to low and very low income participants in other HUD programs. ACS certifies and agrees that no contractual or other legal incapacity exists which would prevent compliance with these requirements. ACS agrees to send to each labor organization or representative of workers with which it has a collective agreement or other contract or understanding, if any, a notice advising the labor organization or worker’s representative of its commitments under this "Section 3" clause and shall post copies of the notice in conspicuous places available employees and applicants for employment or training. ACS will include this ~Section 3" clause in every subcontract and will take appropriate action pursuant to the subcontract upon a finding that the contractor or subcontractor is in violation of regulations issued by the grantor agency. ACS will not subcontract with any contractor or subcontractor where it.has notice or knowledge that the latter has been found in violation of regulations under 24 CFR Part 135 and will not let any subcontract unless the contractor or subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of these regulations. 13.4 Conduct. 13.4.1 Assignability. ACS shall not assign or transfer any interest in this Agreement without the prior written consent of the City; provided, however, that claims for money due or to become due to ACS from the City under this Agreement may be assigned to a bank, trust company, or other financial institution without such approval. Notice of any such assignment or transfer shall be furnished promptly to the City. 13.4.2 Hatch Act. ACS agrees that no Funds provided, nor personnel employed under this Agreement, shall be in any way or to any extent engaged in the conduct of political activities in violation of Chapter 15 of Title 5 of the United States Code. 13.4.3 Conflict 0f Interest. ACS agrees to abide by the provisions of 24 CFR Section 570.611 with respect to conflicts of interest, and covenants that it presently has no financial interest and shall not acquire any financial interest, direct or indirect, which would conflict in any manner or degree with the performance of Services required under this Agreement. ACS further covenants 19 030922 syn 0091309 that in the performance of this Agreement, no person having such a financial interest shall be employed or retained by ACS hereunder. These conflict of interest provisions apply to any person who is an employee, agent, consultant, officer, or elected official or appointed officia! of the City, or of any designated public agencies or ACS which are receiving Funds under the CDBG Program. 13.4.4 Subcontracts. ACS shall not enter into any subcontracts with any agency or individual in the performance of this Agreement without the written consent of the City prior to the execution of such subcontracts. ACS will monitor all subcontract services on a re~Fular basis tO assure contract compliance. Results of monitoring efforts shall be summarized in written reports and supported with documented evidence of follow-up actions taken to correct areas of noncompliance. C ¯ACS shall cause all of the provisions of this Agreement in its entirety to be included in and made a part of any subcontract executed in the performance of this Agreement. ACS shall undertake to ensure that all subcontracts let in the performance of this Agreement shall be awarded on a fair- and open competition basis. Executed copies of al~ subcontracts shall be forwarded to the City along with documentation concerning the selection process. 13.4.5 Lobbying. ACShereby certifies that: a° 0309~1 syn 0091309 No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting zo influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; If any funds other than Federal appropriated funds have been paid or will be paid to any person for 2O influencing or attempting to influence an officer or emp!oyee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, ~Disclosure Form to Report Lobbying," in accordance with its instructions; It will require that the language of paragraph (d) of this certification be included in the aware documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all ACS shall certify and disclose accordingly; and Lobbying Certification - Paragraph d This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $i0,000 and not more than $I00,000 for each such failure. 13.4.6 Copyrights. If this Agreement results in any copyrightable material, the City or grantor agency, or both, reserves the right to royalty-free, non-exclusive and irrevocable license to reproduce, publish or otherwise use and to authorize others to use, the work for government purposes. 13.4.7 Religious Organizations. ACS agrees that Funds provided under this Agreement will not be utilized for religious activities, to promote religious interests, or for the benefit of a religious organization in accordance with the federal regulations specified in 24 CFR Section 570.200(j). ARTICLE 14 -ENVIRONMENTAL CONDITIONS 14.1 Air and Water. ACS agrees to comply with the following regulations insofar as they apply to the performance of this Agreement: Clean Air Act, 42 U.S.C. 7401, et seq.; Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq., as amended, 1318 relating to inspection, monitoring, entry, reports, and information, as well as other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder; U.S. Environmental Protection Agency regulations pursuant to 40 CFR Part 50, as amended. 030922 syn 0091309 21 !4.2 Flood Disaster Protection. !n accordance with the requirements of the Flood Disaster Protection Act of 1973 (42 USC 4001), ACS shall assure that for activities located in an area ideniified by FEMA as having special flood hazards, flood insurance under the National Flood Insurance Program is obtained and maintained as a condition of financial assistance for acquisition or construction purposes (including rehabilitation). 14.3 Lead-Based Paint. ACS agrees that any construction or rehabilitation of residential structures with assistance provided under this Agreement shall be subject to HUD Lead-Based Paint Regulations at 24 CFR Part 35 et seq. as amended. 14.4 Historic Preservation. ACS agrees to comply with the historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470) and the procedures set forth in 36 CFR Part 800, Advisory Council on Historic Preservation Procedures for Protection of Historic Properties, insofar as they apply to the performance of this Agreement. In general, this requires concurrence from the State Historic Preservation Officer for all rehabilitation and demolition of historic properties that are fifty years old or older or that are included on a federal, state, or local historic property list. ARTICLE 15 -SEVERABILITY If any provision of this Agreement is held invalid, the remainder of the Agreement shall not be affected thereby and all other parts of this Agreement shall nevertheless be in full force and effect. ARTICLE !6 -MISCELLANEOUS 16.1 Neither the failure nor the delay on the part of CITY to exercise any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partia! exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. 16.2 Nothing contained in this Agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer and employee between the parties. ACS shal! at all times remain an independent contractor with respect to the services to be rendered or work to be performed, or both, under this Agreement. The terms of this Agreement shall in no way be construed to create a partnership, joint venture or any other joint relationship between CITY and ACS. ACS lacks any authority or power to pledge the credit of CITY or incur any obligation in the name of CITY. This Agreement shall not be construed or deemed to be an agreement for the benefit of any thi}d party, and no third party 030922 sy~ 0091309 22 shall have any claim or right of action hereunder for any cause whatsoever. 16.3 This Agreement constitutes the entire agreement of the parties concerning its subject matter, and there are no other oral or written agreements of the parties not incorporated in this Agreement. Any amendment to this. Agreement shall be binding upon the parties, provided such amendment is set forth in a writing signed by the parties. The city manager is authorized to execute any amendments to this Agreement, including any amendments which may be required of ACS or CITY or HUD, and confer any consents that must be provided by CITY. 16.4 The covenants, agreements, terms, and conditions of this Agreement shall inure to and be binding on the successors and assigns of the parties. Any provision of this Agreement which is characterized as a covenant or a condition shall be deemed both a covenant and a condition. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid, illegal, void, or unenforceable in any respect, the validity of all other provisions herein shali remain in full force and effect. 16.5 This Agreement, the Note and the Deed of Trust shall be deemed contracts nmde under the laws of the State of California, and for the purposes hereof shall be governed and construed by and in accordance with the laws of the State of California. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules which may, from time to time, be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and shall be deemed to be part of this Agreement. This A~reement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. The paragraph headings are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part of this Agreement. 16.6 In the event that suit is brought by either party, the parties agree that trial of such action shall be vested exclusively in the state court of California in the City of San Jose, County of Santa Clara, or in the United States District Court for the Northern District of California in the City of San Jose. The prevailing party in any action brought to enforce the terms of this Agreement or arising out of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with such an action from the other party. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ATTEST:CITY OF PALO ALTO 030922 syn 0091309 23 City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney APPROVED: Assistant City Manager Director of Administrative Services Director of Planning and Community Environmen% Risk Manager Mayor ADOSESCENT COUNSELING SERVICES, !NC. By: Name: Title: By:, Name: Title: Taxpayer Identification No. Fed. I.D. #5!-0192551 (Compliance with Co.~qD. Code § 313 as required if the entity on whose behalf this contrac~ is signed is a corporation. In the alternative, a certified co---porate resolution attesting to the signatory authority of the ~individua!s signing in their respective capacities is accepzabie) Attachments: EX/~IBIT "A": EXHIBIT "B" : EXHIBIT ’~ C" : EXHIBIT "D" SCOPE OF SERVICES & LEGAL DESCRIPTON OF PROPERTY PROMISSORY NOTE SECURED BY DEED OF TRUST DEED OF TRUST INSURANCE REQUIREMENTS 030922 s~ 0091309 24 STATE OF CALIFORNIA COUNTY OF SANTA CLARA On , 2003, before me, a Notary Public in and for said County and State, personally appeared , personally known to me to be the person whose name is subscribed ~o the within instrument and acknowledged to me that he executed the same in his authorized capacity as Mayor of the City of Palo Alto, a municipal corporation, and that by his signature on the instrument acknowledged that said municipal corporation executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. STATE OF CALIFORNIA COUNTY OF Notary Public in and for said County and State On , 2003, before me, a Notary Public in and for said County and State, personally appeared personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity as of Adolescent Counseling Services, Inc., a California non-profit public benefit corporation, and that by his/her signature on the instrument acknowledged that said nonprofit co~-poration executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. Notary Public q~ ~M ÷~ said County and State 030922 syn 0091309 25 STATE OF CALIFORkTiA COUNTY OF ) ) ss. ) On , 2003, before me, a Notary Public in and for said County and State, personally appeared personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capaciZy as of Adolescent Counseling Services, inc., a California non-profit public benefit corporation, and that by his/her signature on the instrument acknowledged that said nonprofit corporation executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. Notary Public in and for said County and State 03092Z syn 009130~) EXHIBIT "B" ADOLESCENT COUNSLING SERVICES CARAVAN HOUSE REHABILITATION SCOPE OF SERVICES Adolescent Counseling Services (ACS) is a community-based nonprofit agency providing a number of services for adolescents and their families in the City ofPalo Alto. Every year ACS sez-ves more than 1,000 unduplicated adolescent clients through three programs: Caravan House, a group home for teenage girls, Adolescent Substance Abuse Treatment Program, a program that provides intensive outpatient substance abuse treatment toteens; and the On-Campus counseling Program, which provides free counseling services to students at all high schools in Palo Alto and Menlo-Atherton. This project consists of rehabilitating the Caravan House, a group home for teenage girls who have been removed from their families because of child abuse and neglect. The major tasks that Adolescent Counseling Services will perform in connection with the project include, but are not limited to, the following: Apply for city required permits and/or variances based on proposed modifications to existing housing units. °Prepare bid specifications in accordance with federal regulations including, but not limited to, prevailing wage and competitive bid requirements, if applicable. Select contractor. Attend pre-construction conference. 5.Replace the roof on both the house and the garage. Add a new 5" x 8" bathroom including a toilet, sink, and shower for staff use. o Replace the linoleum with Pergo in the kitchen halls, and new carpet in the living room and bedrooms. Smooth walls and ceilings, replace baseboards, and interior painting. Regrout the tile in the existing bathroom. Lift the bathroom floors to replace the underflooring. !i.Replace the water heater door. 030922 syn 0091309 12.Replace window sills and siding that have fungus damage. 13.Repaint the exterior of the house. 14.Replace the wooden gate and fence section on the driveway. 15.Replace a pre-fa~ricated storage shed. 030922 sy~ 0091309 EXHIBIT ~B" ADOLESCENT COUNSLING SERVICES CARAVAN HOUSE REHABILITATION SCOPE OF SERVICES - continued Competitive Bid Process All contracts and subcontracts shall be awarded through a fair and open competitive bidding process. The process shall be reviewed and approved by City. Adolescent Counseling Services will use its best efforts to afford minority and women-owned business enterprises the maximum practicable opportunity to participate in contracts let in the performance of this project. Executed copies of all contracts shall be supplied to City along with documentation concerning the selection process. Prevailing Wage and Federal Labor Standards Adolescent Counseling Services, Inc., its contractors and subcontractors shall comply with the Federal Davis-Bacon Act Prevailing Wage requirements including inserting the applicable wage decision into the bid documents, and all contracts awarded under this Agreement. Adolescent Counseling Services, Inc., the selected contractor and any subcontractors will participate in a pre-construction conference with City to review Davis Bacon compliance requirements, including reporting and monitoring. Timeline: The project will attempt tol adhere to the following timetable. June 3, 2003 Meeting with City Staff to review project specifications September !, 2003 Bid Documents Available/Ad in Paper September 15, 2003 October 15, 2003 City Contract Si_~ned Bid Opening and contractor selection October 15, 2003 City council contract approval November 15, 2003 Pre-construction conference November 15, 2003 Start of construction March 15, 2004 Work Completed 030922 syn 0091309 PdBCOPdDING REQUESTED BY AND WHEN RECORDED I~.IL TO : City of Palo Alto Office of City Attorney 250 Hamilton Avenue Palo Alto, CA 94301 RECORDED WITHOUT CHARGE GOVEF!krME!qT CODE §§ 6103, 27383 ~PACE ABOVE THIS LINE FOR P~CORDER’S USE DEED OF TRUST AND ASSIGNMENT OF RENTS APN This Deed of Trust, made this __ day of .... 2003, between the ADOLF_~CENT COUNSELING SERVICES, INC., a California corporation duly organized and existing under the Nonprofit Corporation Law of the State of California ("Trustor"), located at 4000 Middlefield Road, Room FH, Palo Alto, California 94301, Old Republic Title Company, a California corporation ("Trustee"), and the CITY OF PALO ALTO, a California municipal corporation ("Beneficiary"), Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that property in Santa Clara County, California, described as: See Exhibit "A," attached hereto and incorporated herein by this reference. In the event the herein described properD’ or any part thereof, or an3’ interest therein is sold, agreed to be sold, conveyed or alienated by the Trustor, or by the operation of law or otherwise, all obligations secured by this instrument, irrespective of the maturity dates expressed therein, at the option of the holder hereof and without demand or notice shall immediately become due and payable. Together With the rentL issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and supply such rents, issues and profits.. For the Purpose of Securing: i. Performance of each agreement of Trustor herein contained. 2. Payment of the indebtedness evidenced by one promissory, note ("note") of even dam herewith, and any extension or renewal thereof, in the principal sum of $111197 executed by Trustor in favor of Beneficiary or order. 3. Payment of such further sums as the then record owner of said property hereafter may borrow from Beneficiary, when evidenced by another note (or notes) reciting it is so secured. 4. Performance by Trustor of its obIigations arising under that certain contract entitled "Agreement between The City of Palo Alto and Adolescent Counseling Services, Inc. Concerning the Cit),’s Funding of the Rehabilitation of the Caravan House Facility at 2361 High Street, Palo Alto", dated , ("Agreement"), and recorded on ¯2003, as Instrument No.., in Book Page of Oflqcial Records, Santa Clara Count3,, California. To Protect the Seem:ity of This Deed of Trust, Trustor Agrees: (1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good wor~ardJ2e mariner an3’ building which may be consu-ucted, damaged or des~oyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property, or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit an?, act upo~a said property in violation of law; to cultivate, irrigate, fertilize, 030922 syn 0091309 fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the generai. (2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may.determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary; and to pay all costs and expenses, including cost 0f evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary may appear, and in any suit brought by Beneficiary or Trustee to foreclose this Deext of Trust. (4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees, costs and expenses. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. (6) That an3’ award of damages in connection with any condemnation for public use of or injury to said property or any pan thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by it in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (7) That by accepting payment of any sam secured hereby after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so’ to pay. (8) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warrant),, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyanee may be described as "the person or persons legally entitled thereto." Five years after issuance of such full reconveyance, Trustee may destroy said note and this Deed of Trust (unless directed in such request to retain them). (10) That as additional security Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving onto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreements hereunder, to collect and retain such rents, issues, and profits as the become due and payable. Upon any such 2 030922 syn 0091309 defauK, Beneficiary may at any time without notice, either in person, by agent, or by a r~eiver to be appointed by a com~, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or an), part thereof, in its own name sue for or otherwise collect such rents, issues and profits, including thos~ past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebw, dne.ss secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (11) That upon default by Trustor in payment of any indebtedness secured h~reby, or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trus~ shall cause to be fried for record. Beneficiary also shall deposit with Truste~ this Dew.zi of Trust, said note and all documents evidencing expenditures secured hereby. Afte~ the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shal! sell said propertT at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured h~eby; and the remainder, if any, to the person or persons legally entitled thereto. (12) That Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said properly is situated, shall be eonehlsive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance fi’om the Trustee predecessor, succeed to all its title, estate, rights, powers and ¯ duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee. (13) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledges, of the note secured hereby, whether or not named as Beneficiary herein, in this Deed of Trust, whenever the context so requires, the masculine gender_ includes the feminine and/or neuter, and the singular number includes the plural (14) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify, any party, hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a part), unless brought by Trustee. (15) That Trustor shall not sell, convey, transfer, hypothe.Aate or alienate the real property described herein, or any pan thereof, or an)’ interest therein, or shall not be divested of title or an), interest therein in any manner or way, whether voluntarily or involuntarily, without the written consent of Beneficiary being first had and obtained, or if Trustor shall fail to make any payments due under the note secured by this Deed of Trust, or fai! to perform any other obligation under this Deed of Trust or note secured hereby, or any other Deed of Trust encumbering the subject property, then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in an), notes evidencing the same, immediately due and payable. 3 030922 sy~ 0091309 (16) That Trustor shall promptly pay when due the payments of interest, principal and:all other charges accruing under any superior or prior trust deed, mortgage,’or other insmnnent encumbering the subject property. Beneficiary shall have the right, but not the obligation, to cure any defaults on any superior or prior deed of trust or note secured thereby and upon curing such default Trustor shall immediately reimburse Beneficiary for all costs and expenses incurred thereby, together with interest thereon at the maximum legal rate permitted to be charged by non-exempt lenders under the Constitution of the State of California, and Trustor’s failure to pay any such amount on demand shall be a default hereunder. Trustor’s breach or default of any covenant or condition of any superior or prior mast deed, mortgage or other instrument encumbering the Property shall be a default under this Deed of Trust. (17) That Trustor further acknowledges in the event of a defaultby Trustor on account of the note secured hereby, and the expiration of any cure period provided therein, then Beneficiary at its sole option shall have the right to declare the note secured hereby immediately due and payable. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to it at its address hereinbefore set forth and another copy be mailed to the City of Palo Alto, Planning Department, Director of Planning and Community Environment, P. O. Box 10250, Palo Alto, CA 94303. ADOLESCENT COUNSELING SERVICES, INC. By: Title: By: Title: STATE OF CALIFORNIA COUNTY OF On ,2003, before me, a Notary Public in and for said County and State, personally appeared personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity and that by his/her signature on the instrument acknowledged that said nonprofit corporation executed the same. WITNESS my hand and official seal. Notary Public in and for said County and State 030922 syn 0091309 4 ¯ STATE OF CALIFORNIA ) COUNTY OF ) On ., 2003, before me, a Notary Public in and for said County and State, personally appeared personally known to me to be the person whose name is subscribed to the within instrument and acknowlexiged to me that he, she executed the same in Ms/her authoriz~ capacity, and that by hi~ih~.r signature on the instrument acknowledged that said nonprofit corporation executed the same. WITNESS my hand and official seal. Notary Public in and for said Count), and State 030922 syn 0091309 5 PROMISSORY NOTE SECURED BY DEED OF TRUST AND ASSIGNMENT OF RENTS $!Ii, 197 Date: Palo Alto, California FOR VALUE RECEIVED, the Adolescent Counseling Services, Inc., a corporation duly organized and existing under the Nonprofit Corporation Law of the State of California ("BORROWER"), promises to pay to the City of Palo Alto, a California municipal corporation ("CITY"), or order, the principal sum of One Hundred Eleven Thousand One .Hundred Ninety Seven Dollars ($iii,197) at the Revenue Collections office of the City of Palo Alto, First Floor, 250 Hamilton Avenue, P. O. Box 10250, Palo Alto, CA 94303, or at such other place as CITY may from time to time designate, with interest from the date of this PROMISSORY NOTE SECURED BY DEED OF TRUST AND ASSIGNFIENT OF RENTS ("Note"), until paid, at the rate of three percent (3%) per year on the unpaid principal balance. This Note is secured by a deed of trust entitled "DEED OF TRUST AND ASSIGNMENT OF RENTS" ("Deed of Trust") of even date herewith on BORROWER’s equitable interest in real property located at 2361 High Street, Palo Alto, California, Assessor,s Parcel Number ("Property"). This Note is made in connection with an agreement entitled "AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ADOLESCENT COUNSELING SERVICES CONCERNING THE CITY’S FUNDING OF THE REHABILITATION OF THE CARAVAN HOUSE FACILITY AT 2361 HIGH STREET, PALO ALTO" ("Agreement"). Under the Agreement, BORROWER agrees to rehabilitate and operate the Property as a group home for teenage girls who have been removed from their families because of child abuse and neglect. All amounts advanced under this Note, at the option of CITY, shall become immediately due and payable upon the occurrence of an Event of Default, as such term is defined in the Agreement. Payment in full of the unpaid principal balance shall be made by BORROWER not later than forty (40) years after the completion of rehabilitation. BORROWER, any endorser of this Note, and any others who may become liable for all or a part of the obligations evidenced by this Note may prepay all or any portion of the principal sum of this Note, 030922 syn 0091309 1 without pehalty. Any and all payments made hereunder shall be credited, first, on the interest then due and, the remainder, on the principal balance,_and interest on the principal balance so credited shall thereupon cease. BORROWER, any endorser of this Note, and any others who may become liable for all or any part of the obligations evidenced by this Note or this Note, as amended, hereby individually waive demand, presentment for payment, demand and protest, notice of protest, demand, and of dishonor and non-payment, and consent to any number of extensions or renewals of time hereof. Any such extensions or renewals may be made without notice to any of the obligated parties and without affecting their~ liability. The pleading of any statute of limitations as a defense to any demand against BORROWER is expressly waived by BORROWER. if BORROWER consists of more than one person or individual, each person or individual shall be jointly and severally liable under this Note. BORROWER shall not further encumber, mortgage or subject the Property, or the real property on~ which it is !ocated, or any interest therein, to a deed of trust, mortgage, indenture, or other documen~ of lega! encumbrance (individually, "Encumbrance" and jointly, "Encumbrances") without the prior written consent of CITY. Unless CITX expressly agrees otherwise, in writing, any Encumbrance affecting the Property shall provide that, in the event of any default or breach by BORROWER under any Encumbrance entitling any party thereunder to accelerate the indebtedness secured thereby and forec!ose upon the Property, CITY shall have the~right, but not the obligation, to (!) cure the default prior to the completion of any forec!osure and reinstate the Encumbrance, or (2) pay the total unpaid indebtedness secured by such Encumbrance, in which event, such Encumbrance shall be released, canceled, or otherwise reconveyed.. Any amounts expended by CITY under the contingencies set forth in parts (!) or (2) of the preceding paragraph shall be reimbursed by BOP~OWER upon demand of CITY therefor, and, in ~ny event, such amounts shall bear interest at the maximu~n rate permitted by ¯ Article ~, Section 1(2) of the California Constitution, as amended, from the date such amounts were advanced by CITY until paid in fu!l by BORROWER. All such amounts, including interest and any penalty authorized under the Agreement, this Note, or the Deed of Trust, shall be added to the principal of this Note. The approva! by BORROWER of any Encumbrance, and the~ placing of a security interest therefor on the Property, or any portion thereof, not connaininz the provisions of the preceding paragraph and this paragraph shall constitute a default of this Note. 030~7.~ syn 0~91309 If any default is made hereunder, BORROWER further promises to pay reasonable attorneys’ fees and costs and expenses incurred by CITY, in connection with any such default or any other action or other proceeding brought to enforce any of the provisions of this Note. CITY’s right to such fees shall not be limited to or by its representation by staff attorneys of CITY’s Office of the City Attorney, and such representation shall be valued at the customary and reasonable rates for private sector legal services. The relationship of CITY and BORROWER evidenced by this Note shall be deemed to be one of creditor and debtor and not of partnership orjoint venture. This Note may not be modified or amended except by an instrument in writing which expresses such intention of the parties sought to be bound thereby, and such writing shall be firmly attached to this Note and made a part thereof. Any failure of CITY or other holder to exercise any rights under this Note shall not constitute a waiverof such rights or of any other rights under this Note. This Note shall be governedby and construed in accordance with the laws of the State of California. To the extent assignment of this Note is permitted by CITY, the terms of this Note shall apply to, inure to the benefit of, and bind all of the parties thereto, their heirs, successors and assigns. All terms in this Note which are capitalized shall bear the meanings set forth in the Agreement. EXECUTED BY BORROWER by its duly authorized representative in Palo Alto, .County of Santa Clara, State of California, on the date first above written. ADOLESCENT COUNSELING SERVICES,INC. By: Title: By: Title: 030922 syn 0091309 3 ~h---’ policy or pol±cies of insurance maintained by Subrecipient shall provide ~h_ fo!lowing ,_mm-.ns and coverages: MINibTOH.~ LIMITS OF LiAI~!LITY "" ~"=~ Compensation Stazuto~ Comprehensive .Automobile .Liability (inc!udinN owned, hired, and non- owned automobiles) ~000 000 Bodily injury each person S~ ODD ODD~-, , Bo.~_y lnju_--y each occurrence $! 000 000 Property,,~amag~ each occurrence Com~. _h .....v_ General Li~bi!ity ( including products ~nd completed operations, broad f©rm contraczua!, and persona! in j u!-y) ~000 O00 Bodily injury each person S~0O0 O00 Bodily injury each occurrence ~000 000 Bodily injury a~gregate .~ny deductibles -or self-insurance retentions must be declared to and approvedby the City. At ~he option of ~he City, ~inher: nhe insurer shall reduce or eliminate such deductibles or self-insured retentions as "-==-+ ....emm!ovees and volunteers; or the S~breci~ienz shall procure a bond £umranteein~ payment of .losses.and re_a_ec investigations, claim " ~ -~ ~_azm.._,s._a.~on and defense e:penses. insurance sha_: be in full force and effect commencin~ on the first day of the term of this Ag___m_n~. Each insurance po!~cv required by this Agreemen= shall contain the :-~" ~’ " "~ ~{ghts of subrogation are hereby wai<,ed against +_he City and the me~ers of the City Council and elective or appointive officers ~r emmiovees, when ac~in~ ,:-~- ~he " 3 "mhe CILd,, its officers, emP!oy=== a~ents and volunteers =~= to be covered as insu_ems as respects: !i~_biiizy arising ouu of activities perfo_--med by or on behalf of the Subrecipient, products and completed operations of the Subrecipient; premises- owned, occupied or used .by the Subrecipient; or automobiles owned, leased, hired or borrowed by the Subrecipient. The cg~ergge _.s~ll contain no special limitations on the scope of protection afforded to the ~C_~y, its officers, officials, employees, agenns or " ~==-=." 4."It is .agreed that any insurance maintained by the City of Pa!o Alto will apply in excess of, and not contribute to, insurance Provided by the Subrecipient." 5."Any failure to comply with reporting or other provisions of the po!i~ies including breaches of warranties shall not affect coverage provided to ~he City, its officers, officials, employees, agents or volunteers.,, 6."insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liabi!iry." k!! insurance coverage required under this Agreement shall be provided through carriers with a Best’s Key Rating Guide rating of X:V!! or higher that are admitted to do business in the State of California. The certificate(s) of insurance evidencing such coverage shmil be comp!eZed and executed by an au%horized representative of the Company providing insurance, and shall be filed with ind approved by the City.