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statements and other data and information. (i) Sufficient Funds. Leidig holds sufficient funds and/or binding commitments for sufficient funds to complete the rehabilitation of the Development. ARTICLE 5. DEFAULT AND REMEDIES Section 5.1 Events of Default. 163\18\1173589.2 20 Each of the following constitutes a "Default" by Leidig under this Agreement: (a) Failure to Comply with County-Leidig Regulatory Agreement. Failure of Leidig to comply with the County-Leidig Regulatory Agreement, subject to all applicable notice and cure rights provided therein. (b) Breach of Covenants. Failure by Leidig to duly perform, comply with, or observe any of the conditions, terms, or covenants of this Agreement, and such failure continues uncured for thirty (30) days after receipt of written notice thereof from the City to Leidig or, if the breach cannot be cured within thirty (30) days, Leidig shall not be in breach so long as Leidig is diligently undertaking to cure such breach and such breach is cured within ninety (90) days or such longer period as may be expressly approved by the City in writing; provided, however, that if a different period or notice requirement is specified under any other section of this Article 5, the specific provisions shall control. (c) Insolvency. Insolvency. A court having jurisdiction has made or entered any decree or order (i) adjudging Leidig, or its sole member, to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Leidig, or its sole member, or seeking any arrangement for Leidig, or its sole member, under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Leidig, or its sole member, in bankruptcy or insolvency or for any of their properties, (iv) directing the winding up or liquidation of Leidig, or its sole member, if any such decree or order described in clauses (i) to (iv), inclusive, has continued unstayed or undischarged for a period of ninety (90) days; or (v) Leidig, or its sole member, has admitted in writing its inability to pay its debts as they fall due or has voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. (d) Assignment; Attachment. Leidig, or it sole member, has assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon has been returned or released within ninety (90) days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. (e) Suspension; Termination. Leidig, or Leidig's sole member shall have voluntarily suspended its business or has been dissolved or terminated. (f) Liens on Property. There shall be filed any claim of lien (other than liens approved in writing by City) against the Development, the Property, or any part thereof, or any interest or right made appurtenant thereto and the continued maintenance of said claim of lien or notice to withhold for a period of sixty (60) days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to City. (g) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property or the Development, by an entity other than the City or County. 163\18\1173589.2 21 (h) Unauthorized Transfer. Any Transfer not previously approved by the City pursuant to Section 3.10. (i) Representation or Warranty Incorrect. Any Leidig representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the City in connection with this Agreement, proves to have been incorrect in any material respect when made. After issuance of the certificates of occupancy for the Property, Default may be declared under this subsection only if the failure of representation or warranty also has a material adverse effect on the operation of the Property. Section 5.2 Remedies. The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the City or automatically where so specified, gives the City the right to proceed with any and all remedies set forth in this Agreement, including but not limited to the following: (a) Repayment of Grant. The City may demand Leidig repay the City any portion of the CDBG Revocable Grant not forgiven pursuant to Section 2.3 above, together with any accrued interest thereon, to become immediately due and payable. City may proceed to enforce payment of the indebtedness only by nonjudicial foreclosure under the Deed of Trust. Leidig waives all right to presentment, demand, protest or notice of protest or dishonor. Leidig is liable to pay the City on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees) paid or incurred by the City in connection with the repayment of the CDBG Revocable Grant which shall be a part of the Secured Obligation enforced only by nonjudicial foreclosure under the Deed of Trust. (b) Specific Performance. The City has the right to mandamus or other suit, action or proceeding at law or in equity to require Leidig to perform its obligations and covenants under this Agreement and the County-Leidig Regulatory Agreement or to enjoin acts on things that may be unlawful or in violation of the provisions of this Agreement. Section 5.3 Right of Contest. Leidig shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Section 5.4 Remedies Cumulative. No right, power, or remedy given to the City by the terms of this Agreement or the Revocable Grant Deed of Trust is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Leidig and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor does any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. 163\18\1173589.2 22 ARTICLE 6. GENERAL PROVISIONS Section 6.1 Relationship of Parties. Nothing contained in this Agreement is to be interpreted or understood by any of the parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and Leidig or its agents, employees or contractors, and Leidig will at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Leidig has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under this Agreement. In regards to the rehabilitation of the Development, Leidig is solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors are solely responsible for similar matters relating to their employees. Leidig is solely responsible for its own acts and those of its agents and employees. Section 6.2 No Claims. Nothing contained in this Agreement creates or justifies any claim against the City by any person that Leidig may have employed or with whom Leidig may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the rehabilitation of the Development, and Leidig shall include similar requirements in any contracts entered into for the rehabilitation or the operation of the Development. Section 6.3 Amendments. No alteration or variation of the terms of this Agreement is valid unless made in writing by the Parties. The City Manager is authorized to execute on behalf of the City amendments to the CDBG Revocable Grant Documents or amended and restated CDBG Revocable Grant Documents as long as any material change in the amount or terms of this Agreement is approved by City Council, or in the event the amounts or terms of financing provided by other parties for the Property is revised, requiring conforming amendments to the CDBG Revocable Grant Documents. Section 6.4 Indemnification. Leidig shall indemnify, defend (with counsel reasonably selected by the City) and hold the City harmless against any and all claims, suits, actions, losses and liability of every kind, nature and description made against it and expenses (including reasonable attorneys' fees or other professional service fees or costs) that arise out of or in connection with this Agreement, 163\18\1173589.2 23 including but not limited to the rehabilitation of the Development, except to the extent such claim arises from the grossly negligent or willful misconduct of the City, its agents, and its employees and/or claims arising out of or in connection, directly or indirectly, with events prior to the Effective Date. The provisions of this Section will survive the term of this Agreement. Section 6.5 Non-Liability of Officials, Employees and Agents. No member, official, employee or agent of the City will be personally liable to Leidig in the event of any default or breach by the City or for any amount that may become due to Leidig under the terms of this Agreement. No member, officer, director, employee or agent of Leidig shall be personally liable to the City in the event of any default or breach by Leidig or for any amount which may become due to the City or its successor or on any obligation under the terms of this Agreement. Section 6.6 No Third Party Beneficiaries. There are no third party beneficiaries to this Agreement. Section 6.7 Discretion Retained By City. The City's execution of this Agreement in no way limits the discretion of the City in the permit and approval process in connection with rehabilitation of the Development. Section 6.8 Conflict of Interest. (a) Except for approved eligible administrative or personnel costs, no person described in Section 6.8(b) below may, during or after their tenure, obtain a personal or financial interest or benefit from the activities funded pursuant to this Agreement, or have any interest in any contract, subcontract or agreement with respect to such activities, or the proceeds under the contract, either for themselves or those with whom they have family or business ties. Leidig shall exercise due diligence to ensure that the prohibition in this Section 6.8(a) is followed. (b) The conflict of interest provision of Section 6.8(a) above applies to (i) any person who is an employee, agent, consultant, or officer of the City who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Grant or who is in a position to participate in a decision-making process or to gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any , (ii) any immediate family member of such person, (iii) any elected or appointed official of the City, and (iv) any person related within the third (3rd) degree of such person. (c) In accordance with Government Code Section 1090 and the Political Reform Act, Government Code section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of Leidig, or immediate family member of any of the preceding, may make or participate in a decision, made by the City or a City board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Leidig. Interpretation 163\18\1173589.2 24 of this section shall be governed by the definitions and provisions used in the Political Reform Act, Government Code section 87100 et seq., its implementing regulations manual and codes, and Government Code section 1090. (d) Leidig shall comply with the conflict of interest provisions set forth in 24 C.F.R. Section 570.611. Section 6.9 Notices, Demands and Communications. Formal notices, demands, and communications between the parties will be sufficiently given if and will not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service (e.g., Fed-Ex, UPS), return receipt requested, or delivered personally, to the principal office of the Parties as follows: City: City of San Leandro Community Development Dept. Housing Services Division 835 E. 14th Street San Leandro, CA 94577 Attn: Housing/Planning Mgr. Leidig: Leidig LLC c/o Eden Investments, Inc. 22645 Grand Street Hayward, CA 94544 Attention: President Fax: 510-582-6523 Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected party may from time to time designate by mail as provided in this Section. Receipt will be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). Section 6.10 Applicable Law. The laws of the State of California govern all matters arising out of this Agreement. Section 6.11 Parties Bound. Except as otherwise limited herein, the provisions of this Agreement are binding upon and inure to the benefit of the parties and their heirs, executors, administrators, legal representatives, successors, and assigns. This Agreement is intended to run with the land and 163\18\1173589.2 25 shall bind Leidig and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof shall inure to the benefit of City and its successors and assigns. Section 6.12 Attorneys' Fees. If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing party has the right to recover its reasonable attorneys' fees and costs of suit from the other party. Section 6.13 Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions will continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. Section 6.14 Force Majeure. In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in Default where delays or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, or court order. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) days of receipt of the notice. In no event shall the City be required to agree to cumulative delays in excess of one hundred eighty (180) days. Section 6.15 City Approval. The City has authorized the City Manager to execute the CDBG Revocable Grant Documents and deliver such approvals or consents as are required by this Agreement, and to execute estoppel certificates concerning the status of the CDBG Revocable Grant and the existence of Leidig defaults under the CDBG Revocable Grant Documents. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that that a sole discretion standard applies. The City shall not unreasonably delay in reviewing and approving or disapproving any proposal by Leidig made in connection with this Agreement. Section 6.16 Waivers. Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Leidig or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Leidig to perform any obligation under this Agreement does not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Leidig is not to be construed to be a consent to any 163\18\1173589.2 26 other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers. Section 6.17 Title of Parts and Sections. Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and are to be disregarded in interpreting any part of this Agreement's provisions. Section 6.18 Entire Understanding of the Parties. This Agreement, together with the CDBG Revocable Grant Documents, the CDBG Assignment Agreement and the other documents specifically indentified herein constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof. Section 6.19 Multiple Originals; Counterpart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. Remainder of Page Intentionally Left Blank 163\18\1173589.2 27 WHEREAS, this Agreement has been entered into by the undersigned as of the Effective Date. LEIDIG: LEIDIG COURT LLC, a California limited liability company By: Eden Investments, Inc., a California nonprofit public benefit corporation, its sole member By: ______________________________ Name: ____Linda Mandolini___________ Its: _____President__________ CITY: CITY OF SAN LEANDRO, a municipal corporation By: ______________________________ Chris Zapata, City Manager 163\18\1173589.2 A-1 EXHIBIT A LEGAL DESCRIPTION PORTION OF BLOCK "S" AS SAID BLOCK IS SHOWN ON THE "MAP OF ANNEX TO MEEK ORCHARD TRACT," FILED MARCH 11, 1918, IN MAP BOOK 16, PAGE 59, ALAMEDA COUNTY RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHEASTERN BOUNDARY LINE OF SAID TRACT, DISTANT THEREON, SOUTH 42° 01' EAST, 525 FEET FROM THE INTERSECTION THEREOF, WITH THE CENTER LINE OF HARRIS ROAD, AS SAID ROAD IS SHOWN ON SAID MAP; RUNNING THENCE SOUTH 47° 59' WEST, 240 FEET; THENCE SOUTH 42° 01' EAST 100 FEET; THENCE NORTH 47° 59' EAST, 240 FEET TO THE NORTHERN BOUNDARY LINE OF SAID TRACT; THENCE ALONG SAID LAST NAMED LINE NORTH 42° 01' WEST, 100 FEET TO THE POINT OF BEGINNING. 163\18\1173589.2 B-1 EXHIBIT B APPROVED BUDGET 163\18\1173589.2 C-1 EXHIBIT C CEQA MITIGATION MEASURES Impact (I-1): The project proposes to introduce additional exterior lighting to the area, which includes residential uses. Mitigation Measure (I-1): 30 days prior to the issuance of a building permit, the applicant shall submit for review and approval of the Zoning Administrator a Lighting Plan. Light standards shall be low-lying and exterior lights on the building shall be deflected so that lights shine onto applicant's property and not toward adjacent properties; all subject to review and approval by the Zoning Administrator prior to issuance of a building permit. Implementation of this mitigation measure will reduce this impact to less than significant. Potentially Significant Environmental Effect (VI-1): Strong to violent earthquake ground shaking on active fault zones in the region could cause significant damage to improvements, and in extreme cases, loss of life. Mitigation-Measures (VI-1): Require geotechnical investigations to mitigate effects of engineered fills, settlement and liquefaction. 1. Engineered fills in the planning area shall be properly designed and adequately compacted to significantly reduce both seismically induced and natural fill settlement. 2. All roads, structural foundations and underground utilities shall be designed to accommodate estimated settlement without failure. 3. Final design of improvements shall be made in conjunction with a design level geotechnical investigation submitted to the City for review. The investigation shall include deep borings and evaluation of liquefaction potential and the report shall estimate the magnitude of differential settlement. If a high liquefaction potential exists, the report shall include measures to control drainage, including measures aimed at controlling damage to buildings, buried pipelines and surface parking. Potentially Significant Environmental Effect (XI-1): Short-term noise level increases at sensitive locations in and surrounding the area would be expected during periods of heavy construction. Temporary increases in ambient noise levels in the project vicinity are to be expected during the construction phase of the project. Mitigation Measures (XI-1): Contractor and/or developer shall comply with the following construction, noise, dust and litter control requirements. 1. The project sponsor shall require their contractor and subcontractors to fit all internal combustion engines with mufflers which are in good condition. 163\18\1173589.2 C-2 2. A dust and litter control program shall be submitted for the review and approval of the Zoning Administrator. Any violation of the approved program or applicable ordinances shall require an immediate work stoppage. Construction work shall not be allowed to resume until, if necessary, an appropriate construction bond has been posted. 3. The applicant shall make a good-faith effort to avoid interference with existing neighborhood traffic flows. Prior to issuance of building permits, the proposed roads serving this development shall be constructed to provide access to each lot. This shall include provision for an on-site area in which to park earth moving equipment. 4. Transporting of heavy equipment and trucks shall be limited to weekdays between the hours of 9:00 A.M. and 4:00 P.M. and prohibited on Federal and State holidays. 5. The site shall be maintained in an orderly fashion. Following the cessation of construction activity, all construction debris shall be removed from the site.