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HomeMy WebLinkAbout2016-019 H&S Hospitality LLC/Marston's 101 1 CIS'®F A s't1SCAL7RC� CONTRACT P 01(n—O i ro frann, ; rnr f s k" r r CAM] AGREEMENT FOR DEFERRAL OF DEVELOPMENT IMPACT FEES By and Between CITY OF ATASCADERO and H & S Hospitality, LLC DATED; September 14, 2016 AGREEMENT FOR DEFERRAL OF DEVELOPMENT IMPACT FEES This Agreement for Deferral of Development Impact Fees ("Agreement"), dated for reference purposes as first indicated on the cover page, is entered into by and between the CITY OF ATASCADERO, a California municipal corporation ("City") and H & S HOSPITALITY, LLC ("Developer") on the following terms and conditions: RECITALS A. Developer is presently developing a Project on the Property located within the City of Atascadero, California. The Developer will need to obtain permits and approvals for the Project. A standard condition on the issuance of these permits will be the payment of City imposed Permit and Processing Fees and Development Impact Fees. These Permit and Processing Fees and Development Impact Fees are generally payable to the City at the time the project applicant submits an application to the City for these permits and approvals. B. The City has established a regular program of imposing the payment of specified Permit and Processing Fees on the construction of new development projects within the City with respect to the connection of the Project to City utility services as well as inspection and processing of permits by various City departments. These fees are typically payable to the City at the time the project applicant submits an application to the City for these permits and approvals. C. The City has established a regular program of the payment of specified Development Impact Fees to offset impacts on public services from new development within the City. These fees, listed below, are typically payable to the City at the time the project applicant submits an application to the City for permits and approvals. D. In certain instances the City acknowledges that it may be to the public's benefit to defer the payment of Permit and Processing Fees or Development Impact Fees until a specified time after the issuance of the permit or approval, provided adequate security for the future payment of the fees is provided. Generally where the project involves a significant capital investment by the developer and will serve to either encourage further development of an area where development has been stagnant or where the project will provide a needed service, convenience, or accommodations to residents or visitors the City Council may find that the project qualifies to have the payment of Permit and Processing Fees or Development Impact Fees deferred. F. Developer has requested that the Project be considered eligible for deferral of Development Impact Fees. The City Council has found, based on the nature and location of the Project and the convenience it will provide to residents of the City, that the Project qualifies for a deferral under the terms and conditions of this Agreement. Developer acknowledges and agrees that absent this Agreement it would be required to pay all Development Impact Fees at the time the Developer submits Project-related applications to the City. G Developer and City acknowledge that the California Prevailing Wage law normally applies to projects where public funds are used for construction or for the payment of fees that are mandatory conditions of construction. In this case, City is not paying fees but is 2 instead deferring payment of them. Developer is absolutely bound to pay all required fees, but will be allowed to pay the Development Impact Fees over time, with interest. Developer and City acknowledge that they have each and separately investigated California Prevailing Wage Law and have each and separately determined that the City's deferral of the Development Impact Fees does not constitute a contribution of public funds to the Project, as defined by California Labor Code Section 1720 and described in non-binding decisions issued by the Department of Industrial Relations interpreting that Section. Notwithstanding the analysis and determination of the parties, Developer acknowledges that if the Department of Industrial Relations determines that the deferral of Development Impact Fees is found to constitute payment of public funds for the Project then the construction and construction-related activities for the Project would be subject to the California Prevailing Wage Law and Developer would be required to pay the general prevailing wage rates of per diem wages and overtime and holiday wages determined by the Director of the Department of Industrial Relations under Section 1720, et seq., of the California Labor Code for all covered work performed on the Project. DEFINED TERMS "Action" shall mean any suit (whether legal, equitable, or declaratory in nature), proceeding or hearing (where administrative or judicial), arbitration or mediation (whether voluntary, court-ordered, binding, or non-binding), or other alternative dispute resolution process, and the filing, recording, or service of any process, notice, claim, demand, lien, or other instrument. "City" shall mean the City of Atascadero, a municipal corporation formed and existing under the laws of the State of California and any successor-in-interest to the rights, obligations, and powers of the City. "Developer" shall mean H & S Hospitality, LLC. The term "Developer" shall also include all assignees, to the extent permitted under this Agreement, of the rights and obligations of Developer under this Agreement, and any successor-in-interest to Developer having a legal and/or equitable interest in the Property. "Development Impact Fees" shall mean those development impact fees imposed and levied by the City to recover the cost of planned public facilities and to mitigate impacts of development on the City as are listed below. The Development Impact Fees include: 1. Law Enforcement Facilities 2. Fire Protection Facilities 3. Fire Aerial Response Vehicle 4. Circulation System 5. Storm Drainage Facilities 6. General Government Facilities 3 7. Open Space Acquisition 8. Library Expansion Facilities (Hotels exempt from this fee) 9. Public Meeting Facilities (Hotels exempt from this fee) 10. Parkland (Hotels exempt from this fee) "Effective Date" shall mean the date the Agreement has been formally approved by the City Council and executed by the appropriate authorities of the City and Developer. "Interest Rate" shall mean a fixed rate equal to the quarterly investment yield for the City's investment portfolio as of June 30, 2016, a rate of 1.175%. "Litigation Expenses" shall mean all costs and expenses, to the extent such are reasonable in amount, that are actually and necessarily incurred in good faith by the Prevailing Party directly related to the Action, including, but not related to, court costs, filing, recording, and service fees, copying costs, exhibit production costs, special media rental costs, attorneys' fees, consultant fees, fees for investigators, witness fees (both lay and expert), travel expenses, deposition and transcript costs, and any other cost or expense reasonably and necessarily incurred by the prevailing party in good faith and directly related to the Action. Where attorneys' fees are to be paid by Developer to the City's Iaw firm on behalf of, or in defense of, City, the rate to be paid shall be the full litigation rate charged by the City's law firm to the City in accord with the City's contract with that law firm. "Other Government Fees" shall mean any and all fees levied on the Project by any government entity other than the City, including but not limited to the State of California and any of its agencies, the County of San Luis Obispo, any local school district, or any local special district. "Payment Period" shall mean a period of Five (5) years from and after the Effective Date of the Agreement during which Developer will have to pay the amount of the Development Impact Fees,plus accrued interest,to the City as provided in section 3 [Terms of Payment]. "Permit and Processing Fees" shall mean those fees imposed and levied by the City with respect to the connection to City utility services as well as inspection, processing and granting of permits by various City departments. "Project" shall mean the construction of a new restaurant and banquet room of approximately 2,850 square foot, on the Property that will be operated by Marston's 101 Restaurant and that is suitable for occupancy and use under Chapter 9 [Planning and Zoning] of the City's Municipal Cade. "Property" shall mean that certain parcel of real property commonly known as Assessor's Parcel Numbers 056-131-023, located at 9006 and 9008 West Front Road, City of Atascadero, State of California, as more particularly described in the legal description attached hereto and incorporated herein by reference as Attachment"A". 4 OPERATIVE PROVISIONS NOW, THEREFORE, in consideration of the mutual promises and covenants made by the parties and contained herein and other consideration, the value and adequacy of which are hereby acknowledged, the parties agree as follows: 1. Deferral And Payment. 1.1 City's Deferral. The City agrees that Developer may defer payment of the Development Impact Fees imposed on the Project by City for the Payment Period provided Developer remains in compliance with the terms, conditions, and covenants of this Agreement. The parties acknowledge that City normally requires the payment of all Permit and Processing Fees and Development Impact Fees at the time the project applicant submits an application to the City for these permits and approvals. In this case, by virtue of this Agreement, the City will issue permits and approvals for the Project, provided all other requirements for the issuance of such permits have been met, even though the Developer will not have paid the Development Impact Fees. 1.2 Developer's Payment. 1.2.1 Permit and Processing Fees. Developer has paid all Permit and Processing Fees imposed on the application. 1.2.2 _Development Impact Fees. Developer covenants and agrees to timely pay during the Payment Period the Development Impact Fees, together with all interest accrued thereon, as provided in this Agreement. Developer acknowledges that Developer's Property will be encumbered by a lien created by the recording of a second Deed of Trust securing Developer's payment of the Development Impact Fees. 1.3 Other Government Fees. Developer understands and agrees that the City is required to collect Other Government Fees that may be imposed on the Project. Developer agrees to timely pay the Other Government Fees as required by the City. The Other Government Fees are not subject to deferral pursuant to this Agreement. 1.4 Prevailing Wage Law. California Prevailing Wage law applies to projects where public funds are used for construction or for the payment of fees that are mandatory conditions of construction. Pursuant to Section 1.1 [City's Deferral], City will defer payment of Development Impact Fees, but will not itself pay any fees otherwise required to be paid by Developer. Developer further agrees to pay interest on the deferred Development Impact Fees at the a rate equivalent to the rate that the City would receive if the City had the Development Impact Fees in hand and had invested those moneys in the City's investment portfolio. 1.4.1 Deferral is not Payment of Public Funds. Developer is absolutely bound to pay all required fees, but pursuant to Section 3 [Terms of Payment] will be allowed to pay some of them over time, with interest pursuant to Section 3.2 [Payment Over Time]. The parties, having each researched California Prevailing Wage Law, agree that this deferral is not a payment of public funds pursuant to California Labor Code Section 1720(b). The deferral is instead a 5 market transaction with the Developer paying market rate interest for the opportunity to pay the Development Impact Fees over time. 1.4.2 Develo er's Agreement to Comply With Prevailing Wage Law. Notwithstanding the foregoing, Developer acknowledges that if the Department of Industrial Relations determines that the deferral of Development Impact Fees constitutes the payment of public funds for the Project then the construction and construction-reIated activities for the Project would be subject to the Prevailing Wage Law and Developer would be required to pay the general prevailing wage rates of per diem wages and overtime and holiday wages determined by the Director of the Department of Industrial Relations under Section 1720, et seq., of the California Labor Code for all covered work performed on the Project. Without limiting Developer's obligation to comply with all of the Prevailing Wage Law under the foregoing scenario, Developer shall at minimum (a) require its contractors and subcontractors to submit certified copies of payroll records to Developer; (b) maintain complete copies of such certified payroll records; and (c) make such records available to the City and its designees for inspection and copying during regular business hours at the Property or at another location within the City. Under such scenario, Developer shall also obligate Developer's contractors and agents to comply with all such Prevailing Wage Laws. 1.4.3 Developer's Agreement to Indemnify and Defend City. If the Department of Industrial Relations determines that the deferral of Development Impact Fees constitutes the payment of public funds for the Project, Developer further agrees that it shall indemnify and defend the City from and against any and all present and future liabilities, obligations, orders, claims, damages, fines, penalties and expenses (including attorneys' fees and costs) arising out of or in any way connected with Developer's obligation to comply with all Prevailing Wage Laws with respect to the work of Public Improvements, including all claims that may be made by contractors, subcontractors or other third parry claimants pursuant to Labor Code Sections 1726 and/or 1781. 2. Development Impact Fees 2.1 Development Impact Fees. The total amount of Development Impact Fees to be paid for the Project is currently calculated to be $56,500.05. The Developer agrees to pay these fees as provided in Section 3 [Terms of Payment]. 2.2 Refund of Development Impact Fees Paid in Anticipation of this Agreement. City acknowledges that Developer has remitted payment of$56,500.05 to City in order to obtain occupancy of the Project and with the understanding that the funds would be returned if this Agreement were approved by the City Council. Upon such approval, and no less than fifteen(15) days after execution of this Agreement by representatives of both parties, City shall issue to Developer a check in the amount of $56,600.05 and Developer shall be obligated to pay the Development Impact Fees as set forth in Section 3 [Terms of Payment of Development Impact Fees]. 6 3. Terms of Pa went of Development Impact Fees 3.1 Absolute Payment Obligation. Developer has the absolute obligation to pay the entire outstanding balance of the Development Impact Fees. Notwithstanding the provisions of this Agreement granting Developer permission to pay the Development Impact Fees over time, such payment over time shall not be deemed to waive all or any portion of Developer's obligation to pay the entire balance of the Development Impact Fees. Failure to fully pay the Development Impact Fees as required shall be deemed a Default of this Agreement. 3.2 Payment Over Time. Developer shall pay the entire outstanding balance of the Development Impact Fees, plus accrued interest, by no later than the last business day of the Fifth (51h) year from and after the Effective Date of this Agreement. Developer shall make the following payments: 3.2.1 First Payment. On or before the one-year anniversary of the Effective Date of this Agreement, in the amount of$11,700. 3.2.2 Second Payment. On or before the two-year anniversary of the Effective Date of this Agreement, in the amount of$11,700. 3.2.3 Third Payment. On or before the three-year anniversary of the Effective Date of this Agreement, in the amount of$11,700. 3.2.4 Fourth Payment. On or before the four-year anniversary of the Effective Date of this Agreement, in the amount of$11,700. 3.2.5 Final Payment. On or before the five-year anniversary of the Effective Date of this Agreement, in an amount equal to the remaining outstanding principal plus all interest accrued over the term of the Payment Period, an amount currently estimated to be $11,716.53. 3.3 Pre-Payment Option. At any time during the Payment Period, Developer may pay the entire outstanding principal balance of the Development Impact Fees. Pre-payment shall include all principal amounts owed and all interest accrued as of that date. There shall be no penalty for pre-payment. 3.4 Interest Accrual and Payment. From and after the Effective Date until the outstanding principal balance on the Note has been repaid in full, the outstanding balance under this Agreement and the Promissory Note shall bear interest at the Interest Rate. In no event shall the amount of interest paid or agreed to be paid to City exceed the maximum amount permissible under applicable laws. 4. 3.5 Security. As further evidence of Developer's obligation to pay the Development Impact Fees, Developer shall execute and provide to the City a Promissory Note that is the same in all material respects to that attached hereto and incorporated herein by reference as Attachment `B". Developer's payment obligation under the Promissory Note and this Agreement shall be secured by a Deed of Trust recorded against the Property subordinate only to a deed of trust securing the Developer's obligations to the Project's construction lender. The 7 Deed of Trust shall be the same in all material responses as that attached hereto and incorporated herein by reference as Attachment"C". Upon request from Developer's construction lender, City will execute a subordination agreement to subordinate the Deed of Trust to the construction lender's deed of trust against the Property. 5. General Indemnity. 5.1 General Indemnity. Except as to the sole negligence, active negligence or willful misconduct of the City, Developer expressly agrees to, and shall, indemnify, defend, release, and hold the City, and its respective officials, officers, employees, agents, and contractors harmless from and against any Action, liability, loss, damage, entry,judgment, order, and lien, which arises out of, or are in any way related to, any act or omission of Developer, or its officers, directors, employees, agents, or contractors, connected with the performance under this Agreement, the construction, use, or operation of the Project, notwithstanding that the City may have benefited therefrom, or any challenge to this Agreement. This Section shall apply to any acts or omissions, willful misconduct or negligent conduct, whether active or passive, on the part of Developer's officers, directors, employees, agents and contractors. The City shall not be responsible for any acts, errors or omissions of any person or entity except the City and its officers, agents, servants, employees or contractors. The Parties expressly agree that the obligations of Developer under this Section shall survive the expiration or early termination of the Agreement. 6. Default And Remedies. 6.1 Default. Either party's failure or unreasonable delay to perform any term or provision of this Agreement constitutes a Default of this Agreement. In the event of a Default, the injured party shall give written "Notice of Default" to the defaulting party, specifying the Default. Delay in giving such notice shall not constitute a waiver of the Default. If the defaulting party fails to cure the Default within thirty (30) days after receipt of a notice specifying the Default, or, if the Default is of a nature that cannot be cured within thirty (30) days, the defaulting party fails to commence to cure the Default within said thirty (30) days and thereafter diligently prosecute such cure to completion,then the defaulting party shall be liable to the injured party for any and all damages caused by such Default, unless otherwise provided for by this Agreement. 6.2 No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shalI any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times. 6.3 Legal Actions. In addition to any other rights and remedies any party may institute a legal action to require the cure of any default and to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. The following provisions shall apply to any such legal action: 8 i 6.3.1 Jurisdiction and Venue. Legal actions must be instituted and maintained in the Superior Court of the County of San Luis Obispo, State of California, Central Branch, Civil Division, or if appropriate, in the United States District Court for the Central District of California. Participant specifically waives any rights provided to it pursuant to California Code of Civil Procedure §394 and any federal statue or rule of similar effect. 6.3.2 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 6.3.3 Attorney's Fees. In the event either party commences an Action against the other party which arises out of a Default of, breach of, failure to perform, or that is otherwise related to, this Agreement, then the Prevailing Party (as defined here) in the Action shall be entitled to recover its Litigation Expenses from the other party in addition to whatever relief to which the prevailing party may be entitled. For the purpose of this section, "Prevailing Party" shall have the meaning ascribed in §1032(a) (4) of the California Code of Civil Procedure. 6.4 Rights and Remedies are Cumulative. The rights and remedies of the Parties are cumulative, and the exercise by a party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different time, of any other rights or remedies for the same Default or any other Default by another Party. 7. General Provisions. 7.1 No Third Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the City and Developer. No other parties or entities are intended to be, or shall be considered, a beneficiary of the performance of any of the parties' obligations under this Agreement. 7.2 Recitals and Definitions. The Recitals and Definitions set forth at the beginning of this Agreement are a substantive and integral part of this Agreement and are incorporated by reference in the Operative Provisions of this Agreement. 7.3 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or any of its terms. Reference to section numbers are to sections in this Agreement unless expressly stated otherwise. 7.4 Interpretation. The City and Developer acknowledge that this Agreement is the product of mutual arms-length negotiation and drafting and each represents and warrants to the other that it has been represented by legal counsel in the negotiation and drafting of this Agreement. Accordingly, the rule of construction which provides the ambiguities in a document shall be construed against the drafter of that document shall have no application to the interpretation and enforcement of this Agreement. In any action or proceeding to interpret or enforce this Agreement, the finder of fact may refer to such extrinsic evidence not in direct conflict with any specific provision of this Agreement to determine and give effect to the intention of the parties hereto. 7.5 Severability. Each provision, term, condition, covenant, and/or restriction, in whole and in part, in this Agreement shall be considered severable. In the event any provision, 9 i term, condition, covenant, and/or restriction, in whole and/or in part, in this Agreement is declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be severed from this Agreement and shall not affect any other provision, term, condition, covenant, and/or restriction, of this Agreement and the remainder of the Agreement shall continue in full force and effect. 7.6 Amendments to Agreement. Any amendments to this Agreement must be in writing and signed by the appropriate authorities of the City and Developer. 7.7 Administration. Following approval of this Agreement by the City's Council, the City shall exercise its rights, perform its obligations, and otherwise administer this Agreement through the City Manager. The City Manager shall have the authority to issue interpretations and to make minor amendments to this Agreement on behalf of the City, provided such actions do not materially increase the obligations of the City, make a commitment of additional funds to by paid by, or costs to be incurred by, the City, or result in a discretionary extension of time in excess of thirty (30) days. All other changes, modifications, and amendments shall require the prior approval of the City Council. 7.8 Notices, Demands and Communications Between the Parties. Formal notices, demands and communications between the parties shall be given in writing and personally served or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the parties, as designated in this Section, or telefaxed to the facsimile number listed below followed by dispatch as above described. Such written notices, demands, and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section. Any such notice shall be deemed to have been received (i) upon the date personal service is effected, if given by personal service, (ii) upon the expiration of one (1) business day, if telefaxed, or (iii) upon the expiration of three (3) business days after mailing, if given by certified mail, return receipt requested, postage prepaid. If notice is to be made to the City: City Manager City of Atascadero 6500 Palma Avenue Atascadero, California 93422 If notice is to be made to Developer: H & S Hospitality, LLC Attn: Amar Sohi 9010 West Front Road Atascadero, California 93422 7.9 Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Government Code § 6700 and § 6701. If any act is to be done by a particular time during a day, that time shall be Pacific Standard Zone time. 10 r 7.10 Authority. The individuals executing this Agreement on behalf of Developer and the instruments referenced on behalf of Developer represent and warrant that they have the legal power, right and actual authority to bind Participant to the terms and conditions hereof and thereof. 7.11 Counterpart Originals. This Agreement may be executed in duplicate originals, each of which is deemed to be an original. 7.12 Effective date of Agreement. This Agreement shall not become effective until the date it has been formally approved by the City Council and executed by the appropriate authorities of the City and Developer. 7.13 Waiver of Actions. Developer, for itself and its contractors, hereby expressly agrees that City has satisfied its obligations under the Prevailing Wage Laws to identify projects as being subject to the Prevailing Wage Laws and any other obligations imposed upon the City under Labor Code Sections 1726 and/or 1781 that are owed to or may be actionable by Developer and its contractors. Furthermore, Developer, for itself and its contractors hereby expressly waives any right of action against the City created under Labor Code Sections 1726 and/or 1781, whether known, or unknown, foreseen or unforeseen relating to the Project and/or this Agreement. IN� WITNEpSS�WHEREOFF, the parties hereto have executed this Agreement on the day of the-St ` O16. CITY: C ATASCAD Rachelle Rickard City Manager ATTEST: _ --`-- -_`-,�� P1 q 1-P Marcia McClure Torgerson City Clefk APPROVEDASN i O FORM: —9 Y�u Brian A. Pierik City Attorney DEVELOPER: H & S Hos itality, LLC Amarpreet S. Sohi Owner/Operator 11 PROMISSORY NOTE City of Atascadero, California $56,500.05 SST-1VA , 2016 For valid consideration duly received and hereby acknowledged, the undersigned H & S Hospitality, LLC, a California limited liability company ("Maker"), promises and agrees to pay to the order of the City of Atascadero, 6500 Palma Avenue, Atascadero, California 93422, or holder ("City"), in lawful money of the United States of America, the principal sum of FIFTY SIX THOUSAND FIVE HUNDRED DOLLARS and five cents ($56,500.05) (the "Principal Sum"), to be paid in five (5) payments in accordance with the payment schedule appended hereto and incorporated herein. This Note shall bear interest at the rate of 1.175 percent (1.175%) per annum, in accordance with the terms the Agreement For Deferral of Development Impact Fees By and Between the City of Atascadero and H & S Hospitality, LLC dated �7'EM9eJZ_ I� , 2016 ("Agreement"), which is incorporated herein in full by reference. Payments shall be applied first to satisfy accrued interest and then to outstanding principal. Unless otherwise specified in writing by the City, all payments on this Promissory Note shall be paid to the City, by check, made payable to the order of the City of Atascadero, 6500 Palma Avenue, Atascadero, California 93422. This Note may be prepaid in full or in part at any time and from time to time without penalty or premium. Partial prepayments will be applied to the installments due hereunder in the inverse order of their maturity. This Note is to be secured by a deed of trust against real property as described in the Agreement. This Note is not a purchase money note. Default. The existence or occurrence of any one or more of the following will constitute a "Default" under this Note: (a) The failure by Maker to make any payment of principal or interest on this Note when due and such failure shall have continued for thirty (30) days after notice of such failure has been provided. (b) Any breach by Maker of any covenant to which it is bound under this Note. (c) Maker shall make an assignment for the benefit of creditors; apply for or consent to the appointment of a receiver or trustee for itself or such a receiver or trustee otherwise shall be appointed; or admit in writing its inability to pay its debts as they mature. (d) Maker becomes the subject of any bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor-creditor relationships ("Insolvency Proceeding"), and as to any involuntary Insolvency Proceeding, it either: (A) is consented to or (B) has not been dismissed within sixty (60) days. 1 Remedies Upon Default. Upon the occurrence of any Default, at the option of the City in its sole discretion, and without notice or demand of any kind, the entire Principal Sum then outstanding and all accrued and unpaid interest will become immediately due and payable. Upon any such acceleration, the Principal Sum shall thereafter bear interest at the maximum legal rate of ten percent (10%) per annum. Whether or not suit is filed, Maker agrees to pay all attorneys' fees, costs of collection, costs, and expenses incurred by the City in connection with the enforcement or collection of this Note. This Promissory Note has been executed and delivered in and shall be construed in accordance with and governed by the laws of the State of California and of the United States of America. Executed as of the date first written above. H & S HOSPITALITY, LLC By. Amarpreet S. Sohi Owner/Operator Payment Schedule Payment Due Payment Amount Date ONE YEAR FROM THE EFFECTIVE DATE $11,700.00 OF THE CERTIFICATE OF OCCUPANCY TWO YEARS FROM THE EFFECTIVE DATE $11,700.00 OF THE CERTIFICATE OF OCCUPANCY THREE YEARS FROM THE EFFECTIVE DATE $11,700.00 OF THE CERTIFICATE OF OCCUPANCY FOUR YEARS FROM THE EFFECTIVE DATE $11,700.00 OF THE CERTIFICATE OF OCCUPANCY FIVE YEARS FROM THE EFFECTIVE DATE $11,716.53 plus any additional OF THE CERTIFICATE OF OCCUPANCY accrued interest 2 L 2017002710 Tommy Gong San Luis Obispo - County Clerk-Recorder 01/18/2017 11:52 Ali When recorded mail to: CONFORMED COPY ; City Clerk Cit of Atascadero Copy of document recorded. City Has not been compared with original-;- 6500 Palma Avenue Atascadero, California 93422 No fee for recording pursuant to , Government Code Section 27383 DEED OF TRUST WITH ASSIGNMENT OF RENTS This DEED OF TRUST, made this 14th day of SEPTEMBER 2016, between H &S Hospitality,LLC, herein called TRUSTOR whose address is 9010 West Front Road,Atascadero, California 92422, FIRST AMERICAN TITLE COMPANY, a California corporation, herein called TRUSTEE, and CITY OF ATASCADERO,a California municipal corporation, herein called BENEFICIARY. Trustor irrevocably grants, transfers and assigns to Trustee in Trust, with Power of Sale that property in the County of San Luis Obispo, State of California,described as follows: SEE LEGAL DESCRIPTION ATTACHED HERETO A.P.N.056-131-023 Together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits. FOR THE PURPOSE OF SECURING (1) payment of the sum of$56,500.05 Dollars with interest thereon according to the terms of a promissory note or notes of even date herewith made by TRUSTOR, payable to order of BENEFICIARY, and extensions or renewals thereof; (2) the performance of each agreement of TRUSTOR incorporated by reference or contained herein or reciting it is so secured; (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. A. To protect the security of this Deed of Trust, and with respect to the property above described, 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 and workmanlike manner any building which may be constructed, damaged or destroyed 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 any act upon said property in violation of the law; to cultivate, irrigate, fertilize, 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 general. (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 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 or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed 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. (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 the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: (1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be.paid to Beneficiary who may apply or release such moneys received by him or her in the same manner and with the same effect as above provided for disposition or proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his or her right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (3) 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 and said note for endorsement, and without affecting the personal liability or any person for payment of the indebtedness secured hereby,Trustee may: reconvey any part of said property; consent to 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. (4) That upon written request of beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, 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 reconveyance may be described as"the person or persons legally entitled thereto." (5) 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 unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder,to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his or her own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness 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. (6) That upon default by Trustor in payment of any indebtedness secured hereby 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 i notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After 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, shall sell said property 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 expanded 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 hereby;and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor of 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 property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from 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 is recorded and the name and address of the new Trustee. (8) That this Deed applies tQ, 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 pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or the neuter, and the singular number includes the plural. (9) The Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obliged 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 party unless brought by Trustee. Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge thereof does not exceed the maximum allowed by laws. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him or her at his or her address hereinbefore set forth. H & S Hospitatlit , LLC Amar Solar' f Trustor A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of1 LCh i �- County of Y1 �Jl�t,i� �, Y On It&<be_ K ,00A before me, 6� Ca✓" - nAAr-A, b C(here insert name ,and title of the officer), personally appeared r _6C>A U who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing -paragraph is true and correct. WITNESS my hand }nd official seal. / V Signature (Seal) LISA CAVA COmmisslon 2030435 Z . Notary Public:-Calilornis San Luis Obispo County My COMM.EXPIMS Jun 22 2017 a Legal Description Lot 3, as created by subdivision map Tract 2621 recorded April 4, 2007 in Book 29, Pages 66 through 74 of Maps in the Official Records of San Luis Obispo County, California. t ITEM NUMBER: A-6 DATE: 09113/16 ATTACHMENT: 3 DO NOT RECORD REQUEST FOR FULL RECONVEYANCE To First American Title Company The undersigned is the legal owner and holder of the note or notes, and of all other indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust have been fully paid and satisfied, and you are hereby requested and directed, on payment to you of any sums owning to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidence of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note(s)and Reconveyance to: Do not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 16