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HomeMy WebLinkAboutOrange Housing Development Corporation (OHDC) - 1994-09-20 REQUEST FOR REDEVELOPMENT AGENCY ACTION ED 94-38 Date: September_19,�199-t Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Ray Silver, Assistant City Ad.ministratorsA/ Prepared by: Barbara A. Kaiser, Deputy City Admini`strator/Economic Development APPROVED BY CITYCOUtiCIL Subject: Negotiation Agreement - Orange Hous �—.20 I9 ± Development Corporation 70 crtY rUt 3R Consistent with Council Policy? [X]Yes [ 1 New Policy or Exception ----------------------------------------------------------------------------- Statement of Issue,Recommendation,Analysis, Funding Source,Altermative Actions,Attachments: Statement of Issue: The Agency has acquired a housing site in the Yorktown/Lake Project Area and the Agency has selected the Orange Housing Development Corporation to be ultimate owner and operator of the housing project. Recommendation: Approve the attached Negotiation Agreement between Orange Housing Development Corporation (OHDC) and the Redevelopment Agency of the City of Huntington Beach for a twelve-month period, and direct the Agency Chairman and Agency Clerk to execute. Analysis: In December , 1993, the Redevelopment Agency acquired a 0.75 acre site at the southeast c3rner of Yorktown Avenue and Lake Street for the purpose of constructing senior citizen apartments. These actions were taken as part of the Agency's continuing program to meet its statutory obligations to provide affordable housing. After acquisition of the site, staff recruited qualifications from non-profit housing sponsors and conducted interviews which process resulted in a f _ ) 3 After acquisition of the site, staff recruited qualifications from non- profit housing sponsors and conducted interviews which process resulted in a recommendation to the Agency for the selection of Orange Housing Development Corporation. In concurrence with this recommendation Orange Housing Development Corporation was selected by the Agency on July 5, 1994. Meanwhile, staff has contracted with an architect to do preliminary designs for the Senior Citizen Housing Project proposed for the site and these plans have been shared at regular meetings with surrounding property owners. The Agreement provides one year for the representatives of the Corporation and Agency staff to negotiate a Disposition and Development Agreement which will specify the details of the proposed project and include the long term restrictions on affordability necessary to meet State requirements. The Agreement also provides that the Corporation will be entering into the agreement at its own risk and its approval in no way provides any claim on the Agency owned parcel, money damages or other legal remedies. Attached to the Negotiation Agreement is a resolution by the Board of Directors of the Orange Housing Corporation authorizing it to enter into the agreement and pursue the project. Also, attached are the by-laws of the Corporation. FUNDING SOURCE: Redevelopment Agency Administrative Funds ALTERNATIVE ACTION: Do not approve Negotiation Agreement. ATTACHMENTS: 1. Negotiation Agreement 2. Resolution of OHDC Board 3. By-Law's of Orange Housing Development Corporation 1M U/BAK/SVK/dw Stephen/RCA/Negordev CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALtl=ORNIA 92648 OFFICE OF THE CITY CLERK CONNE BROCKWAY CITY CLERK November 16, 1994 Orange Housing Development Corporation 217 East Chapman Orange, CA 92666 The City Council of the City of Huntington Beach at their meeting held September 30, 1994 approved the Negotiating Agreement Between Orange Housing Development Corporation and the Redevelopment Agency of the City of Huntington Beach. Enclosed is a copy of the executed agreement for your records. 1f you have any questions regarding this matter please call the Office of the City Clerk(714) 536-5227. Connie Brockway City Cleric Evelyn Schubert Deputy City Clerk cc: Stephen Kohler, Project Manager q:ccwxywnVwvet (Te6phww-7144 227) NEGOTIATION AGREEMENT BETWEEN ORANGE HOUSING DEVELOPMENT CORPORATION AND THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH This Negotiation Agreement ("Agreement")is made and entered into this 2-5+k day of SUL-Y . 1994 by and between ORANGE HOUSING DEVELOPMENT CORPORATION, a California corporation ("Orange"), and the REDEVELOPMENT AGENCY of the CITY OF HUNTINGTON BEACH, a public body("Agency"). WHEREAS, in furtherance of the objectives of the Community Redevelopment Law of the State of California(Health and Safely Code Section 33000, et seq.), the Agency desires to redevelop an Agency-owned parcel located near the intersection of Yorktown Avenue and Lake Street, as shown on the map attached hereto as Exhibit"A" and incorporated herein by this reference, said parcel referred to herein as the"Proposed Development Site;" and The parties desire to negotiate a Disposition and Development Agreement("DDA") for the purpose of redeveloping the Proposed Development Site; and The parties recognize and acknowledge that the purpose of this Agreement is to seek to negotiate the terms of a DDA which will include without limitation, the economics of the development, and the other terms of a DDA toward the disposition and redevelopment of the Proposed Development Site. NOW, THEREFORE, the parties hereto do hereby agree as follows: 1. NEGOTIATING PERIOD The parties shall negotiate diligently and in good faith for a 12-month period from the date of this Agreement is executed by the Agency("Negotiating Period"), to establish and 1 G:Agmt:0rwge:7/1&'94 agree and upon mutually acceptable development plans, concepts, or alternatives, determine the economic feasibility of the development, investigate the possibility of including a component of affordable housing within the Proposed Development Site, and determine other matters as necessary or convenient for the adoption of a DDA. Except as this Agreement may be extended, if at the end of the Negotiating Period;Orange has not signed and submitted a DDA to the Agency, then this Agreement shall automatically terminate, and the parties knowingly agree that none of the parties shall have any further rights or obligations to the other under this Agreement. If a DDA is so signed and submitted within the Negotiating Period, then this Agreement may be extended in writing fora period not to exceed sixty(60)days from the date of such submittal to enable the Agency to: (I) determine whether it desires to enter into such DDA, (ii) take the actions necessary to bring such DDA before the Agency for consideration, action, and authorization to sign, and(iii) sign the DDA, if such is approved. 2. DESIGN AND DEVELOPMENT OBJECTIVES The design and development objectives for the project shall be specified in the DDA and the actual development shall be in conformity therewith. Orange shall cooperate fully with the Agency's Professional consultants and associates in providing them with any information and assistance reasonably within the capacity of Orange to provide in connection with the preparation and execution of the drawings, plans, and specifications or other documents or information required to be submitted by the Agency to the City of Huntington Beach("City") pursuant to this Agreement or as required by state or local laws and regulations. All design, architectural,and building plans for development shall be subject to the review and approval of the Agency and the City. 2 G:Agmt:Ckangc:7/1&94 3. DEFAULTS In the event that either party fails to fulfill the obligations described in this Agreement within the times specified, the non-performing party shall have fifteen (15) days following written notice from the other party to cure, or commence to cure, such failure to perform as may be identified in the written notice. If the non-performing party has failed to cure, or failed to commence to cure,within such fifteen(IS) day period,the other party may terminate this Agreement and, thereafter, none of the parties shall have any further rights or obligations to the others under this Agreement except as hereafter provided. Orange, by execution hereof, knowingly agrees, notwithstanding anything herein to the contrary, that it shall have no right by virtue of this Agreement to specific performance of this Agreement, nor to specific performance for conveyance of, nor to claim any right of title or interest in,the Proposed Development Site or any part thereof, nor to money damages, nor any other legal remedies or equitable remedies under the law. 4. NON-DISCRIMINATION The parties hereto shall not discriminate against nor segregate, any person, or group of persons on account of sex, race, color, age, marital status, religion, handicap, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Proposed Development Site, nor shall the parties establish or permit any such practice or practices of discrimination or segregation in the selection,location,number,use, or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. 3 c:Ag t:orangc:7n,'9a 5. NO AGENCY LIABILITY FOR REAL ESTATE COMMISSIONS OR FEES The Agency shall not be liable for any real estate commission or brokerage fees which may arise herefrom. Each party represents that it has engaged no broker, agent or finder in connection with this transaction, and each party agrees to hold the other parties harmless from any claim by any broker, agent or finder claiming through any such party. 6. COMPLIANCE WITH RELOCATION LAWS The parties hereto acknowledge and agree that under the DDA, should it be adopted, they shall be required to comply with all applicable federal, state and local laws and regulations concerning the displacement and relocation, if such occurs, of persons and/or businesses on and from the Proposed Development Site, including without limitation, compliance with the Relocation Assistance Law,Government Coate Section 7260, et seq. 7. NOTICES All notices required or permitted hereinunder shall be delivered in person or by registered or certified mail to an authorized representative of the party to whom delivery is to be made, at the place of business of such party, or to any other place designated in writing by such party. Rest of page intentionally left blank. 4 G:Agn t:ornnge:7n,94 S. ENTIRE AGREEMENT This Agreement, and the Exhibit"A"attached hereto, represents the entire agreement between the parties. The parties hereto have executed this Agreement on the date and year first above written. ORANGE HOUSING DEVELOPMENT REDEVELOPMENT AGENCY OF CORPORATION THE CITY OF HUNTINGTON BEACH a California corporation a California public body By Chairman Its ATTEST: Agency Clerk Its APPROVED AS TO FORM: J / J By. '�`='L� LrJ Its Secretary 1S3'i7 Attorney 11�11TIATED;REVIEWED AND APPROVED Executiv hector 5 L3 made by the irsured inarw i:a.�cie,w...~.��-��.�w:n::�� /...-��.._. - : .. ALTA 0w NERS POLICY OR-9 3 6 019 8 EMBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS: LOTS 1 TO 5 INCLUSIVE OF TRACT NO. 13920, AS SHOWN ON A MAP FILED IN BOOK 673, PAGES 14 TO 16 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING THEREFROM ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED OR EXTRACTED OR TAKEN FROM SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN A DEED RECORDED NOVEM BER 4, 1988 AS INSTRUMENT NO.88-569347 OF OFFICIAL RECORDS. ALSO EXCEPTING ALL WATER RIGHTS AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO. 88 569347 OF OFFICIAL RECORDS. NOTE 1: BY A QUITCLAIM DEED RECORDED AUGUST 29, 1957 IN BOOK 4021. PAGE 372 OF OFFICIAL RECORDS,THE HUNTINGTON BEACH COMPANY QUITCLAIMED ALL ITS RIGHT TO DRILL SLANTED WELLS FROM LANDS ADJACENT TO SAID LAND, INTO AND THROUGH THE TOP FIVE HUNDRED (500) FEET. MEASURED VERTICALLY IN DEPTH BELOW THE SURFACE OF SAID LAND. NOTE 2: EXCEPT AS JEREINAFTER SPECIFICALLY PROVIDED, GRANTEE AGREES THAT, WITHOUT THE CONSENT OF GRANTOR IN WRITING BEING FIRST OBTAINED, IT WILL NOT USE THE SURFACE OF THE LANDS DESCRIBED ABOVE OR THAT PORTION OF SAID LANDS FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER. INCLUDING, BUT NOT LIMITED TO DRILLING ANY WELL OR WELLS OR ANY OTHER ACTIVITY IN CONNECTION WITH DEVELOPING. PRODUCING OR OPERATING THE MINERAL INTERESTS (NOTHING HEREIN IS INTENDED TO PREVENT GRANTOR FROM USING CITY STREETS AND OTHER PUBLIC WAYS). IT IS UNDERSTOOD AND AGREED, HOWEVER,THAT BELOW A DEPTH OF FIVE HUNDRED(500)FEET BENEATH THE SURFACE(HEREINAFTER CALLED THE 'SUB-500 PORTION-) GRANTEE MAY SLANT DRILL UNDER SUCH LANDS, AND/OR DRILL WELL OR WELLS ON LANDS POOLED THEREWITH, AND OTHERWISE CONDUCT OPERATIONS WHICH DO NOT INVOLVE THE USE OF THE SURFACE (OR THAT PORTION OF THE SUBSURFACE OTHER THAN THE SUB-500 PORTION) OF SUCH LANDS, IN ORDER TO REACH AND PRODUCE THE OIL, GAS AND OTHER MINERALS IN AND UNDER SUCH SUB-500 PORTION OF SUCH LANDS. IT IS RECOGNIZED THAT THE CERTAIN WELLS KNOWN AS THE ELLIOTT NO. 1 WELL IS LOCATED ON THE A13OVE DESCRIBED LANDS AND IS PRODUCING OIL AND GAS ATTRIBUTABLE TO THE MINERAL INTERESTS; GRANTEE AGREES TO PLUG AND ABANDON SUCH WELLS ON OR BEFORE JANUARY 1, 1989, AND GRANTOR AGREES THAT. NOTWITHSTANDING THE PRECEDING PORTION OF THIS PARAGRAPH,GRANTEE MAY USE THE SURFACE OF THE ABOVE DESCRIBED LANDS TO OPERATE SUCH WELLS PRIOR TO SUCH JANUARY 1, 1989,AND TO CONDUCT SUCH OPERATIONS AS MAY BE REQUIRED TO PLUG AND ABANDON SUCH WELLS,AS GRANTED TO ANGUS PETROLEUM CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO.88-319698 OF OFFICIAL RECORDS. PAGE 4 Taal J T J - r..x qr*art- .TACT"0 130" •CtRaCE. rN7 K. o�a, � OCTC.[•.1..•� TRACT N0.1392 ) I M.M .673/14_ t6 ocan aaGS fr',;ti:r(r! ++C'ES •tra•"CS S•.Oa"al•tOr•w Wig IraOa n;CS"'tRarrt Or�Jft Vert,•t e. r011:/• 9:r WT•ia 7aC'...P•A 1JSN rr as,/s•-SSat".M t YJa r•t ra•aC rran.act /NOT •0 K Se aT a1L b,4A. Or Orrrr6t r,Q{rrTt :*••[•S rnw M 34ri ar•ta aCCW-Cc Cw a-•Mr("IS Z 11 ao""•'Ir•aC Srarfta at[ •WY 0•r 9-1. 00a(R STr�t9 rarer 'a C t IW! '4 Z St,0-L% -7. :a••44s."Ktr CC•It•R*.t a'taSCC•.D.S. f:3 EC 3.r�0 4 OIKR•a•rrS Cr CO"raCL anwl SO ban 4M*aCCV"w<f . 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First American Title Insurance COmpany THIS MA► !S talk IMfOWATION ONLY AND IS MOT A PAI" Of T1412 MU RVINN" CERTIFIED COPY OF RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE HOUSING DEVELOPMENT CORPORATION I, the undersigned, am the Chairman of Orange Housing Development Corporation, a California nonprofit public benefit corporation , duly organized and in good standing under the laws of the State of California, and I hereby certify that the following is a true and correct copy of the resolution adopted by the Projects Committee on behalf of the board as allowed in Bylaws of Corporation on May 31, 1994, authorized the actions state therein: Project Committee on behalf of Board of Directors of OHDC authorizes Executive Director to negotiate and sign an Exclusive Right to Negotiate with the Redevelopment Agency of Huntington Beach to develop .75 acres on corner of Lake and Yorktown, own by the Agency and another site to be named later. ` IN witness whereof the undersigned has executed this Certificate on May V , I994. Robert Mickelson Chairman Orange Housing Development Corporation ceocs\obdc\boerd.hba BYLAWS , OF ORANGE HOUSING DEVELOPMENT CORPORATIONo a California nonprofit public Zinefit corporation 2/91 TABLE OF CONTENTS ARTICLEI . OFFICES . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II MEMBERSHIP. . . . . . . . . . . . . . . . . . . 1 ARTICLEIII DIRECTORS . . . . . . . . . . . . . . . . . . . 1 Section 1 Powers Section 2 Number of Directors Section 3 Appointment of Directors Section 4 Term of Office of Directors Section 5 Vacancies Section 6 Meetings of the Board Section 7 Notice of Board Meetings Section 8 Waivers of Notice Section 9 Quorum of Directors Section 10 Action in Lieu of Meeting Section 11 Standard of Care Section 12 Prohibited Transactions Section 13 Inspection Rights Section 14 Compensation Section 15 Interested Persons Limit ARTICLE IV COMMITTEES. . . . . . . . . . . . . . . . . . . 6 Section 1 Committees of Directors Section 2 Executive Committee Section 3 Audit Committee Section 4 Advisory Committees Section 5 Meetings ARTICLEV OFFICERS. . . . . . . . . . . . . . . . . . . . 8 Section 1 Officers Section 2 Appointment Section 3 Removal, Section 4 Resignation Section 5 Executive Director Section 6 Secretary Section 7 Chief Financial Officer Section 8 Vice Presidents Section 9 Compensation Section 10 Execution of Instruments ARTICLEVI RECORDS . . . . . . . . . . . . . . . . . . . . 10 Section 1 Minute Book Section 2 Annual Report _2_ 2/91 r ARTICLE VII INDEMNIFICATION . 11 Section 1 Indemnification of Directors, Officers, and Employees Section 2 Advancement of Expenses ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . 12 Section 1 Fiscal Year Section 2 Corporation Seal Section 3 Amendment of Bylaws Section 4 Reimbursement of Expenses of the Corporation —3- 2/91 ARTICLE I OFFICES The principal executive office of the corporation shall be located in the City of Orange, State of California, as the Board of Directors may from time to time designate. Additional offices may be established and maintained at such place or places in the City of Orange, State of California, as the Board of Directors may from time to time designate. ARTICLE 11 MEMBERSHIP This corporation shall have no -members. All corporate actions shall be approved by the Board of Directors as provided in these bylaws. All rights which would otherwise rest in the members shall rest in the Directors . ARTICLE III DIRECTORS Section 1. Powers. This corporation shall have powers to the full extent allowed by law. All powers and activities of this corporation shall be exercised and managed directly by the Board of Directors or, if delegated, under the ultimate direction of the Board. Section 2. Number of Directors. The City Council of the City of Orange has requested Barry A. Cottle and Scott D. Richmond to serve as interim Directors of this corporation. The two interim Directors shall serve until a full Board of Directors is appointed pursuant to Section 3 of these bylaws. Beginning with the corporation's fiscal year commencing July 1, 1990, there shall be eleven (11) members of the Board of Directors until the directors shall fix a different number of members of the Board by an amendment to these bylaws. Section 3. Appointment of Directors. The Board of Directors shall consist of two classes, and shall be appointed as follows: A. Five Directors shall be Class I Directors. Class I Directors shall be appointed by the City Council of the City of Orange. At lease one Class I Director shall be n member of the City Council. At lease one Class III Director shall be an employee of the Redevelopment '. Agency of. Ue City of Orange. At lease one Class I Director shall be a real estate developer. At least one Class I Director shall be n member of the California State Bar. -a- 2/91 B. Six Directors shell be Class II Directors. Class II Directors shall be appointed by the Class I Directors. In order to ensure broad representation throughout the community, Class II Directors shall be chosen from among persons who are engaged in the following activities: business (including particularly real estate and financial services) , education, and local community organizations. In recruiting and selecting Class I Directors and Class II Directors, preference shall be given to persons with the following characteristics: (i) demonstrated leadership in the community; (ii) interest in and commitment to affordable housing; (iii) demonstrated history of public service, either as an elected or appointed civic official, or as a member of the board of directors or board of trustees of a local community organization; (iv) willingness to volunteer time' and energy in support of the corporation. No more than two of the eleven Directors shall be members of the City Council of the City of Orange at the time they are appointed to serve as Directors. Section 4. Term of Officec=-of Directors . Except as provided below for the initial terms of the first full Board of Directors , the term of office for each Director of this corporation shall be three (3) years or until his or her successor is appointed. A Director may succeed himself or herself in office. In order to stagger the terms of the- Directors, the initial term of office for the Directors whose terms commence on July 1 , 1990 shall be three years for two of the Class I Directors and two of the Class II Directors , two years for two of the Class I Directors and . two of the Class II Directors, and one year for one of the Class I Directors and two of the Class II Directors. The City Council of the City of Orange shall determine which terms shall apply to which Class I Directors and the Class I Directors shall determine which terms shall apply to which Class II Directors. Any Director who was a member of the City Council of the City of Orange at the time of his or her appointment to serve as a Director shall be deemed to have resigned his or her position as Director and shall no longer be entitled to serve in such capacity effective upon the date that he or she no longer serves as a member of the City Council. Any Director who was an employee of the Redevelopment Agency of the City of Orange at the time of his or her appointment to serve as a Director shall be deemed to have resigned his or her position as Director and shall no longer be entitled to serve in such capacity effective upon the date that he or she no longer serves as an employee of the Redevelopment Agency. Section 5. Vacancies. A vacancy shall be deemed to exist in the event that the actual number of Directors is less than the authorized number for any reason. A resignation shall be effective —upon receipt of written notice by the Board, the Chairman of the Board, the Executive Director or the Secretary, 2/91 unless the notice specifies a later time of effectiveness. The Board may remove any Director with or without cause. Absence of a Director from three or more consecutive Board meetings shall constitute cause for removal. If a vacancy occurs, the entity that appointed such Director pursuant to Section 3 of this Article III, within two months thereafter, shall fill the vacancy. A Director so appointed shall serve for the unexpired term of his or her predecessor. Section 6. Meetings of the Board. The Board of Directors shall meet at least once during each quarter of the fiscal year at such dates, times and places as the Board of Directors shall determine. In addition to the quarterly meetings, additional regular or special meetings shall be held at such times as shall from time to time be fixed by the Executive Director or the Directors. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Executive Director or by any three (3) Directors. Members of the board may participate in any meeting through the use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hearzLne another. Participation in a meeting by this means constitutes presence in person at such meeting. Section 7. Notice of Board Meetings. Notice of regular and special meetings shall be given to the Directors not less than six (6) days prior to the meeting if delivered by first class mail or not less than forty-eight (48) hours prior to the meeting if the notice is delivered personally or by telephone. If mailed, such notice shall be deemed given when deposited in the United States mail, with postage thereon prepaid, directed to the Director. Section S. Waivers of Notice. The notice requirements contained in these bylaws may be waived in writing by any Director, either before or after the meeting. The attendance of any Director at a meeting without protesting prior to the conclusion of the meeting the lack of notice of such meeting shall constitute a waiver of notice by him or her. All waivers shall be made part of the minutes of the meetings. Section 9. Quorum of Directors. A quorum for any meeting of the Board of Directors shall 'be a majority of the members in office, but such number shall not be less than one-fifth (1/5) of the authorized number of Directors. Except where a greater vote is required by the Articles of Incorporation or bylaws or by applicable law, if a quorum is present, the affirmative vote of a majority of the Directors represented at the meeting, entitled to vote, and voting on any manner, shall be the act of the Board of Directors. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of Directors , if any action taken is approved by at least a majority of the required quorum for such -6- 2/91 %moo, neeting. A majority of the Directors then present, whether or not constituting a quorum, may adjourn any meeting to another time and place. Section 10. Action in Lieu of a Meeting. Any Board action required or permitted to be taken by the Board may be taken without a meeting, if all Directors of the Board, not including any "interested director" as defined in Section 5233 of the California Nonprofit Corporation Law, shall individually or collectively consent in writing. Such written consent shall be node a part of the minutes of the proceedings of the Board. Such action by written consent shall have the same force and effect as the unanimous vote of the Directors. Section 11. Standard of Care. A. General. A Director shall perform the duties of a director, including duties as a member of any committee of the Board on which the Director may serve, in good faith, in a manner such Director believes to be in, the best interest of this corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like situation would use under similar circumstances. In performing the duties of a Director, a Director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial • data, in each case prepared or presented by: (1) One or more officers or employees of the corporation whom the Director believes ' to be reliable and competent in the matters presented; (2) Counsel, independent accountants or other persons as to matters which the Director believes to be within such person's professional or expert competence; or (3) A committee of the Board upon which the Director does not serve, as to matters within its designated authority, which committee the Director believes to merit confidence, so long as, in any such case, the Director acts in good faith, after reasonable inquiry when the need therefore is indicated by the circumstances and without knowledge that would cause such reliance to be unwarranted. A person who performs the duties of a Director in accordance with the above shall have no liability based upon any failure or alleged failure to discharge that person's obligations as a Director, including, without limiting the generality of the foregoing, any actions or omissions which exceed or defeat a public or charitable purpose to which a corporation, or assets held by it, are dedicated. —7- 2/91 B. Investments . Except with respect to assets held for use or used directly in carrying out this corporation's charitable activities, in investing, reinvesting, purchasing, acquiring, exchanging, selling and managing this corporation's investments, the Board shall avoid speculation, looking instead to the permanent disposition of the funds, considering the probable income, as well as the probable safety of this corporation's capital . The provisions of Subsection A above shall apply to this Subsection. Section 12. Loans and Self-Dealing Transactions. A. Loans. This corporation shall not make any loan of money or property to or guarantee the obligation of any Director or officer; provided, however, that this corporation may advance money to a Director or officer of this corporation or any subsidiary .for expenses reasonably anticipated to be incurred in performance of the duties of such officer or Director so long as such individual would be entitled to be reimbursed for such expenses absent that advance. B. Self-Dealing_ Transactions. The Board shall not approve a self-dealing transaction. A self-dealing transaction is one to which this corporation is a party and in which one or more of the directors has a material financial interest and which does not meet the requirements of Subsection C below. C. Exem tion Requirements. The following transactions are exempted from the prohibition of Subsection B above: (1) A transaction which is part of a public or charitable program approved in good faith by the Board of Directors without unjustified favoritism and which results in a benefit to one or more Directors or their families only because they are in a class of persons intended to be benefited by the program. (2) A transaction of which the Director with a material financial interest has no actual knowledge, and which does not exceed the lesser of one percent of the gross receipts of this corporation for the preceding fiscal year or $100#000. (3) A transaction which has been approved by the Attorney General before or after it was consummated. (4) A transaction which the Board of Directors, having knowledge of the material facts concerning the transaction and the Director's interest in the transaction, authorizes (by a vote of a majority of the directors then in office without counting the vote of the interested Director) after considering and in good faith determining, upon reasonable investigation under the circumstances, thnt (a) the transaction 2/91 will be entered into by this corporation for its own benefit, (b) the transaction is fair and reasonable as to this corporation, and (c) this corporation could not have obtained a more advantageous arrangement with reasonable effort under the circumstances. Section 13. Inspection RiKhts. Every Director shall have the absolute right at any reasonable time to inspect and copy ell books, records, and documents, and to inspect the physical properties of this corporation. Such inspection by a Director may be made in person or by agent or attorney and the right of inspection includes the right to copy and make extracts. Section 14. Compensation. No Director shall receive any compensation from the corporation for serving on the Board. Subject to approval by the Board of Directors, Directors shall be entitled to receive reimbursement for necessary travel and other actual expenses incurred in performing duties of his or her office and in attending meetings of the Board of directors and meetings of committees of the Board of Directors. Section 16. Interested Persons Limit. Not more than forty-nine (49) percent of the persons serving on the corporation's Board may be interested persons. For purposes of this section, "interested persons" means either: A. Any person currently being compensated by the corporation for services rendered to it within the previous twelve (12) months, whether as a full- or part-time employee, independent contractor, or otherwise; or B. Any brother, sister, ancestor, descendant , spouse, brother-in--law, mother-in-law or father-in-law of any such person. ARTICLE IV COMMITTEES Section 1. Committees of Directors. The Board of Directors may, by resolution adopted by a majority of the Directors then in office, designate one or more committees, each consisting of three or more Directors. to serve at the pleasure of the Board. Appointments to such committees shall be made annually by majority vote of the Directors then in office. Any committee, to the extent provided in the resolution, shall have all the authority of the Board, except that no committee, regardless of the Board resolution, may: A. Fill vacancies on the Board of Directors or on any committee; } B. Fix compensation of Directors for serving on the Board or any committee; a -9- i 2/91 C. Amend or repeal bylaws or adopt new bylaws; D. Amend or repeal any resolution of the Board of Directors which by its express terms is not so amendable or repealable; E. Appoint any other committees of the Board of Directors or the members of these committees; or F. Approve any self-dealing transaction. Section 2. Executive Committee. There shall be an Executive Committee of the Board of Directors consisting of the following five members: A. Chairman of the Board; B. Vice-Chairman of the Board; C. Secretary of the Board; and D. Two at-large Board Members . Each at-large Board member shall be elected to the Executive Committee annually by a majority of the members of the Board of Directors. Such Executive Committee shall have all the authority of the Board except as provided in Section I of this Article IV. Section 3. Audit Committee. There shall be an Audit Committee of the Board of Directors consisting of three Directors elected by the Board. Members of the Executive Committee and officers of the Corporation shall be ineligible to serve on the Audit Committee. The Audit Committee shall have no powers of the Board but shall serve in an advisory capacity by reviewing the corporation's annual audit and preparing a report for the Board of Directors. Section 4. Advisory Committees. Advisory committees may be appointed from time to time by the Board ' of Directors. Advisory committees ' membership may consist of Directors only or both Directors and nondirectors or nondirectors only. Advisory committees have no legal authority to act for the corporation, but shall report their findings and recommendations to the Board of Directors. Section 5. Meetings. Except as otherwise provided in this Article IV, meetings and actions of committees shall be i governed by and held and taken in accordance with the provisions of Article III of these bylaws. concerning meetings of Directors, with such changes in the content of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members. Minutes shall be kept of each meeting -ZO- 2/81 of any committee and shall be filed with the corporate records. The Board of Directors may adopt rules for the governance of any committee not inconsistent with the provisions of these bylaws. ARTICLE ,V OFFICERS Section 1. Officers. The officers of this corporation shall be an Executive Director, Chief Financial Officer, Secretary and such officers as the Board of Directors may appoint. No person may hold more than one of these officers at one time. Section 2. Appointment. The Board of Directors shall elect all officers of the corporation for terms of one year or until their successors are elected and qualified. Section 3. Removal . Subject to the rights, if any, of the officer under any contract of employment, any officer of the corporation may be removed with or wi'hout cause by the Board of Directors at any time. Section 4. Resirnntion. Any officer may resign at any time by giving written notice to this corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified by that notice and unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of this corporation under any contract to which the officer is a party. Section 5. Executive Director. The Executive Director shall be the chief executive officer of the corporation and shall be responsible for conducting the affairs of the corporation in a manner consistent with the policies and directives of the Board of Directors. He or she shall have such other duties as may be prescribed by the Board. Section 6. Secretary. The Secretary shall serve notice of and act as Secretary at all meetings of the Board of Directors, shall record all such proceedings in the Minute Books and shall be responsible for conducting the. affairs of the corporation in a manner consistent with the policies and directives of the Board of Directors. The Secretary shall have such additional powers and duties as shall be prescribed by the Board. Section 7. Chief Financial Officer. The Chief Financial Officer of the corporation shall have charge and custody of and shall receive, safeguard, disburse and account for all funds of the corporation , and shall deposit and invest them in such banks, other depositories or investments as may be designated by the Board. The Chief Financial Officer shall maintain books and --11- 2/91 records of the corporation, and shall prepare and submit such accounting and tax forms as may be required by local , state and federal law. The Chief Financial Officer shall have such additional powers and duties as shall be prescribed by the board. Section S. Vice Presidents. The Board may appoint one or more Vice Presidents to perform such duties and have such powers as the Board shall designate. Section 9. Compensation. Compensation of the officers shall be determined by the Board; provided, however, that no officer who is an employee or officer of a governmental entity shall receive any payments other than for necessary travel and other actual expenses incurred in performing duties of his or her office. Section 10. Execution of Instruments . Any and all instruments executed in the name of the corporation, including, but not limited to, contracts, agreements, purchase orders, notes, deeds, deeds of trust , mortgages , leases, security agreements , checks and drafts issued, endorsemen(s' of checks and drafts received, certificates , applications and reports, shall be executed by one or more officers, employees or agents of the corporation as authorized from time to time by the Board of Directors. Such authorization may be general or confined to specific instances . The respective offices and duties thereof as established and defined in this Article V and by resolution of the Board of Directors include, except as otherwise provided, the authority to execute instruments in the name of the corporation when the execution of the instrument is incident to carrying out the duties of the offices. ARTICLE VI RECORDS Section 1. Minute Book. The corporation shall keep or cause to be kept a minute book which shall contain: A. The record of all meetings of the Board of Directors including date, place, those attending the proceedings thereof, a copy of the notice of the meeting and when and how given, written waivers of notice of meeting, written consents to holding meeting, written approvals of minutes of meeting, and unanimous written consents to action of the Board of Directors without a meeting, and similarly as to meetings of committees of the Board of Directors and as to meetings or written consents of the Incorporator of the corporation prior to the appointment of the initial Board of Directors. B . A copy of the Articles of Incorporation and all amendments thereof and a copy of all certificates filed with the Secretary of State. —12- 2/91 C. A copy of the bylaws, as amended, duly certified by the Secretary. Section 2. Annual Report. A. Financial statements shall be prepared as soon as reasonably practicable after the close of the fiscal year. The financial statements shall contain in appropriate detail the following: (1) The assets and liabilities, including trust funds, of this corporation as of the end of the fiscal year; (2) The principal changes in assets and liabilities, including trust funds, during the -fiscal year; (3) The revenue of receipts of this corporation, both unrestricted And restricted to particular purposes, for the fiscal year; (�4) The expenses ora disbursements of this corporation, for both general and restricted purposes during the fiscal year; (3) Any transaction during the previous fiscal year involving Forty Thousand Dollars ($40,000.00) or more to which this corporation or a subsidiary was a party and in which any Directors or officers of the corporation or subsidiary had or has a direct or indirect material financial interest. The report must disclose the names of the interested persons involved in such transaction, stating such person's relationship to the corporation, the nature of such person's interest in the transaction and, where practicable, the amount of such interest; and (6) The amount and circumstances of any indemnification or advances aggregating more than Ten Thousand Dollars ($10,000.00) paid during the fiscal year to any officer or Director of the corporation. B. Such financial statements shall be accompanied by any report thereon of independent accountants, or, if there is no such report, the certificate of an authorized officer of the corporation that such statements were prepared without audit from the books and records of the corporation. C. A report including the financial statements prescribed above shall be furnished annually to all Directors of the corporation. -13- 2/91 ARTICLE VII INDEMNIFICATION Section 1. Indemnification of Directors , Officers and Emplo,Xees. The corporation may indemnify its -Directors, officers, employees and other eligible persons pursuant to the provisions of Section 5238 of the California Nonprofit Corporation Law, or pursuant to a contract entered into with any employee who is not an officer or Director. Section 2. Advancement- of Expenses. Expenses incurred in defending any proceeding may be advanced by the corporation as authorized in Section 523E of the California Nonprofit Corporation Law prior to final disposition of such proceeding, upon receipt of an undertaking by or on behalf of the Director, officer or employee to repay such amount unless it shall be determined ultimately that the Director, officer or employee is entitled to be indemnified. ARTICLES VIII MISCELLANEOUS Section 1. Fiscal Year. The fiscal year of this corporation shall be determined by resolution of the Board of Directors. Section 2. Corporation Seal . This corporation shall have a seal which shall be specified by resolution of the Board of Directors. The seal shall be affixed to all corporate instruments, but failure to affix it shall not affect the validity of the instrument. Section 3. Amendment ofBXlaws. These bylaws may be amended by the vote of a majority of all of the members of the Board of Directors, except that Sections 2 and 3 of Article III of these bylaws may be amended and these bylaws may be repealed and new bylaws adopted only by the vote of a majority of all of the members of the Board of Directors and by the vote of a majority of the Class I Directors. All Directors must receive at least thirty (30) days notice of any vote on amending or repealing these bylaws. Section 4. Reimbursement of Expenses_ of the, Corporation. The corporation shall provide full reimbursement for monies expended on behalf of the corporation by its officers or Directors. -14- 2/31