Exhibit 3 - Declaration of Covenants and Restrictions


Recording Requested By:

Alta Bates Hospital
3001 Colby Street
Berkeley, California

When Recorded Return To:

Eric Gold, Esq.
6432 Hillegass Avenue
Oakland, California 94618

DECLARATION

OF

COVENANTS AND RESTRICTIONS

THIS DECLARATION OF COVENANTS AND RESTRICTIONS (here-inafter "Declaration") by Alta Bates Hospital, a non-profit corporation established under the laws of the State of California (hereinafter "Hospital) is made with regard to certain improved real property in the City of Berkeley bounded by Ashby Avenue, Regent Street, South Hospital Drive and Colby Street (herein- after the "Colby-Ashby Site") and to certain adjacent properties owned by the Hospital (which are hereinafter referred to as the "Regent Street Site", the "South Hospital Drive Site" and the "Hospital Parking Site"), all of which are more particularly described on Exhibit A attached hereto.

This Declaration is also made in respect to the leasehold interest held by Guardian Foundation, Inc. at the Southeast corner of the intersection of Ashby Avenue and Regent Street in the City of Berkeley, now occupied by the Claremont Convalescent Hospital, more particularly described on Exhibit A attached hereto.


This Declaration is also made in respect to any real property or interest in real property now owned or hereafter acquired by the Hospital within an area surrounding the Hospital which area is described on Exhibit B attached hereto and is hereinafter referred to as Area A and Area B. RECITALS:

WHEREAS, the Hospital applied to the City of Berkeley for an amendment to its use permit and a variance necessary to authorize the Hospital's plan for the removal of buildings from the Colby-Ashby Site and their replacement with new buildings, the expansion of certain patient-related hospital services, and the modification of a previously established open-space requirement; and

WHEREAS, residents of the neighborhoods surrounding the Colby-Ashby Site, the Regent Street Site, and the South Hospital Drive Site (hereinafter "Neighborhood Residents") opposed the Hospital's applications on the grounds that they would be adversely affected by the granting of the Hospital's applications including the adverse impacts on their health, quality of life, and the value of their property: and

WHEREAS, Neighborhood Residents wish to avoid further adverse impacts resulting from future Hospital construction and/or expansion; and

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WHEREAS, the Neighborhood Residents withdrew their opposition to the Hospital's application for a variance authorizing the replacement of existing buildings on the Colby-Ashby Site with new buildings, agreed to remain neutral, before the City of Berkeley, regarding the Hospital's application for an amendment to its use permit to expand certain patient-related services, and agreed that, prior to the year 2014, certain future Hospital construction and/or expansion, as described in this Declaration and the Agreement dated as of March 3, 1983 between the Hospital and certain Neighborhood Associations, could occur notwithstanding any such adverse impacts on certain conditions, among them being the Hospital's agreement restricting the future development and use of the Colby-Ashby Site, the development and use of the Regent Street and South Hospital Drive Sites as open space, and the development and use by the Hospital of real property within, AREAS A & B, all as contained in this Declaration, and

WHEREAS, the City of Berkeley, on March 7, 1993, granted the Hospital's applications for use permit and variance, thereby authorizing the Hospital's plan of replacement and development, subject to specified conditions; and

WHEREAS, the Hospital desires to proceed with its plan of replacement and development and accordingly desires that its agreements with respect to its use and development of the Colby-Ashby Site, the Regent Street Site, the South Hospital Drive Site and real property and interests in real property

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within AREAS A & B, including the Hospital Parking Site, be made a covenant and restriction running with the land, and binding on all successors in interest as provided herein.

NOW, THEREFORE, the Hospital hereby declares and covenants as follows:

1. General

This Declaration is expressly made for the benefit of all that real property consisting of parcels situated in the area of the City of Berkeley and the City of Oakland, described more particularly in Exhibit C attached hereto (herein- after the "Benefitted Estate") and may be enforced by the owners of such parcels and their successors and assigns (the "Beneficiaries') as provided in Paragraph 10 herein. All dates in this Declaration which relate to specific buildings are intended to be dates of the start of construction, unless otherwise specified.

2. Definitions

As used in this Declaration:

(a) "Patient-care space" means space used for medical, inpatient or out-patient related uses, but does not include space used for purposes such as education, storage, conference, dining and administration.

(b) "Emergency vehicle" means ambulance, police, or fire vehicles.

3. The Colby-Ashby Site

(a). The use permit amendment and variance issued by the city of Berkeley authorize the construction of

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two new buildings on this site, as replacements for buildings existing at the date of the Hospital's application to the City. The new buildings so authorized are (1) the Southwest Building containing 22,341 assignable square feet, consisting of a basement and two above-grade floors (and a penthouse housing exclusively mechanical equipment for the building) with a foundation incapable of supporting any additional floors or portions of floors, and located at the corner of Colby Street and South Hospital Drive: and (2) the East Building, containing 30,353 assignable square feet, consisting of a basement and two above-grade floors to be located in the east central portion of the site facing Regent Street, in an area now occupied by the 1928 and 1954 Buildings, both of which are to be demolished. The use permit amendment and variance also authorized the construction of an electrical generator/transformer housed in a building whose approximate exterior dimensions are 40 feet by 27 feet, immediately north of the East Building, as shown on Figure 5 of the Final Environmental Impact Report on the project dated January 10, 1983 and this Declaration also authorizes its construction in that location.

(b) The ultimate development of the East Building shall be no more than a basement plus three complete and three partial above-grade floors. The ultimate development of the Southwest building shall be no more than a basement plus two complete above-grade floors and the above-described penthouse

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(c) The Hospital shall not construct any new buildings expand the size of any existing buildings (by the addition of floors or otherwise) or replace any building on the Colby-Ashby Site except as authorized by this Declaration.

(d). The Hospital may expand the East Building in June, 1993, and no earlier, by the addition of one complete floor which may be used, in whole or in part, for patient care. As used herein, the date June, 1993 refers to the earliest date at which the Hospital may first occupy such third floor. The Hospital may commence construction of such third floor no earlier than April 1, 1992 so as to permit it to first occupy the third floor in June 1993.

(e). The Hospital may further expand the East Building in 2003, and no earlier, by the addition of up to three partial floors which may be used, in whole or in part, for patient care. As used herein, the date 2003 refers to the earliest date at which the Hospital may first occupy such partial floors. The Hospital may not commence construction of such partial floors prior to 2002, regardless of whether such construction commencement date will permit occupancy in the year 2003.

(f) As used in this paragraph in reference to the East Building, "complete floor" means a floor containing no more than 18,800 gross square feet; "partial floor" means a floor containing no more than 13,000 gross square feet.

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(q) Commencing construction no earlier than the year 2008, the Hospital may replace any building on the Colby-Ashby Site with a new building provided that the new building contains no more gross square feet than, no more above-grade floors than, and is located substantially on the site of, the building to be replaced.

(h) The Hospital shall not alter the use of or convert its buildings or structures now utilized as its laundry, shop, power plant, or incinerator if the change results in increased patient care space within the Hospital on the Colby-Ashby Site.

(i) At any time the Hospital may replace buildings or structures destroyed by fire, earthquake or other catastrophe or damaged so severely that rehabilitation is infeasible, or which it is required to remove or vacate by law, or which are rendered unusable by then-applicable laws, regulations or codes, provided that the replacement building contains no more gross square footage than, no more above-grade floors than, and is located substantially on the site of, the building replaced.

(j). At the same time that this Declaration permits construction and occupancy of the third floor of the East Building, the Hospital may construct a below-grade addition underneath the landscaped area which borders the north edge of the 1975 Building, provided that, prior to the year 2008, such addition does not result in increased patient-care space within

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the Hospital on the Colby-Ashby Site. The addition shall not provide any additional entrances, exits, or external structures, except such emergency exits as may be required by governmental agencies with jurisdiction over construction for fire safety and related purposes. Upon completion, the external appearance of the area will be unaltered from its appearance prior to construction, except for such emergency exits as are required by such governmental agencies.

4. The South Hospital Drive Site

(a) The South Hospital Drive Site consists of a parcel of approximately 9,646 square feet located at the south- east corner of Colby Street and South Hospital Drive now used as a physicians' parking lot. Prior to commencement of construction of the Southwest Building, the Hospital will fence approxi- mately one-half of the parking lot area and landscape that portion adjacent to the neighborhood as park space.

(b) At the earliest date permitted by the construction of the Southwest Building, but in any case prior to the occupancy of the Southwest Building by any Hospital equipment, personnel or programs, the Hospital will remove the fence and remaining parking lot and develop and maintain the South Hospital Drive Site as landscaped open space for reasonable use by residents of the surrounding area. No buildings or structures will thereafter be constructed on this site.

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(c) If the City of Berkeley closes South Hospital Drive (which separates the Colby-Ashby Site from the South Hospital Drive Site) between Colby Street and the Hospital's proposed delivery entrance to all traffic other than emergency vehicles, the Hospital will, at its expense, and upon occupancy of the Southwest Building by any Hospital equipment, personnel or programs, perform the construction work necessary to effect such closure, the removal of the pavement in the closed portion and its replacement with landscape materials which will support passage by emergency vehicles, as generally depicted on Exhibit D . The Hospital will also thereafter maintain any landscaped areas of South Hospital Drive not maintained by the City of Berkeley. The Hospital's obligations under this Paragraph 4(c) are subject to its having the legal authority to perform the construction and maintenance work described.

5. The Regent Street Site

The Regent Street Site consists of a parcel of approximately 7,167 square feet located at the Southwest corner of Webster and Regent Streets now improved with the Health Testing Center. At the earliest date permitted by the construction of the Southwest Building but no later than upon commencement of construction of the East Building, the Hospital will remove all buildings and structures from the Regent Street Site

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and develop and maintain the site as landscaped open space for reasonable use by residents of the surrounding area. No buildings or structures will thereafter be constructed on this site.

6. Area A and Area B

(a) For purposes of this Declaration, the Surrounding Area, described in Exhibit B hereto, is divided into two zones: Area A and Area B. Included in Area B is the Hospital-owned property at the Southwest corner of Ashby Avenue and Colby Street, improved with a parking facility and referred to herein as the Hospital Parking Site.

(b) The Hospital shall not, prior to the year 2082, lease additional space for medical, patient, or hospital related uses, construct any building or structure, or convert any building or structure to, medical, patient or hospital- related uses within Area A, or encourage or assist others to do so. In addition, the Hospital shall not contract for a third party to provide medical, patient or hospital-related services directly to it in a building in Area A which the Hospital would be prohibited by this Declaration from using to perform such services. Residential uses do not constitute medical, patient, or hospital-related uses. Nothing in this Paragraph 6(b) shall be construed to prohibit the Hospital from making minor additions to residential structures permitted by the applicable zoning ordinance or from replacing structures destroyed by fire,

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earthquake or other catastrophe or damaged so severely that rehabilitation is infeasible, with a similar structure.

(c). The Hospital shall not, prior to the year 2014, lease additional space for medical, patient, or hospital- related uses, construct any building or structure or convert any building or structure to medical, patient or hospital-related uses within Area B. in addition, the Hospital shall not contract for a third party to provide medical, patient, or hospital-related services directly to it in a building in Area B which the Hospital would be prohibited by this Declaration from using to perform such services. Notwithstanding the foregoing: (1) the Hospital may use (including purchasing, leasing or contracting for services to be performed therein) any existing building or structure within Area B which was utilized for medical, patient, or hospital-related uses as of January 1, 1983, as well as the commercially zoned property at the Southeast corner of Telegraph and Ashby Avenues (now used as a gas station) for any purposes now permitted by the present R-3 zoning of the City of Berkeley (Ordinance 3018-N.S., as of August 12, 1982); and (2) this paragraph 6(c) shall not apply to limit the construction or expansion of parking facilities in Area B concurrently with, or subsequent to, an expansion of the Hospital permitted by paragraph 3(d). or 3(e). of this Declaration, provided that such parking structure is constructed on a parcel contiguous to that on which the presently existing parking

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structure at Ashby Avenue and Colby Street is located. The size and scope of any such parking construction must, however, relate directly to needs for parking generated by permitted concurrent or prior construction under Paragraph 3(d) or 3(e) or, if additional parking is required by the City of Berkeley, under paragraph 3(j) of this Declaration.

7. Acquisition of Property in the Surrounding Area

Real property or interests in real property acquired by the Hospital in Area A or Area B after the date of this Declaration shall be subject to this Declaration. The Hospital shall file for recordation an amendment to this Declaration, to include a specific description of such acquired real property or interest in real property, with the office of the Recorder, Alameda County, California, within 30 days after acquiring title to such real property or interest in real property. Notwithstanding the foregoing, any real property or interest in real property owned by the Hospital as of the date of this Declaration in Area A or Area B, or thereafter acquired, shall be subject to this Declaration regardless of whether such real property or interest in real property is described in this Declaration or an amendment thereto. Upon request of a person owning real property within the benefitted estate, the Hospital shall file for recordation an amendment to this Declaration to include a specific description of such real property or interest in real property, with the Office of

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the Recorder, Alameda County, California, within 30 days after receipt of such request.

8. Constructive Notice

Every person or entity who now or hereafter owns, occupies or acquires any right, title or interest in or to any portion of the Colby-Ashby Site, the South Hospital Drive Site, the Hospital Parking Site, or the Regent Street Site or who hereafter acquires from the Hospital any real property or interest in real property acquired by the Hospital in Area A or Area B shall be conclusively deemed to have knowledge of, and to have agreed to, every covenant and restriction contained herein, whether or not any reference to this Declaration is contained in the instrument by which such person or entity acquired such interest, but only insofar as such covenant or restriction applies to the particular property or interest in property so acquired.

9. Changed Circumstances Release

(a) In accordance with principles applicable in law or equity, the Hospital may depart from the covenants and restrictions in paragraph 3(d) regarding the date at which the Hospital may construct and occupy a third floor on the East Building to the extent warranted by a change of circumstances as determined by a court of competent jurisdiction.

(b) All other restrictions on real property development and use contained within this Declaration shall be

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strictly complied with. The Hospital recognizes that the need and demand for its services as well as its need and desire for buildings and structures resulting from, among other things, changes/expansions in offered services, medical equipment and technology, changes in surrounding land use, changes in (or demise of) other medical facilities or changes in government, regulation will change during the term of this Declaration and will not justify a departure from the terms of the Declaration, except as may be permitted by subparagraph (a) of this paragraph in respect to the covenants and restrictions contained in paragraph 3(d) .

The Hospital or a successor in interest may obtain release from any provision of this Declaration by written consent of Beneficiaries owning of record at least fifty-one percent (51%) in number of the parcels constituting the Benefitted Estate.

10. Enforcement

The provisions of this Declaration may be enforced by a suit in law or equity brought in a court of competent jurisdiction. Such a suit may be brought only by Beneficiaries owning of record at least twenty (20) separate parcels within the Benefitted Estate. Notwithstanding any provision to the contrary, any Beneficiary may oppose:

(a) Any Hospital application, made to any governmental entity which departs from the covenants and restrictions in this Declaration, and

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(b) Any lawsuit seeking to invalidate, interpret, modify, allow departure from the terms of, or otherwise affect this Declaration.

11. Term and Binding Effect

Except for Paragraph 6(c) , which terminates on January 1, 2014, all of the covenants and restrictions in this Declaration shall remain in effect, and shall not be revoked, for a period of ninety-nine (99) years, commencing with the date this Declaration is recorded in the office of the Recorder of Alameda County, California.

This Declaration shall run with the Colby-Ashby Site, the South Hospital Drive Site, the Regent Street Site, the Hospital Parking Site, any other real property or interest in real property now owned or hereafter acquired by the Hospital in Area A and Area B. it shall be binding on the Hospital and all successive owners of all or any portion of those sites, real properties or interests in real property, (insofar as a covenant or restriction applies to the particular property or interest in property so acquired) except that persons who acquire any such property other than the South Hospital Drive Site or the Regent Street Site and convert it from medical, patient or hospital-related uses to another use permitted by the then-applicable zoning ordinance shall not be bound by this Declaration unless they thereafter reconvert such property to medical, patient, or hospital-related uses, in which case this Declaration shall be binding upon them.

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The covenants and restrictions in this Declaration shall be binding, in addition, on the Hospital's parent, subsidiary and affiliated corporations, such as Alta Bates Corporation, Alta Bates Foundation, and Guardian Foundation, Inc.

12. City Approvals

The Hospital will make all reasonable and good faith efforts to obtain any City permits or approvals necessary to carry out the terms of this Declaration.

13. Construction

This Declaration shall be construed according to its fair intent and meaning and neither for nor against the Hospital or the Beneficiaries.

14. Subordination to Encumbrances

Notwithstanding anything in this Declaration to the contrary, the covenants and restrictions contained in this Declaration shall be subordinate to any encumbrance upon all or any portion of the Colby-Ashby Site, the Regent Street Site the South Hospital Drive Site, the Parking Garage Site, or property now owned or hereafter acquired by the Hospital in Area A and Area B given by the Hospital to secure indebtedness incurred for the purpose of acquiring the property, constructing existing improvements or improvements permitted by this Declara- tion, or refinancing such indebtedness.

Nothing in this paragraph shall be construed to allow the Hospital to take any action prohibited by this Declaration.

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15. Paragraph Captions

Paragraph captions used herein are inserted for convenience only and are not intended to be a part of this Declaration or in any way to define, limit or describe the scope and intent of the particular paragraph to which they refer.

16. Relationship to City Permits

This Declaration is made by the Hospital in express reliance upon the validity of the use permit amendment and variance issued by the City of Berkeley in 1983 authorizing the construction of the Southwest Building and East Building described in paragraph 3(a)

If, as a result of any legal proceeding (whether filed before or after this Declaration is recorded) challenging the validity of the use permit amendment or variance or attempting in any other way to prevent or delay construction of these two buildings, the Hospital is enjoined or otherwise prohibited from proceeding with construction, the effectiveness of this Declaration shall be suspended during the time such injunction is in force. If a final judgment is entered declaring that said use permit amendment or variance or both, authorizing the construction of the Southwest and East buildings, were improperly issued by the City of Berkeley and prohibiting the Hospital from constructing or occupying them, then this Declaration shall become null and void.

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17. Validity of Declaration

In the event this Declaration, or any part there- of, is not a valid Declaration of Covenants and Restrictions, it shall be construed to be an agreement between the Hospital and all owners of real property in Areas A and B. It shall be enforceable, mutatis mutandis, by persons owning of record at least twenty separate parcels within the Benefitted Estate.

18. Authority for Declaration

The Board of Trustees, on behalf of Alta Bates Hospital, authorizes this Declaration. A copy of such resolution is attached hereto as Exhibit E.

IN WITNESS WHEREOF, this Declaration has been executed this _____ day of __________________ , 1983, by Alta Bates Hospital, acting by and through its Board of Trustees.

                            ALTA BATES HOSPITAL

                            By  /s/                       
                              President, Board of Trustees


(NOTARIZATION)




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Last update: May 12, 1997.