HomeMy WebLinkAboutHabitat for Humanity Fresno HOME Inv Partnerships Program 386 North Park Ave Rehab Projectand When Recorded Return to:
qv
Acct l0Ø2-ChicaEo Title Ins Co ER
ltlednesday, FEB t2, Zø14 t2t3?:55
Ttr Pd $0,00 Jn![Íg0,tl6jz6City of Fresno
City Clerk's Office
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603
This Agreement is recorded at the request and for the benefit of the City of Fresno and ¡s exempt
from the payment of a recording fee pursuant to Government Code Section 6103
(SPACEABOVE
CITY OF FRESNO
By:
Bruce Rudd, City Manager
CITY OF FRESNO
DISPOSITION AND REHABI LITATION
AND
HOME INVESTMENT PARTNERSHIPS PROGRAM
AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporation
and
Habitat for Humanity Fresno, lnc.
a California Corporation
regarding
386 North Park Avenue Rehabilitation project
(A.P.N.: 459-144-24T)
South Central Fresno, CA 93701
PA
/4 ttl)Ðt i
TABLE OF CONTENTS
paqe
RECTTALS ...........3
ARTTCLE 1. DEF|N|T|ONS.......... .......5
ARTICLE 2. TRANSFER OF AFFORDABLE PROJECT PROPERry.... ............ 8
ARTTCLE 3. TERMS................ ........ 10
ARTICLE 4. GENERAL REPRESENTATION AND WARRANTIES OF DEVELOPER. ....11
ARTICLE 5. HOME PROGRAM REPRESENTATION AND WARRANTIES BY
DEVELOPER. ......... ...........12
ARTICLE 6. COVENANTS AND AGREEMENTS OF DEVELOPER ............,..17
ARTICLE 7. DISBURSEMENT OF HOME FUNDS.... .......21
ARTICLE 8. ACQUISITION AND REHABILITATION OF PROJECT ............,...23
ARTICLE 9. OPERATIONS OF THE PROJECT ............... 28
ARTICLE 10. INSURANCE AND INDEMNITY AND BONDS........... ................. 29
ARTICLE 11. DEFAULTAND REMEDY. ..........35
ARTICLE 12. GENERAL PROVISIONS. ...........37
2
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
the "Agreement") is entered into this,
Fresno, a municipal corporation, acting through its Development and Resource
Management Department - Housing and Community Development Division (hereinafter
referred to as the "ClTY"), and Habitat for Humanity Fresno, lnc. a California corporation
(hereinafter referred to as "DEVELOPER").
RECITALS
A. WHEREAS, the CITY has received a HOME lnvestment Partnerships ("HOME")
Program grant from the U.S. Department of Housing and Urban Development (hereinafter
referred to as ('HUD"), under Title ll of the Cranston-Gonzalez National Affordable Housing
Act of 1990, as amended (hereinafter referred to as the "Act").
B. WHEREAS, to advance the supply of Affordable housing within the City of Fresno
the CITY desires, among other things, to encourage investment in the affordable housing
market.
C. WHEREAS, the DEVELOPER desires to acquire one (1) single-family house from
the City of Fresno at the appraised value the CITY paid for the property (collectively the
"Property") located within the boundaries of the City of Fresno, as more particularly
described in EXHIBIT "A" - Property Description, and rehabilitate the one (1)single-family
house and related on-site improvements (hereinafter referred to as the "Project") utilizing
sweat-equity from the proposed homebuyer.
D. WHEREAS, the DEVELOPER desires to act as the owner/developer exercising
effective project control, as to the acquisition of one (1)house and rehabilitation of the one
(1) single-family house of which will be a HOME-assisted unit to be preserved as Low-
lncome homeownership housing, as defined by the HOME Program, and related on-site
improvements as more particularly described in EXHIBIT '8" - Project Description and
Schedule, incorporated herein.
E. WHEREAS, the Project will be rehabilitated upon HOME Program eligible Property
to be purchased by DEVELOPER at no more than fair market value the CITY paid for the
property.
F. WHEREAS, to fuilher its goal to increase the supply of Affordable Housing within
the City of Fresno, the CITY desires to provide assistance to the Project in the amount of
One Hundred Twenty Thousand dollars and 00/100 ($t20,000.00) in HOME Funding as an
assumable and partially forgivable loan, for eligible HOME Project Property acquisition and
rehabilitation costs, upon the terms and conditions in this Agreement, as further identified in
EXHIBIT "C" - Budget, to be secured by the underlying Property and the Affordable
Housing covenants attached as EXHIBIT "D" - Exemplar Declaration of Restriction, and
Note, Exemplar Notes attached as EXHIBIT "F" - Promissory Note loan, upon the terms
and conditions in this Agreement.
G. WHEREAS, the CITY will transfer fee title to the Project Property "as is" to the
1
DEVELOPER through Escrow with the Chicago Title Company located at 7330 N. Palm,
Suite 101, Fresno, CA 93711 (Attention: Cherie Zuniga at [559-451-3700]. The parties
acknowledge and agree that the fair market purchase price for the property is the amount
of Seventy Thousand dollars and 00/100 ($70,000). This Agreement, when signed by both
parties and deposited with the Escrow holder will be the parties' joint escrow instructions.
The DEVELOPER and the CITY will sign any other form instructions required by Escrow
holder that are: (i) identified in this Agreement; or (ii) required by the Escrow holder to
effect the closing. The Escrow will be consider closed on the date that the Escrow holder is
prepare to issue a standard CLTA owner's title insurance policy to the DEVELOPER
insuring fee title and records the grant deed. lt is agreed and confirmed by the
DEVELOPER and the CITY that notwithstanding other provisions in this Agreement, the
right of possession and use of the Property by the DEVELOPER shall commence only
upon the close of Escrow; and
H. WHEREAS, the CITY conducted an environmental review of the Project pursuant to
the California Environmental Quality Act ("CEQA") guidelines on April 28, 2011, which
resulted in Categorical Exemption. Additionally, the CITY completed an environmental
review of the Project pursuant to the National Environmental Policy Act ("NEPA") guidelines
on May 2,2011, that resulted in a converts to Exemption determination.
l. WHEREAS, the CITY has determined that this Agreement is in the best interest of,
and will materially contribute to, the Housing Element of the General Plan. Further, the
CITY has found that the Project: (i) will have a positive influence in the neighborhood and
surrounding environs, (ii) is in the vital and best interest of the CITY, and the health, safety,
and welfare of CITY residents, (iii) complies with applicable federal, State, and local laws
and requirements, (iv) will increase, improve, and preserve the community's supply of Low-
lncome Housing available at an affordable cost to Low-lncome household, as defined
hereunder, (v) planning and administrative expenses incurred in pursuit hereof are
necessary for the production, improvement, or preservation of Low-lncome Housing, and
(vi) will comply with any and all owner participation rules and criteria applicable thereto.
J. WHEREAS, the CITY and DEVELOPER have determined that the Project's HOME-
assisted Units constitute routine programmatic/grantee lender activities utilizing available
and allocated program/grantee funding, outside the reach of the California Constitution
Article XXXIV and enabling legislation.
K. WHEREAS, the parties acknowledge and agree that the obligations and liabilities of
the DEVELOPER hereunder shall be joint and several unless and except to any extent
expressly provided othenryise.
L. WHEREAS, on August 14, 2013, the Housing and Community Development
Commission of the City of Fresno reviewed this HOME Agreement and recommended
approval.
M. WHEREAS, 2013, the DEVELOPER'S Board reviewed and approved
the development of d HOME Agreement.
NOW, THEREFORE, lN CONSIDERATION of the above recitals, which recitals are
contractual in nature, the mutual promises herein contained, and for other good and
,\
valuable consideration hereby acknowledge, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following terms have the meaning and content set forth in this Article wherever used in
this Agreement, attached exhibits or attachments that are incorporated into this Agreement
by reference.
1.1 Acquisition means vesting of the Property in fee title to the DEVELOPER.
1.2 ADA means the Americans with Disabilities Act of 1990, as most recently
amended.
1.3 Affirmative Marketinq means a good faith effort to attract eligible persons of
all racial, ethnic and gender groups, in the housing market area, to purchase the proposed
Housing Unit that proposed for rehabilitation on the eligible Property, as hereinafter
defined.
1.4 Affordabilitv Period means the minimum period of thirty (30) years
commencing from the date the CITY enters project completion information into HUD's
lntegrated Disbursement and Information System (lD¡S), which date will be provided to the
DEVELOPER by the CITY and added as an administrative amendment hereto; CITY
agrees to enter project completion information into lDlS within 30 days of City's receipt
thereof.
1.5 Affordable Housinq means the for sale single-family Housing unit required to
meet the affordability requirements of 24 C.F.R. 92.252.
1.6 Budqet means the Budget for the development of the Project, as may be
amended upon the approval of the CITY's Housing and Community Development Divlsion
Manager provided any increase in HOME Funds hereunder requires City Council Approval,
attached hereto as EXHIBIT "C'.
1.7 Certificate of Completion means that certificate issued, in the form attached
as EXHIBIT "E' ("Exemplar Certificate of Completion"), to the DEVELOPER by the ClTy
evidencing completion of the Project and a release of construction related covenants for
the purposes of the Agreement.
1.8 CFR means the Code of Federal Regulations.
1.9 Commencement of Rehabilitation means the time the DEVELOPER or the
DEVELOPER's construction contractor begins substantial physical work on the Property,
including, without limitation, delivery of materials and any work, beyond maintenance of the
Property in its status quo condition, which shall take ptace in accordance with the Project
Schedule.
1.10 Declaration of Restrictions means the Declaration of Restrictions in the form
attached hereto as EXHIBIT "D", which contains the Atfordability covenants and
requirements of this Agreement which shall run with the land and whictr the DEVELOPER
I
shall record or cause to be recorded against the Property no later than the date of
Commencement of Construction.
1.11 Deed of Trust means that standard form Deed of Trust (including the security
agreement) given by the DEVELOPER as Trustor, to the CITY as beneficiary, through
escrow established by the DEVELOPER at its sole cost and expense with Chicago Title
Company, and recorded against the Property to ensure the Note, together with the Rider to
Deed of Trust attached as EXHIBIT "G" to the Note and acceptable to the City Attorney, as
well as any amendments to, modification of and restatements of said Deed of Trust, which
Deed of Trust shall be subordinated to Project lenders per the Budget attached as EXHIBIT
"C". There terms of any such Deed of Trust are hereby incorporated into this Agreement
by this reference.
1.12 Eliqible Costs means the HOME eligible Property acquisition and construction
costs funded by the Loan, consistent with the Project Budget attached as EXHIBIT "C'
allowable undei24 C.F.R. Part g2, as specified in24C.F.R-.92.205 andg2.206, and noi
disallowed by 24 C.F.R. 92.214, provided, however, that costs incurred in connection with
any activity that is determined to be ineligible under the Program by HUD or the CITY shall
not constitute Eligible Costs.
1.13 Event of Default shall have the meaning assigned to such term under Section
10.1 hereunder.
1.14 Family has the same meaning given that term in 24 C.F.R. 5.403.
1.15 Fundino Sources means the CITY's HOME Funds, the DEVELOPER's funds
and any other funds that may become available to the Project.
1.16 Hazardous Materials means any hazardous or toxic substances, materials,
wastes, pollutants or contaminants which are defined, regulated or listed as "hazardous
substances," "hazardous wastes," "hazardous materials," "pollutants," "contaminants" or
"toxic substances" under federal or state environmental and health safety laws and
regulations, including without limitation, petroleum and petroleum byproducts, flammable
explosives, urea formaldehyde insulation, radioactive materials, asbestos and lead.
Hazardous Materials do not include substances that are used or consumed in the normal
course of developing, operating or occupying a housing project, to the extent and degree
that such substances are stored, used and disposed of in the manner and in amounts that
are consistent with normal practice and legal standards.
1.17 HOME lnvestment Partnerships Funds (also referred to in this Agreement as
HOME Funds) means the HOME Program monies consisting of the Loan in an amount not
to exceed the sum of one Hundred rwenty Thousand dollars and 00/100 ($t20,000.00) to
be used for eligible Project acquisition and rehabilitation costs, pursuant to this Agreement.
1.18 Household means one or more persons occupying a single-famity home
within the Project.
1.19 HUD means the United States Department of Housing and Urban
Development.
1.20 Loan means the assumable Project Loan of HOME Funds, in the total amount
of One Hundred Twenty Thousand dollars and 00/100 ($t20,000.00) and the aggregate
HOME per unit cap (24 CFR 92.250) for the one (1) single-family HOME-assisted Unit as
determined by the CITY and made available by the CITY to the Project pursuant to this
Agreement, as more specifically described in the Budget and in the Promíssory Note
attached as EXHIBIT "F". The Loan shall be payable in accordance with the terms of the
Note, shall be secured by a deed of trust on each parcel constituting the Property, and shall
be subject to the Rider to Deed of Trust attached as EXHIBIT "G'. Upon conveyance of the
completed Unit to a Low-lncome homebuyer through purchase escrow, the sum of Seventy
Thousand dollars and 00/100 ($70,000.00) shall be forgiven so long as the DEVELOPER is
not then in default of this Agreement and confirms said reduction in principal in writing
noticed to the CITY in a manner provide herein.
1.21 Loan Documents are collectively this Agreement, the Note (attached heretoas EXHIBIT "F"), Deed of Trust, Declaration of Restrictions, and all related
documents/instruments as they may be amended, modified or restated from time to time
along with all exhibits and attachments thereto, relative to the Loan.
1.22 Low-lncome Household means families whose annual income does not
exceed eighty percent (80%) of the median income for the Fresno, California area as
determined by HUD, except as HUD may establish income ceilings higher or lower than
eighty percent (80%) of the median for the area on the basis of HUD finding that such
variations are necessary.
1.23 Note means that certain assumable, HOME Loan Note in a principal amount
not to exceed the HOME Program per unit cap (24 C.F.R. 92.250) as determined by the
CITY, given by the DEVELOPER as promissor, in favor of the CITY as promisee,
evidencing the Loan and performance of the affordability and other covenants and
restrictions set forth in this Agreement, secured by the Deed of Trust as 2nd position lien
upon the Property, naming the CITY as beneficíary and provided to the CITY, no later than
the date of the Affordable Project funding hereunder, an exemplar of which is attached her
to as EXHIBIT "F", and incorporated herein, as well as any amendments to, modifications
of and restatements of said Note consented to by the CITY.
1.24 Proqram lncome has the meaning provided in the HOME Program including
24 C.F.R. 92.503.
1.25 Project means acquisition of one (1) single-family house located at 386 N.
Park and the rehabilitation of the house on the Property and sold as Low-lncome Housing,
and related on-site improvements all as described in the Project Description and Schedule
attached hereto and incorporated herein as EXHIBIT "Bu, upon the property as more
particularly described in EXHIBIT "4".
1.26 Proiect Completion Date means the date that the CITY shall have determined
that the Project: 1) has reached completion in accordance with the scope of work as
approved by the CITY; 2) is in compliance with all Housing Standards, and 3) has been
issued a Certificate of Occupancy, 4) final Project costs and homebuyer Household
information is entered into lDlS.
1.27 Project Schedule means the schedule for commencement and completion
and close of escrow of the Project included in EXHIBIT "8".
1.28 Property means the single-family house located at 386 N. Park Avenue,
Fresno, CA 93701 (A.P.N.: 459-144-24T), more specifically described in the Property
Description attached to EXHIBIT'A'.
1.29 Unit means the one (1) single-family Housing Unit to be rehabilitated upon the
Property and preserved as Affordable Housing for the duration of the thirty (30) year
Affordability Period.
ARTICLE 2. TRANSFER OF AFFORDABLE PROJECT PROPERTY
2.1 Purchase and Sale. The CITY agrees to convey the Affordable Project
Property to the DEVELOPER, and the DEVELOPER agrees to accept conveyance of the
Affordable Project Property from the CITY, upon the terms and conditions set forth in this
Agreement.
2.2 Purchase Price. The fair market purchase price the Affordable Project
Property shall be Seventy Thousand dollars and 00/100 ($70,000) ("Purchase Price"). The
DEVELOPER and the CITY agree that the Purchase Price is to be based upon the March
8, 2011, appraised value of the Affordable Project Property. The Purchase Price shall be
paid as follows:
A. Within fifteen (15) days after the effective date of this Agreement the
parties shall open an escrow (the "Escrow") with Chicago Title Company, 7330 N. Palm,
Suite 101, Fresno, CA 93711 (Attention: Cherie Zuniga at [559-451-3700]). At the close of
escrow the DEVELOPER shall deliver the Note to the CITY in the full amount of the
Purchase Price and rehabilitation costs of Fifty Thousand dollars and 0O/100 ($SO,OOO.O0)
as payment for the Property.
B. The DEVELOPER shall pay all escrow fees and ctosing costs, including
document preparation fees and recording fees, and the premium for the buyer's policy of
the title insurance.
2.3 Condition of Title. Upon Closing, the CITY shall convey to the DEVELOPER,
marketable and insurable fee simple title to the Affordable Project Property by duly
executed and acknowledged standard Title Company form grant deed ("Deed"). Evidence
of delivery of marketable and insurance fee simple title shall be the issuance by Chicago
Title Company (the "Title Company") to the DEVELOPER an CLTA Owner's Policy of Title
lnsurance in the amount of the Purchase Price, insuring fee simple title to the Affordable
Housing Property, the DEVELOPER will accept title as shown on that certain Preliminary
Title Report prepared by the Title Company under Order No. 13-45044435-TL, Dated July
11,2013 (the "Title Policy").
2.4 Conditions Precedent to Closino. The following are conditions precedent to
the DEVELOPER's oblígation to purchase the Affordable Project Property, accept the Loan
and perform its obligation under this Agreement (the "Affordable Project Conditions
Precedent"). The Affordable Project Conditions Precedent are intended solely for the
benefit of the DEVELOPER and may be waived only by the DEVELOPER in writing. ln the
event of the failure of the satisfactory of any of the Affordable Project Conditions
Precedent, the DEVELOPER shall have the right, but not the obligation, to terminate the
Agreement with respect to the Affordable Project.
A. The DEVELOPER shall have received the unconditional commitment of
the Title Company to issue the Title Policy upon the Closing in the form approved by the
DEVELOPER as buyer.
B. The DEVELOPER shall have approved the amount of the construction
financing required for the rehabilitation of the Affordable Housing Project.
C. The DEVELOPER shall give written notice to the CITY within fifteen (15
days after the effective date of this Agreement that it has inspected the Affordable Project
Property in AS lS condition. ln its sole and absolute discretion, the DEVELOPER may,
after its inspection of the Affordable Project Property and review of environmentat reports,
disapprove the Affordable Project Property's environmental or other aspect of the
Affordable Project Property and thereafter terminate the Agreement by written notice to the
CITY without liability for breach or othenruise.
D. The Clry shall have received allthe necessary approvals from HUD,
received the HOME funds and shall be irrevocable committed to fund the Loan at Closing.
E. The DEVELOPER has submitted the Finance Plan to the CITY and the
CITY has approved the Finance Plan.
2.5 Access to the Property. The Developer shall be permitted to enter the
Affordable Project Property during reasonable daylight hours, upon the DEVELOPER's
satisfaction of liability insurance requirements of this Agreement. The DEVELOPER will
give the CITY 24 hours' written notice of its intent to enter on to the Affordable Project
Property.
2.6 Joint Escrow Instructions. This Agreement, when signed by both parties and
deposited into the Escrow holder will be the parties' joint escrow instructions. The
DEVELOPER and the CITY will sign any other form instructions required by the Escrow
holder. The CITY and the DEVELOPER will deposit all instruments, documents, money,
and other items with the Escrow holder that are: (i) identified in the Agreement; or (ii)
required by the Escrow holder to effect the closing. Either party may tender supplemental
escrow instructions consistent with this Agreement.
2.7 Escrow Closino. The parties intend for the Closing to take place on a date
selected by the Buyer but in no event later than October 30,2013 ("the Affordable Project
Closing Date").
A. At or before the Closing, the CITY shall deliver to the Escrow holder or the
DEVELOPER, the following:
(i) a duly executed and acknowledged Deed; and(ii) any other instruments, records or correspondence called for
\
hereunder which have not previously been delivered.
B. At or before the Closing, the DEVELOPER shall deliver to the Escrow
holder or the City, the following:
(i) duly executed (and acknowledged, where required) Loan
Documents; and(ii) any other instruments, records or correspondence called for
hereunder which have not previously been delivered.
C. As a further condition to close, the DEVELOPER shall have received the
unconditional commitment of the Title Company to issue the Title Policy upon the Closing
in the form approved by the DEVELOPER as buyer.
2.8 Possession. Possession of the Affordable Project Property shall be delivered
to the DEVELOPER on the Closing Date free of any and all other tenancies and/or
occupancy rights. The parties acknowledge and agree that each has inspected the
Property and determined it is vacant and unoccupied.
ARTICLE 3. TERMS
3.1 Loan of HOME Funds. The CITY agrees to convey the Property to the
DEVELOPER, and to accept one (1) Note from the DEVELOPER in the full amount of the
Purchase Price and rehabilitation costs in the amount of One Hundred Twenty Thousand
dollars and 00/100 ($120,000), all under the terms and condition provided in this
Agreement. The Loan shall be assignable as provided in this Agreement and Note.
3.2 Loan Documents. The DEVELOPER shall execute and deliver
the Loan Documents including the Note to the CITY, and notarized Deed of Trust to
Chicago Title Company for recordation against the Property, as provided for in this
Agreement.
3.3 Term of Aqreement. This Agreement is effective upon the date of execution
and shall remain in force with respect to the Project for the duration of the Affordability
Period unless earlier terminated as provided herein. After the thirty (30) year Affordability
Period, this Agreement will expire. lt is understood and agreed upon, however, that if for
any reason this Agreement should be terminated in whole or in part as provided hereunder
without default, thé DEVELOPER prior to the Property sale to the DEVELOPER hereunder
the CITY agrees to record a Notice of Cancellation regarding this Agreement upon tne
written request of the DEVELOPER.
3.4 Loan Repavment and Maturitv. The Loan will be due and payable in
accordance with the Note and not later than the Maturity date provided in the Note.
3.5 lncorporation of Documents. The DEVELOPER's HOME application dated
July 8, 2013, the CITY Council approved Minutes of September 12, 2013, approving this
Agreement, the Loan Documents, the Act and HUD regulations at 24 C.R.F. Part 85, 92,
CPD 98-2 and all exhibits, attachments, documents and instruments referenced herein, as
now in effect and as may be amended from time to time, constitute part of this Agreement
10 t
and are incorporated herein by reference. All such documents have been provided to the
parties herewith or have been othenryise provided to/procured by the parties and reviewed
by each of them prior to execution hereof.
3.6 Covenants of DEVELOPER. The DEVELOPER for itself and its
agents/assigns covenants and agrees to comply with all the terms and conditions of this
Agreement and the requirements of 24 CFR Part 92.
3.7 Subordination. This Agreement, the Declaration of Restrictions and the Deed
of Trust may be subordinated to certain approved financing (in each case, a "senior
Lender"), to no worse than 2nd position, but only on condition that all of the following
conditions are satisfied: (a) All of the proceeds of the proposed Senior Loan, less any
transaction costs, must be used to provide construction or permanent financing for the
Project consistent with an approved financing plan; (b) DEVELOPER must demonstrate to
the CITY's reasonable satisfaction that subordination of Deed of Trust is necessary to
secure adequate construction or permanent financing to ensure the viability of the Project;
(c) the subordination agreement must provide the CITY with adequate rights to cure any
defaults by the DEVELOPER including providíng the CITY or its successor with copies of
any notices of default; (d) upon a determination by the City Manager that the conditions in
this Section have been satisfied, the City Manager or his/her designee will be authorized to
execute the approved subordination agreement, inter-creditor agreements, standstill
agreements, and/or other documents as may be reasonably requested by the Lender to
evidence subordination to the Project financing, without the necessity of any further action
or approval provided that such agreements contain written provisions that are no more
onerous and which are consistent with the customary standard requirements imposed by
the financing source(s), on subordinate cash flow obligations under their then existing
senior financing policies, and further provided that the City Attorney approves such
document(s) as to form.
ARTICLE 4. GENERAL REPRESENTATIONS AND WARRANTIES OF DEVELOPER
4.1 Existence and Qualification. The DEVELOPER, represents and warrants to
the CITY as of the date hereof, that the DEVELOPER is a duly organized California
corporation in good standing with the State of California; the DEVELOPER has the
requisite power, right, and legal authority to execute, deliver, and perform its obligations
under the HOME Agreement has taken all actions necessary to authorize the execution,
delivery, performance, and observance of its obligations under this Agreement. This
Agreement, when executed and delivered by the DEVELOPER enforceable against the
DEVELOPER in accordance with its respective terms, except as such enforceability maybe limited by: (a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or other similar laws of general applicability affecting the enforcement of
creditors' rights generally, and (b) the application of general principles of equity without the
joinder of any other party.
4.2 No Litiqation Material to Financial Condition. The DEVELOPER represents
and warrants to the CITY as of the date hereof that, except as disclosed to and approved
by CITY in writing, no litigation or administrative proceeding before any court or
governmental body or agency is now pending, nor, to the best of the DEVELOPER's
knowledge, is any such litigation or proceeding now threatened, or anticipated against the
\11
DEVELOPER that, if adversely determined, would have a material adverse effect on the
financial condition, business, or assets of the DEVELOPER or on the operation of the
Project.
4.3 No Conflict of Interest. The DEVELOPER represents and warrants to the
CITY as of the date hereof that no officer, agent, or employee of the CITY directly or
indirectly owns or controls any interest in the DEVELOPER, and no person, directly or
indirectly owning or controlling any interest in the DEVELOPER, is an official, officer, agent,
or employee of the CITY.
4.4 No Leoal Bar. The DEVELOPER represents and warrants to the CITY, as of
the date hereof that the execution, delivery, performance, or observance by the
DEVELOPER of this Agreement will not, to the best of the DEVELOPER's knowledge,
materially violate or contravene any provisions of: (a) any existing law or regulation, or any
order of decree of any court, governmental authority, bureau, or agency; (b) governing
documents and instruments of the DEVELOPER; or (c) any mortgage, indenture, security
agreement, contract, undertaking, or other agreement or instrument to which the
DEVELOPER is a party or that is binding on any of its properties or assets, the result of
which would materially or substantíally impair the DEVELOPER's ability to perform and
discharge its obligations or its ability to complete the Project under this Agreement.
4.5 No Violation of Law. The DEVELOPER represents and warrants to the CITY
as of the date hereof that, to the best of the DEVELOPER's knowledge, this Agreement
and the operation of the Project as contemplated by the DEVELOPER, do not violate any
existing federal, state or local laws of regulations.
4.6 No Litisation Material to Proiect. The DEVELOPER represents and warrants
to the CITY as of the date hereof, except as disclosed to, and approved by the CITY in
writing, there is no action, proceeding, or investigation now pending, or any basis therefor
known or believed to exist by the DEVELOPER that questions the validity of this
Agreement, or of any action to be taken under this Agreement, that would, if adversely
determined, materially or substantially impair the DEVELOPER's ability to perform and
observe its obligations under this Agreement, or that would either directly or indirectly have
an adverse effect or impair the completion of the Project.
4.7 Assurance of Governmental Approvals and Licenses. The DEVELOPER
represents and warrants to the CITY, as of the date hereof, that the DEVELOPER has
obtained and, to the best of the DEVELOPER's knowledge, is in compliance with all
federal, state, and local governmental reviews, consents, authorizations, approvals, and
licenses presently required by law to be obtained by the DEVELOPER for the Project as of
the date hereof.
ARTICLE 5. HOME PROGRAM REPRESENTATION AND WARRANTIES BY
DEVELOPER
The DEVELOPER, for itself and its development team represents and warrants that:
5.1 Accessibilitv. The DEVELOPER covenants and agrees with the GITY that it
shall comply wíth 24 C.F.R. Par 8, which implements Section 504 of the Rehabilitation Act
12
of 1973 (29 U.S.C .794), including, without limitation, the construction of the Project so that¡t meets the applicable accessibility requirements, including, but not limited to, the
following:
A. The unit shall be made accessible, upon request of the prospective
homebuyer, if the nature of the handicap of an expected occupant so requires. ln such
case, the homebuyer shall be given the opportunity to consult wíth the DEVELOPER
regarding the specific design features to be provided. lf accessibility features selected at
the option of the homebuyer are ones covered by the standards prescribed by 24 C.F.R.
Section 8.32, those features shall comply with the standards prescribed in Section 8.32.
The homebuyer shall be permitted to depart from particular specification of these standards
in order to accommodate his or her specific handicap. The cost of making a unit accessible
under this paragraph may be included in the mortgage amount within the allowable
mortgage limits, where applicable. To the extent such costs exceed allowable mortgage
limits, they may be passed on to the prospective homebuyer, subject to maximum saÉs
price limitations (24 C.F.R . 235.320).
5.2 Affirmative Marketinq. The DEVELOPER warrants, covenants and agrees
with the CITY that it shall comply with all affirmative marketing requirements, including
without limitation, those set out at 24 C.F.R. 92.350 and g2.351, in order to provide
information and othenryise attract eligible persons from all racial, ethnic and gender groups
in the housing market in the sale of the Project Unit. The DEVELOPER slrall be
responsible for complying with the CITY's "Affirmative Marketing Policy" document, as
amended from time to time. The DEVELOPER shall maintain records of actions taken to
affirmatively market units constructed in the future, and to assess the results of these
actions.
5.3 Availability of HOME Funds. The DEVELOPER understands and agrees that
the availability of HOME Funds is subject to the control of HUD, or other federatãgencies,
and should said Funds be encumbered, withdrawn or othenuise made unavailablè to tneClry, whether earned by or promised to the DEVELOPER, and/or should the CITY in any
fiscal year hereunder fail to allocate said Funds, the CITY shall not provide said Funds
unless and until they are made available for payment to the CITY by HUD and the ClTy
receives and allocates said Funds. No other funds owned or controlled by the CITY shall
be obligated under this Agreement.
5.4 Compliance with Aqreement. The DEVELOPER warrants, covenants and
agrees that, in accordance with the requirements of 24 C.F.R. 92.252 and 24 C.F.R. Part
85, upon any uncured default by the DEVELOPER within the meaning of Article 11.1 of this
Agreement, the CITY may suspend or terminate this Agreement and all other agreements
with the DEVELOPER without waiver or limitation of rights/remedies otherwise availabte to
the CITY.
5.5 Conflict of lnterest. The DEVELOPER warrants, covenants and agrees that it
shall comply with the Conflict of Interest requirements of 24 C.F.R. 92.356 including,
without limitation, that no officer, employee, agent or consultant of the DEVELOPER may
occupy a Project Unit. The DEVELOPER understands and acknowledges that no
employee, agent, consultant, officer or elected official or appointed official of the CITY, who
exercises any functions or responsibilities with respect to the Project, or who is in a position
13
to participate in a decision making process or gain inside information with regard to these
activities, may obtain a financial interest or benefit from the Project, or have an interest in
any contract, subcontract or agreement with respect thereto, or the proceeds thereunder
eitñer for him or herself or foränyone with which that person has family or business ties,
during his or her tenure or for one year thereafter. To the extent provided at 24 C.F.R.
92.356(f), no owner, developer or sponsor of the Project, or officer, employee, agent or
consultant thereof, may occupy a Project Unit.
5.6 Construction Standards. The DEVELOPER shall rehabilitate the proposed
Project Unit assisted under this Agreement in compliance with all applicable local codes,
ordinances and zoning requirements in effect at the time of issuance of CITY building
permits.
5.7 Covenants and Restrictions to Run with the Land. The CITY and the
DEVELOPER expressly warrant, covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will run with the land, provided,
however, that, consistent with the Loan Documents, the CITY may release said covenants
and restrictions only upon recapture of all HOME Funding allocated to the Unit by the CITY.
The DEVELOPER further warrants, covenants and agrees to ensure that the covenants
and restrictions set forth herein shall run in favor of the CITY.
A. The CITY and the DEVELOPER hereby declare their understanding
and intent that the covenants and restrictions set forth herein directly benefit the land (a) by
enhancing and increasing the enjoyment and ownership of the proposed Project by a
certain Low-lncome Household, and (b) by making possible the obtaining of advantageous
financing for rehabilitation.
B. The DEVELOPER covenants and agrees with the CITY that after
issuance of a recorded Certification of Completion for the Project until the expiration of the
Affordability Period it shall cause the one (1) Project Unit to be sold as Affordable Housing
to Low-lncome Household,
C. Without waiver or limitation, the CITY shall be entitled to injunctive or
other equitable relief against any violation or attempted violation of any covenants and
restrictions, and shall, in addition, be entitled to damages available under law or contract
for any injuries or losses resulting from any violations thereof.
D. All present and future owners of the Property and other persons
claíming by, through, or under them shall be subject to and shall comply with the covenants
and restrictions. The acceptance of a deed of conveyance to the Property shall constitute
an agreement that the covenants and restrictions, as may be amended or supplemented
from time to time, are accepted and ratified by such future owners, tenant or occupant, and
all such covenants and restrictions shall be covenants running with the land and shall bind
any person having at any time any interest or estate in the Property, all as though such
covenants and restrictions were recited and stipulated at length in each and every deed,
conveyance, mortgage or lease thereof.
E. The failure or delay at any time of the CITY or any other person
entitled to enforce any such covenants or restrictions shall in no event be deemed a waiver
\{14
of the same, or of the right to enforce the same at any time or from time to time thereafter,
or an estoppel against the enforcement thereof.
5.8 Displacement of Persons. The DEVELOPER covenants and agrees with the
CITY that pursuant to 24 C.F.R. 92,353, it will take all reasonable steps to minimize the
displacement of any persons (families, individuals, businesses, nonprofit organizations and
farms). The parties acknowledge and agree that the Property is currently vacant land and
is not occupied.
5.9 lnitial and Annual lncome Certification and Reportins. The DEVELOPER
covenants and agrees that it shall comply with the procedures for annual income
determinations at 24 C.F.R. 92.203. The DEVELOPER, shall obtain, complete and
maintain on fÍle, immediately prior to initial occupancy, and annually thereafter, income
certifications from the single-family Affordable Project Unit Household. The DEVELOPER,
shall make a good faith effort to verify that the income provided by an applicant or
occupying Household in an income certification is accurate by taking one or more of the
following steps as part of the verification process: (1) obtain a pay stub for the most recent
pay period; (2) obtain an income verification form from the applicant's current employer; (3)
obtain an income verification form from the Social Security Administration and California
Department of Social Services if the applicant receives assistance from either of such
agencies; (4) obtain income tax return for the most recent tax year; or (5) if the applicant is
unemployed, obtain another form of independent verification. Copies of Household income
certification and verification must be available for review and approval by the CITY prior to
the close of escrow and the transfer of the title to a Low-lncome homebuyer. The
DEVELOPER further warrants, covenants and agrees that it cooperate with the CITY in the
CITY's income certification/affordability monitoring activities at the time subsequent to the
initial transfer of the Property Unit.
5.10 Lead-Based Paint. The DEVELOPER covenants and agrees with the CITY
that it shall comply with all applicable requirements of the Lead-Based Paint Poisoning
Prevention Act of 42 U.S.C. 4821 et seq., 24 C.F.R. Part 35, including the HUD 1012 Rule,
and 24 C.F.R. 982.401fi), and any amendment thereto, and Environmental Protection
Agency (EPA) Section 402 (c)(3) of the Toxic Substances Control Act (TSCA) to address
lead-based hazards created by renovation, repair, and painting activities that disturb lead-
based paint in target housing and child-occupied facilities. Contractors performing
renovations in lead-based paint units must be EPA-certified renovators. These
requirements apply to all units and common areas of the Project. The DEVELOPER shall
incorporate or cause incorporation of this provision in all contracts and subcontracts for
work performed on the Project, which involve the application of paint. The DEVELOPER
shall be responsible for all disclosure, inspection, testing, evaluation, and control and
abatement activities.
5.11 Minority Outreach Activities. The DEVELOPER covenants and agrees that it
shall comply with all federal laws and regulations described in Subpart H of 24 C.F.R. Part
92, including, without limitation, any requirement that the DEVELOPER comply with the
CITY's minority outreach program.
5.12 Other Laws and Requlations. The DEVELOPER covenants and agrees that,in addition to complying with the federal laws and regulations already cited in this
É15
Agreement, the DEVELOPER has reviewed, and shall comply with and require all its
contractors and subcontractors on the Project to comply with, all other federal laws and
regulations that apply to the HOME Program, including, without limitation, requirements of
24 C.F.R.58.6 and the Flood Disaster Protection Act of 1973, as amended (42 U.S.C.
4001 -4128 the following:
A. The DEVELOPER does not intend to use any financing that is secured
by a mortgage insured by HUD in connection with the Project as part of its land acquisition
and rehabilitatíon costs of the Project.
B. The Project is not located in a tract identified by the Federal
Emergency Management Agency as having special flood requirements.
C. The Project requirements, Subpart F of 24 C.F.R. Part 92, as
applicable and in accordance with the type of Project assisted, including, but not limited to,
the HOME CHDO per-unit subsidy amount at 24 C.F.R.92.250.
D. The property standards at 24 CFR 92.251.
E. The Project "Labor" requirements, as applicable, of 24 C.F.R. 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part S).
F. The provisions of Section 102 and 107 of the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor
Regulations (29 CFR Part 5), in regards to the construction and management of the
proposed Project.
G. The DEVELOPER and its contractors, subcontractors and service
providers for the Project, shall comply with all applicable local, State and federal
requirements concerning equal employment opportunity, including compliance with
Executive Order (E.O.) 11246, "Equal Employment Opportunity", as amended by E.O.
11375, (amending E.O. 11246 Relating to Equal Employment Opportunity), and as
supplemented by regulations at 41 C.F.R. part 60, "Office of Federal Contract Compliance
Programs, Equal Employment Opportunity, Department of Labor".
H. The provisions of the Copeland "Anti-Kickback" Act (18 U.S.C. 874), as
supplemented by Department of Labor regulations (29 C.F.R. part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or
Grants from the United States").
l. The provisions of the Clean Air Act (42 U.S.C.7401 et seq.) and the
Federalwater Pollution controlAct (33 u.S.c. 1251 et seq.), as amended.
J. The provisions of the Byrd Anti-Lobbying Amendment (31 U.S.C.
1352).
K. The provision of E.O.s 12549 and 12689, "Debarment and
Suspension," as set foilh at24 C.F.R. paft24.
v16
L. The provisions of the Drug-Free Workplace Act of 1988 (42 U.S.C.
701), in accordance with the Act and with HUD's rules at 24 CFR part24, subpart F.
M. Title 8 of the Civil Rights Act of 1968 PL. 90-284.
N. E.O. 11063 on Equal Opportunity and Housing.
O. Section 3 of the Housing and Urban Development Act of 1968
P. The Housing and Community Development Act of 1974.
O. Clean Water Requirements 33 U.S.C. 1251.
R. Civil Rights Requirements, 29 U.S.C. 623, 42 U.S.C. 2000, 42 U.S.C.
6102,42 U.S.C 12112,42 U.S.C. 12132,49 U.S.C 5332,29C.F.R. Part 1630,41 C.F.R.
and Part 60 et seq.
5.13 Faith Based Activities. The DEVELOPER warrants, covenants and agrees
that it shall not engage in any prohibited activities described in 24 C.F.R .92.257.
5.14 Reporting Requirements. The DEVELOPER warrants, covenants and agrees
with the CITY that it shall submit performance reports to the CITY as detailed in Section8.17. Furthermore, the DEVELOPER agrees to provide, at the sole cost of the
DEVELOPER, an annual audited Fínancial Statements for the Project expenses and
ongoing financial transactions which occur as a result of this Agreement as detailed in
Section 6.6. The DEVELOPER agrees to account for the expenditure of HOME Funds
using generally accepted accounting principles, which financial documentation shall be
made available to the CITY and HUD upon their respective written request(s).
5.15 Affordabilitv Period. The DEVELOPER covenants and agrees with the CITY
that the single-family Project Unit will be Affordable Housing available to a Low-lncome
Household and other requirements of 24 C.F.R. 92.252 upon sate of the home to an
eligible Low-lncome homebuyer, except upon foreclosure by a lender or transfer in lieu of
foreclosure following default under a Deed of Trust. ln the event DEVELOPER fails to
comply with this section, the DEVELOPER shall return to the CITY all the HOME Funds
disbursed to the DEVELOPER by the CITY.
5.16 Terminated Projects. The DEVELOPER understands and agrees that, if the
Project is terminated before completion, either voluntarily or othenryise, such constitutes an
ineligible activity and the CITY will not be required to provide any further HOME Program
assistance funding to the Project and the CITY may seek available relief.
ARTICLE 6. COVENANTS AND AGREEMENTS OF DEVELOPER
The DEVELOPER covenants and agrees to the following, for the entire term of the
Agreement.
6.1 Adequate Repair and Maintenance. The DEVELOPER during its time on
17
title shall cause the maintenance the Project and Property to be in compliance with all
applicable codes, laws, and ordinances.
6.2 Affordable Rental Housinq. The DEVELOPER covenants and agrees that the
Affordable Project shall constitute one (1) affordable Housing Unit for sale and preserved
for a Low-lncome Household during the thirty (30) year affordability period. ln the event the
DEVELOPER fails to comply with the time period in which the Affordable Units constitute
Affordable Housing, the CITY shall without waiver or limitation be entitled to injunctive
relief, as the DEVELOPER acknowledges that the damages are not adequate remedy at
law for such breach.
6.3 Compliance with Environmental Laws. The DEVELOPER shall cause the
Project to be in compliance with, and not to cause or permit the Project to be in violation of
any Hazardous Materials law, rule, regulation, ordinance, or statute. Although the CITY wili
utilize its employees and agents for regular inspection and testing of the eligible Property,
the DEVELOPER agrees that, if the CITY has reasonable grounds to suspect any such
violation, the DEVELOPER shall be entitled to thirty (30) days' notice and opportunity to
cure such violation. lf the suspected violation is not cured, the CITY shall have the right to
retain an independent consultant to inspect and test the eligible Property for such violation.
lf a violation is discovered, the DEVELOPER shall pay for the reasonable cost of the
independent consultant.
Additionally, the DEVELOPER agrees:
A. That the CITY shall not be directly or indirectly responsible, obligated
or liable with the inspection, testing, removal or abatement of asbestos or other hazardous
or toxic chemicals, materials, substances, or wastes and that all cost, expense and liability
for such work shall be and remain solely with the DEVELOPER;
B. Not to transport to, or from, the proposed Property, or use, generate,
manufacture, produce, store, release, discharge, or dispose of on, under, or about the
Property, or surrounding real estate, or transport to or from the project site, or surrounding
real estate, any hazardous or toxic chemicals, materials, substance, or wastes or allow any
person or entity to do so except in such amounts and under such terms and conditions
permitted by applicable laws, rules, regulations, ordinances, and statutes;
C. To give prompt written notice to the CITY of the following:
1. Any proceeding or inquiry by any governmental authority with
respect to the presence of any hazardous or toxic chemicals, materials, substance, or
waste in or on the eligible Property or the surrounding real estate or the migration thereof
from or to other property;
2. All claims made or threatened by any third party against the
DEVELOPER, or such properties relating to any loss or injury resulting from any hazardous
or toxic chemicals, materials, substance, or waste; and
3. The DEVELOPER's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of such properties that would cause such
{18
properties or underlying or surrounding real estate or part thereof to be subject to any
restrictions on the ownership, occupancy, transferability, or use of the property under any
environmental law, rule, regulation, ordinance or statute; and
4. To indemnify, defend, and hold the CITY harmless from any and
all claims, actions, causes of action, demand, judgments, damages, injuries, administrative
orders, consent agreements, orders, liabilities, penalties, costs, expenses (including
attorney's fees and expenses), and disputes of any kind whatsoever arising out of or
relating to the DEVELOPER or any other party's use of release of any hazardous or toxic
chemicals, materials, substance, or waste on the Property regardless of cause or origin,
including any and all liability arising out of or relating to any investigation, site monitoring,
containment, cleanup, removal, restoration, or related remedialwork of any kind or nature.
6.4 Compliance With Laws. The DEVELOPER shall promptly and faithfully
comply with, conform to and obey all present and future federal, state and local statutes,
regulations, rules, ordinances and other legal requirements applicable by reason of this
Agreement or othenryise to the Project including without limitation prevailing wage
requirements. The DEVELOPER acknowledges that the use of HOME Funds subjects the
Project to extensive federal regulation and covenants and agrees that it shall comply with,
conform to and obey (and take steps as are required of the DEVELOPER to enable the
CITY to comply with, conform to and obey) all federal statues, regulations, rules and
policies applicable to the Project. The CITY and DEVELOPER acknowledge that (i)
pursuant to 24 CFR 92.354 a contract for the construction (new construction) of housing
that includes fewer than 12 units assisted with HOME funds need not contain a provision
requiring the payment of the wages prevailing in the locality as predetermined by the
Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a-276a-5), to all
laborers and mechanics employed in the development of any part of the housing, or the
overtíme provisions, as applicable, of the Contract Work Hours and Safety Standards Act
(40 U.S.C.327-332), and (ii) pursuant to Cal. Labor Code 1720, the public participation in
the Project that would othenryise meet the criteria of a public work for which State prevailing
is required under Cal. Lab. Code 1720 el seq. is exempt where the public funding ís in the
form of below-market interest rate loan for a project in which occupancy of at least 40
percent of the units is restricted for at least 20 years, by deed or regulatory agreement, to
individuals or families earning no more that 80 percent of the area median income.
Nonetheless DEVELOPER shall be solely responsible for determining and effectuating
compliance. Notwithstanding anything to the contrary contained herein, nothing in this
Agreement shall be construed as imposing any independent prevaifing wage requirements
that are different from those imposed by applicable federal or state law.
6.5 Existence, Qualification, and Authority. The DEVELOPER shall provide to
the CITY any evidence required or requested by the CITY to demonstrate the continuing
existence, qualification, and authority of the DEVELOPER to execute this Agreement and
to perform the acts necessary to carry out the Project.
6.6 Financial Statements and Audits. The DEVELOPER, as a subrecipient of
federal financial assistance, is required to comply with the provisions of the Single Audit Act
of 1984 (31 U.S.C. Sections 7501 et seq.), as amended. Annually, within one hundred and
eighty (180) days following: 1) the end of fiscal yea(s) in which the HOME Funds are
disbursed hereunder, and 2) the end of fiscal yea(s) in which this contract shall terminate
\q19
and otherwise upon the CITY's, written request during the term of this Agreement, the
DEVELOPER, at its sole cost and expense shall submit to the CITY:
A. Audited annual financial statements that are current, signed, and
prepared according to generally accepted accounting principles consistently applied
(except as othenruise disclosed therein).
B. Audited Financial Statements covering the income and expenses, and
the financial transactions for the Project during the prior fiscal year.
6.7 lnspection and Audit of Books, Records and Documents. The DEVELOPER
shall be accountable to the CITY for all HOME Funds disbursed for the Project pursuant to
this Agreement. Any duly authorized representative of the CITY or HUD shall, at all
reasonable times, have access to and the right to inspect, copy, make excerpts or
transcripts, audit, and examine all books of accounts, records, files and other papers or
property, and other documents of the DEVELOPER pertaining to the Project or all matters
covered in this Agreement and for up to six (6) years after the expiration or termination of
this Agreement.
A. The DEVELOPER will maintain books and records for the Project
using generally accepted accounting principles. The DEVELOPER agrees to maintain
books and records that accurately and fully show the date, amount, purpose and payee of
all expenditures financed with HOME Funds and to keep all invoices, receipts and other
documents related to expenditures financed with HOME Funds for not less than six (6)
years after the expiration or termination of the Agreement. Books and records must be
kept accurate and current. For purposes of this section, "books, records and documents"
include, without limitation; plans, drawings, specifications, ledgers, journals, statements,
contracts/agreements, funding information, funding applications, purchase orders,
invoices, loan documents, computer printouts, correspondence, memoranda, and
electronically stored versions of the foregoing. This section shall survive the termination of
this Agreement.
B. The CITY may audit any conditions relating to this Agreement at the
CITY's expense, unless such audit shows a significant discrepancy in information reported
by the DEVELOPER in which case the DEVELOPER shall bear the cost of such audit. The
DEVELOPER shall also comply with any applicable audit requirements of 24 C.F.R.
92.506. This section shall survive the termination of this Agreement.
C. The DEVELOPER will cooperate fully with the CITY and HUD in
connection with any interim or final audit relating to the Project that may be performed
relative to the performance of this Agreement.
6.8 lnspection of Property Any duly authorized representative of the CITY or HUD
shall, at all reasonable times, have access and the right to ínspect the Property until
completion of the Project.
6.9 No Other Liens. The DEVELOPER shall not create or incur, or suffer to be
created or incurred, or to exist, any additional mortgage, pledge, encumbrance, lien,
charge, or other security interest of any kind on the eligible Property, other than those
?o20
related to the Project's construction or pre-development loans in relation to the Project,
consistent with the attached Budget, without the prior written consent of the CITY.
6.10 Nondiscrimination. The DEVELOPER shall comply with and cause any and
all contractors and subcontractors to comply with any and all federal, state, and local laws
with regard to illegal discrimination, and the DEVELOPER shall not illegally discriminate
against any persons on account of race, religion, sex, family status, age, handicap, or place
of national origin in its performance of this Agreement and the completion of the Project.
6.11 Ownership. Except as required in pursuit hereof, the DEVELOPER shall not
sell, lease, transfer, assign or othenruise dispose of all or any material part of any interest it
might hold in the Property or the Project without the prior written consent of the CITY
which consent shall not be unreasonably withheld or delayed.
6.12 Payment of Liabilities. The DEVELOPER shall pay and discharge in the
ordinary course of its business all material obligations and liabilities, the nonpayment of
which could have a material or adverse impact on its financial condition, business, or
assets or on the operation of the Project, except such obligations and liabilities that have
been disclosed to the CITY in writing and are being contested in good faith.
6.13 Report of Events of Default. The DEVELOPER shall promptly give written
notice to the CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 7. DISBURSEMENT OF HOME FUNDS
Without waiver of limitation, the parties agree as follows, regarding HOME Funds:
7.1 Use of HOME Proqram Funds. The DEVELOPER warrants, covenants and
agrees that HOME Program Funds shall be applied to pay for HOME eligible Project
Property acquisition costs to finance the sale of the Property to the DEVELOPER through
an escrow account established by Chicago Title Company as provided herein. The CITY's
obligations shall in no event exceed the HOME Funds amount specified in this Agreement.
7.2 Conditions Precedent to Property Sale, The CITY shall not be obligated to
convey the Property to the DEVELOPER or take any other action under this Agreement
unless the following conditions are satisfied:
A. lf any such HOME Funds shall be determined to have been requested
and/or used by the DEVELOPER for costs other than for eligible land acquisition
reimbursement or rehabilitation reimbursement costs, and subject to the notice and cure
provisions of Section 11.2 hereunder, an equal amount from non-public funds shall become
immediately due and payable by the DEVELOPER to the CITY; provided, however, that the
DEVELOPER shall, subject to its full cooperation with the CITY, be entitled to participate in
any opportunity to remedy, contest, or appeal such determination.
B. ln the event HOME Funds are requested to reimburse Eligible Costs
which subsequently lose eligibility as Eligible Costs, the DEVELOPER shall immediately
return such HOME Funds to the CITY.
21 t
C. The CITY will disburse HOME Funds, only to the DEVELOpER
through proper invoicing costs of the Project as provided in this Rrt¡ôe Z.
7.3 Conditions Precedent to Disbursement. The CITY shall not be obligated tomake or authorize any disbursements of HOME Funds unless the following con-Oitions aresatisfied:
A' There exists no Event of Default as provided in Article 11, nor any act,failure, omission or condition that with the passage of time or the giving of notice oi notnwould constitute an Event of Default.
B. The DEVELOPER has received and delivered to the ClTy firmcommitments of, or Agreements for, sufficient funds to finance the Project.
C- The CITY has approved the requested reimbursement of eligibleProject costs.
D. The DEVELOPER has obtained insurance coverage and delivered tothe City evidence of insurance as required in Article 10.
E. The DEVELOPER is current with its compliance of reportingrequirements set forth in this Agreement.
F. The DEVELOPER has provided the CITY with a written request forHOME Funds (provÍded by the CITY), for reimbursement of eligible project co'sts, anddetailing such Eligible Costs applicable to the request.
G. The CITY has received certification required by Section 7.S of thisAgreement.
H. The clrY has received, and continues to the have
disburse, HOME Funds.
the right to
7.4 Requests for Disbursement of HOME Funds. The DEVELOPER shallrequest that the CITY convey the Property through escrow as a form of disbursement ofHOME Funds for property acquisition. The DEVELOPER shall request that the ClTyreimburse funds for eligible rehabilitation cost using the CITY's Request for Disbursement
of Funds form. The DEVELOPER shall only request a maximum of Fifty Thousand dollarsand 00/100 ($s0,000.00) in HOME Program assistance for the Projeci rehabilitation. Allrequests should provide in detail such Eligible Costs applicable to the request.
7.5 DEVELOPER Certification. The DEVELOPER shall submit to the ClTy awritten certification that, as of the date of the Request for ReÍmbursement ("Certification',):
A. The representations and warranties contained in or incorporated byreference in this Agreement continue to be true, complete and accurate in material
respects.
C\CàLì
22
B. The DEVELOPER has carried out all of its obligations and is in
compliance with all the obligations or covenants specified in this Agreement, to the extent
that such obligations or covenants are required to have been carried out or are applicable
at the time of the request for the Reimbursement;
C. The DEVELOPER has not committed or suffered an act, event,
occurrence, or circumstance that constitutes an Event of Default or that with the passage of
time or giving of notice or both would constitute an Event of Default; and
D. The Disbursement requested will be used solely for reimbursement of
Eligible Costs identified in this Agreement and must by supported by the itemized
obligations that have been properly incurred and are properly chargeable in connection
with the Project.
7.6 Disbursement of Funds. The disbursement of HOME Program Loan Funds
shall occur within the normal course of CITY business (approximately thirty (30) days) after
the CITY receives the Certification and to the extent of annually allocated and available
HOME Funds.
ARTICLE 8. ACQUISITION AND REHABILITATION OF PROJECT
Without waiver of limitation, the parties agree as follows:
8.1 Meeting Reqardinq HOME Program Processes and Procedures. The CITY
will schedule, and the DEVELOPER shall attend a meeting prior to rehabilitation with theclrY for the purpose of outlining the Project processes and procedures.
8.2 , Commencement and Completion of Proiect. The DEVELOPER shall
commence rehabilitation of the Project and, record a Notice of Completion of construction
of the Project in accordance with thé Project Schedule as indentified in EXHIBIT'8".
8.3 Contracts and Subcontracts. Consistent with Section 6.3, alt hazardous
waste abatement, construction work and professional services for the Project shall be
performed by persons or entities licensed or otherwise legally authorized to perform the
applicable work or service in the State of California and the City of Fresno. The
DEVELOPER shall provide the CITY with copies of all agreements it has entered into with
any and all general contractors or subcontractors for this Project. The DEVELOPER shall
require that each such general contractor agreement contain a provision whereby the
party(ies) to the agreement, other than the DEVELOPER, agree to: (i) notify the CITY
immediately of any event of default by the DEVELOPER thereunder, (ii) notify the ClTy
immediately of the filing of a mechanic's lien, (iii) notify the CITY immediately of termination
or cancellation of the construction agreement on the Project, and (iv) provide the C!TY,
upon the CITY's request, an Estoppel Certificate certifying that the agreement is in full
force and effect and the DEVELOPER is not in default thereunder. The DEVELOPER
agrees to notify the CITY immediately of termination or cancellation of any such
agreement(s), notice of filing of a mechanic's lien, or breach or default by other party(ies)
thereto.
8.4 Damaqe to Propertv. To the extent consistent with the requirements of any
23 t{\J
¿
permitted encumbrance, or as otheruise approved by the CITY, and subject to Article 10 of
this Agreement, if any building or improvement constructed on the Property is damaged or
destroyed by an insurable cause, the DEVELOPER shall, at its cost and expense, dilþenfly
undertake to repair or restore said buildings and improvements consistent with the original
Plans and Specifications of the Project. Such work or repair within ninety (90) days ãfter
the insurance proceeds are made available to the DEVELOPER and shall be completed
within two (2) years thereafter. All insurance proceeds collected for such damage or
destruction shall be applied to the cost of such repairs or restoration and, if such insuiance
proceeds shall be insufficient for such purpose, the DEVELOPER shall use its best efforts
to make up the deficiency.
8.5 Fees, Taxes and Other Levies. The DEVELOPER shall be responsibte for
payment of all fees, assessments, taxes, charges and levies imposed by any public
authority or utility company with respect to the Property or the Project, and shall pay such
charges prior to delinquency. However, the DEVELOPER shall not be required to pay and
discharge any such charge so long as: (a) the legality thereof is being contested diligenfly
and in good faith and by appropriate proceedings, and (b) if requested by the ClTy, the
DEVELOPER deposits with the CITY any funds or other forms of assurances that the
CITY, in good faith, may determine from time to time are appropriate to protect the ClTy
from the consequences of the contest being unsuccessful. The DEVELOPER shall have
the right to apply for and obtain an abatement and/or exemption of the Project from real
property taxes in accordance with all applicable rules and regulations, including Section
21aß\ of the California Revenue and Taxation Code.
8.6 Financinq. The DEVELOPER shall promptly inform the CITY of any new
financing or funding not included in the budget for the Project, and the DEVELOPER shall
provide the CITY with copies of all agreements with any and all funding sources for the
Project. The DEVELOPER shall require each agreement with any and all funding sources
not included in the Budget to contain a provision whereby the party(ies) to the agreement
other than the DEVELOPER, ¡f permitted by the party(ies) applicable rules and regulations,
agree to notify the CITY immediately of any event of default by the DEVELOPER
thereunder. Should the DEVELOPER not comply with all the obligations of this section, the
loan shall become immediately due and payable as provided for in this Agreement. This
section shall survive expiration or termination of this Agreement.
8.7 ldentification Siqnase. Before the start of rehabilitation, the DEVELOPER
shall place a poster or sign, with a minimum four feet by four feet in size, identifying theCity of Fresno Development and Resource Management Department, Housing- and
Community Development Division as a Project participant. The sign shall also incluáe the
CITY's Housing logo, as well as the Equal Housing Opportunity logo, as mandated by
HUD. The font size shall be a minimum of 4 inches. The poster/sign shall be appropriately
place, and shall remain in place throughout the project construction.
8.8 lnspections. The DEVELOPER shall permit, facilítate, and require its
contractors and consultants to permit and facilitate observation and inspection at the job
site by the CITY and other public authorities during reasonable business hours, for ihe
purpose of determining compliance with this Agreement, including without limitation those
annual on-site inspections required of the clry by 24 c.F.R. 92.s04(d).
24 $\
8.9 Utilities. The DEVELOPER shall be responsible, at its sole cost and
expense, to determine the location of any utilities on the Property and to negotiate with the
utility companies for, and to, relocate the utilities, if any, as necessary tı complete the
Project.
8.10 Insurance and Bonds. The DEVELOPER shall submit for CITY approval
bonds, certificates and applicable endorsements for all insurance and bonds required by
this Agreement in accordance with Article 10.
8.11 Mechanic's Liens and Stop Notices. lf any claim of lien is filed against the
Property or a stop notice affecting any financing, HOME Program Funds or funding sources
for the Project is served on the CITY or any other third party in connection with thé project,
the DEVELOPER shall, within twenty (20) days of such filing or service, either pay and Îulg
discharge the lien or stop notice, effect the release of such lien or stop notice by-delivering
to the CITY a surety bond in sufficient form and amount, or provide the CITY with other
assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or
discharged.
A. lf the DEVELOPER fails to discharge, bond or othenruise satisfy the
CITY with respect to any lien, encumbrance, charge or claim referred to in Section 8.11
above, then, in addition to any other right or remedy, the CITY may, but shall not be
obligated to, discharge such lien, encumbrance, charge, or claim at the DEVELOpER's
expense. Alternatively, the CITY may require the DEVELOPER to immediately deposit
with the CITY, the amount necessary to satisfy such lien or claim and any costs, pending
resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is
adversely determined against the DEVELOPER. The DEVELOPER hereby agrees to
indemnify and hold the CITY harmless from liability for such liens, encumbrances,Lharges
or claims together with all retated costs and expenses.
8.12 Permits and Licenses. The DEVELOPER shall submit, for CITY approval, all
the necessary permits and licenses required for Commencement of Rehabilitation. As the
CITY may reasonably request, the DEVELOPER, at its sole cost and expense, shall
provide to the CITY copies of any and all permit approvals and authorizations including plot
plan, plat, zoning variances, sewer, building, and other permits required by governmental
authorities other than the CITY in pursuit of the Project, and for its stated purposes in
accordance with all applicable building, environmental, ecological, landmark, subdivision,
zoning codes, laws, and regulations. The DEVELOPER is responsible at its sole cost and
expense to determine the location of any utilities on the Property and to negotiate with the
utility companies for and to relocate the utilities, if any, as necessary to complete the
Project.
8.13 Plans and Scope of Work. Before Commencement of Rehabilitation, the
DEVELOPER shall submit to the CITY, for its review and approval, the Plans and Scope of
Work for the Rehabilitation Project. The DEVELOPER will perform Rehabilitation of the
Project in full conformance with the C|TY-approved plans and scope of work thereto
approved by the CITY. The DEVELOPER shall obtain the CITY's prior written approval for
any modifications to the plans and scope of work.
8.14 Propertv Condition. The DEVELOPER shall maintain the Project and all
25
improvements on site in a reasonably good condition and repair (and, as to landscaping, in
a healthy condition), all according to the basic design and related plans, as amended from
time to time. The DEVELOPER and those taking direction under the DEVELOPER shall:(i) maintain all on-site improvements according to all other applicable law, rules,
governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials; (ii) keep the improvements free from graffiti; (iii) keep
the Project Property free from any accumulation of debris or waste material; (iv) promptly
make repairs and replacements to on-site improvements; and (v) promptly replace any
dead, or diseased plants and/or landscaping (if any) with comparable materials.
8.15 Qualitv of Work. The DEVELOPER shall ensure that construction of the
Project employs building materials of a quality suitable for the requirements of the Project.
The DEVELOPER shall cause completion of the rehabilitation of the Project on the
Property in full conformance with applicable local, state and federal laws, statutes,
regulations, and building and housing codes.
8.16 Relocation. lf and to the extent that the rehabilitation of the proposed Project
results in the permanent or temporary displacement of residential homeowners, the
DEVELOPER shall comply with all applicable local, state and federal statutes and
regulations with respect to relocation planning, advisory assistance and payment of
monetary benefits. The DEVELOPER shall be solely responsible for payment of any
relocation benefits to any displaced persons and any other obligations associated with
complying with said relocation laws.
8.17 Reporting Requirements.
following Project reports:
The DEVELOPER shall submit to the CITY the
A. From the date of execution of this Agreement, until issuance of the
final Certificate of Completion, the DEVELOPER shall submit a Quarterly Report, in a form
approved by the CITY, which will include, at a minimum, the following information:
progress of the Project and affirmative marketing efforts. The Quarterly Reports are due
fifteen (15) days after each March 31't, June 30th, September 30th, and December 31't,
during said period.
B. Annually, beginning on the first day of the month following the CITY's
issuance of the Certificate of Completion, and continuing until the termination of the
Agreement, the DEVELOPER shall submit an Annual Report to the CITY, in a form
approved by the CITY. The Annual Report shall include, at a minimum, the following
information: occupancy of each Project Unit including the annual income and the
household size, the date occupancy commenced, certification from an officer of the
DEVELOPER that the Project is in compliance with the Affordability requirements, and
such other information the CITY may be required by law to obtain. The DEVELOPER shall
provide any additional information reasonably requested by the CITY.
C. Annually, beginning on the first day of the month following the CITY's
issuance of the final Certificate of Completion, evidencing the rehabilitation of the Project,
and continuing until the expiration of the Agreement, the DEVELOPER shall submit proof of
insurance as required in Article 10.
26
8.18 tt
shall be the responsibility of the DEVELOPER to coordinate and schedule the work to be
performed so that the Commencement of the Rehabilitation and issuance of the Notice of
Completion will take place in accordance with the provisions of the Agreement and ProjectSchedule. The time for performance contained in the Project Schedule shall be
automatically extended upon the following:
A. The time for performance of provisions of the Agreement by either
party shall be extended for a period equal to the period of any delay directly affecting the
Project or this Agreement which is caused by: war, insurrection, strike or other labor
disputes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of a public
enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, suits
filed by third parties concerning or arising out of this Agreement, or unseasonable weather
conditions ("force majeure"). An extension of time for any of the above specified causes
will be granted only if written notice by the party claiming such extension is sent to the other
party within ten (10) calendar days from the date the affected party learns of the
commencement of the cause and the resulting delay and such extension of time is
accepted by the other party in writing. ln any event, the Project must be completed no later
than one hundred eighty (180) calendar days after the scheduled completion date specified
in this Agreement, notwithstanding any delay caused by that included in this section.
B. Any and all extensions hereunder shall be by mutual written
agreement of the CITY's Housing and Community Development Division Manager and the
DEVELOPER, shall not cumulatively exceed one hundred eighty (180) days.
8.19 Certificate of Completion. Upon completion of the Rehabilitation of the
Project, the DEVELOPER shall submit to the CITY: 1) certification in writing to that the
Project has been substantially rehabilitated in accordance with the plans and scope of
work, approved by the CITY; 2) a recorded Notice of Completion; 3) a cost-certifying final
budget where the DEVELOPER shall identify the actual costs of construction of thé Pioject.
This final cost-certification shall identify costs in line-item format, consistent with the próject
Budget; 4) a request for a recorded Certification of Completion. Upon a determination bythe CITY that the DEVELOPER is in compliance with all of the DEVELOPER's
rehabilitation obligations, as specified in this Agreement, the CITY shall furnish, within thirty
(30) calendar days of a written request by the DEVELOPER, a recordable Certificate of
Completion for the Project in the form attached hereto as EXHIBIT "E". The ClTy will not
unreasonably withhold or delay furnishing the Certificate of Completion. lf the CITY fails to
provide the Certificate of Completion within the specified time, it shall provide the
DEVELOPER a written statement indicating in what respects the DEVELOPER has failed
to complete the Project in conformance with this Agreement or has othenruise failed to
comply with the terms of this Agreement, and what measures the DEVELOPER will need to
take or what standards it will need to meet in order to obtain the Certificate of Completion.
Upon the DEVELOPER taking the specified measures and meeting the specified
standards, the DEVELOPER will certify to the CITY in writing of such compliance and the
CITY shall deliver the recordable Certificate of Completion to the DEVELOPER in
accordance with the provisions of this section.
,,\
?'27
ARTICLE 9. OPERATIONS OF THE PROJECT
9.1 Operation of the Proiect. The DEVELOPER shall operate and/or manage the
Project in full conformity with the terms of this Agreement.
9.2 Occupancv Requirements. One (1) Project Unit shall be marketed and sold
as a principal residence and be owner-occupancy by a Low-lncome Household. The
DEVELOPER shall comply with the income targeting and Affordable Housing requirements
of 24 C.F.R. 92.217 and 92.254. No homebuyer shall take occupancy of any home prior to
the close of escrow vesting title in said homebuyer.
9.3 Fair Marketinq Plan. Before selling any Project Unit and at least sixty (60)
calendar days prior to the Project Completion Date, the DEVELOPER shall submit to CITY
for review and approval a plan for marketing and managing the Unit (hereinafter referred to
as the "Fair Marketing Plan"). The Fair Marketing Plan shall address in detail how the
DEVELOPER plans to market the availability of Units to prospective Low-lncome
Homebuyers and how the DEVELOPER plans to certify the eligibility of potential
household. The Fair Marketing Plan shall also address how the DEVELOPER plans to
manage and maintain the Project Units, and shall include appropriate financial information
and documentation. Topics to be covered in these procedures shall include at a minimum
the following:
o lnterviewing procedures for prospective buyers;o Homebuyerreferences;o Credit reports and checks;o Criminal background checks;. Deposit amounts, purpose, use and refund policy;. EmploymenUlncome verification;o Occupancyrestrictions;o Income Limit;o Equal Housing Opportunity Statement;o Restrictions on use of the premises; and. Homebuyer Education Certification.
The Fair Marketing Plan shall contain copies of all standardized forms associated with the
above listed topics. The DEVELOPER shall abide by the terms of this Fair Marketing Plan,
approved by the CITY, in marketing, managing and maintaining the Property.
9.4 Property Manaqement. With respect to the Project and during the entire
Affordability Period, the DEVELOPER shall comply with the following:
A. Management Responsibilities. The DEVELOPER is specifically
responsible for all management functions with respect to the Project and the Affordable
Units, without limitation, the selection of homebuyers, certification and re-certification of
Household age, size and income, construction management, affirmative marketing,
maintenance, landscaping, routine and extraordinary repairs, replacement of capital items
and security. The CITY shall have no responsibility for such management of the Project.
28
9.5 Maintenance and Security. The DEVELOPER shall during the entire
Affordability Period: (i) at its own expense maintain the Project Unit in good condition, in
good repair and in decent, safe, sanitary, habitable and tenantable living conditions for the
benefit of Unit occupant; (ii) not commit or permit any waste on or to the Project Property,
and shall prevent and/or rectify any physical deterioration of the Property; and (iii) maíntain
the Project in conformance with all applicable federal, state and local laws, ordinances,
codes and regulations, the Final Marketing Plan, and this Agreement.
9.6 Nondiscrimination. One Project Unit shall be available for initial purchase to
members of the general public who are income eligible. The DEVELOPER shall not
illegally discriminate or segregate in the development, construction, use, enjoyment,
occupancy, conveyance of any part of the Project or Property on the basis of race, color,
ancestry, national origin, religion, sex, age, marital status, family status, source of
income/rental assistance subsidy, physical or mental disability, Acquired lmmune
Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC), sexual orientation, or any
other arbitrary basis. The DEVELOPER shall otherwise comply with all applicable local,
State and federal laws concerning nondiscrimination in housing. Neither the DEVELOPER
nor any person claiming under or through the DEVELOPER, shall establish or permit any
such practice or practices of illegal discrimination or segregation with reference to the
selection, location, number, use or occupancy of any Unit. All deeds or contracts made or
entered into by the DEVELOPER as to the Units or Project, or portion thereof, shall contain
covenants concerning nondiscrimination consistent with this section. The DEVELOPER
shall include a statement in all advertisements, notices and signs for availability of Units for
rent to the effect that the DEVELOPER is an Equal Housing Opportunity Provider.
A. Nothing in this section is intended to require the DEVELOPER to
change the character, design, use or operation of the Project; or to require the
DEVELOPER to obtain licenses or permits other than those required for the Project.
9.7 Proiect Home Sale Price. The initial sale price of the single-family home is
the total amount paid by the homebuyer for the home conveyance, inclusive of any first
lien/loan and exclusive escrow fees, title insurance costs, broker's commission (if any),
loan fees or any other closing or transaction costs. Notwithstanding the foregoing, the sale
price for the area as applied under 24 C.F.R. 92.254. The CITY shall approve in advance
the homebuyer. The Homebuyer financing shall be based upon the buyer's ability to pay,
consistent with this Agreement.
ARTICLE 10. INSURANCE AND INDEMNITY AND BONDS
Without waiver of limitation, the parties agree as follows regarding DEVELOPER Insurance
and lndemnity Obligations:
10.1 lnsurance Requirements Throughout the life of this Agreement, the
DEVELOPER shall pay for and maintain in full force and effect all policies of insurance
hereunder with an insurance company(ies) either (i) admitted by the California lnsurance
Commissioner to do business in the State of California and rated not less than "A-Vll" in
Best's lnsurance Rating Guide, or (ii) authorized by the CITY's Risk Manager. The
following policies of insurance are required:
\
û29
(i) COMMERCIAL GENERAL LIABILITY insurance which shall be at least as
broad as the most current version of lnsurance Services Otfice (lSO)
Commercial General Liability Coverage Form cG 00 01 and include
insurance for "bodily injury," "property damage" and "personal and advertising
injury" with coverage for premises and operations (including the use of owned
and non-owned equipment), products and completed operations, and
contractual liability (including, without limitation, indemnity obligations under
the Agreement) with limits of liability of not less than the following:
$1,000,000 per occurrence for bodily injury and property damage
$1,000,000 per occurrence for personal and advertising injury
$2,000,000 aggregate for products and completed operations
$2,000,000 general aggregate applying separately to work performed
under the Agreement
(ii) COMMERCIAL GENERAL LIABILITY insurance which shall be at as
board as the most current version of lnsurance Service Office (lSO) Business
Auto coverage Form cA 00 01, and include coverage for all owned, hired,
and non-owned automobiles or other licensed vehicles (Code 1-Any Auto)
with limits of liability of not less than $1,000,000 per accident for bodily injury
and property damage.
(i¡¡) WORKERS' COMPENSATION insurance as required under the California
Labor Code.
(iv) EMPLOYEE LIABILITY insurance with limits of liability of not less than
$1,000,000 each accident, $1,000,000 disease policy limit and $1,000,000
diseased each employee.
(v) BUILDERS RISK (Course of Construction) insurance obtained by the
Developer or subcontractor in an amount equal to the completion value of the
Project with no coinsurance penalty provisions. (Only required if the project
includes new construction of a building; or renovation of, or addition to, an
existing building.)
(vi) CONSTRACTOR POLLUTION LIABILTY (Unless waived in writing by the
City's Risk Manager or his/her designee, Pollution Liability is required, by the
DEVELOPER or the Contractor for all environmental and water remediation
work and for all work transporting fuel. Unless waived in writing by the City's
Risk Manager or his/her designee, the Pollution Liability is also required for
demolition, renovation, HVAC, plumbing or electrical (including, without
limitation, lighting) work on any structure built prior to the year 1gg0) i
insurance with limits of liability of not less than the following:
$1,000,000 per occurrence or claim
$2,000,000 general aggregate per annual policy period
30 ^\)Õ
ln the event the DEVELOPER purchases an Umbrella or Excess insurance policy(ies) to
meet the minimum limits of insurance set forth above, this insurance policy(ies) shall "follow
form" and afford no less coverage than the primary insurance policy(ies).
ln the event the DEVELOPER involves any lead-based, mold or asbestos environmental
hazard, either the Automobile Liability insurance policy or the Pollution Liability insurance
policy shall be endorsed to include Transportation Pollution Liability insurance covering
materials to be transported by the DEVELOPER pursuant to the HOME Agreement.
ln the event the DEVELOPER involves any lead-based environmental hazard (e.g., lead-
based paint), the DEVELOPER's Pollution Liability insurance policy shall be endórsed to
include coverage for lead based environmental hazards. ln the event the DEVELOPER
involves any asbestos environmental hazard (e.g., asbestos remediation), the
DEVELOPER's Pollution Liability insurance policy shall be endorsed to include coverage
for asbestos environmental hazards. In the event the HOME Agreement involves any mo-ld
environmental hazard (e.9., mold remediation), the DEVELOPER's Pollution Liability
insurance policy shall be endorsed to include coverage for mold environmental hazards
and "microbial matter including mold" within the definition of "Pollution" under the policy.
The DEVELOPER shall be responsible for payment of any deductibles contained in any
insurance policies required hereunder and the DEVELOPER shall also be responsible for
payment of any self-insured retentions. Any deductibles or self-insured retentions must be
declared to, and approved by, the CITY's Risk Manager or his/her designee. At the option
of the CITY's Risk Manager or his/her designee, either (i) the insurer shall reduce or
eliminate such deductibles or self-insured retentions as respects CITY, its officers, officials,
employees, agents and volunteers; or (ii) the DEVELOPER shall provide a financial
guarantee, satisfactory to CITY's Risk Manager or his/her designee, guaranteeing payment
of losses and related investigations, claim administration and defense expenses. At no
time shall City be responsible for the payment of any deductibles or self-insured retentions.
All policies of insurance required hereunder shall be endorsed to provide that the coverage
shall not be cancelled, non-renewed, reduced in coverage or in limits except after thirty (3b)
calendar day written notice has been given to CITY. Upon issuance by the insurer, broker,
or agent of a notice of cancellation, non-renewal, or reduction in coverage or in limits, the
DEVELOPER shall furnish CITY with a new certificate and applicable endorsements for
such policy(ies). ln the event any policy is due to expire during the work to be performed
for CITY, the DEVELOPER shall provide a new certificate, and applicable endorsements,
evidencing renewal of such policy not less than fifteen (15) calendar days prior to the
expiration date of the expiring policy.
The General Liability and Automobile Liability insurance policies shall be written on an
occurrence form. The Pollution Liability insurance policy shall be written on either an
occurrence form, or a claims-made form. The General Liability, Automobile Liability and
the Pollution Liability insurance policies shall name CITY, its officers, officials, agents,
employees and volunteers as an additional insured. All such policies of insurance shall be
endorsed so the DEVELOPER's insurance shall be primary and no contribution shall be
required of CITY. The coverage shall contain no special limitations on the scope of
protection afforded to CITY, its officers, officials, employees, agents and volunteers. lf the
DEVELOPER maintains higher limits of liability than the minimums shown above, the ClTy
?)31
requ¡res and shall be entitled to coverage for the higher limits of liability maintained by the
DEVELOPER. The General Liability insurance policy shall also name the CITY, its officers,
officials, agents, employees and volunteers as additional insureds for all ongoing and
completed operations. The Builders Risk (Course of Construction) insurance policy shalt
be endorsed to name the CITY as loss payee. Any Workers' Compensation insurance
policy shall contain a waiver of subrogation as to City, its officers, officials, agents,
employees and volunteers.
The DEVELOPER shall furnish CITY with all certificate(s) and applicable endorsements
effecting coverage required hereunder. All certificates and applicable endorsements are to
be received and approved by the CITY's Risk Manager or his/her designee before work
commences. Upon request of CITY, the DEVELOPER shall immediately furnish CITY with
a complete copy of any insurance policy required under this HOME Agreement, including
all endorsements, with said copy certified by the undenryriter to be a true and correct copy
of the original policy. This requirement shall survive expiration or termination of this
Agreement.
Claims-Made Policies - lf any coverage required is written on a claims-made coverage
form:
(i) The retroactive date must be shown, and must be before the effective date of
the commencement of work by the DEVELOPER.
(ii) lnsurance must be maintained and evidence of insurance must be provided
for at least 5 years after completion of the work or termination of the HOME
Agreement, whichever first occurs.
(iii) lf coverage is canceled or non-renewed, and not replaced with another
claims-made policy form with a retroactive date prior to the effective date of the
HOME Agreement, or work commencement date, the DEVELOPER must
purchase extended reporting period coverage for a minimum of 5 years after
completion of the work or termination of the HOME Agreement, whichever first
occurs.
(iv) A copy of the claims reporting requirements must be submitted to CITY for
review.
(v) These requirements shall survive expiration or termination of the HOME
Agreement.
lf at any time during the life of the HOME Agreement or any extension, the DEVELOPER,
its contractor, or any of its subcontractors fail to maintain any required insurance in full
force and effect, all work under this HOME Agreement shall be discontinued immediately,
and all payments due or that become due to the DEVELOPER shall be withheld until notice
is received by CITY that the required insurance has been restored to full force and effect
and that the premiums therefore have been paid for a period satisfactory to CITY. Any
failure to maintain the required insurance shall be sufficient cause for CITY to terminate the
HOME Agreement. No action taken by CITY hereunder shall in any way relieve the
DEVELOPER of its responsibilities under the HOME Agreement. The phrase "fail to
maíntain any required insurance" shall include, without limitation, notification received by
CITY that an insurer has commenced proceedings, or has had proceedings commenced
against it, indicating that the insurer is insolvent.
,þ
32
The fact that insurance is obtained by the DEVELOPER shall not be deemed to release or
diminish the liability of the DEVELOPER, including, without limitation, liability under the
indemnity provisions of the HOME Agreement. The duty to indemnify the CITY shall apply
to all claims and liability regardless of whether any insurance policies are applicable. The
policy limits do not act as a limitation upon the amount of indemnification to be provided by
the DEVELOPER. Approval or purchase of any insurance contracts or policies shall in no
way relieve from liability nor limit the liability of the DEVELOPER, its principals, officers,
agents, employees, persons under the supervision of the DEVELOPER, vendors,
suppliers, invitees, consultants, sub-consultants, subcontractors, or anyone employed
directly or indirectly by any of them.
ln the event of a partial or total destruction by the perils insured against of any or all of the
work and/or materials herein provided for at any time prior to the final completion of the
HOME Agreement and the final acceptance by the CITY of the work or materials to be
performed or supplied thereunder, the DEVELOPER shall promptly reconstruct, repair,
replace, or restore all work or materials so destroyed or injured at his/her sole cost and
expense. Nothing herein provided for shall in any way excuse the DEVELOPER or his/her
insurance company from the obligation of furnishing all the required materials and
completing the work in full compliance with the terms of the HOME Agreement.
lf the DEVELOPER should subcontract all or any portion of the services to be performed
under the HOME Agreement, the DEVELOPER shall require each subcontractor to provide
insurance protection in favor of CITY, its officers, officials, employees, agents and
volunteers in accordance with the terms of each of the preceding paragraphs, except that
the subcontractors' certificates and endorsements shall be on file with the DEVELOPER
and the CITY prior to the commencement of any work by the subcontractor.
A. The above described policies of insurance shall be endorsed to
provide an unrestricted thirty (30) day written notice in favor of the CITY, of policy
cancellation, change or reduction of coverage. ln the event any policy is due to expire
during the term of this Agreement, a new certificate evidencing renewal of such policy shall
be provided not less than fifteen (15) days prior to the expiration date of the expiring
policy(ies). Upon issuance by the insurer, broker, or agent of a notice of cancellation,
change or reduction in coverage, the DEVELOPER or its contractors, as the case may be,
shall file with the CITY a certified copy of the new or renewal policy and certificates for such
policy.
B. The DEVELOPER shall furnish the CITY with the certificate(s) and
applicable endorsements for ALL required insurance prior to the CITY's execution of this
Agreement. The DEVELOPER shall furnish the CITY with copies of the actual policies
upon the request of the CITY at any time during the life of the Agreement or any extension.
At all times hereunder the DEVELOPER shall maintain the required
insurance in fullforce and effect.
10.2 lndemnitv The DEVELOPER shall indemnify, hold harmless and defend the
CITY and each of its officers, officials, employees, agents and volunteers from any and all
loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or
strict liability, including but not limited to personal injury, death at any time and property
33 ,+l1
damage) incurred by the CITY, DEVELOPER or any other person, and from any and all
claims, demands and actions in law or equity (including attorney's fees and litigation
expenses), arising or alleged to have arisen directly or indirectly out of performance of this
Agreement. The DEVELOPER's obligations under the preceding sentence shall apply
regardless of whether the CITY or any of its officers, officials, employees, agents or
volunteers are passively negligent but shall not apply to any loss, liability, fines, penalties,
forfeitures, costs or damages caused by the active negligence or by the willful misconduct
of the CITY or any of its officers, officials, employees, agents or volunteers.
A. This section shall survive termination or expiration of this Agreement.
10.3 Propertv lnsurance Upon acquisition of the property, the DEVELOPER shall
pay for and maintain in full force and effect, throughout the remaining life of this
Agreement, a policy(ies) of property insurance acceptable to the Clry, covering the Project
premises, with limits reflective of the value of the Project premises upon issuance of the
Certificate of Completion, or substantial completion of the Project referenced in this
Agreement, including fire and Extended Comprehensive Exposure (ECE) coverage in an
amount, form, substance, and quality as acceptable to the CITY's Risk Manager. The
CITY shall be added by endorsement as a loss payee thereon.
10.4 Bond Obliqations The DEVELOPER or its General Contractor shall obtain,
pay for and deliver good and sufficient payment and performance bonds along with a
primary Obligee, Co-Obligee or Multiple Obligee Rider in a form acceptable to the CITY
from a corporate surety, admitted by the California lnsurance Commissioner to do business
ín the State of California and Treasury-listed, in a form satisfactory to the CITY and naming
the CITY as Obligee.
A. The "Faithful Performance Bond" shall be at least equal to 100% of the
DEVELOPER's estimated construction costs as reflected in the DEVELOPER's pro forma
budget, attached hereto as EXHIBIT uC", to the guarantee faithful performance of the
Project, within the time prescribed, in a manner satisfactory to the CITY, consistent with
this Agreement, and that all material and workmanship will be free from original or
developed defects.
B. The "Payment Bond" shall be at least equal to 100% of construction
costs approved by the CITY to satisfy claims of material supplies and of mechanics and
laborers employed for this Project. The bond shall be maintained by DEVELOPER in full
force and effect until the Project is completed and until all claims for materials and labor are
paid and as required by the applicable provisions of Chapter 7, Title 15, Part 4, Division 3
of the California Civil Code.
C. The "Material and Labor Bond" shall be at least equal to 100% of the
DEVELOPER's estimated construction costs as reflected in the DEVELOPER's pro forma
budget, attached hereto as EXHIBIT "C", to satisfy claims of material supplies and of
mechanics and laborers employed for this Project. The bond shall be maintained by the
DEVELOPER in full force and effect until the Project is completed, and until all claims for
materials and labor are paid, released, or time barred, and shall othenruise comply with any
applicable provision of the California Code.
34
D. In lieu of the bonds required above, the CITY in its sole discretion, may
accept from the DEVELOPER an lrrevocable Standby Letter of Credit issued with the ClTy
named as the sole beneficíary in the amounts(s) of the bonds required above. The Standby
Letter of Credit is to be issued by a bank, and in the form, acceptable to the ClTy. This
lrrevocable Standby Letter of Credit shall be maintained by the DEVELOPER in full forceand effect until the CITY is provided with a recorded Notice of Completion for the
construction of the Project and shall be subject to and governed by the laws of the State of
California.
ARTICLE 11. DEFAULT AND REMEDIES
11.1 Events of Default. The parties agree that each of the following shall
constitute an "Event of Default" by the DEVELOPER for purposes of this Agreement:
A- The DEVELOPER's use of HOME Funds for costs other than Eligible
Costs or for uses not permitted by the terms of this Agreement;
B. The DEVELOPER's Failure to obtain and maintain the insurance
coverage required under this Agreement;
C. Except as othenruise provided in this Agreement, the failure of the
DEVELOPER to punctually and properly perform any other covenant or agreement
contained in this Agreement including without limitation the following: Al the
DEVELOPER's material deviation in the Project work specified in the Project Descriptionas identified in this Agreement, without the CITY's prior written consent; (2) the
DEVELOPER's use of defective or unauthorized materials or defective workmanship in
pursuit of the Project; (3) the DEVELOPER's failure to commence or complete the project,
as specified in this Agreement, unless delay is permitted under Section 8.18 of this
Agreement; (4) cessation of the Project for a period of more than fifteen (1S) consecutive
days (other than as provided at Section 8.18 of this Agreement) prior to submitting to the
CITY certification lhqt the Project is complete; (5) añy material'adverse changã in the
condition of the DEVELOPER or its development team, or the Project that gives tne Clry
reasonable cause to believe that the Project cannot be completed by ihe scheduled
completion date according to the terms of this Agreement; (6) the DEVELOPER's failure to
remedy any deficiencies in record keeping or failure to provide records to the ClTy upon
the CITY's request; (7) the DEVELOPER's failure to comply with any federal, state or lócal
laws or applicable CITY restrictions governing the Project, including but not limited to
provisions of this Agreement pertaining to equal employment opportuniiy, nondiscrimination
and lead-based paint;
D. Any representation, warranty, or certificate given or furnished by or on
behalf of the DEVELOPER shall prove to be materially false al of the date of which the
representation, warranty, or certification was given, or that the DEVELOPER concealed or
failed to disclose a material fact to the CITY, provided, however, that if any representation,
warranty, or certification that proves to be materially false is due merely to the
DEVELOPER's inadvertence, the DEVELOPER shall have a thirty (30) day opportunity
after written notice thereof to cause such representation, warranty, oi certification io be truä
and complete in every respect;
35
L
11
E. The DEVELOPER shall file, or have filed against it, a petition of
bankruptcy, insolvency, or similar law, state or federal, or shall file any petition or answer
seeking, consenting to, or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been
vacated within ninety (90) days; or shall be adjudicated bankrupt or insolvent, under any
present or future statute, law, regulation, under state or federal law, and such judgment or
decree is not vacated or set aside within ninety (90) days;
F. The DEVELOPER's failure, inability or admission in writing of its
inability to pay its debts as they become due or the DEVELOPER assignment for the
benefit of creditors;
G. A receiver, trustee, or liquidator shall be appointed for the
DEVELOPER or any substantial part of the DEVELOPER's assets or properties, and not
be removed within ten (10) days;
H. The Failure of DEVELOPER to cause completion of the Project prior to
the completion date identified in Exhibit "B".
L The DEVELOPER's breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not othenrise identified
within this Section.
J. Any substantial or continuous breach by the DEVELOPER of any
material obligation owned by the DEVELOPER imposed by any other agreement with
respect to the financing, of the Project, whether or not the CITY is a party to such
agreement after expiration of all notice and cure periods contained within such document.
11.2 Notice of Default and Opportunity to Cure. The CITY shall give written notice
to the DEVELOPER of any Event of Default by specifying: (1)the nature of the event or
deficiency giving rise to the default; (2) the action required to cure the deficiency, if any
action to cure is possible, and (3) a date, which shall not be less than the lesser of any time
period provided in this Agreement, any time period provided for in the notice, or thirty (30)
calendar days from the date of the notice, by which such deficiency must be cured,
provided that if the specified deficiency or default cannot reasonably be cured within the
specified time, with the CITY's written consent, the DEVELOPER shall have an additional
reasonable period to cure so long as it commences cure within the specified time and
thereafter diligently pursues the cure in good faith. The CITY acknowledges and agrees
that the DEVELOPER shall have the right to cure any defaults hereunder and that notice
and cure rights hereunder shall extend to any and all partners of the DEVELOPER that are
previously identified in writing delivered to the CITY in the manner provided in this
Agreement.
11.3 Remedies Upon an Event of Default. Upon the happening of an Event of
Default and a faílure to cure said Event of Default within the time specified, the CIW's
obligation to disburse HOME Funds shall terminate. The CITY may also at its option and
without notice institute any action, suit, or other proceeding in law, in equity or otherwise,
which it shall deem necessary or proper for the protection of its interests and may without
36
.ta
limitation proceed with any or all of the following remedies in any order or combination that
the CITY may choose in its sole discretion:
A. Terminate this Agreement immediately upon written notice;
B. Bring an action in equitable relief: (1) seeking specific performance of
the terms and conditions of this Agreement, and/or (2) enjoining, abating or preventing any
violation of said terms and conditions, and/or (3) seeking declaratory relief;
C. Pursue any other remedy allowed by law or in equity or under this
Agreement; and
ARTICLE I2. GENERAL PROVISIONS
Without waiver of limitation, the parties agree that the following general provisions shall
apply in the performance hereof:
12.1 Amendments. No modification or amendment of any provision of this
Agreement shall be effective unless made in writing and signed by the parties hereto,
12.2 Attorney's Fees. lf either party is required to commence any proceeding or
legal action to enforce or interpret any term, covenant or condition of this Agreement, the
prevailing party will be entitled to recover from the other party its reasonable attorney's fees
and legal expenses.
12.3 Bindinq on All Successors and Assiqns. Unless othenruise expressly provided
in this Agreement, all the terms and provisions of this Agreement shall be binding on and
inure to the benefit of the parties hereto, and their respective heirs, successors, assigns,
and legal representatives.
12.4 Counterparts. This Agreement may be executed in counterparts, each of
which when executed and delivered will be deemed an original, and all of which together
will constitute one instrument. The execution of this Agreement by any party hereto will not
become effective until counterparts hereof have been executed by all parties hereto.
12.5 Disclaimer of Relationship. Nothing contained in this Agreement, nor any act
of the CITY or of the DEVELOPER, or of any other person, shall in and by itself be deemed
or construed by any person to create any relationship of third party beneficiary, or of
principal and agent, of limited or general partnership, or of joint venture.
12.6 Discretionary Governmental Actions. Certain planning, land use, zoning and
other permits and public actions required in connection with the Project including, without
limitation, the approval of this Agreement, the environmental review and analysis under
NEPA or any other statute, and other transactions contemplated by this Agreement are
discretionary government actions. Nothing in this Agreement obligates the CITY or any
other governmental entity to grant final approval of any matter described herein. Such
actions are legislative, quasi-judicial, or othenruise discretionary in nature. The CITY cannot
take action with respect to such matters before completing the environmental assessment
of the Project under NEPA and any other applicable statutes. The CITY cannot and does
37
not commit in advance that it will give final approval to any matter. The CITY shall not be
liable, in contract, law or equity, to the DEVELOPER or any of its executors, administrators,
transferees, successors-in-interest or assigns for any failure of any governmental entity to
grant approval on any matter subject to discretionary approval.
12.7 Effective Date. This Agreement shall be effective upon the date first above
written, upon the CITY and the DEVELOPER's complete execution following City Council
approval.
12.8 Entire Aqreement. This Agreement represents the entire and integrated
agreement of the parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations, representations or agreements, either written or orat.
12.9 Exhibits. Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
12.10 Expenses lncurred Upon Event of Default. The DEVELOPER shall reimburse
the CITY for all reasonable expenses and costs of collection and enforcement, including
reasonable attorney's fees, incurred by the CITY as a result of one or more Events of
Default by the DEVELOPER under this Agreement.
12.11 Governing Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of California shall govern all aspects of this Agreement,
including execution, interpretation, performance, and enforcement. Venue for filing any
action to enforce or interpret this Agreement will be Fresno, California.
12.12 Headinqs. The headings of the articles, sections, and paragraphs used in
this Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
12.13 lnterpretation. This Agreement in its final form is the result of the combined
efforts of the parties. Any ambiguity will not be construed in favor or against any party, but
rather by construing the terms in accordance with their generally accepted meaning.
12.14 No Assionment or Succession. The DEVELOPER shall not sell, transfer,
assign or othenruise dispose of all or a material part of any interest it might hold in the
Property without the prior written consent of the CITY, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, upon prior written notice
to the CITY, the DEVELOPER shall be permitted to assign its rights and obligation under
this Agreement with respond to the Project.
12.15 No Third-Partv Beneficiarv. No contractor, subcontractor, mechanic,
materialman, laborer, vendor, or other person hired or retained by the DEVELOPER shall
be, nor shall any of them be deemed to be, third-party beneficiaries of this Agreement, but
each such person shall be deemed to have agreed: (a) that they shall look to the
DEVELOPER as their sole source of recovery if not paid, and (b) except as othenruise
agreed to by the CITY and any such person in writing, they may not enter any claim or
bring any such action against the CITY under any circumstances. Except as provided by
law, or as othenryise agreed to in writing between the CITY and such person, each sucñ
38 ,{-,h
person shall be deemed to have waived in writing all right to seek redress from the CITY
under any circumstances whatsoever.
12.16 No Waiver. Neither failure nor delay on the part of the CITY in exercising any
right under this Agreement shall operate as a waiver of such right, nor shall any single or
partial exercise of any such right preclude any further exercise thereof or the exercise of
any other right. No waiver of any provision of this Agreement or consent to any departure
by the DEVELOPER therefrom shall be effective unless the same shall be in writing, signed
on behalf of the CITY by a duly authorized officer thereof, and the same shall be effective
only in the specific instance for which it is given. No notice to or demand on the
DEVELOPER in any case shall entitle the DEVELOPER to any other or further notices or
demands in similar or other circumstances, or constitute a waiver of any of the CITY's right
to take other or further action in any circumstances without notice or demand.
12.17 Nonreliance. The DEVELOPER hereby acknowledges having obtained such
independent legal or other advice as it has deemed necessary and declares that in no
manner has it relied on the CITY, it agents, employees or attorneys in enteríng into this
Agreement.
12.18 Notice. Any notice to be given to either party under the terms of this
Agreement shall be given by certified United States mail, postage prepaid, return receipt
requested, at the addresses specified below, or at such other addresses as may be
specified in writing by the parties.
lf to the CITY: City of Fresno
Development and Resource Management Department
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
lf to DEVELOPER: Habitat for Humanity Fresno, lnc.
Attention: Executive Director
4991 E. Mc KinleyAvenue, Suite 123
Fresno, CA 93727
12.19 Precedence of Documents. In the event of any conflict between the body of
this Agreement and any exhibit or attachment hereto, the terms and conditions of the body
of this Agreement will control.
12.20 Recording of Documents. The DEVELOPER agrees to cooperate with the
CITY and execute any documents required, promptly upon the CITY's request, and to
promptly effectuate the recordation of this Agreement, the Declaration of Restrictions, the
Deed of Trust, and any other documents/instruments that the CITY requires to be recorded
in the Official Records of Fresno County, California, consistent with this Agreement.
12.21 Remedies Cumulative. All powers and remedies given by this Agreement
shall be cumulative and in addition to those otherwise provided by law.
^An39
12.22 Severabilitv. The invalidity, illegality, or un-enforceability of any one or more
of the provisions of this Agreement shall not affect the validity, legality, or enforceability of
the remaining provisions hereof or thereof.
ilt
ilt
ilt
).f40
lN WITNESS WHEREOF, the parties have
California, the day and year first above written.
CITY OF FRESNO, a Municipal Corporation
By: Date
(Attach notary certificate of acknowledgment)
ATTEST:
WONNE SPENCE, CMC
City Clerk
By;&dùtr"l-
Deputy 6t+Et¿&tE L' b*ùt
Date:
executed this Agreement in Fresno,
APPROVED AS TO FORM:
DOUGLAS T. SLOAN
City Attorney
OR HUMANITY ., a California corporation
Date: I 7 /t1
Attachments:
EXHlBIT A:
EXHIBIT B:
EXHIBIT C:
EXHIBIT D:
EXHIBIT E:
EXHIBIT F:
EXHIBIT G:
PROPERTY DESCRIPTION
PROJECT DESCRIPTION AND SCHEDULE
PROJECT BUDGET
EXEMPLAR DECLARATION OF RESTRICTIONS
EXEMPLAR CERTIFICATE OF COMPLETION
EXEPLAR PROMISSORY NOTE
EXEMPLAR DEED OF TRUST
t\\
1/ilttrnnno,-,
Tracy Parvanian, Deputy City Attorney
Date: l'3- l+
Name: ,\nthony Jl Mi
Title: Executive Di
CATIFORNIA ALL.PURPOSE ACKNOWLEDGMENT
State of California
County of lr¿çnd
personally appeared
before me,
Here lnse
\l
t re^at*
f Signe(s)
Ì
On
who proved to me on the basis of satisfactory
evidence to be the perso whose name(s) is*are
subscribed to the within instrument and acknowledged
to me that he/ y executed the same inhis/ authorized capacity(ies), and that by
person or the entity upon behalf of which theperso 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 and officialseal.
Signature:
Place Notary Seal Above
OPTIONAL
Though the information below is not required by law, ¡t may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Document
Title or Type of Document: + - 3fþ N' /or k'
Document Date:
Signe(s) Other
Capacity(ies)
Signer's Name:
Number of Pages:
Than Named Above:
Claimed by Signer(s)
n Corporate Officer - Title(s):
n lndividual
n Partner-! Limited n General
n Aüorney in Fact
n Trustee
n Guardian or Conservator
n Other:
Signer ls
Signer's
n Officer - Title(s):
n Partner-n Limited n General
n Attorney in Fact
n Trustee
n Guardian or Conservator
tr Other:
Signer ls Representing:
Commisslor t 200E360
t{ot¡ry Public - C¡lllorni¡
Fmno CorûtT
OF SIGNER
@ 2009 National Notary Assoc¡ation . Nat¡onalNotary.org . 1-800-US NOTABY (1-800-876-6827)Item #5907
ñ
CALIFORNIA ALL.PURPOSE AGKNOWLEDGMENT clvll CODE 5 tl89
State of California I
County of Presno f
On 01 /06 /2014 before me,Katherv'n Cornell, Notary Public
Date
personally appeared
Here lnserl Neme and ol the Ofl¡cer
:k:k:k**:kþ¡UCe RUdd******
Name(s) oJ Signe(s)
who proved to me on the basis of satisfactory
evidence to be the personþ) whose name(s) is
subscribed to the within instrument and acknowledged
to me that h executed the same in
person(e), 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 and official seal.
Place Notary Seal Above
Signature:
ure of Notary Public
OPTIONAL
Though the ¡nformat¡on below is not required by law, it may prove valuable to persons rely¡ng on the document
and could prevent fraudulent removal and reattachment ol this form to another document.
or Type of Document:Aqreement 386 North Park
Number of Pages:
Signe(s) Other
Capacity(ies)
Signer's Name:
Named Above:
Signer(s)
n corporate officer - Title(s):
n lndividual
n Partner - n Limited nGeneral
n Attorney in Fact
n Trustee
I Guardian or
n Other:
!
Signer's Name:
ual
Partner - n Limited n General
D Trustee
fl Guardian or
n Other:
Signer ls Representing :
Description of Attached Document
@ 2012 National Notary Associat¡on . NationalNotary org . 1-800-lJS NOTARY (1-500-876-6827) tten +Se7Z
,s
EXHIBIT "A'' . LEGAL DESCRIPTION
The Property is located at 386 North Park Avenue, Fresno, cA 93701.
THE I.AND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY
OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
THE WEST 140 FEET OF THE NORHT 37-112 FEET OF LOT 6 IN BLOCK 10 OF TERRY TRACT
IN THE CITY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IÑ
BOOK 2, PAGE 31 OF PLATS, FRESNO COUNTY RECORDS.
EXCEPTING THE WEST 20 FEET THEREOF.
APN: 459-144-247
\\
EXHIBIT ¡'B'' . PROJECT DESCRIPTION AND SCHEDULE
I. PROJECT DESCRIPTION
The Project consists of the acquisition of a City-owned single-family house and property located at
386 N. Park Avenue, Fresno, CA 93701, rehabilitation of the single-family house and related on-site
improvements, and then subsequent sale of the rehabilitated house to a iow-income homebuyer.
The single-family house:
Once the single-family house is rehabilitated, the house will be sold through escrow to a low-
income homebuyer. Upon sale of the house, the City will forgive $7O,OOO of the $120,000 Note to
make the house more affordable to a low-income homebuyer. The City will also subordinate the
One Hundred Twenty Thousand dollars and 00/100 ($120,000.00) loan to Habitat's 1't position loan
lien to the project.
HOME FUNDED UNITS
PROJECT SCHEDULE
A. Acquisition of the Property from the City: October 30, 2013
B. Commencement of Rehabilitation: June 1 ,2014
C. Completion of Rehabilitation: April 30,2015
D. Sell/Close escrow: June 30,2015
lt.
,6
SCOPE OF WORK Project No: HM 00040
Site Address: 386 N. Park
Fresno, CA 93701
Basement. Repair retaining wall at basement. Construct basement access door
Bathroom. Replace vanity cabinet, mirror, toileto Paint with semi-gloss
Bedroom. Replace switch leg at back bedroom. Replace interior door at front bedroom. Replace master bedroom closet door
Kitchen Upgrades. Counters/Fixtures, Etc.
Asbestos¡ Remove abandoned transit pipe
Lead Testing
HVAC. lnstall new roof mount HVAC systemo Remove wallfurnace
Electrical. lnstall new wiring as needed
Entry. Replace front door, paint weathering stripping
Windows. Replace back bedroom window to meet egress requirement. Repair/refinish front elevation windows to meet Loweil/Jefferson
design requirement.. Replace all other windows with dual pane single hung
Exterior Paint. Repair Exterior. Replace exterior vents
$ 2,000.00
$ 2,000.00
$ 1,000.00
$ 2,500.00
$ 2,500.00
$ 8,000.00
$ 5,000.00
$ 2,000.00
$ 2,500.00
$ 3,000.00
$ 6,000.00
$ 4.000.00
$40,500.00
O:\Rchab - 386 N Pæk\SCOPE OF WORK Project No 12-00 I 6.doc Revised : I 0-30-1 3
)^ü
Fencing. Replace rear and side fence with 6' chain link privacy fence $ 2,OOO.OO
Garport - Behind House¡ Construct new carport per City "standard plan". $ S,OOO.0O
Tree Trimmingo Trim trees in backyard at fence line. Remove tree in front yard $ 2,OOO.OO
Porch Railing. Replace front porch railing with similar design and material $ 1,OOO.OO
Plumbing. Replace water heater. Replace water main. lnstall back flow prevention $ 2,500.00
lnterior Electrical. lnstall carbon monoxide and smoke detectors per Code $ 2,SOO.OO
lnterior Paint¡ Paint ínterior $ 2,OOO,OO
Flatwork. Reimburse Housing Authority for drawing $ 1,442.00. Replace front yard walking and lawn borders $ 3,000.00
Landscaping. Replace irrigation system. Add bark/sod/shrubs $ 2,5OO.OO
Roof. Replace roof. Add tech shield sheathing $ 9,0OO.OO. Attic insulation $ 1,600.00
Flooring $ 2.S0O.OO
$37,042,00
Total for Project Number:ç77,542.00
,fl
o:\Rehab - 386 N Park\scoPE oF woRK project No 12-0016.<toc Revised: l0-30-t 3
EXHIBIT ¡fD'' . EXEMPLAR DECLARATION OF RESTRICTIONS
Recorded at the Request of
and When Recorded Return to:
City of Fresno
Development and Resource Management Dept
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
(SPACE ABOVE TH|S L|NE FOR RECORDER'S USE ONLÐ
The document is exempt from the payment of a recording fee ¡n accordance with Govemment Code Secflons 6103 and 273g3.
APN: 459-144-247
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS, ("Declaration"), is executed as of this
day of 2013, by Habitat for Humanity Fresno, lnc., a California corporat¡on,
("DECLARANT"), in favor of the CITY OF FRESNO, a California municipal corporation
("clTY").
WHEREAS, DECLARANT is the owner of the real estate in the county of Fresno,
state of California located at 386 N. Park Avenue, Fresno, California 93701 (A.P.N.: 45g-
144'24), which is more particularly described in EXHIBIT uAu - Property Description,
attached hereto and made a part hereof, including the improvements thereon (the
"Property"); and
WHEREAS, pursuant to a certain City of Fresno HOME lnvestment Partnerships
Agreement dated 2013, incorporated herein by reference ("HOME
Agreement") and instruments referenced therein, DECLARANT agrees to utilize, the ClTy
agrees to provide, certain HOME funds from the United States Department of Housíng and
Urban Development ("HUD"), to DECLARANT and DECLARANT agrees to rehabilitate one
single-family housing unit as an Affordable Low-lncome un¡t, subject to the terms and
conditions set forth in the HOME Agreement, and reserve the unit for a Low-lncome
household earning eighty percent (80%), or below, of the area median income for the
Fresno Metropolitan Statistical Area ("FMSA').
WHEREAS, the HOME regulations promulgated by HUD, including without limitation
24 C.F.R. 92.252; 24 and the HOME Agreement impose certain affordability requirements
upon property owned by the DECLARANT, which affordability restrictions shall be
enforceable for a thirty (30) year period; and
WHEREAS, these restrictions are intended to bind the DECI-ARANT, and all
purchasers of the Property and their successors.
NOW THEREFORE, DECLARANT declares that the Property is held and will be
held, transferred, encumbered, used, sold, conveyed and occupied subject to the
(t
ù'u
covenants, restrictions, and limitations set forth in this Declaration, all of which are declared
and agreed to be in furtherance of the Project. All of the restrictions, covenants and
limitations will run with the land and will be binding on all parties having or acquiring any
right, title or interest in the Property or any part thereof, will inure to the benefit of the CITY
añO w¡ll be enforceable by it. Any purchaser under a contract of sale covering any right,
title or interest ín any part of the Property, by accepting a deed or a contract of sale or
agreement of purchase, accepts the document subject to, and agrees to be bound by, any
and all restrictions, covenant, and limitations set forth in this Declaration commencing on
the date the DECI-ARANT is notified by the CITY that the Affordable Unit Homebuyer
information is has been entered into HUD's lntegrated Disbursement and lnformation
System (lDlS) as provided in the HOME Agreement, constitutíng the commencement of the
thirty (30) year Affordability Period.
1. Declarations. DECLARANT hereby declares that the Property is and shall be
subject to the covenants and restrictions hereinafter set forth, all of which are declared to
be in furtherance of the Project and the HOME Agreement, and are established and agreed
upon for the purpose of enhancing and protecting the value of the Property and in
consideration of the CITY entering into the HOME Agreement with the DECIARANT.
2. Restrictions. The following covenants and restrictions on the use and
enjoyment of the Property shall be in addition to any other covenants and restrictions
affecting the Property, and all such covenants and restrictions are for the benefit and
protection of the CITY and shall run with the Property and be binding on any future owner's
of the Property and inure to the benefit of and be enforceable by CITY. These covenants
and restrictions are as follows:
a. The DECLARANT for itself and its successor(s) on title covenants and
agrees that from the date the Project is entered into lDlS as complete, until the expiration
of the Affordability Period, it shall cause the single-family housing unit to be used as single-
family owner-occupied affordable housing to Low-lncome Households with an income of
eighty percent (80%), or less, of area median income. The DECI-{RANT further agrees to
file a recordable document setting forth the Project Completion Date when determined by
the CITY. Unless othenruise provided in the Agreement, the term Affordable Housing shall
include, without limitation, compliance with the following requirements:
i. Nondiscrimination. There shall be no discrimination against nor
segregation of any persons or group of persons on account of race, color, creed, religion,
sex, marital status, national origin, ancestry, or handicap in the sale, transfer, use,
occupancy, tenure, or enjoyment of any of the Property, nor shall DECLARANT establish or
permit any practice of discrimination or segregation with reference to the selection
location, number, use or occupancy of owners or vendees of the Project and/or Property.
ii. Principal Residence. The single-family Affordable Housing Unit
constituting the Project upon the Property shall be sold only to eligible natural persons, who
shall occupy the single-family house as the purchaser's principal place of residence. The
forgoing requirement that the purchaser of the house occupy the house as the purchaser's
principal residence does not apply to (i) persons, other than natural persons, who acquire
the Project Property or portion thereof by foreclosure or deed in lieu of foreclosure; or HUD
qualified entities that acquire the Property or portion thereof with the consent of the CITY.
t\\
¡ii. Homeowner lncome Requirements. The one (1) single-family
house constituting the Project upon the Property may be conveyed only to a natural
person(s) whose annual Household income at the time of purchase is not greater than
eighty percent (80%) of the most recent annual median income calculated and published
by HUD for the FMSA applicable to such household's size.
iv, Recapture Provision. Should the Affordable Housing Unit upon
the Property not continue to be the principal residence of the Household purchasing the
Property/house as affordable housing for the duration of the period of affordability then a
portion of the HOME financial assistance provided by CITY and allocated to the
Property/house shall immediately come due and must be repaid to the CITY's HOME
Program Trust Fund and thereupon the balance of the affordability restrictions shall be
released. The DECI-ARANT shall be possessed of a first right of refusal to purchase the
home before foreclosure to preserve affordability.
Item (a) above is hereinafter referred to as the Covenant and Restriction.
3. Enforcement of Restrictions. Without waiver or limitation, the CITY shall be
entitled to injunctive or other equitable relief against any violation or attempted violation of
any Covenant and Restriction.
4. Acceptance and Ratification. All present and future owners of the Property
and other persons claiming by, through, or under them shall be subject to and shall comply
with the Covenant and Restriction. The acceptance of a deed of conveyance to the
Property shall constitute an agreement that the Covenant and Restriction, as may be
amended or supplemented from time to time, are accepted and ratified by future owners,
tenant or occupant, and such Covenant and Restriction shall be a covenant running with
the land and shall bind any person having at any time any interest or estate in the Property,
all as though such Covenant and Restriction was recited and stipulated at length in each
and every deed, conveyance, mortgage or lease thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other transfer in lieu
of foreclosure, or assignment of an FHA-insured mortgage to HUD, the Affordability Period
shall be terminated unless the foreclosure or other transfer in lieu of foreclosure or
assignment recognizes any contractual or legal rights of public agencies, nonprofit
sponsors, or others to take actions that would avoid the termination of low-income
affordability. However, the requirements with respect to Affordable Unit shall be revived
according to their original terms, if during the original Affordability Period, the owner of
record before the foreclosure or other transfer, or any entity that includes the former owner
of those with whom the former owner has or had formally, family or business ties, obtains
an ownership interest in the Project or the Property, the Affordability Period shall be revived
according to its originalterms.
5. Benefit. This Declaration shall run with and bind the Property for a term
commencing on the date Project information is entered into lDlS as complete, until the
expiration of the thirty (30) year Affordability Period. The failure or delay at any time of
CITY and/or any other person entitled to enforce this Declaration shall in no event be
deemed a waiver of the same, or of the right to enforce the same at any time or from time
to time thereafter, or an estoppel against the enforcement thereof.
6. Costs and Attornev's Fees. ln any proceeding arising because of failure of
DECLARANT or any future owner of the Property to comply with the Covenant and
Restriction required by this Declaration, as may be amended from time to time, the CITY
shall be entitled to recover its respective costs and reasonable attorney's fees incurred in
connection with such default or failure.
7. Waiver. Neither DECLARANT nor any future owner of the Property may
exempt itself from liability for failure to comply with the Covenant and Restriction required in
this Declaration; provided however, that upon the transfer of the Property, the transferring
owner may be released from liability hereunder, upon the CITY's written consent of such
transfer, which consent shall not be unreasonably withheld, conditioned or delayed.
8. Severabilitv. The invalidity of the Covenant and Restriction or any other
covenant, restriction, condition, limitation, or other provision of this Declaration shall not
impair or affect in any manner the validity, enforceability, or effect of the rest of this
Declaration and each shall be enforceable to the greatest extent permitted by law.
9. Pronouns. Any reference to the masculine, feminine, or neuter gender herein
shall, unless the context clearly requires the contrary, be deemed to refer to and include all
genders. Words in the singular shall include and refer to the plural, and vice versa, as
appropriate.
10, Interpretation. The captions and titles of the various articles, sections,
subsections, paragraphs, and subparagraphs of this Declaration are inserted herein for
ease and convenience of reference only and shall not be used as an aid in interpreting or
construing this Declaration or any provision hereof.
11. Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of the CITY and DECLARANT.
12. Recordation. DECLARANT acknowledges that this Declaration will be filed of
record in the Office of the Recorder of County of Fresno, State of California.
13. Capitalized Terms. All capitalized terms used in this Declaration, unless
othenruise defined herein, shall have the meanings assigned to such terms in the HOME
Agreement.
14. Headinqs. The headings of the articles, sections, and paragraphs used in
this Declaration are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision,
15. DECLARANT LIABILITY. The DECI-ARANT shall not have any personal
liability for the obligations under this Declaration. The sole recourse of the CITY shall be
exercised of its rights against the Property pursuant to the Deed of Trust and Lender shall
have not right to seek or recover any deficiency amount from DECLARANT.
ilt
s\
lN WITNESS WHEREOF, DECLARANT has executed this Dectaration of
Restrictions on the date first written above.
DECLARANT:
Habitat for Humanity Fresno, lnc., a California corporation
Date:
Name: Anthony J. Miranda
Title: Executive Director
(Attach notary certificate of acknowledgment)
By:
,+-
EXHIBIT ..A''
To Declaration of Restrictions
The Property is located at 386 North Park Avenue, Fresno, CA 93701.
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY
OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
THE WEST 140 FEET OF THE NORHT 37-112 FEET OF LOT 6 IN BLOCK 10 OF TERRY TRACT,
IN THE CITY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN
BOOK 2, PAGE 31 OF PLATS, FRESNO COUNTY RECORDS.
EXCEPTING THE WEST 20 FEET THEREOF.
APN: 459-144-247
+
EXHIBIT "E: CERTIFICATE OF COMPLETION
Recorded at the Request of
and When Recorded Return to:
City of Fresno
Development and Resource Management Dept.
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
R'S USE ONLY)
This Certificate of Completion is recorded at the request and for the benefit of the City of Fresno
and is exempt from the payment of a recording fee pursuant to Government Code Section 6103.
A.P.N.: 459-144-247
City of Fresno
Bruce Rudd, City Manager
By:
+
Certificate of Gompletion
A.P.N.: 459-144-247
Recitals:
A. By a HOME Investment Partnerships Program Agreement dated ,
2013, ("HOME Agreement") between the City of Fresno, a municipal corporation ("C|TY"),
and Habitat for Humanity Fresno, lnc., a California corporation, ("DEVELOPER"), the
DEVELOPER agreed to acquire one vacant single-family house, rehabilitate the house and
incorporate related on-site improvements upon the Property described in EXHIBIT "A"
attached to the HOME Agreement, and made part hereof by this reference (the "Property"),
with assistance of HOME Funds while meeting the affordable housing, income targeting
and other requirements of 24 C.F.R. 92 according to the terms and conditions of the
HOME Agreement and Loan Documents and other documents/instruments referenced
therein, and then sellthe single-family house to a Low-lncome Homebuyer.
B. The HOME Agreement or a memorandum of it was recorded on
as lnstrument No. in the Official Records of Fresno County, California.
C. Under the terms of the HOME Agreement, after the DEVELOPER completes
the Project, the DEVELOPER may ask the CITY to record a Certificate of Completion.
D. The DEVELOPER has asked the CITY to furnish the DEVELOPER with a
recordable Certificate of Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive evidence
that the DEVELOPER has completed the Project as set forth in the HOME Agreement.
NOW THEREFORE:
1. The CITY certifies that the DEVELOPER commenced rehabilitation of the
and has done so in full compliance with the HOME Agreement.
2. This Certificate of Completion is not evidence of the DEVELOPER's
compliance with, or satisfaction of, any obligation to any mortgage or security interest
holder, or any mortgage or security interest insurer, securing money lent to finance work on
the Property or Project, or any part of the Property or Project.
3. This Certificate of Completion is not a notice of completion as referred to in
California Civil Code Section 3093.
ilt
ilt
ilt
L-
,
4. Nothing contained herein modifies any provision of the HOME Agreement.
lN WITNESS WHEREOF, CITY has executed this Certificate of Completion as of this
day of 20-.
CITY OF FRESNO
By:Date:
Bruce Rudd, City Manager
(Attach notary certificate of acknowledgment)
ATTEST:
WONNE SPENCE, CMC
CITY CLERK
APPROVED AS TO FORM:
DOUG T. SLOAN
CITY ATTORNEY
By:By:
Deputy Tracy Parvanian, Deputy City Attorney
Dat Date:
HABITAT FOR HUMANITY FRESNO, lNC., a California corporation
By:Date:
Name: Anthonv J. Miranda
Title: Executive Director
(Attach notary certificate of acknowledgment)
N
EXHIBIT "F" . PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: When paid, this note, must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
Secured by Deed of Trust
Loan Amount: $120.000
Fresno, California
Date:
Promise to Pav. For value received, the undersigned, Habitat for Humanity Fresno, lnc., a California
Corporation ("Borrower"), promises to pay to the order of the City of Fresno, a California municipal
corporation ("Lender"), the sum of One Hundred Twenty Thousand dollars and 00/100 ($120,000.00)
along with interest on the unpaid principal at the rate of 2o/o pil annum, all due and payable on or
before June 30, 2015, (the "Borrower Loan Maturity Date") pursuant to the parties' HOME Agreementdated 2013, ("HOME Agreement"), on which date the unpaid principal balance together with
interest and unpaid penalties or late changes where applicable thereon shall be due and payable,
along with attorney's fees and costs of collections, without relief from valuation and appraisement
laws, provided that, in the event the Borrower is not then in default of the HOME Agreement, the
Borrower may at any time prior to the Borrower Loan Maturity Date convey the completed
rehabilitated single-family Affordable Unit securing the Note to a Low-lncome homebuyer through a
purchase escrow ("Escrow") that conforms to the HOME Agreement and concurrent therewith assigns
$120,000 Note to the Low-lncome homebuyer, who shall assume such Note at 0% interest with a
lump sum principal only payment due and payable from the Low-lncome homebuyer on, or before,
thirty (30) years from close of escrow ("Low-lncome Homebuyer Loan Maturity Date"). ln the event
and concurrent therewith the CITY shall forgive from principal due thereunder the sum of Seventy
Thousand dollars and 00/100 ($70,000.00) (provided the Borrower confirms said reduction in a writing
noticed to the Escrow Officer and the CITY in a manner provided in the HOME Agreement), and the
Borrower shall be released from any further liability to the Lender under this Note, including as to any
interest accrued prior to assumption of the Note by the Low-lncome Homebuyer. Any failure to make
a payment required hereunder shall constitute a default under this Note.
Definitions. All capitalized terms used in this Note, unless otherwise defined, wilt have the respective
meanings specified in the HOME Agreement.
Business Dav. Means any day other than Saturday, Sunday, or public holiday or the equivalent for
banks generally under the laws of California. Whenever any payment to be made under this Note is
stated to be due on a day other than a Business Day, that payment may be made on the next
succeeding Business Day. However, if the extension would cause the payment to be made in a new
calendar month, that payment will be made on the next preceding Business Day.
Security. This Note, and any extensions or renewals hereof, is secured by a Deed of Trust, Security
Agreement executed by the Borrower and recorded against the Property in Fresno County, California,
as Document No.on 2013, that provides for acceleration upon stated events,
and executed in favor of the Lender ("Deed of Trust"), creating and insured as a not worse than 2nd
position lien on the Property, subordinated only to a lien created by Borrower to insure payment of
monies borrowed to pay for the construction of a completed Unit on the Property. Said Deed of Trust
shall be subject to the terms of the Template Rider to the Deed of Trust attached hereto, and such
shall automatically be incorporated in the terms of the Deed of Trust that secures this Note. Said
t-
Deed of Trust is insured by CLTA Lender's policy in the principal amount of, and endorsed for this
Note.
Time is of the Essence. lt will be a default under this Note if the Borrower defaults under the HOME
Agreement, defaults under any other Loan Documents, or if Borrower fails to pay when due any sum
payable under this Note. ln the event of a default by the Borrower, the Borrower shall pay a late
charge equal to the lesser oÍ 2o/o of any outstanding payment or the maximum amount allowed by
law. All payments collected shall be applied first to payment of any costs, fees or other charges due
under this Note or any other Loan Documents then to the interest and then to principal balance. On
the occurrence of a default or on the occurrence of any other event that under the terms of the Loan
Documents give rise to the right to accelerate the balance of the indebtedness, then, at the option of
Lender, this Note or any notes or other instruments that may be taken in renewal or extension of all or
any part of the indebtedness will immediately become due without any further presentment, demand,
protest, or notice of any kind.
Terms of Pavment. The indebtedness evidenced by this Note may, at the option of the Borrower, be
prepaid in whole or in part without penalty. Lender will apply all the prepayments first to the payment
of any costs, fees, late charges, or other charges due under this Note or under any of the other Loan
Documents and then to the interest and then to the principal balance.
All Loan payments are payable in lawful money of the United States of America at any place that
Lender or the legal holders of this Note may, from time to time, in writing designate, and in the
absence of that designation, to:
City of Fresno - Finance
Accounts Receivable
2600 Fresno Street, Suite 2156
Fresno, C493721
Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by the holder of
this Note in enforcing payment, whether or not suit is filed, and including, without limitation, all costs,
attorney fees, and expenses incurred by the holder of this Note in connection with any bankruptcy,
reorganization, arrangement, or other similar proceedings involving the undersigned that in any way
affects the exercise by the holder of this Note of its rights and remedies under this Note. All costs
incurred by the holder of this Note in any action undertaken to obtain relief from the stay of
bankruptcy statutes are specifically included in those costs and expenses to be paid by Borrower.
Borrower will pay to Lender all attorney fees and other costs referred to in this paragraph on demand.
Any notice, demand, or request relating to any matter set forth herein shall be in writing and shall be
given as provided in the HOME Agreement. No delay or omission of Lender in exercising any right or
power arising in connection with any default will be construed as a waiver or as acquiescence, nor will
any single or partial exercise preclude any further exercise. Lender may waive any of the conditions
in this Note and no waiver will be deemed to be a waiver of Lender's rights under this Note, but rather
will be deemed to have been made in pursuance of this Note and not in modification. No waiver of
any default will be construed to be a waiver of or acquiescence in or consent to any preceding or
subsequent default.
Terms of Securitv lnstruments. The Deed of Trust securing this note provides as follows:
DUE ON SALE-CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare immediately
due and payable all sums secured by this Deed of Trust upon the sale or transfer of all or any portion
.ì
-l
of the Property, or any interest therein, other than a sale to a Low Income homebuyer as provided in
the HOME Agreement, without the Beneficiary's prior consent. A "sale or transfer" means the
conveyance of the Property or any right, title or interest therein; whether legal, beneficial or equitable;
whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding
title to the Property, or by any other method of conveyance of land interest. lf any Trustor is a
corporation, partnership or limited liability, company, transfer also includes any change in ownership
of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability
company interests, as the case may be, of Trustor. However, this option shall not be exercised by
Beneficiary if such exercise is prohibited by applicable law.
Assionment by Lender. Lender may transfer this Note and deliver to the transferee all or any part of
the Property then held by it as security under this Note, and the transferee will then become vested
with all the powers and rights given to Lender; and Lender will then be forever relieved from any
liability or responsibility in the matter, but Lender will retain all rights and powers given by this Note
with respect to Property not transferred.
Enforceabliltv. lf any one or more of the provisions in this Note is held to be invalid, illegal, or
unenforceable in any respect by a court of competent jurisdiction, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or impaired. This Note will
be binding on and inure to the benefit of Borrower, Lender, and their respective successors and
assigns.
Governing Law. Borrower agrees that this Note will be deemed to have been made under and will be
governed by the laws of California in all respects, including matters of construction, validity, and
performance, and that none of its terms or provisions may be waived, altered, modified, or amended
except as Lender may consent to in a writing duly signed by Lender or its authorized agents.
ilt
ilt
ilt
','IU\t_"ì
ln witness whereof, Borrower has caused this Promissory Note to be executed by its
authorized agent as of the date and year first above written.
BORROWER
Habitat for Humanity Fresno lnc., a California corporation
Date:
Name: Anthony J. Miranda
Title: Executive Director
(Attach notary certificate of acknowledgment)
$
EXHIBIT f'G'' . EXEMPLAR DEED OF TRUST
Recorded at the Request of
and When Recorded Return to:
City of Fresno
Development and Resource Management Dept.
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
TITLE ORDER NO.
APN NO :459-144-247
DEED OF TRUST
Humanity Fresno, lnc,, California company (herein "Borrower"), Chicago Ti¡e Company, a California
Corporation (herein "Trustee"), and the City of Fresno, a Municipal Corporãtion organized and ex¡sting underthelawsof the State of California whose address is 2600 Fresno Street, Fresno, California 93721lnerein
"Beneficiary" and "Lender").
Borrower, in consideration of the indebtedness herein recited and the trust herein created, does irrevocably
grant and convey to Trustee, in trust, with power of sale, all Borrower's right, title, and interest now owned or
hereafter acquired in the real property ("Land") known as 386 N. Park Avenue, Fresno, CA 93701, located in
Fresno County, California and more particularly described in the Attached Exhibit A, incorporated by reference
(Borrower agrees that any greater to the Land later acquired during the term of this Deed of Tiust will be
subject to this Deed of Trust), together with the rents, issues, and profits, subject however, to the right, power,
and authority granted and conferred on Borrower in this Deed of Trust to coilect and apply the reñts, issues,
and profits; and
Borrower also irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale, all of
Borrower's right, title and interest now owned or later acquired to the following property (including the rights or
interests pertaining to the property) located at the property.
(1) All buildings ("Buildings") and improvements now or later on the land and all easements, rights,
appurtenances, water and water rights, minerals and mineral rights; all machinery, equipment,
appliances, and fixtures for the generation or distribution of air, water, heat, electricity, light, fuel,
or refrigeration or for ventilating or sanitary purposes or for the exclusion of vermin or insects or
for the removal of dust, refuse, or garbage; all wall safes, built-in furniture, and installations,
window shades and blinds, light fixtures, fire hoses and brackets, screens, linoleum, carpets,
furniture, furnishings, fixtures, plumbing, laundry tubs and trays, refrigerators, heating units,
stoves, water heaters, incinerators, and communication systems and installations for which any
Building is specially designed; all of these item, whether now or later installed, being declared to
be for all purposes of this Deed of Trust a part of the Land, the specific enumerations in this
Deed of Trust not excluding the general;
(2) The rents, issues, profits, and proceeds relating to the foregoing; and
(3) The Property to the extent not included on clauses (1) and (2) above. .\
t a.\U
TO SECURE, in order of priority that Beneficiary determines:
(1) Payment of the indebtedness evidenced by a note of Borrower of even date with this Deed of
Trust in the principal amount of One Hundred Twenty Thousand dollars and
00/100($120,000.00) ("Note"), payable to Beneficiary or order, and all extensions, modifications,
or renewals of that note;
(2) Payment of the interest on that indebtedness according to the terms of the Note;
(3) Payment of all other sums (with interest as provided herein) becoming due and payable to
Beneficiary or Trustee pursuant to the terms of this Deed of Trust;
(4) Performance of every obligation contained in this Deed of Trust, the Note, the HOME
securing any indebtedness secured by this Deed of Trust, and any agreements, supplemental
agreements, or other instruments of security executed by Borrower as of the same date of this
Deed of Trust or at any time subsequent to the date of this Deed of Trust for the purpose of
further securing any indebtedness amending this Deed of Trust or any instrument secured by
this Deed of Trust (collectively the "Loan Documents"); and
(5) Payment of all other obligations owed by Borrower to Beneficiary that by their terms recite that
they are secured by this Deed of Trust, including those incurred as primary obligor or as
guarantor.
Borrower covenants that Borrower is lawfully seized of the estate hereby conveyed and has the right to grant
and convey the Property, and that the Property is unencumbered except for encumbrances of record.
Borrower covenants that Borrower will forever warrant and will defend the grant made in this Deed of
Trust against all claims and demands, subject to encumbrances of record. Borrower covenants that Borrower
will maintain and preserve the lien of this Deed of Trust until all the indebtedness under the Note is paid in full.
Borrower represents and warrants to Beneficiary that as of the date of this Deed of Trust Borrower is a validly
existing, and in good standing under the laws of the State of California and is qualified to do business in
California; that Borrower has the requisite power and authority to own, develop, and operate the property; and
that Borrower is in compliance with all laws, regulations, ordinances, and orders of public authorities applicable
to it.
Borrower represents and warrants to Beneficiary that as of the date of this Deed of Trust the execution,
delivery, and performance by the Borrower and the borrowings evidenced by the Note are within the power of
the Borrower; have been duly authorized by all requisite corporate or partnership actions, as appropriate; has
received all necessary governmental approvals; and will not violate any provision of law, any order of any court
or agency of government, the charter documents of Borrower, or any indenture, agreement, or any other
instrument to which Borrower is a party or by which Borrower or any of it property is bound, nor will they
conflict with, result in a breach of, or constitute (with due notice and lapse of time) a default under any
indenture, agreement, or other instrument, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature on any of the property or assets of Borrower, except as contemplated by the
provisions of the Loan Documents; and each of the Loan Documents, when executed and delivered to
Beneficiary, will constitute a valid obligation, enforceable in accordance with its terms.
Borrower represents and warrants to Beneficiary that as of the date of this Deed of Trust that the Property is
not used principally for agricultural or grazing purposes; that Borrower is engaged in the development and
operation of lmprovements to the Property; and that the principal purpose of the Loan is the acquisition,
development and/or the operation of the lmprovements to the Property.
UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:
1. Pavment of Principal. Borrower shall promptly pay when due the principal indebtedness evidenced by the
Note.
2. Hazard lnsurance. Borrower, at its sole cost and expense, for the mutual benefit of Borrower and
Beneficiary, shall keep the improvements now existing or hereafter erected on the Property insured against
loss by fire, hazards included within the term "extended coverage", and such other hazards as Lender may
require and in such amounts and for such periods as Lender may require as set forth in the HOME
Ag reement referenced above.
The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender;
provided that such approval shall not be unreasonably withheld. All insurance policies and renewals
thereof shall be in a form acceptable to Lender and shall include a standard mortgage clause in favor of
and in a form acceptable to Lender. Lender shall have the right to hold the policies and renewats thereof,
subject to the terms of any mortgage, deed of trust or other security agreement with a lien which has
priority over this Deed of Trust.
ln the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may
make proof of loss if not made promptly by Borrower.
lf the Property is abandoned by Borrower, or if Borrower fails to respond to Lender within 30 days from the
date notice is mailed by Lender to Borrower that the insurance carrier offers to settle a claim for insurance
benefits, Lender is authorized to collect and apply the insurance proceeds at Lender's option either to
restoration or repair of the Property or to the sums secured by this Deed of Trust.
Borrower shall keep the Property in good repair and shall not commit waste or permit impairment or
deterioration of the Property and shall comply with the provisions of any lease if this Deed of Trust is on a
leasehold. lf this Deed of Trust is on a unit in a condominium or a planned unit development,
Borrower shall perform all of Borrower's obligations under the declaration or covenants creating or
governing the condominium or planned unit development, the by-laws and regulations of the condominiumor planned unit development, and constituent documents. Borrower shall not permit overcrowded
conditions to exist as defined by the U.S. Department of Housing and Urban Development.
Protection of Lende/s Securitv. lf Borrower fails to perform the covenants and agreements contained in
this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's interest in
the Property, then Lender, at Lender's option, upon notice to Borrower, may make such appearances,
disburse such sums, including reasonable attorney's fees, and take such action as is necessary to protect
Lender's interest. lf Lender requires mortgage insurance as a condition of making the loan secured by this
Deed of Trust, Borrower shall pay the premiums required to maintain such insurance in effect until such
time as the requirement for such insurance terminates in accordance with Borrower's and Lender's written
agreement or applicable laws.
3.
4.
\þ
t
o
Any amounts disbursed by Lender pursuant to this Paragraph 5 shall become additional
indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other
terms of payment, such amounts shall be payable upon notice from Lender to Borrower requesting
payment thereof. Nothing contained in this paragraph 5 shall require Lender to incur any expense or take
any action hereunder.
lnspection. Lender may make or cause to be made reasonable entries upon and inspections of the
Property, provided that Lender shall provide Borrower notice prior to any such inspection specifying
reasonable cause therefore related to Lender's interest in the Property.
Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection
with any condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of
condemnation, are hereby assigned and shall be paid to Lender, subject to the terms of any mortgage,
deed of trust or other security agreement with a lien which has priority over this Deed of Trust.
Borrower Not Released: Forbearance Bv Lender Not a Waiver, Extension of the time for payment or
modification of amortization of the sums secured by this Deed of Trust granted by Lender to any successor
in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and
Borrower's successors in interest. Lender shall not be required to commence
proceedings against such successor or refuse to extend time for payment or otherwise modify amortization
of the sums secured by this Deed of Trust be reason of any demand made by the original Borrower and
Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy hereunder,
or otherwise afforded by applicable law, shall not be waiver of or preclude the exercise of any such right of
remedy.
The covenants and
agreements herein contained shall bind, and the rights hereunder shall inure to the respective successors
and assignees of Lender and Borrower. All covenants and agreements of Borrower shall be joint and
several. Any borrower who co-signs this Deed of Trust, but does not execute the Note, (a) is co-signing
this Deed of Trust only to grant and convey that Borrower's interest in the Property of Trustee under the
terms of this Deed of ïrust, (b) is not personally liable on the Note or under this Deed of Trust or the Note,
without that Borrower's consent and without releasing that Borrower or modifying this Deed of Trust as to
that Borrower's interest in the Property.
Transferabilitv. One of the inducements to Beneficiary for making the Loan is the identity of Borrower. The
existence of any interest in the Property other than the interests of Borrower and Beneficiary and any
encumbrance permitted in this Deed of Trust, even though subordinate to the security interest of
Beneficiary, and the existence of any interest in Borrower other than those of the present owners, would
impair the Property and the security interest of Beneficiary, and, therefore, except as provided herein or in
the Loan Documents, Borrower will not sell, convey, assign, transfer, alienate, or otherwise dispose of its
interest in the Property, either voluntarily or by operation of law, or agree to do so, without the prior written
consent of Beneficiary. Consent to one transaction by Beneficiary will not be deemed a waiver of the right
to require consent to further or successive transactions. lf Borrower is a corporation, any sale, transfer, or
disposition of fifty percent (50%) or more of the voting interest of Borrower or of any entity that directly or
indirectly owns or controls Borrower, including, without limitation, the parent company of Borrower, and the
parent company of the parent company of Borrower, will constitute a sale of the Property for purposes of
this article. lf Borrower is a partnership any change or addition of a general partner of Borrower, change of
a partnership interest of Borrower, or sale, transfer, or disposition of fifty percent (507o) or more of the
voting interest or partnership interest of any partner of Borrower or of any corporation, partnership or entity
7.
8.
9.
rò
that directly or indirectly owns or controls any partner of Borrower, including, without limitation, each parent
compeny of a partner of Borrower and each parent company of any parent company of a partner of
Borrower, will constitute a sale of the Property for purposes of this section. lf Borrower is a limited liability
company, any change of the manager or any sale, transfer or disposition of fifty percent (50%) or more of
the partnership interests of Borrower , or disposition of fifty percent (50%) or more of the voting interest of
Borrower or of any corporation, partnership or entity that directly or indirectly owns or controls any member
of Borrower, including without limitations, each parent company of Borrower and each parent company of
any parent company of a member of Borrower, will constitute a sale of the Property for purposes of this
section. Any transaction in violation of this section will cause all lndebtedness, irrespective of the maturity
dates, at the option of the Beneficiary and without demand or notice, immediately to become due, together
with any prepayment premium in accordance with the terms of the Note except as prohibited by law.
10. Notice. Except for any notice required under applicable law to be given in another menner, (a) any notice
to Borrower provided for in this Deed of Trust shall be given by delivering it or by mailing such notice by
certified mail addressed to Borrower at the Property Address or at such other address as Borrower may
designate by notice to Lender as provided herein, and (b) any notice to lender shall
be given by certified mail to Lender's address stated herein or to such other address as Lender may
designate by notice to Borrower as provided herein. Any notice provided for in this Deed of Trust shall be
deemed to have been given to Borrower or Lender when given in the manner designated herein.
11. Governino Law: Severabilitv. The state and local laws applicable to this Deed of Trust shall be the laws of
the jurisdiction in which the Property is located. The foregoing sentence shall not limit the applicability of
Federal law to this Deed of Trust or if the Note conflicts with applicable law, such conflict shall not affect
other provisions of this Deed of Trust or the Note which can be given effect without
the conflicting provision, and to this end the provisions of this Deed of Trust and the Note are declared to
be severable. As used herein, "costs", "expenses", and "attorney's fees" include all sums to the extent not
prohibited by applicable law or limited herein.
12. Borrower's Copv. Borrower shall be furnished a conformed copy of the Note and of this Deed of Trust at
the time of execution or after recordation thereof.
NON-CONFORMING COVENANTS. Borrower and Lender further covenant and agree as follows:
13. Acceleration: Remedies. Upon Borrower's breach of any covenant or agreement of Borrower in this Deed
of Trust, including the covenants to pay when due any sums secured by this Deed of Trust, the Note or the
Program restrictions, Lender prior to acceleration shall give notice to Borrower as provided in paragraph 10
hereof specifying: (1) the breach; (2) the action requiredtocuresuch breach; (3) a date, not less than 10
days from the date notice is mailed to Borrower, by which such breach must be cured; and (4) that failure
to cure such breach on or before the date specified in the notice may result in acceleration of the sums
secured by this Deed of Trust and sale of the Property. The notice shall further inform Borrower of the right
to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a default or
any other defense of Borrower to acceleration and sale. lf the breach is not cured on or before the date
specified in the notice, Lender, at Lender's option may declare all of the sums secured by this Deed of
Trust to be immediately due and payable without further demand and may invoke the power of sale and
any other remedies permitted by applicable law. Lender shall be entitled to collect all reasonable costs and
expenses incurred in pursuing the remedies provided in this paragraph 13, including, but not limited to,
reasonable attorney's fees. lf Lender invokes the power of sale, Lender shall execute or cause Trustee to
execute a written notice of the occurrence of an event of default and of Lender's election to cause the
Property to be sold and shall cause such notice to be recorded in each county in which the Property or
i.
r lr -,
some part thereof is located. Lender or Trustee shall mail copies of such notice in the manner prescribed
by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by
applicable law. After the lapse of such time as may be required by applicable law, Trustee, without
demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place
and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee
may determine.
Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and
place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any
sale.
Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant
or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the
truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order:
(a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and
attorney's fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess,
if any, to the person or persons legally entiiled thereto.
14. Borrower's Riqht to Reinstate. Notwithstanding Lender's acceleration of the sums secured by this Deed of
Trust due to Borrower's breach, Borrower shall have the right to have any proceedings begun by Lender to
enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant
to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this
Deed of Trust if: (a) Borrower pays Lender all sums which would be then due under this Deed of Trust and
the Note had no acceleration occurred; (b) Borrower cures all breaches of any other covenants or
agreements of Borrower contained in this Deed of Trust; (c) Borrower pays all reasonable expenses
incurred by Lender and Trustee in enforcing the covenants and agreementsof Borrower in paragraph 13
hereof, including but not limited to, reasonable attorney's fees; and (d) Borrower takes such
action as Lender may reasonably require to assure that the lien of this Deed of Trust, Lender's interest in
the Property and Borrower's obligation to pay the sums secured by this Deed of Trust shall continue
unimpaired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured
hereby shall remain in fullforce and effect as if no acceleration had occurred.
15. Nonrecourse. Bonower shall not have any personal liability for repayment of the loan. The sole recourse
of the Lender under the Loan Documents for repayment of the Loan shall be the exercise of its rights
against the Property.
16. Withdrawal, Removal and/or Replacement. General partner of the Borrower pursuant to the terms of a
partnership agreement due to violation by a general partner of the terms of a partnership agreement, or a
voluntary withdrawal from a partnership by a general partner, and any transfer of limited partnership
interest or interests in the same, shall not constitute a default under any of the Loan Documents, and any
such actions shall not accelerate the maturity of the loan.
17. Lien of Deed of Trust. Beneficiary agrees that the lien of this Deed of Trust shall be subordinated to any
extended low-income housing commitment (as such term is defined in Section (42(hX6XB) of the internal
Revenue Code) (the "Extended Use Agreement") recorded against the Property, provided that such
Extended Use Agreement, by its terms, must terminate upon foreclosure under this Deed of Trust or upon
a transfer of the Property by instrument of lieu of foreclosure, in accordance with Section a2(hX6XE) of the
lnternal Revenue Code, subject to the limitations upon evictions, terminations of tenancies and increases in
gross rents of tenants of low-income units as provided in that section.
18. As additional security hereunder,
Borrower hereby assigns to Lender the rents of the Property, provided that Borrower shall, prior to
acceleration under paragraph 13 hereof or abandonment of the Property, have the right to collect and
retain such rents as they become due and payable.
Upon acceleration under paragraph 13 hereunder or abandonment of the Property, Lender, in person, by
agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the
Property and to collect the rents of the Property including those past due. All rents collected by Lender or
the receiver shall be applied first to premiums on receiver's bonds and reasonable attorney's fees, and then
to the sums secured by this Deed of Trust. Lender and the receiver shall be liable to account only for those
rents actually received.
19. Reconvevance. Upon payment of all sums secured by this Deed of Trust, Lender shall request Trustee to
reconvey the Property and shallsurrender this Deed of Trust, and all notes evidencing indebtedness
secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty and without
charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of
recordation, if any.
20. Substitute Trustee. Lender at lender's option, may from time to time, appoint a successor trustee to any
Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the
Fresno County Recorder's Otfice. The instrument shall contain the name of the original Lender, Trustee
and Borrower, the book and page where this lnstrument is recorded and the name and address of the
successor trustee. The successor trustee shall, without conveyance of the Property, succeed to all the
title, powers and duties conferred upon the Trustee herein and by applicable law. This procedure for
substitution of trustee shall govern to the exclusion of all other provisions for substitution.
21. Statement of Obliqation. Lender may collect a fee not to exceed $50 for furnishing the statement of
obligation as provided by Section 2943 of the Civil Code of California,
22. Event of Default. Prior to declaring or taking any remedy permitted under Loan Documents, (where
applicable) Borrower's limited partners shall have an additional period of not less than thirty (30) days to
cure such alleged default. Notwithstanding the foregoing, in the case of a default that cannot with
reasonable diligence be remedied or cured within thirty (30) days, Borrower's limited partners shall have
such additional time as reasonably necessary to remedy or cure such default, but in no event more than
ninety (90) days from the expiration of the initial thirty (30) day period above, and if the Borrower's limited
partners reasonably believe that in order to cure such default, Borrower's limited partners must remove one
or both of Borrower's general partners in order to cure such default, Borrower's limited partners shall have
an additional (30) days following the effective date of such removal to cure such default. To the extent that
there is a conflict between this paragraph 22 and any remedy permitted by the HOME Agreement, Loan
Documents, or Loan, the terms of this paragraph 22 shall control.
The following events are each an "Event of Default":
(a) Default in the payment of any sum of principal or interest when due under the Note or any other sum
due under the Loan Documents.
(b) Failure to maintain insurance as provided in Section 2 hereof.
(d)
(e)
(c) The failure (without cure during the applicable period, if any, for cure) of any Borrower to observe,
perform, or discharge any obligation, term, covenant, or condition of any of the Loan Documents, any
agreement relating to the Property, or any agreement or instrument between any Loan Party and
Beneficiary.
The assignment by Borrower, as lessor or sublessor, as the case may be, of the rents or the income of
the Property or any part of it (other than to Beneficiary) without first obtaining the written consent of
Beneficiary.
The following events:
(i) the filing of any claim or lien against the Property or any party of it, whether or not the lien is prior to
this Deed of Trust, and the continued maintenance of the claim or lien for a period of thirty (30) days
without discharge, satisfaction, or adequate bonding in accordance with the terms of this Deed of
Trust;
(ii) the existence of any interest in the Property other than those of Borrower, Beneficiary, any tenants
of Borrower, and any one listed in a title exception approved by Beneficiary in writing; or
(iii) the sale, hypothecation, conveyance, or other disposition of the Property except with the express
written approval of Beneficiary, any of which will be an Event of Default because Borrower's
obligation to own and operate the Property is one of the inducements to Beneficiary to make the
Loan;
(f) Default under any agreement to which Borrower is a party, which agreement relates to the borrowing of
money by Borrower from Beneficiary.
(g) Any presentation or warranty made by any Loan Party or any other Person under this Deed of Trust or
in, under, or pursuant to the Loan Documents, is false or misleading in any material respect as of the
date on which the representation or warranty was made.
(h) Any of the Loan Documents, at any time after their respective execution and delivery and for any
reason, cease to be in full force or are declared null and void, or the validity or enforceability is
contested by Borrower or any stockholder or partner of Borrower, or Borrower denies that it has any or
further liability or obligation under any of the Loan Documents to which it is a party.
lf one or more Event of Default occurs and is continuing, then Beneficiary may declare allthe lndebtedness
to be due and the lndebtedness will become due without any further presentment, demand, protest, or
notice of any kind, and Beneficiary may:
(i) in person, by agent, or by a receiver, and without regard to the adequacy of security, the solvency of
Borrower, or the existence of waste, enter on and take possession of the Property or any party of it in
its own name or in the name of Trustee, sue for or othenruise collect the rents, issues, and profits, and
apply them, less costs and expenses of operation and collection, including reasonable attorneys' fees,
upon the lndebtedness, all in any order that Beneficiary many determine. The entering on and taking
possession of the Property, the collection of rents, issues, and profits, and the application of them will
not cure or waive any default or notice of default or invalidate any act done pursuant to the notice;
(ii) commence an action to foreclose this Deed of Trust in the manner provided by law for the foreclosure
C,
\i'.Y
of mortgages of real property;
(iii) deliver to Trustee a written declaration of default and demand for sale, and a written notice of default
and election to cause the Property to be sold, which notice Trustee or Beneficiary will cause to be
filed for record;
(iv) with respect to any Personalty, proceed as to both the real and personal property in accordance with
Beneficiary's rights and remedies in respect of the Land, or proceed to sell the Personalty separately
and without regard to the Land in accordance with Beneficiary's rights and remedies; or
(v) exercise any of these remedies in combination or any other remedy at law or in equity.
24. Protection of Securitv.
lf an Event of Default occurs and is continuing, Beneficiary or Trustee, without notice to or demand upon
Borrower, and without releasing Borrower from any obligations or defaults may:
(a) enter on the Property in any manner and to any extent that either deems necessary to protect the
security of this Deed of Trust;
(b) appear in and defend any action or proceeding purporting to affect, in any manner, the Obligations or
the lndebtedness, the security of this Deed of Trust, or the rights or powers of Beneficiary or Trustee;
(c) pay, purchase, or compromise any encumbrance, charge, or lien that in the judgment of Beneficiary or
Trustee is prior or superior to this deed of Trust; and
(d) pay expenses relating to the Property and its sale, employ counsel, and pay reasonable attorneys'fees.
Borrower agrees to repay on demand all sums expended by Trustee or Beneficiary pursuant to this section
with interest at the Note Rate of lnterest, and those sums, with interest, will be secured by this Deed of
Trust.
25. Effect of Assionment.
The assignment rents as provided herein will not impose on Beneficiary any duty to produce rents, issues,
or profits from the Property, or cause Beneficiary to be:
(a) a "mortgage-in-possession" for any purpose;
(b) responsible for performing any of the obligations of the lessor under any of the Leases; or
(c) responsible for any waste committed by lessees or any other parties, any dangerous or defective
condition of the Property, or any negligence in the management, upkeep, repair, or control of the
Property.
Beneficiary will not be liable to Borrower or any other party as a consequence of the exercise of the rights
granted to Beneficiary under this assignment or the failure of Beneficiary to perform any obligation of Borrower
arising under Leases.
lN WITNESS WHEREOF, Borrower has executed this Deed of Trust on the day and year set forth
above. By signing below, Borrower agrees to the terms and conditions as set forth above.
BORROWER
Habitat for Humanity Fresno lnc., a California corporation
Name: Anthonv J. Miranda
Title: Executive Director
(Attach notary certificate of acknowledgment)
,1.r \'.
The following is a copy of provisions (1) to (14), inclusive, of the fictitious deed of trust, recorded in
each county in California, as stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length therein
To Protect the Security of This Deed of Trust, Trustor (herein "Borrower") 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 violations of 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 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 Borrower.
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 such 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 Borrower 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 Borrower and without
releasing Borrower 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 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.
(6) 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 rece¡ved by him in the same manner and with the same effect as above
provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not
waive his rights either to require prompt payment when due of all other sums so secured or to declare
default for failure so to pay.
(8) That at any time or from time to time, without liability therefor and without notice, upon written
request of Beneficiary and presentation of this Deed and said Note for endorsement, and without
affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee
may reconvey any part of said property, consent to the making of any map or plot thereof; join in
granting any easement thereon; or join in any extension agreement or any agreement subordinating
the lien or charge hereof.
(9) That upon written request of Beneficiary state that all sums secured hereby have been paid, and
upon surrender of this Deed and said Note to Trustee for cancellation and retention 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 "Five years after issuance of such full reconveyance, Trustee may destroy said note
and this Deed (unless directed in such request to retain them).
(10) That as additional security, Borrower 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 Borrower the right, prior to any default by Borrower in payment of any
indebtedness secured hereby or in performance of any agreement hereunder, to collect the rents,
issues and profits of said property, reserving unto Borrower the right, prior to any default by Borrower
Ín 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 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.
(11) That upon default by Borrower 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 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
Borrower, 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 Borrower,
Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of
title in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums
expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law
in effect at the date hereof, all other sums then secured hereby, and the remainder, if any, to the
person or persons legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time
to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and
recorded in the office of the recorder of the county or counties where said 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 Borrower, Trustee and Beneficiary hereunder,
the book and page where this Deed is recorded and the name and address of the new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs,
legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall
mean the owner and holder, including 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 neuter, and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a
public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale
under any other Deed of Trust or of any action or proceeding in which Borrower, Beneficiary or
Trustee shall be a party unless brought by Trustee.
DO NOT RECORD
REQUEST FOR FULL RECONVEYANCE
To be used only when note has been paid:
To Lawyers Title Company, Trustee: Dated
The undersigned is the legal owner and holder of all indebtedness secured by the within Deed of Trust. All sums 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 owing to you under the terms of said Deed of Trust, to cancel all evidences of indebtedness, secured by said
Deed of Trust, delivered to you herewith together with said Deed of Trust, and to reconvey, without warranty, to the
parties designated by the terms of said Deed of Trust, the estate now held by you under the same.
MAIL RECONVEYANCE TO:
By
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.
EXHIBIT "A''
To Deed of Trust
The Property is located at 386 North Park Avenue, Fresno, CA 93701.
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY
OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
THE WEST 140 FEET OF THE NORHT 37-112 FEET OF LOT 6 IN BLOCK 10 OF TERRY TRACT,
IN THE CITY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK
2, PAGE 31 OF PLATS, FRESNO COUNTY RECORDS.
EXCEPTING THE WEST 20 FEET THEREOF,
APN: 459-144-247
"ò
[TEMPLATE RrDER TO DEED(S) OF TRUSTI
The Trustor (herein "Borrower") understands and agrees that the Note secured by this
Deed of Trust is made for the sole purpose of assisting in the purchase of the
Borrower's home as their principal place of residence. Therefore, the Borrower
understands and agrees that said Note secured by this Deed of Trust shall be
immediately due and payable upon the earlier of (1) upon any change in residency of
the Borrower from the Borrower's home which is used as security for the Note described
above, unless having obtained the written consent of the Beneficiary (herein "Lender");
(2) upon the sale or transfer, without the Lender's prior written consent, of all or any part
of the Property, or any interest in the Property. A "sale or transfer" means the
conveyance of the Property or any right, title or interest therein; whether legal, beneficialor equitable; whether voluntary or involuntary; whether by outright sale, deed,
installment sale contract, land contract, contract for deed, lease-option contract, or by
sale, assignment, or transfer of any beneficial interest in or to any land trust holding title
to the Propefi, or by any other method of conveyance of land interest.
Borrower also assigns to Lender all rents, issues and profits from said real property
reserving, however, the right to collect and use the same so long as there is no existing
default hereunder, and does hereby authorize Lender to collect and recover the same in
the name of Borrower of his successor in interest by use of any lawful means.
The Lender and Borrower acknowledge and agree that this security instrument is
second and subordinate in all respects to the liens, terms, covenants and conditions of
the first Deed of Trust and shall not impair the rights of any institutional lender which is
the maker of a loan secured by such first deed of trust, or such lender's assignee or
successor in interest, to exercise its remedies under the deed of trust in the event of
default by the Borrower. These remedies include the right to foreclosure or exercise a
power of sale or to accept a deed or assignment in lieu of foreclosure. The terms and
provisions of the first Deed of Trust are paramount and controlling, and they supersede
any other terms and provisions hereof in conflict therewith. ln the event of a foreclosure
or deed in lieu of foreclosure of the first Deed of Trust, any provisions herein or any
provisions in any other collateral agreement restricting the use of the property to low
income households or othenryise restricting the Borrower's ability to sell the property
shall have no further force or effect on subsequent owners or purchasers of the
property. Any person, including his successors or assigns (other than the Borrower or a
related entity of the Borrower), receiving title to the property through a foreclosure or
deed in lieu of foreclosure of the first Deed of Trust shall receive title to the property free
and clear from such restrictions.
In the event of a catastrophic occurrence that results in the property having to be sold,
the portion of the existing second mortgage lien that results in the combined loan-to-
value ratio being more than 100% of the value of the property will be released with no
forgiveness of that portion of the debt, and the contemporaneous execution of an
unsecured promissory note equal to the amount released from the second mortgage,
and a modification agreement that reduces the secured debt of the existing second
mortgage by the amount of the new unsecured promissory note.
Period of Affordability: The HOME Agreement sets periods of affordability as
províded in 24 CFR 92.254 based on the amount of HOME funds provided. The
minimum period of affordability for this program is thirty years (30 years.) Year one shall
be the 12-month period following date the Project completion information is entered into
lDlS, with each succeeding year beginning on the anniversary thereof and ending 12
month hence. There will be no partial years.
Recapture of HOME Funds: Pursuant to 24 CFR 92.254(a)(5)(ii), the City of Fresno
requires that HOME funds be recaptured if the home does not continue to be the
Borrower's principal residence or if all or any part of the property or any interest in it is
sold, rented, conveyed or transferred for the duration of the Period of Affordability. lf the
net proceeds are not sufficient to recapture the full HOME investment plus enable the
homeowner to recover the amount of the homeowner's down payment and any capital
improvement investment made by the owner since purchase, the CITY may share the
net proceeds. The net proceeds are the sales price minus superior loan repayment
(other than HOME funds) and any closing costs. The net proceeds may be divided
proportionally as set forth in the following mathematical formulas:
HOME investment = HOME recaptured
HOME investment +
homeowner investment
Homeowner investment x Net = amount to homeowner
proceeds
HOME investment +
homeowner investment
ln the event of foreclosure, the amount subject to recapture is based on the amount of
net proceeds (if any) from the foreclosure sale.
x Net
proceeds