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HomeMy WebLinkAboutHabitat for Humanity Single Family Homes Echo AveREPORT TO THE CRY COUNCIL Apol 30, 2009 FROM: KEITH BERGTHOLD, Interim Director Planning and Development Department BY: CLAUDIA CAZARES, Interim Manager Housing and Community Development D v SUBJECT: APPROVE A$M,000 DISPOSITION ANDi WITH HABITAT FOR HUMANITY FRESNO, AFFORDABLE SINGLE-FAMILY HOMES 01 KEY RESULT AREA hnmimacgcou c c.uY 9d o One Fresno Oi1v4t in RECOMMENDATION Sten recommends Cly Council approve a $1T ,000 Oisp x with Habitat for Humanity Fresno, Inc. (Habitat) for =no" North Echo Avenue. EXECUTIVE SUMMARY On September 12, 2009, the City issued a Request for Pmpo: affordable housing on surplus City -owned Infill properties coal incentive, to CM offered to sell the property to to developer that amount as the HOME subsidy to the proposed afdrdable Submttes a successful propose! to construct two -sweat oquff Etlw Avenue stria. The sale price of each property will be So sale to the homebuyer to make Me Mme affordable. In addill homebuyers will receiv r -teau t equity crest thorned Me pact KEY OBJECTIVE BALANCE Approvd of the Agreement presents an opportunity to maks Satisfaction, Employee Satisfaction, and Financial Menage impacts the Customer Service aspect by damonstratng the Partnerships to ensure adequate and affordable housing to attributes to Employee Satisfaction by supporting efforts th, producing affordable housing. In addition, it demonstrates by encouraging the practice of leveraging available resourc BACKGROUND In October of 2 , Me Housing and Community Developm Echo Avenue (172 and 182 N. Echo). The lot to Me south' rehabilitation of two existing structures that will be contends AGENDA ITEM NO.: j N COUNCIL MEETING: April 30, 2009 MI'MWEO By DEPARTMENT DIRE CITYWISAGER elann i )EVELOPMENT AND HOME AGREEMENT INC., FOR CONSTRUCTION OF TWO J NORTH ECHO AVENUE ition and Development and HOME Agreement lion of two affordable single-family homes on at (RFP) hom qualified developers to develop ad at various sites throughout the City. As an at Me City's initial purchase prim, and provide housing project. In raepooee to the RFP. Habitat f affordable single-family homes on Me North 9,500 each, of which a portion will be forgiven at an 0 Me Ciys mortgage asabtarKe, the mea of Meir home, as facilitated through HabMt. t a positive Impact to the Customer hent Key Objectives. The approval also City's commitment to strengthening low-income householde. The approval also it help achieve Housing Element goals of creative and resourceful Financial Management So to develop affordable housing. ant Division purchased two infill lots on North was sold to Marko Construction to complete of into a duplex. REPORT TO THE CITY COUNCIL RE APPROVAL OF $177,000 DISPOSITION AND DEVELOPMENT AND HOME AGREEMENT WITH HABITAT FOR HUMANITY FRESNO April W, 2009 Page 2 A smell porton of the south tot was combined with the larger lel to the north, and subsequently split into two equal lots; creating two single-family lots, in addition to Me duplex lot. In September of 2008, the City issued an RFP to create affordable housing opportunities while disposing of this site on North Echo and other scattered infill sites throughout the City. In response to the RFP, Habitat submitted a successful proposal to construct two "sweat equity affordable single-family homes on the North Echo Avenue sites. Habitat is a local leading non-profit housing development organization committed to providing safe, decent, and affordable housing, and has a 23 -year history of partnering with low -Income families to ensure that their housing and homeownership experience is positive and successful. Habitat will acquire the lots through esi and enter into a 2% Interest loan In the amount of $177,000 (floe initial purchase price that the City old for the two lots), all the City. The propera s to be sold to and developed by Habitat are as follows: Iwaeal •.a..avi sa twPm.1 oppalwevaue We Av Nunhr xwe 172 N. Edeavznie 959 -292 -An 71,45 f]5,500 patim 18214.GMa�e 054392.28 7.9th 535.500 mi Once the houses ere constructed. Ne City will forgive a porton of the loan to accommodate for the difference between the Cry's Initial purchase price and the current medal value ($35,500) per home. The loan forgiveness is the only viable option to accommodate for Me reduction in property value, ensure not only that the City is fully reimbursed for the initial property acquisition cost, but that the home Is affordable for a low- income homebuyer. The two affordable 'sweat equity houses will be sold to low -Income households with a photon of the HOME subsidy to beI used as mortgage assistance. In addition to the mortgage assistance, the homebuyers will reserve 'sweat equity credit toward the purchase of their home from Habitat. Both houses will be Mrea- bedroom. two -bathroom units, and have solar panels add Universal Design features in accordance with City Ordinenca No.200853. Habltat's'sweat equity meMM of Musirg development consists of training families In basic construction so that May may assist in the building of their home. Habitat also provides training and support services in the areas of home maintenance, Mme improvement, Intenor design, budgetng, and consumer awareness. A National Environmental Policy Act review resulted in a finding of no significant impact and the California EnWrenmental Quality Act review resulted In an Exempt Status. The Cry received federal approval for release of HOME Program funds pursuant to 26 CFR Pad M on September 5, 2006. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION The Housing and Community Development Commission considered and recommended approval of this had on April 22, 2009, FISCAL IMPACT This action will have no impact to the Planning and Development Department's FY 2009 Budget L,s IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII FRESNO County Recorder g RECORDED AT THE REQUEST OF Robert CWerner 5$ AND MEN RECORDED RETURN TO: DOC— 2009-0073859 g CNyof Fmeno Monday, JUN 01, Me 13:17:07 g6 city darn§Office Tit Pd $0.00 JZGbrR-00 HI750 i# NoFes—Gov? Coda5103 a fTV 2600 Finano Street, Room 2133 Fresno, CA 93721 space ABOVE rHS LME EORFECORJERS UBEOM'n This Agreement is renarded at the request and fm the benefit of the Cdy of Fresno and is exempt from Me payment of a recording fee pursuant to Government Code Section 6103 and 27363. CITY OF FRESNO By ASouza It's:: City Manaoer Date Ahuovadm DISPOSITION AND DEVELOPMENT AND HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT by and between CITY OF FRESNO, a municipal corporztion and Habitat for Humanity Fresno, Inc. regarding `172 and 182 North Echo Avenue (APN: 459-292-287/459-292-27T)" Low -Income Single -Family Housing Development TABLE OF CONTENTS Page ARTICLE 1. DEFINITIONS.................................................................. ARTICLE 2. TRANSFER OF AFFORDABLE PROJECT PROPERTY ARTICLE 3. TERMS............................................................................. ARTICLE 4. GENERAL REPRESENTATIONSIWARRANTIES....................................... 10 ARTICLE S. HOME PROGRAM REPRESENTATIONIWARRANTIES ............................. 12 ARTICLES. COVENANTS AND AGREEMENT OF DEVELOPER .................................. 16 ARTICLE T. HOME FUNDS.............................................................................................. 20 ARTICLE S. DEVELOPMENT AND CONSTRUCTION OF PROJECT_ .......................... 21 ARTICLE 9. PROJECT OPERATIONS............................................................................. 25 ARTICLE 10. INSURANCE AND INDEMNITY ARTICLE 11. DEFAULT AND REMEDIES...., ARTICLE 12. GENERAL PROVISIONS......... EXHIBITS EXHIBIT A: PROPERTY DESCRIPTION EXHIBIT B: PROJECT DESCRIPTION AND SCHEDULE EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS EXHIBIT D: BUDGET EXHIBIT E: EXEMPLAR CERTIFICATE OF COMPLETION EXHIBIT F: EXEMPLAR NOTE -TEMPLATE RIDER TO DEED(S) OF TRUST DEVELOPMENT AND DISPOSITION AND HOME INVESTMENT PARTNERHIPS PROGRAM AGREEMENT This Development and Disposition and HOME Investment Partershi a Pr rem Agreement (hereinafter referred M as the "Agreement") is entered iota th' 2009, by and between the CITU OF FRESNO, a municipal mryoretion, acting th ugh its Planning and Development Department— Housing and Community Development Division (hereinafter referred to as the "CITY'), and Habitat for Humanity Fresno, Inc., a California Corporation (hereinafter referred to as "DEVELOPER'). RECITALS WHEREAS, the CITY has received a HOME Investment Partnerships Program (hereinafter referred to as "HOME Program") grant from Me U.S. Department of Housing and Urban Development (hereinafter referred to as "HUD"), under Title II of the Cranston- Gonzalez National Affordable Housing Act of 1990, as amended (hereinafter referred to as the "ACT"); and WHEREAS, to advance the supply of Affordable Housing within the City of Fresno, the CITY desires, among other things, to encourage private investment in the affordable housing market; and WHEREAS, the Project will be constructed upon two HOME eligible parcels (collectively'Property") located within the boundaries of the City of Fresno, owned by the CITY, as more particularly describetl in the attached EXHIBIT "A", to be transferred to the DEVELOPER in fee at an agreed upon fair market price through an escrow as provided hereunder; and WHEREAS, the DEVELOPER desires to construct two (2) separate single -family Affordable Housing Units to be sold as Low-Income Housing and related on-site and off-site improvements, hereinafter referred to as the'Pmjecr, as more particularly described in the Project Description and Schedule attached hereto as EXHIBIT "B', incorporated herein; and WHEREAS, to advance the supply of Affordable Housing within the City of Fresno, Me CITY desires to provide assistance to the Project in the total amount of One Hundred Seventy-Seven Thousand and 00!100 Dollars ($1]],000.00) in HOME Funding as an assumable and partially forgivable Loan, for eligible HOME Project property acquisition costs, upon the terms and conditions in this Agreement, as further identified In Exhibit "D' (Budget), to be secured by the underlying Property and Na Affordable Housing covenants, see attached Exhibit "F" Exemplar Note (Project Loan) and the attached Exhibit "C' Declaration of Restrictions, respectively, and WHEREAS, the CITY will transfer fee title to the Project Property "as is" to the DEVELOPER through Escrow with the Chicago Ti le Company located at 7330 N. Palm, Suite 101, Fresno, CA 93711 (Attention: Cherie Zuniga at [559-051-3700]), The partes acknowledge and agree that the fair market purchase price for Me Property is the amount of One Hundred Seventy-Seven Thousand Dollar: and 00/100 (177,000.00). 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. Parties may submit supplemental escrow instructions. DEVELOPER will deposit all instruments, documents, money, and other items with the Escrow holder that are: (i) identified in this Agreement; or (it) required by the Escrow holder to effect the closing. The Escrow will be considered closed on the date that the Escrow holder is prepared! to issue a standard CLTA/ALTA ownefs title insurance policy to DEVELOPER insuring fee lBle and records the grant dead. It is agreed and confirmed by DEVELOPER and CITY that notwithstanding other provisions in this Agreement, the right of possession and use of the Property by DEVELOPER shall commence only upon close of Escrow; and WHEREAS, the CITY has conducted an environmental review of the Projed Pursuant to the National Environmental Policy Ad ("NEPA"), resulting In a finding of no sgnificant impact according to the provisions of the NEPA (Environmental Assessment No. 014-06051) and the California Environmental Quality Ad ("CEQA"), resulting in an Exempt Status according to the provisions of CEQA (Environmental Assessment No. 014-06051) and CITY has received federal approval for release of HOME Program funds pursuant to 24 CFR Part 58 on September 5, 2006; and WHEREAS, the CITY has determined that this Agreement is in the best interests 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, (it) is in the vital and best interests 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 -Income Housing available at affordable housing cost to persons and families of Low - Income, as defined hereunder, (v) planning and admintslrabve expenses incurred in pursuit hereof are necessary for the production, improvement, or preservation of Low -Income Housing, and (vi) will comply with any and all owner participation rules and criteria applicable thereto; and WHEREAS, onA%r, 2009. Me Housing and Community Development Commission of the City, resno reviewed this Agreement and recommended approval. NOW, THEREFORE, IN 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 alfachments that are incorporated into this Agreement by reference. 1.1. Acquisition means vesting of Property in fee title to the Developer. 1.2. ADA means the Americans with Disabilities Ad of 1990, as most recently amended 1.3. Affirmative Madretina means a good faith effort to attract eligible persons of all anal, ethnic and gentler groups, in the housing market area, to purchase the Housing Units) that are proposed for construction an the eligible Property, as hereinafter defined. 1.4. Affordable Housing means Me proposed Affordable Housing Project Units, consisting of two (2) separate single-family homes, each of which will be required to meet the affordability requirements of this Agreement and 24 CFR 92.254 and which affordability requirements shall run with the land for the Affordability Period subject to release as provided in this Agreement. 1.5. Affordability Pedgd Means the twenty (20) year period commencing from the date of first sale of each Project Unit following CITY's issuance and recordation of the Certificate of Completion, as more fully described in the Declaration of Restrictions, attached hereto as Exhibit "C" incorporated herein. 1.8. Butlget means the pro forma Budget, and any changes thereto, approved by the CITY's Housing and Community Development Division Manager provided Me total amount of HOME Funding allocated to the Project shall not be increased without City Council approval. attached hereto as EXHIBIT "D". 11 Certificate of Completion means Nat certificate issued, in the form attached as EXHIBIT "E" ("CertMcate of Completion"), to DEVELOPER by the CITY evidencing completion of each Project Unit constructed on the Property for purposes of this Agreement. 1.8. CFR means the Code of Federal Regulations. 1.9. Commencement of Construction means the time DEVELOPER or DEVELOPER'S construction contractor begins substantial physical work of the Projectmach Project Unit on the Property, including, without limitation, delivery of materials and any wodc, beyond maintenance of the Property in be status quo condition, and not later than August 1, 2009. 1.10. Declaration of Restrictions means the Declaration of Restrictions in the form attached hereto as EXHIBIT "C", which shall be recorded against the Property no later than the close of escrow hereunder, setting out the Affordable Housing covenants and requirements of this Agreement which shall run with the land. 1.11. Dead of Trust means that Deed of trust (including security agreement) given by DEVELOPER as Trustor, to Me CITY as beneficiary, through an escrow established by 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 Dead of Trust attached as Exhibit 'Fm to the Note and acceptable to the City Attorney, as well as any amendments to, motlfications of and restatements of said Dead of Trust, which Dead of Trust shall be subordinated m Project lenders Per the Budget attached as Exhibit "O". The terms of any such Dead of Trust are hereby incorporated into this Agreement by this reference. 1.12. Eligible Costs means the HOME Program eligible property acquisition costs funded by the Loan, consistent with the Budget attached as EXHIBIT "D", allowable under 24 CFR Part 92, as specified in 24 CFR 92.205 and 92.208, and not disallowed by 24 CFR 92.214, provided, however, that costs incurred in connection with any activity Nat 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 11.1 hereunder. 1.14. Family has the same meaning givers that term in 24 CFR 5403, 1.15. 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 Mat are used or consumed in the normal course of developing, operating or occupying a housing project, to Me 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. 1.16. HOME Investment Partnerships Funds (also referred to In Mis Agreement as HOME Funds) means the HOME Program monies constituting Me Loan, in an amount not to exceed the sum of One Hundred Seventy -Seven Thousand Dollars and 00/100 ($177,000.00) used for HOME Program eligible property acquisition costs. 1.17. Household means one or more persons occupying a Unit in the proposed Affordable Housing Project. 1.18. HUD means the United States Department of Housing and Urban Development. 1.19. Loan means the assumable Project Loan of HOME Funds, in the total amount not to exceed the lesser of Me sum of One Hundred Seventy -Seven Thousand Dollars and 00/100 ($177,000.00) and the aggregate HOME Program per unit rap (24 C.F.R. 92.250) for the two (2) HOME- assisted Units as determined by Me CITY made available by the CITY to the Project pursuant to this Agreement, as more specifically described in the Budget and in Me Promissory Note attached hereto as Exhibit "F". The Loan shall be allocated $88,500 to each of the two parcels, shall be payable in accordance with the terms of the Note, shall be secured by a dead of trust on each parcel constituting Me Property, and shall be subject to the Rider to Dead of Trust attached to the Exhibit "F" Exemplar Note. As to each such Note and Dead of Trust there shall be forgiven from the principal due thereunder the sum of $53,000 upon conveyance of a completed Unit to a Low Income homebuyer through purchase escrow, so long as Developer is not then in default of this Agreement and confirms said reduction in principal in a writing noticed to the CITY in the manner provided herein. 1.20. Loan Documents are collectively this Agreement, Me Note(s). Deeds) of Trust, Declaration(s) 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. 1.21. Low -Income Families means families whose annual income does notexceed silly percent (60%) of the median income for the Fresno, California area as determined by HUD, except as HUD may establish income ceilings higher or lower than 60% of the median for the area on the basis of HUD findings Mat such variations are necessary. 1.23. Note or Notes mean(s) the assumable, partially forgivable Project Note on each parcel, substantially in the form attached hereto/incorperaled herein as Exhib@'F' in principal amount of $88,500 allocated to each parcel. given by DEVELOPER as promissor, in favor of the CITY, as promissee, evidencing the Loan and performance of the affordability and other covenants and restrictions set forth in this Agreement, secured by a standard Deed of Trust creating a lien upon the Property, naming the CITY as beneficiary and Provided to the CITY no later than the date of initial disbursement hereunder, as well as any amendments to, modifications of and restatements of said Note consented to by CITY. 1.25 Pronram Income has the meaning provided in the HOME program including 24 CFR 92.503. 1.26 Pro ed means Me two(2)single-family low-income Affordable Housing Units to be constructed, marketed, and sold as Low -Income Housing, and related onsite and off- site improvements all as described in the Project Descriptlon and Schedule attached hereto and incorporated herein as EXHIBIT "B'. upon the Property as more particularly described! in EXHIBIT "A". 1.27 Protect Completion Date means the data that the CITY shall have determined that the Project has reached completion in accordance with this Agreement. The Project Completion Date for this project is January 30, 201 O. 1.28 Project Schedule means the schedule for completion of the Project included within the EXHIBIT "B° Project Description and Schedule, consistent with the above Project Completion Date. 1.29 Property means the vacant, unimproved City -owned HOME Program eligible property located at 172 North Echo Avenue (Assessor Parcel Number 459-292-28T) and 182 North Echo Avenue (Assessor Parcel Number 459-292-27T), Fresno, Califamia, more specifically described in the attached EXHIBIT "A", to be transferred in fee to the DEVELOPER from the CITY prior to Commencement of Project Construction through escrow and developed as alow-income housing project as provided herein. 1.30 Unit means each of the two (2) single-family homes developed upon Me Property and preserved as Affordable Housing for the duration of the Affordability Period. ARTICLE 2. TRANSFER OF AFFORDABLE PROJECT PROPERTY 2.1 Purchase and Sale. The CITY agrees to convey the Affordable Project Property to DEVELOPER, and DEVELOPER agrees to accept conveyance of Me 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 for the Affordable Project Properly shall be One Hundred Seventy-Seven Thousand Dollars and 001100 ($177,000.00) ("Purchase Price'.) DEVELOPER and Me CITU agree that the Purchase Price is M be based upon Me January 6, 2006 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 "ESUDW) with Chicago Title Company, 7330 N. Palm, Suite 101, Fresno, CA 93711 (Attention Cherie Zuniga at (559) 451-3700). At the Gose of escrow the DEVELOPER shall deliver two (2) Notes to the City in the full amount of Me Purchase Price as payment for each parcel constituting the Property. B. DEVELOPER shall pay all escrow fees and closing costs, including document preparation fees and recording fees, and the premium for the buyer's Policy of title insurance. 2.3 Condition of Tdle. Upon the Closing, CITY shall convey to DEVELOPER marketable and insurable fee simple title to the Affordable Project Property by duly executed and acknowledged! standard Title Company form grant deed(s) ("Deed"). Evidence of delivery of marketable and insurable fee simple title shall be the issuance by Chicago Title Company (the "Title Company") to DEVELOPER of CLTAIALTA Owner's Policy of Title Insurance in the amount of the Purchase Price, insuring lee simple Idle to the Affordable Project Property, the DEVELOPER will accept title subject to exceptions 1 through 4 shown on Mose certain Preliminary Title Reports prepared by the Title Company under Order No. 0935023518 and 0935023519, Dated March 25 and March 26, 2009 (Me "Tkle Policies'), 2.4 Conditions Precedent to Cimino. The following are condkions precedent to DEVELOPER's obligation to purchase the Affordable Project Property, accept the Loan and perform its obligation under this Agreement (Me "Affordable Project Conditions Precedent"). The Affordable Project Conditions Precedent are intended solely for the benefit of DEVELOPER and may be waived only by DEVELOPER in writing. In Me event of the failure of the satisfaction of any of the Affordable Project Conditions Precedent. DEVELOPER shall have Me right. but not the obligation. to terminate the Agreement with respect to the Affordable Project. A. DEVELOPER shall have receive! Me unconditional commitment of Title Company to issue the Title Policy upon the Closing in Me farm approved by DEVELOPER as buyer. B. DEVELOPER shall have approved Me amount of the construction financing required for the development of the Affordable Housing Projact. C. DEVELOPER shall have given written notice to the CITY within fifteen (15) days after Me effective date of this Agreement that it has inspected the Affordable Project Property and shall accept Me Property in AS IS condition. If DEVELOPER, after its inspection of the Affordable Project Property and review of an environmental reports disapproves of the Affordable Project Property's environmental or other conditions or aspect of the Affordable Project Property or Affordable Project in its sole and absolute discretion, than DEVELOPER may terminate the Agreement by written notice to the CITY and without Iiabilty for breach or otherwise. D. The CITY shall have received all necessary approvals from HUD, received the HOME funds and shall be irrevocably committed to fund the Loan at Closing. E. DEVELOPER has submitted the Finance Plan to the CITY and the CITY has approved the Finance Plan. 2.5 Access to the Property. DEVELOPER shall be pemritted to enter the Affordable Project Property during reasonable daylight hours, upon DEVELOPER's satisfaction of liability insurance requirements of this Agreement DEVELOPER will give the CITY 24 hours written notice of its intent to enter onto the Affordable Project Property. 2.8 Joint Escrow Instructions. This Agreement, when signed by both parties and deposited with the Escrow holder will be the partiesjoint escrow instructions. DEVELOPER and the CITY will sign any other form instructions required by Escrow holder_ CITY and DEVELOPER will deposit all instruments, documents, money, and other items with the Escrow holder that are: (i) identified in this Agreement; or (ii) required by the Escrow holder to effect Me closing. Either party may tender supplemental escrow instructions consistent with this Agreement. 2.7 Escrow Closing. The parties intend for the Closing to take place on a date selected by Buyer but in no event later Man May 30, 2009 (the "Affordable Project Closing Date'). A. At or before the Closing, CITY shall deliver to Escrow holder or DEVELOPER the following: (i) a duly executed and acknowledged Deed(s); (ii) any other instruments, records or correspondence called for hereunder which have not previously been delivered. B. At of before Closing, DEVELOPER shall deliver to Escrow holder or CITY the following: (i) Duly executed (and acknowledged, where required) Loan Documents; and (ii) Any other instrument, records or correspondence called for hereunder which have not previously been delivered. C. As a further condition to close, DEVELOPER shall have received the unconditional commitment of Title Company to issue the Title Policy upon the Closing in the form approved by DEVELOPER as buyer. 2.8 Possession. Possession of the Affordable Project Property shall be delivered to 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 convey Ne Property to the Developer, and ro accept two (2) Notes from the Developer in the full amount of the Purchase Price, all under the terms and conditions provided in this Agreement. The Loan shall be assignable as provided in this Agreement and the Note(s). 3.2 Loan Documents. The DEVELOPER shall execute and deliver to Ne CITY the Loan Documents including the Note(s), and notarized Deed(s) of Trust, for recordation against Vie Property. 3.3 Tenn of Agreement This Agreement is e0ecbve upon the date of execution and shall remain in force for the duration of Me longer of the Affordability Period and the Loan unless earlier terminated as provided herein. It is understood and agreed upon, however, that if for any reason this Agreement should be terminated in whole of in on as provided hereunder, without default, by DEVELOPER prior to Property sale to DEVELOPER hereunder, Ne CITY agrees to record a Nonce of Cancellation regarding this Agreement, upon the written request of DEVELOPER. 3.4 Loan Repayment and MatunN. The Loan will be due and payable in accordance with the Note(s) and not later Men Me maturity data provided in Ne Note(s). 3.5 Incorporation of Documents. The DEV LOPER proposal date October 13, 2008, and the CITY Council approved Minutes c o , 2009, approving this Agreement, Me Loan Documents, the Act and HUD regulatfons 24 CRF Part 92, and all exhibhs, attachments, documents and instruments referenced herein, as now in effect and as may be amended from time to time, constitute pan of this Agreement and are incorporated herein by reference. All such documents have been provided to the parties herewith or have been othervdse provided to/procured by the parties and reviewed by each of them prior to execution hereof. 36 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 Pan 92 ARTICLE 4. GENERAL REPRESENTATIONS AND WARRANTIES OF DEVELOPER 4.1 Existence and Qualification. The DEVELOPER represents and warrants as of the date hereof, that DEVELOPER is a duly organized California Corporation. DEVELOPER has the requisite power, right, and legal authority to execute, deliver and perform its obligations under this Agreement and 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 shall constitute the legal, valid and binding obligations of the DEVELOPER enforceable against the DEVELOPER in accordance with Its respective terms, except as such enforceability may be 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 1101 application of general principles of equity without the joinder of any other party 4.2 No Litigation Material to Financial Condition. The DEVELOPER represents and warrents 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 DEVELOPER's knowledge, is any such litigation or proceeding now Unfastened or anticipated against DEVELOPER that, if adversely determined would have a material adverse effect on the financial condition, business, or assets of DEVELOPER or on the operation of the Project. 4.3 No Conflict of Interest. The DEVELOPER represents and warrants as of the date hereof that no official, officer. agent, or employee of the CIN directly of indirectly owns or controls any interest In DEVELOPER, and no person, directly or indirectly owning or controlling any interest in DEVELOPER, is an official, officer, agent or employee of the CITY. 4.4 No Legal Ber. The DEVELOPER represents and warrants as of the date hereof that the execution, delivery, performance, or observance by DEVELOPER of this Agreement will not, to the best of 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 DEVELOPER; or (c) any mortgage, indenture, security agreement, contract. undertaking, or other agreement or instrument to which DEVELOPER is a party or that is binding on any of IN properties or assets, the result of which would materially or substantially impair 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 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 DEVELOPER, do not violate any existing federal, state, or local laws or regulations. 4.6 No Litigation Material to Prous . The DEVELOPER represents and warrents as of the date hereof that, except as disclosed W. 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 DEVELOPER that questions the validity of this Agreement, of of any action to be taken under this Agreement, that would if adversely determined, materially or substantially impair DEVELOPER'S ability to perform and observe its obligations under this Agreement, or that would eller directly or indirectly have an adverse effect on or impair the completion of the Project. 4.7 Assurance of Governmental Approvals and Licenses. DEVELOPER represents and warrants, as of me data hereof, that DEVELOPER has obtained and, to the best of DEVELOPER'S knowledge, is in compliance with all federal, state, and local govemmental reviews, consents, authorizations, approvals, and licenses presently required by law to be obtained by DEVELOPER for the Project as of the data hereof, ARTICLE 5. HOME PROGRAM REPRESENTATION AND WARRANTIES BY DEVELOPER DEVELOPER, for itself and its development team, represents and warrants that: 51 Accessibility. The DEVELOPER warrants, covenants and agrees that it shall comply with 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), including, without limitation, the construction of the Project so that it meets the applicable accessibility requirements, including, but not limited to, Ne following: A. All housing units shall be made accessible, upon request of the prospective homebuyer, if the nature of the handicap of an expected occupant so requires. In such rase, the homebuyer shall be given the opportunity to consult with DEVELOPER regarding the specific design features to be provided If accessibility features selected at the option of the homebuyer are ones covered by the standards prescribed by 24 CFR Sac. 8.32, those features shall comply with the standards prescribed in Sec. 8.32. The homebuyer shall be permitted to depart from particular specifications 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 Ne mortgage amount within the atlowable 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 sales price limitations (24 CFR 235.320.) 5.2 Affirmative Marketing. The DEVELOPER warrants, covenants and agrees Nat it shall comply with all affirmative marketing requirements, including without limitation, Nose set out at 24 CFR 9124 CFR 92.351, In order to provide information and othervi se attract eligible persons from all racial, ethnic and gender groups in the housing market in the sale of Project Unifa. DEVELOPER shall be responsible for complying with the CITY "Affirmative Marketing Policy' document, incorporated herein, as amended from time to time. 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 Na availability of HOME Funds is subject to the control of HUD, or other federal agencies, and should said Funds be encumbered, withdrawn or otherwise made unavailable to the CITY, whether earned by or promised to DEVELOPER, and/or should 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 CITY receives and allocates said Funds. No other funds owned or controlled by the CITY shall be obligated under this Agreement. 5.4 Compliance with Aareement. The DEVELOPER warrants, covenants and agrees that, in accordance with the requirements of 24 CFR 92.254 and 24 CFR Part 85, upon any uncured default by DEVELOPER within the meaning of Article 11 of this Agreement, the CITY may suspend or terminate this Agreement and all other agreements with DEVELOPER without waiver or lim0ation of rightsrremedies otherwise available to the CITY. 5.5 Conflict of Interest. The DEVELOPER warrants, covenants and agrees that it LY] shall comply with the Conflict of Interest requirements of 24 CFR 92.356 including, without limitation, that no officer, employee, agent or consultant of DEVELOPER may occupy a Project Unit. DEVELOPER understands and acknowledges that no employee, agent, consultant, officer or elected official or appointed official of the CITY, who exercises or has exercised any functions or responsibilities with respect to the Project, or who is In a position 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, either for him or herself or for anyone 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 CFR 92.356(1), no owner, developer or sponsor of the Project, or officer, employee, agent or consultant thereof, may occupy a Project Unit. 5.6 Cgnstructon Standards. DEVELOPER shall construct the proposed housing units assisted under this Agreement in compliance with all applicable local codes, ordinances and zoning requirements in effect at the tlme of issuance of Certification of Completion. In the absence of a local code for construction, DEVELOPER agrees to comply with the applicable standards identified in 24 CFR 92.251. 57 Covenants and Restrictions to Run with the Land. The CITY and DEVELOPER expressly warrent, 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, CITY may release said covenants and restrictions only upon recapture of all HOME funding allocated to the Unh(s) by the CITY. 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 DEVELOPER hereby declare their understanding and intent Nat 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 certain LowIncomeFamilies, and (b) by making possible the obtaining of advantageous financing for construction. B. The DEVELOPER covenants and agrees that It shall cause the two (2) of the Project Units to be sold as Affordable Housing to Low -Income Families. C, Without waiver or limitation, the CITY shall be entitletl 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. The failure or delay at any time of the CITY or any other person enlaled to enforce any such covenants or restrictions shall in no event be deemed a waiver of the same, or of the right to enforce the same at any time or from fims to time thereafter, or an estoppel against the enforcement thereof. 5.6 Displacement of Persons. The DEVELOPER warrants, covenants and agrees that pursuant to 24 CFR 92.353, it will lake all reasonable steps to minimize the displacement of any persons (families, individuals, businesses, nonprofit organizations and 13 farms.) The parties acknowledge and agree that the Property is vacant and unimproved. 5.9 Initial Income Certification . The DEVELOPER warrants, covenants and agrees that it shall comply with the procedures for income determinations at 24 CFR 92.203. DEVELOPER shall obtain, complete and maintain on file, immediately prior to initial occupancy, income cenificabons from each of the two (2) Affordable Project Uni Household. DEVELOPER shall make a good farm 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 e8her of such agencies; (4) obtain an income tax return for the most recent tax year, or (5) If the applicant is unemployed and has no such tax return, obtain anomer forth of independent verification. Copies of household income certification and verification must be available for review and approval by Me CITY prior to the close of escrow and the transfer of title to the low-income homebuyer. DEVELOPER further warrants, covenants and agrees that it shall cooperate with the CITY in the CITY's income certification/affordability monitoring activities at the time subsequent to initial transfer of the Unit Property. 5.10 Lead -Based Paint. The DEVELOPER warrants. covenants and agrees mat it shall comply with all applicable requirements of the Lead -Based Paint Poisoning Prevention Act of 42 U.S.C. 4821 at seq., 24 CFR Part 35 including the HUD 1012 Rule, and 24 CFR 982.401 g), including any amendments thereto, in the Affordable Housing Project. These requirements apply to all units and common areas in me Affordable Housing Project. 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. DEVELOPER shall be responsible for all disclosure, inspection, testing, evaluation, control and abatement activities. 5.11 Minority Outreach Activities. The DEVELOPER warrants, covenants and agrees Mat 8 shall comply with all federal laws and regulations described in Subpart H of 24 CFR Part 92, including, without limitation, any requirement mat DEVEROPER comply with the CITY's minority outreach program. 5.12 Other Laws and Requisitions. The DEVELOPER warrants, covenants and agrees that, in addition m complying with the federal laws and regulations already cited in this Agreement, DEVELOPER has reviewed, and shall comply with. all other federal laws and regulations that apply to me HOME Program, including, without limitation, requirements of 24 CFR 58.6 and the Flood Disaster Protection AIX of 1973, as amended (42 U.S.G. 40014128) and 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 pan of ds acquisition anchor construction of this Project. B. The Protect is not located in a had identified by me Federal Emergency Management Agency as having special flood requirements. 14 C. The Project requirements, Subpart F of 24 CFR Part 92, as applicable and in accordance with me type of Project assisted, including, but not limited to, the limit on per-unit subsidy amount at 24 CFR 92.250. 0. The property standards at 24 CFR 92.251. E. The Project "Labof'requirements, as applicable, of 24 CFR 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 5). F. The provisions of Section 102 and 107 of the Contract Wolk 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 Provides for the Project, shall comply with all applicable local, state and federal requirements conceming equal employment opportunity, including compliance with E.O. 11246, "Equal Employment Opportunity," as amended by E.O. 11375, "Amending Executive Order 11246 Relating to Equal Employment Opportunity," and as supplemented by regulations at 41 CFR pad 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 CFR 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'). I. The provisions of the Clean Air Act (42 U.S.C. 7401 at seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 at seq.), as amended. J. The provisions of Me Byrd Anti -Lobbying Amendment (31 U.S.C. 1352). K. The provision of E.O.s 12549 and 12689, "Debarment and Suspension," as set forth at 24 CFR part 24. 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 part 24, subpart F. M. Title 8 of the Civil Rights Act of 1968 PL 90-284. N. Executive Order 11063 on Equal Opportunity and Housing. 0. Section 3 of Me Housing and Urban Development Ad of 1968. P. The Housing and Community Development Act of 1974. 15 O. Clean Water Requirements 33 U.S.C. 1251. R. Civil Rights Requirements, 29 U.S.C. Section 623, 42 U.S.0 Section 2000, 42 U.S.0 Section 6102,42 U.S.C. Section 12112, 42 U.S.0 Section 12132, 49 U.S.C. Section 5332, 29 CRF Part 1630, 41 CFR Parts 60 at. seq. 5.13 Religious Omanintions and Fath Based Activities. DEVELOPER warrants, covenants and agrees that it shall not engage in any prohibited activities described in 24 CFR 92.257. 5.14 Reporting Requirements. The DEVELOPER warrents, covenants and agrees that it shall submit peAormance reports to the CITY as required hereunder. Furmem ore, the DEVELOPER agrees to provide, at the sale cost of the DEVELOPER, annual audited Financial Statements for the Project expenses and ongoing financial transactions which occur as a result of this Agreement as required hereunder. The DEVELOPER agrees to account for the expenditure of HOME Funds using generally accepted accounting principals, which financial documentation shall be made available to the CITY and HUD upon their respective written request(s). 5.15 Housing AN rdbdiN. The DEVELOPER warrants, covenants and agrees that the Project will meet the Affordable Housing, income targeting and other requirements of 24 CFR 92.254 upon sale of the two (2) homes to eligible Low -Income homebuyers, except upon foreclosure by a lender or transfer in lieu of foreclosure following default under a Deed of Trust. 5,16 Terminated Proects(s). The DEVELOPER understands and agrees that, if the Project is terminated before completion, either voluntarily or otherwise, such constitutes an ineligible activity and the CITY will not be required to provide any further HOME Program assistance funding to the Project Units 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 ds time on title shall maintain the Projects and Property In compliance with all applicable codes, laws, and ordinances. 6.2 Affordable Housing. The DEVELOPER covenants and agrees that the two (2) Project Units shall be sold only to Love -income families to constitute Affordable Housing, as variously provided at 24 CFR 92.254. 6.3 Compliance With Environmental Lam. The DEVELOPER shall rause the Project to be in compliance with, and not to cause or permit Me housing project to be in violation of, any environmental law. rule, regulation, ordinance, or statute. Although the CITY will 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 16 to cure such violation. If the suspected violation is not cured, the CITY shall have the right to retain an independent consultant to Inspect and last the eligible Property for such violation. If a violation is discovered, the DEVELOPER shall pay for the reasonable cost of Me independent consub ent. Additionally, the DEVELOPER agrees' A. That the CITY shall not be directly or indirectly involved 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 am remain solely with the DEVELOPER; B. Not to transport to or from the proposed project state), or use, generate, manufacture, produce, store, release, diischarge, or dispose of on. under, or about the project stte(s), or surrounding real estate, or transport to or from the project she(s), 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 ha;umdous 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 properties or underlying or surrounding real estate or part thereof to be subject to any restrictions on the ownership, occuparl transferability, or use of the property under any environmental law, rule, regulation, ordinance or statute; and D. To indemnify, defend, and hold the CITY harmless from any and all claims, actions, causes of action, demands, judgments, damages, injuries, administrative orders, consent agreements, orders, liabilities, penaltties, 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 or release of any hazardous or toxic chemicals, materials, substance, or wastes on the eligible Property regardless of cause or origin, including any and all liability arising out of or relating to any investgation, site monitoring, containment, cleanup, removal, restoration, or other remedial work of any kind. 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 otherwise to the Project. 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 such steps as are required of the DEVELOPER to enable the CITY to comply with, conform to and obey) all federal statutes, regulations, rules and policies applicable to the Program and 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 Ad (40 U.S.C. 276a -276a-5), to all laborers and mechanics employed in the development of any pad of the housing, or Me overtime 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 otherwise meet the criteria of a public work for which State prevailing is required under Cal. Lab. Code 1720 at seq. is exempt where the public funding is in the form of below-market interest rale 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. NotwilhstmMing anything to the contrary contained herein, nothing in this Agreement shall be construed as imposing any independent prevailing wage requirements that are different from those imposed by applicable federal or slate 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 W perform Me acts necessary to carry out the Project. 6.6 Financial Statements and Audita. The DEVELOPER, as a recipient 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 sea.), as amended. Annually, within one hundred and eighty (180) days following: 1) the end of fiscal years) in which the HOME Funds are disbursed hereunder, and 2) the end of fiscal years) in which this contrad shall terminate, and otherwise upon the CITY's, written request during the term of this Agreement, 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 otherwise disclosed therein); and B. Audited Financial Statements covering the income and expenses, and the financial transactions for the Project during the prior fiscal year. 6.7 Inspection and Audit of Books. Records and Documents. The DEVELOPER shall be accountable to the CITY for all HOME Funds disbursed for this project pursuant to this Agreement. Any duly authorized representative of the CITY, the State, 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 Me Project using generally accepted accounting principles. The DEVELOPER agrees to maintain books and records that accurately and Polly 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 moms must be kept accurate and current. For purposes of this section, "books, records and documents" include, without limitation', plans, drawings,specifications, ledgers, journals, statements, contracls/agreements, funding intonation, funding applications, purchase orders, Invoices, loan documents, computer printouts, correspondence, memoranda, and electronically stared 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 me DEVELOPER in which case the DEVELOPER shall bear the cost of such audit. The DEVELOPER shall also comply with any applicable audit requirements of 2/ CFR 92.506. This section shall survive the termination of this Agreement. C. The DEVELOPER will cooperate fully with the CITY, the State, and HUD in connection with any Interim or final audit relating to the Programs and the Project that may be performed relative to the performance of this Agreement. 6.6 Inspection of ProberN. Any duty authorized representative of the CITY, the State, or HUD shall, at all reasonable times, have access and the right to inspect 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 related to construction or pre -development loans in relation to the Affordable Housing Project consistent with the attached Exhibit "D" Project 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 Me DEVELOPER shall not illegally discriminate against any parsons on account of race, religion, sex, family status, age, handicap, or place of national origin in its performance of this Agreement and me completion of Me Project. 6.11 Ownership. Except as required in pursuit hereof, the DEVELOPER shall not sell, lease, transfer, assign or otherwise dispose of all or any material part of any interest it might hold in Me Property or the Project without the prior written consent of me 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 19 which could have a material or adverse impact on its financial condition, business, or assets or on Me operation of the Project(s), except such obligations and Ilabilities that have been disclosed to the CITY in writing and are being contested In good faith. 6.13 Report of Events of Def h. The DEVELOPER shall promptly give written notice to the CITY upon becoming aware of any Event of Default under this Agreement. ARTICLE 7. HOME PROGRAM FUNDS Without waiver of limitation, the parties agree as follows, regarding HOME Funds 7.1 HOME Program Funds. The DEVELOPER warrents, covenants and agrees that HOME Program Loan Funds shall be applied to pay for HOME eligible Project Property acquisition costs to finance the sale of the Property to DEVELOPER through an escrow account established by with Chicago Title Company as provided herein. The CITYs 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 DEVELOPER or take any other action under this Agreement unless the following conditions are satisfied: 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 or bath would constitute an Event of Default. B. The DEVELOPER, by signing this Agreement, commits to construct Iwo Units on the Property and to sell each Unit to a Low Income homebuyer that has submitted evidence to the CITY of a primary home loan suthcient to purchase the Unit. If the CITY determines that said funds are not sufficient to purchase the Unit, the DEVELOPER or the individual homebuyer(s) may satisfy this condition by depositing the amount of the deficiency with the CITY or escrow account, as applicable. C. The CITY has approved the requested eligible Property coats. D. The DEVELOPER has acquired insurance coverage and delivered to the CITY evidence of Insurance as required in Article 10. E. Upon CITY'a reasonable request, the DEVELOPER has provided Me CITY copies of Project surety (payment and performance) bonds. F. The DEVELOPER is current with its compliance of all reporting requirements set forth in this Agreement. G. Upon CITY's reasonable request, Me DEVELOPER has delivered a Ung construction schedule satisfactory to the CITY. H. The City has received the Certification required by this Article 7 of this Agreement. Yid T3 Request fCredit of HOME Program Funds through E. The DEVELOPER shall request that the CITY convey the Property through escrow as a form of disbursement of HOME funs. The DEVELOPER shall only request a maximum of One Hundred Seventy-Seven Thousand an 00/100 ($777,000.00) in HOME Program assistance to finance emulation and sale of the Property, or as otherwise agreed to by CITY. All requests for HOME funds shall be accompanied with the Certification required by this Article 7 of this Agreement. 7.4 DEVELOPER Certification. The DEVELOPER shall submit to the CITY a written certification that, as of the date of the written Request for Disbursement ("Certification ): A. The representations and warranties contained in or incorporated by reference in this Agreement continue to be true, complete and accurate; I The DEVELOPER has carried out all of its obligations and is in compliance with all the obligations or covenants specked in this Agreement, to the extent that such oblgatlons or covenants are required to have been carried out or are applicable at the time of the request for the Disbursement; 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. Loan disbursement requested will be used solely for HOME eligible Property acquisition casts that have been property incurred and are property chargeable In connection with the Project. ARTICLE 8. DEVELOPMENT AND CONSTRUCTION OF PROJECT Without waiver of limitation, the parties agree as follows: 8.1 Pre-construction Meetino Regarding HOME Program Processes and Procedures CITY will schedule, and the DEVELPER shall attend a meeting prior to construction with the CITY's Housing and Community Development Division Manager for the purpose of outlining HOME program processes and procedures. 8.2 Commencement and Completion f Pro 'act The DEVELOPER shall commence and complete construction in accordance wish the Project Description and Schedule. All Project Construction shall be completed no later than January 30, 2010, 8.3 Contracts and Subcontracts. Consistent with Article 8, all demolition, hazardous waste abatement, construction wodr 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 Stale of California and the City of Fresno. The DEVELOPER shall provide the CITY with copies of all agreements with any and all contractors or subcontractors for this Project. The DEVELOPER shall require that each contractor and subcontractor agreement contain a provision whereby the party(ies) to the agreement other than Me DEVELOPER agree to (i) notify the CITY immediately of any 21 event of default by the DEVELOPER thereunder, (it) notify Me CITY immediately of the fli ing of a mechanic's lien, (iii) notify the CITY immediately of termination or cancellation of the agreement; and (iv) provide the CITY, upon the CITY's request, an Estoppel Certificate certifying that me 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. BA Damage to Props M. To the extent consistent with the requirements of any permitted encumbrance, or as otherwise 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, diligently undertake to repair or restore said buildings and improvements consistent with the original Plans and Specifications of the Project Unit. Such work or repair shall commence within ninety (90) days after the Insurance proceeds are made available to the DEVELOPER and shall be complete within one (1) year thereafter. All insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, the DEVELOPER shall make up the deficiency. 8.5 Fees. Taxes and Other Levies, The DEVELOPER shall be responsible for payment of all lees, assessments, taxes, charges and levies imposed by any public authonty or utility company with respect to the Property or the Project, and shall pay such charges prior to delinquency, However, Me DEVELOPER shall not be required to pay and discharge any such charge so long as; (a) Me legality thereof is being consisted diligently and in good faith and by appropriate proceedings, and (b) 0 requested by the CITY, 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 CRY from the consequences of the contest being unsuccessful. 6.6 Fin_ ancino. The DEVELOPER shall promptly inform the CITY of any new or additional financing or funding, and the DEVELOPER shall provide the CITY copies of all agreements with any and all Funding Sources for this Project. The DEVELOPER shall require each agreement with any and all Funding Sources to contain a provision whereby the panyhes) to the agreement other than the DEVELOPER, agree to (i) notify the CITY immediately of any event of default by the DEVELOPER thereunder; (it) notify the CITY immediately of termination or cancellation of the agreement; and (iii) provide the CITY, upon CRYs request, an Estoppel Certificate codifying that the agreement Is in full force and effect and the DEVELOPER is not in default thereunder. The DEVELOPER agrees M notify Me CITY immediately of termination or cancellation of any such agreements) or receipt of nobce of default thereunder. The DEVELOPER shall comply with all obllgabons of any such agreement(s) with any and all Funding Sources unfit the respective expiration of such agreement(s). In the event DEVELOPER fails to comply with its 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. 87 Identification Signage. Before the start of construction, the DEVELOPER shall place a poster or sign, with a minimum four feel by bur feel in size, Mentifying Me City of Fresno, Planning and Development Department, Housing and Community Development 22 Division, as a Project participant. The sign shall also include Me CITY'S Housing Logo, as well as the Equal Housing Opportunity logo, as mandated by HUD. Font size shall be a minimum of 4 inches. The poster/sign shall be appropriately placed, and shall ba in place throughout Me Project construction. 8.8 Inspections. The DEVELOPER shall Permit. facilitate, and require its contractors and consultants to permit and facilitate observation and inspection at the jab site by the CITY and other public authorities during reasonable business hours, for determining compliance with this Agreement. 8.9 Insurance and Bonds- Upon CITY's reasonable request, the DEVELOPER shall submit for CITY approval bonds, policies, certifcates and applicable endorsements for all insurance and bonds required by this Agreement in accordance wit Article 10. 8.10 Mechanic's Lions and Stay Notices, If any claim of lien is fled against the Property or a stop notice affecting any financing, HOME Program Funds or Funding Sources for the Project is served on Me CITY of any other third party in connection with the Project, the DEVELOPER shall, within twenty (20) days of such filing or service, either pay and fully discharge the lien or slap 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 Me CITY with other assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or discharged. A. If the DEVELOPER fails to discharge, bond or otherwise satisfy the CITY with respect to any lien, encumbrance, charge or claim referred to in this Section, 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 Me DEVELOPER 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 thereat 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. charges or claims together with all related costs and expenses. 8.11 Permits and Licenses. Upon CITY's reasonable request, the DEVELOPER shall submit, for CITY approval, all the necessary Permits and licenses required for Commencement of Construction. As Me CITY may reasonably request, the DEVELOPER, at its sole cost and expense, shall provide to the CITY copies of any and all Park approvals and authorizations including plot plan, plat, zoning variances, sewer, building, and other perils required by governmental authorities other Man Me CITY in pursuft of the Affordable Housing Project, and for its stated purposes in accordance with all applicable builtling, environmental, ecological, landmark, subdivision, zoning codes, laws, and regulations. The DEVELOPER is responsible, at its sole cost and expense, M determine the location of any utilities on the Property and to negotiate with Me utility companies for and to relocate the utilities, if any, as necessary to complete Me Project. 8.12 Plans and Specifications. before Commencement of Construction, Me DEVELOPER shall submit to the CITY, for its review and approval, the final Plans and Specifications for the Project. The DEVELOPER will construct the homes in full 23 conformance with the Plans and Specifications and modifications thereto approved by the CITY. The DEVELOPER shall obtain the CITY's prior written approval for any modificar ions to the Plans and SpecMcabons. 8.13 Protect Responsibilities The DEVELOPER shall be solely responsible for all aspects of the DEVELOPERS conduct in connection with Me Project, including but not limited to, the applicability of and compliance with all local, state and federal laws including, without limitation, as to prevailing wage and public bidding requirements (the CITY's annual resolution seeing out per diem wage rates is available from Me CITY's Construction Management Division), the quality and suitability of the work completed, the supervision of all contracted work, qualifications and financial conditions of and performance of all contractors, subcontractors, consultants and suppliers. Any review or inspection undertaken by the CITY with reference to the Project is solely for the purpose of determining whether the DEVELOPER Is property discharging its obligation to Me CITU, and shall not be relied upon by the DEVELOPER or by any third parties as a waranly or representation by Me CITY as to the quality of the work completed for the Project This Project is a public work subject to prevailing wage requirements except as provided in Section 6.4 hereof. 8.14 Quality of Work. The DEVELOPER shall ensure that construction of the proposed Project, employs building materials of quality suitable for the requirements of the Project. The DEVELOPER shall cause completion of construction of the proposed Project on Me Property in full conformance with applicable local, state and federal laws, statutes, regulations, and building and housing codes. 8.15 Relocation. If and to Me extent that construction of the proposed Project results in Me permanent or temporary displacement of residential tenants, homeowners or businesses, 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. 8.15 Reoorting Regurements. The DEVELOPER shall submit to the CITY the following Project reports: A. From the date of the Commence of the Project, until issuance of Me final Certificate of Completion, evidencing the construction of the last Project Unit, 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 marreting elforta (as applicable), The Quarterly Reports are due on each March 31'r, June 300, September 30r , and December 31e, during redid period. Bi Annually, beginning on the first day of the month following the CITY's Issuance of the final Certificate of Completion, evidencing the construction of the last Project Unit, and continuing until the termination of the Agreement, the DEVELOPER shall submit an Annual Report to Me CITY, in a form approved by the CITY. The Annual Report shall include, at a minimum, Me follovnng. information: the date the occupancy commenced, cerfification from an officer of the DEVELOPER that the Project is in compliance with the 24 Affordable Housing Requirements, and such other information the CITY may be required by law to obtain. The DEVELOPER shall provide any additional information reasonably requested by Ma CITY. C. Annually, beginning on the first day of the month following Me CITY's issuance of the final Certificate of Completion, evidencing the construction of Me last Project Unit, and continuing unfit the expiration of Me Agreement, DEVELOPER shall submit proof of insurance as may be required in Article 10. 8.17 Scheduling and Extension of Time Unavoidable Delay -in Performance. It shall be the responsibility of the DEVELOPER to coordinate and schedule the work to be Performed so Mat the Commencement of the Project and issuance of the Certificate of Completion(s) will take place In accordance with the provisions of the Agreement. The CITY, through its Housing and Community Development Division Manager, may extend such time in writing at its sole and absolute discretion, and upon written request of Me DEVELOPER, as follows: A. The time for pelfonnance of provisions of Me Agreement by either party shall be extended for a period equal to Me Period of any delay direcify affecting the Project or this Agreement which is caused by: war, insurrection, strike or offer labor disputes, lock- outs, nuts, foods, earthquakes, fires, casualties, acts of God, acts of a public enemy. epidemics, quarantine restrictions, height embargoes, lack of transportation, sults filed by third parties concerning or arising out of this Agreement, or unseasonable weather conditions. An extension of time for any of Me above specified causes will be granted only ff written notice by the party claiming such extension is sent to Me other party within ten (10) calendar days from the date Me affected path learns of the commencement of Me cause and the resulting delay and such extension of time is accepted by the other Party in writing. In any event, the Project must be completed no later than one hundred eighty (1 80) calendar days after the scheduled completion date speed in this Agreement, notwithstanding any delay caused by that included in MIS section. B- Any and all extensions hereunder shall be by mutual written agreement of the CITYS Housing and Community Development Division Manager and Me DEVELOPER and shall not cumulatively exceed one hundred eighty (180) days. 8.18 Certificate of Completion. Upon completion of the construction of each Project Unit, the DEVELOPER shall certify, in writing. within thirty (30) days, to the CITY that constmction of the Project Unit has been completed in accordance with the plans and specifications approved by the CITY. Upon completion of each Project Unit. the DEVELOPER shall also submit to the CITY a cost -certifying final budget where the DEVELOPER shall identify the actual casts of construction of each Project Unit. This final cost-certMcation shall identify costs in line -item format, consistent with the Project Budget. Upon a determination by the CITY Mat the DEVELOPER is in compliance with all of Me DEVELOPER'S construction obligations, as specified in this Agreement, for that Project Unit, the CITY shall furnish, within thirty (30) calendar days of a written request by the DEVELOPER, a recoMable Certificate of Completion for the Project(s) in the form attached hereto as EXHIBIT "E". The CITY will not unreasonably withhold or delay furnishing Me Certificate of Completion. If the CITY fails to provide the Certificate of Completion within the specified time, it shall provide the DEVELOPER with a written statement indicating in 25 what respects the DEVELOPER has failed to complete the Project in conformance with this Agreement or has otherwise failed to comply with Me terms of this Agreement, and what measures the DEVELOPER will need to take or what standards it will need to meat in order to obtain the Certificate of Completion. Upon the DEVELOPER taking the specified measures and meeting the specified standards, the DEVELOPER will certHy 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. ARTICLE 9. PROJECT OPERATIONS 9.1 Operation of the Proiect. The DEVELOPER shall operate and/or manage me Project in full conformity with the terms of this Agreement. 9.2 Occupancy Requirements. Two (2) Project Units) shall be marketed and sold as principal residence for single-family owner -occupancy by low-income households. The DEVELOPER shall comply with the income targeting and Affordable Housing requirements of 24 CFR 92.217 and 92.254. No homebuyer shall take occupancy of any home prior to the close of escrow vesting We in said homebuyer. 9.3 Fair Marketing Plan. Before marketing any Project Unit and at least sixty (60) calendar days prior to the Completion of Construction of me first Project Unit, me DEVELOPER shall submit to the CITY, for review and approval a plan, for marketing the Units) ("Fair Marketing Plan"). The Fair Marketing Plan shall address in detail how me DEVELOPER or its dra gnated management entM1y plans to market the availability of Units to prospective low-income purchasers and how the DEVELOPER plans to certify me eligibility of potential buyers. The Final Marketing Plan shall contain detaiiled descriptions of policies and procedures with respect to buyer selection(s). Topics to be covered in these procedures shall Include at a minimum the following: Interviewing procedures for prospective buyers; Buyer references; Credit reports and checks; Deposit amounts, purpose, use and refund policy; Employmentdncome verification; Occupancy restrictions; Income limits; Homebuyer education requirements, Equal Housing Opportunity Statement, and Restrictions on use of the premises and Program Income. The Final Marketing Plan shall contain copies of all standardized forms associated with the above listed topics. The DEVELOPER shall abide by the terms of this Final Marketing Plan, approved by the CITY, In marketing, managing and maintaining me Housing. 9.4 Property Management. With respect to the Project, DEVELOPER shall comply with me following: A. Management Responsibilities. The DEVELOPER is specifically 26 responsible for all management functions with respect to Me Project including, without limitation, construction management, affirmative markelirg, property disposition and initial certification of household size and income. The DEVELOPER during its time on We shall be responsible for Project maintenance, landscaping, routine and extraordinary repairs, replacement of capital items and security. The CITY shall have no responsibility for such management of Me Project. 9.5 Maintenance d Securiliv. The DEVELOPER shall (i) at Its own expense maintain the homes In good condition, in goad repair and in decent, safe, sanitary, habitable and tenantable living conditions for the benefit of the purchasers, hi) not commit or permit any waste on or to the homes, and shall prevent and/or rectify any physical deterioration of the homes; and (iii) maintain the homes in conformance with all applicable federal, state and local laws, ordinances, cod" and regulations and this Agreement, until such are sold to Low -Income buyers. 9,6 Nondiscrimination. All of the Units 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. consbuetion, use, enjoyment, occupancy or conveyance of any part of the Affordable Housing Project or Property on the basis of race, color, ancestry, national origin, religion, sex, age, martial status, family status. source of income/rental assistance subsidy, physical or mental disability, Acquired Immune 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 Me DEVELOPER, shall establish or permit any such practice or practices of illegal discrimination or segregation with reference to Me selection, location, number, use or occupancy of tenants or vainness of any Unit or In connection with employment of persons for the construction of any Unit. All deeds or contracts made or entered into by the DEVELOPER as to the Units or the housing 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 to Me effect Mat Me DEVELOPER is an Equal Housing Opportunity Provider. A. Nothing In this section is intended to require Me DEVELOPER to change Me 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 Pro ad Home Sale Pd . The initial sale price of each home is the total amount paid by the homebuyer for Me home conveyance, inclusive of any first liennoan and exclusive of escrow fees, title insurance costs, brokers commission (if any), loan fees or any other closing or transaction costs. Notwithstanding the foregoing, the sale price of each home shall not exceed ninety five percent (95%) of Me median purchase price for the area as applied under 24 CFR 92.254. The CITY shall approve in advance all homebuyers. Homebuyer financing shall be based upon buyers ability to pay, consistent With this Agreement 9.10 Affordable Housino. The purpose of this Agreement is to use HOME Loan Funds M ensure the affordability of two (2) Project Units to be sok to Low -Income 27 households, The DEVELOPER, and those taking ownership of the Project Property under or through ithhem, covenant and agree that the Project shall constitute Affordable Housing by ensuring Nat the homes are sold only to Low -Income householtls, during the entire Affordability Period. A. If a Project Unit initially built and sold to a lower-income household is subsequently resold, otherwise transferred and/or is no longer the principal residence of the individual(s) who initially purchased the property as Affordable Housing tluring the Affordability Period, and without waiver or limitation, the entire HOME -Funded Loan allocated to Unit shall be repaid la/recaptured by the CITYB HOME Program Trust Fund and thereupon the balance of the Affordability CovenantiPenod shall be released. R. The DEVELOPER shall require that each home buyer assume the Loan. Said Trust Deed Note(s) as assumed shall be security for the provision of HOME Funding for the Project by the CITY. In the event of a failure to comply with the Affordability Restrictions, in addition to any and all other remedies available to d. the CITY shall be entitled to enjoin sale of the Project Units, damages not being an adequate remedy at law for such breach. C. In the event of a failure to comply with the Affordable requirements, as applicable, the CITY shall be entitled to enjoin selling the Units in the Project, as the parties acknowledge that damages are not an adequate remedy at law for such breach. ARTICLE 10. INDEMNIFCATION AND INSURANCE. Without waiver of limitation, the parties agree as follows regarding the DEVELOPER'S Indemnification and Insurance Obligations: 10.1 Indemnfcation 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 damage) incurred by the CITY, the DEVELOPER or any other person, and from any and all claims, demands and actions in law or equity (including attorneys fees and Ihigation 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 CITY or any of its officers, officials, employees, agents or authorized volunteers are negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused solely by the grass negligence, or caused by the willful misconduct, of CITY or any of its vicars, officials, employees, agents or authorized volunteers. A. If the DEVELOPER should contract all or any portion of the work to be performed underthis Agreement, the DEVELOPER shall require each contractor and subcontractor to indemnify, hold harmless and defend the CITY and each of its officers. officials, employees, agents and volunteers in accordance with the banns of the preceding paragraph. R. This section shall survive termination or expiration of this Agreement. 10.2 Insurance. Throughout the life of this Agreement, the DEVELOPER shall itself and/or through its consultant(s), assignee(s). n rnmee(s), contrdchns and subcontractors pay for and maintain in full force and effect all policy(ies) of insurance required hereunder with (an) insurance companyhes) either (1) admitted by the California Insurance Commissioner to do business in the State of California and ratetl not less than "A -VII" in Best's Insurance Rating Guide, or (2) authorized by the CITY'S Risk Manager_ The following policies of insurance are required: A. Until issuance of Cerifirate(s) of Completion, BUILDERS RISK (Course of Construction) Insurance in an amount equal to the completed value of the project with no coinsurance penalty provisions. B. Following issuance of Certificate(s) of Completion, Fire and Extended Coverage Insurance against loss or damage to the project by fire and lightning, with extended coverage for vandalism and malicious mischief and sprinkler system leakage. Such extended coverage insurance will, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle, smoke and such other hazards as are normally covered by such insurance. Such insurance shall be in an amount equal to the replacement cost (without deduction for deprecia0on) of the project with no coinsurance penally provisions. DEVELOPER, or its CITY -approved lender, shall ensure that the required insurance is acquired by the individual homebuyers. 1. The above described policy(ies) of insurance shall be endorsed to provide that the coverage shall not be cancelled, non -renewed, reduced in coverage or in limits except after thirty (30) calendar day written notice has been given to CITY an unrestricted thirty (30) day written notice in favor of the CITY, of policy cancellation, change or reduction of coverage. Upon issuance by the Insurer, broker, or agent of a notice of cancellation, non -renewal, change or reduction in coverage, the DEVELOPER or IN contrac[ore/subcontractors, as the case may be, shall furnish City with a new certificate and applicable endorsements for such policy(ies). In the event the policy is due to expire during the term of this Agreement, Developer shall provide a new certificate, and applicable endorsements, a new certificate evidencing renewal of such policy shall be provided not less Nan fifteen (15) days prior to the expiration date of the expiring policy. Upon issuance by the insurer, broker, or agent of a notice of cancellation, change or reduction in coverage, the DEVELOPER or its cimb ectors/subcontractors, as the case may be, shall file with the CITY a cerfified copy of the new or renewal policy and ceNfcates for such policy. 2. The City shall be named as a less payee. 3. If at any time during the life of this Agreement or any extension, the DEVELOPER fails to maintain the required insurance in full force and effect, all work under this Agreement shall be discontinued immediately, until notice is received by the CITY Nat the required Insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to the CITY. Any failure to maintain the required insurance subject to notes and cure requirements herein, shall be sufficient rause for the CITY to terminate this Agreement. 10.3 Bonds. The DEVELOPER shall obtain, pay for and deliver or cause to be obtained, Paid for and delivered good and sufident surety bons from a corporate surety, 4: admitted by the California Insurance Commissioner to do business in the State of Cal'domia and Treasury -listed, in a form satisfactory to the CITY and naming the CITY as Co -Obligee. A. The "FaRhful Performance Bond" shell be at lead squalid 100% of Owner's estimated construction was to guarantee faithful pedoroance of the Project, within the time prescribed, in a manner satisfactory to the CITY, and that all materials and workmanship will be free from original or developed defacts- B. The "Material and Labor Bond" shall be at least equal to 100% of Owner's estimated construction costs 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, released or tlme barred, and shall otherwise comply with any applicable provisions of Chapter 7, Tltie 15, Par 4, Division 3 of the California Civil Code. C. In lieu of the bonds required above. City may accept from Developer an Irrevocable Standby Letter of Credit issued with Me City named as the sok beneficiary. The Irevocable Standby Letter of Credit is to be Issued by a bank, and in a form, acceptable to City. Throughout the life of this Agreement, Developer shall pay for and maintain in full farce and effect the Irrevocable Standby Letter of Credit in the amounts) of the bonds required above. This Irrevocable Standby Letter of Credit shall be maintained by Developer in full force and effect until the Project Is completed 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" for purposes of this Agreement: A. The DEVELOPER'S use of HOME Funds for casts other than Eligible Coats 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 otherwise provided in this Agreement, the failure of Me DEVELOPER to punctually and properly perform any other covenant or agreement contained in this Agreement including without limitation the following (1)the DEVELOPER'S substantial deviation in the Project work specked in the Project Description as 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) Me DEVELOPER'S failure M commence or complete the Project, as spedfied in this Agreement, unless delay is permittetl under Article 8 of this Agreement; (4) the cessation of the Project for a period of more than fifteen (15) consecutive days (other than as provided in Article 8 of this Agreement) prior to submitting to the CITY, pursuant to Article 8 certification that the Pmject is complete; (5) any material adverse change in the condition of the DEVELOPER or Me Project that gives the CITY reasonable muse to believe that the Profect cannot be completed by the scheduled completion date according fo the terms of this Agreement; (8) the DEVELOPER'S failure to remedy any 30 deficiencies in record keeping or failure to provide records to Me CITY upon Me CITY'S request; (7) the DEVELOPER'S failure to substantially comply with any federal, state or local laws or applicable CITY restrictions governing the Project, including but not limited to provisions of this Agreement pertaining to equal employment opportunity, nondiscrimination and lead-based paint: IT Any representation warranty, or certificate given or furnished by or on behalf of the DEVELOPER shall prove to be materially false as of the date of which the representation, warranty, or certification was given, or that Me DEVELOPER concealed or failed to disclose a material fad 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, or certification to be true and complete in every respect; E, The DEVELOPER shall his, 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 reorganisation, arrangement, composition, readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been vacatetl within fourteen (14) 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 fourteen (14) days, F. The DEVELOPER'S failure, inability or admission in writing of IN 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 the DEVELOPER to cause completion of Me Project prior to January 30, 2010, I. The DEVELOPER'S breach of any other material condition, covenant, warranty, promise or representation contained in this Agreement not otherwise identified within this Section; and J. Any substantial or continuous breach by Me DEVELOPER of any material obligation owed by the DEVELOPER imposed by any other agreement with respect to Me financing, development, construction or operation of Me Project, whether or not the CITY is a party to such agreement. 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, H 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, anytime period provided for in the notice, or thirty (30) calendar days from the date of the notice, by which such deficiency must be cured 31 provided that g the spaded deficiency or default cannot reasonably be wred within the specked 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. 11.3 Remedies Upon an Event of Default Upon the happening of an Event of Default by the DEVELOPER and a failure to cure said Event of Default within the time specified, the CITY's obligation to transfer the property 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 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 to the DEVELOPER; B. Bring an action in equitable relief (1) seeking specific performance by the DEVELOPER of the terms and conditions of this Agreement, andlor (2) enjoining, abating or preventing any violation of said terms and condNons, amuor (3) seeking declaratory relief; and C. Pursue any other remedy allowed by law or in equity or under this Agreement. ARTICLE 12. 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. If either parry 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 Binding All Successors and Assigns. Unless otherwise 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 nominees, 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 parry hereto will not become effective unfil 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 he deemed 32 or construed by any parson 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 Govemmectal 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, CEOA 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 descnbed herein. Such actions are legislative, quasyhx icial, or otherwise discretionary in nature. The CITY cannot take action with respect to such matters befom completing the environmental assessment of Me Project under NEPA, CEM and any other applicable statutes. The CITY cannot and does not commit in advance Met 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 partiescomplete execution following City Council approval. 12.6 Entire Agreement This Agreement represents the entire and integrated agreement of the parties wth respect to the subject matter hereof. This Agreement supersedes all prior negotiations, representations or agreements, either written or oral. 12.9 Exhibits. Each exhibit and attachment referenced in this Agreement Is, by Me reference, incorporated into and made a part of this Agreement. 12.10 Expenses Incurred 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 Me CITY as a result of one or more Events of Default by the DEVELOPER under this Agreement. 12.11 Govemina law and Venue. Except to the extent preempted by applicable federal law, the laws of the State of California shall govem 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 Head�in ss. 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 Interpretation. This Agreement in its final form is the result of the combined efforts of Me parties. Any ambiguity will not be construed m favor or against any party, but rather by construing the terms in accordance with their generally accepted meaning. 12.16 No Assignment or Succession . Except as may be otherwise expressly provided by this Agreement, neither this Agreement, nor any interest of the DEVELOPER in, untler, or to this Agreement, or the Project, may be assigned or transferred by the 33 DEVELOPER without the prior written consent of the CITY, which consent shall not be unreasonably withheld or delayed. Any assignment without consent is null and void. 12.15 No Third -Party Benefc'aw. No contractor, subcontractor, mechanic, matedalman, 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 of except as otherwise agreed to by the CITY and any such person in writing, May may not enter any claim or bring any such action against the CITY under any circumstances. Except as provided by law, of as otherwise agreed to in writing between the CITY and such person, each such 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 Ne 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 exemise 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 rs 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 CITYS right to take other or further action in any circumstances without notice or demand. 12.17 Nomeliance. 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 ailed on the CITY, it agents, employees or attorneys In entering 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. If to the CITY: City of Fresno Housing and Community Development Division 2600 Fresno Sheet, Room 3070 Fresno, CA 93721-3605 If to DEVELOPER: Habitat of Humanity Fresno Inc. Attn: Anthony Miranda 2219 San Joaquin Fresno, CA 93721 12.19 Precedence of Documents. In the event of any conflict between the body of this Agreement and any exhibit or attachment hereto, Me terms and conditions of the body of this Agreement will control. 36 12.20 Recortlina of Documents. The DEVELOPER agrees to cooperate withthe CITY and execute any documents required, promptly upon the CIT's request, the Deed(s) of Trust, and any other documentsfinstruments that the CRY 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. 12.22 Severability. 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 Me remaining provisions hereof or thereof. // M 35 IN WITNESS WHEREOF, the parties have executed this Agreement in Fresno, California, the day and year first above written. CITY OF FRESNO, a Municipal Corporation BY:(X: �•.asl Ree r Andrew T. Souza, CitynaNl ger (Attach notary certifimte of acknotWedgmeru Date: SA (4 ATTEST REBECCA E. KLISCH City Clerk' DepIP Date: glmo9 DEVELOPER Habitat for Humanity Fresno, Inc. a California Corporation B' Anthony Mirand Exe ufive Director (Attach notary ovg le of scknowledgmene Date Attachments' APPROVED AS TO FORM'. JAMES SANCHEZ City Attorney By: Q Robert R. Coyle, Deputy City Attorney Date: N - L I - e=( EXHIBITA: PROPERTY DESCRIPTION EXHIBIT B: PROJECT DESCRIPTION AND SCHEDULE EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS EXHIBIT D. BUDGET EXHIBIT E'. EXEMPLAR CERTIFICATE OF COMPLETION EXHIBIT F. EXEMPLAR NOTE AND TEMPLATE RIDER TO DEED(S)OF TRUST W CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT State of California Cnuatynr Fcesno Onlrlp Z 2009 before me, T erP5 Jr ��I✓A ."', ,,i Y4 ✓J�IC ort. °nl:mamni personally appeared__Antf YCW T, SOU 70.,— _z who proved to me on the basis of satisfactory evidence to be the person(/( whose namely) i&lal. m sc bed to the within instrument and acknowledged to me that hewheuheyexecuted the same in his/heNNeb authorized capacttyOos), and that bybis/hmJ9leI ognature(d) on the instrument the person(gl, or the entity upon behalf of which the person($) acted, executed the instrument. I certify under IIENALT OF PERJURY under thelaws of the State of Calimmia that that foregoing paragraph is nue and carred. NdivldnelO ❑ 1"1111AtlSLL01VRR WITNESS mylond:nld official seal. COMM. 1609668 xmnr der. canlarm. a ❑ Pawege) J� rnv� jjdvve M cum e.o 9 nto r ❑ m, ❑ ADDITIONAL OPTIONAL 11OF01MATION ROSTRUMONS FOR COW LFIWD THIS Fajarl e"r.°.teles 4, s„ym.,rra.1.°.ern rnNaa. v°=w.r AOrDESCRIPTION OFTHLAITACIiED DONMEN9' mw,adeOR wmdm �o rF urr° rOOd °Ip.1n IS, SSOw, dr.umrnr. (Pale°e it ore.. W Ymv¢wi nrbwvledgrmme.r.Lr� vvmgr F e'wM'.surra, so w rrye vertingM S, rM, o,,''I So voewAmyrnm Islet, JI, n°nge every O, aMIS ft°. mryyuy Me..1 .r:etl vg.el. 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BmrtlY oed Au tiv.urvm ry art elgvd emrrw.m CALiFORN1AALL-PURPOSE ACKNOWLEDGMENT Cindy of rMake n0 1 On Aprl N tZib Iq befewe me, {-RC rn0.Y1C V 4wJgA n .Notary PnbliG Eyea Pe,sonallvappearedAA�t!HA O in r��I/-44140 nam.ryataposee yaavn m.a✓..,,yffys,be= 1onrwmran by Ne, weebbiXe,Peles svtog wuo waw ,eemwdpm,n/,. b`1".,. .,d, yshbdrfdyh,,a m...,mam.,m,ar Description of Attached Doormen vw // Tale or The of Doeoment ✓C /o )J /Rf.:� s e Li/Q% &/MzwemIL Signerd) Other Than NamedAMve: _ C peciy(ies) Calmed by Sibledi Sdgm,'y Name. ❑Individual ❑ Corporate (fficer--Titleb)'. ❑ Party r— I] Limited ] General ❑ Attome.'-w Fart ❑ Tasted ❑ Guardian or Comercamr ❑ ONm Sgneir is Representlogr Sipmrs Name ❑Inaividiul ❑ Corporate Dr6rer—Theis): ❑ Partnery p Limited p General ❑Attamry-w Fait ❑Tare ❑ Guardian or(ionannter ❑ Daher Sgnv Is Repressnselg: _ Ll C�O provedm me on the basis ofsatiafoRory evidence mbetne pereonspfwhbse mmelriis/eresrnsc bed to the within nantited and ssomo,.ledged to me that n ay t1XLEYYN11f 61NPSOX executed We a in M1is(!we'NWr authorized CMNRMIININI 1 Na as pautyjim}, and Nat li M1i s/Me/Mer 8^aNre(�a,n[he lablabialeled r,Nna=awry wm,menrroeI�msml,exrraethespunrint. m Ganef e..lwxr mlx whim the persony�aaea,e.eentea Nein,m,eient. d ,new under PENALTY OF PFM under the baso( the Slate o(Glifomia that the foregoing Paragraphia me and cotrem WpNECS my otfioial seals SSignature/ / 1tti p11",ry m6ul.AMK 6hpu� of xae yaavn m.a✓..,,yffys,be= 1onrwmran by Ne, weebbiXe,Peles svtog wuo waw ,eemwdpm,n/,. b`1".,. .,d, yshbdrfdyh,,a m...,mam.,m,ar Description of Attached Doormen vw // Tale or The of Doeoment ✓C /o )J /Rf.:� s e Li/Q% &/MzwemIL Signerd) Other Than NamedAMve: _ C peciy(ies) Calmed by Sibledi Sdgm,'y Name. ❑Individual ❑ Corporate (fficer--Titleb)'. ❑ Party r— I] Limited ] General ❑ Attome.'-w Fart ❑ Tasted ❑ Guardian or Comercamr ❑ ONm Sgneir is Representlogr Sipmrs Name ❑Inaividiul ❑ Corporate Dr6rer—Theis): ❑ Partnery p Limited p General ❑Attamry-w Fait ❑Tare ❑ Guardian or(ionannter ❑ Daher Sgnv Is Repressnselg: _ Ll C�O EXHIBIT A: PROPERTY DESCRIPTION Legal Description: PARCEL 1: 172 North Echo Avenue, Fresno, CA (APN: 459-292-28T) PARCEL 2: 182 North Echo Avenue. Fresno, CA (APN: 459-292-27T) Page i of Exhibit A �I LEM IDESEFtEMON T1EI.WD NEFENNEDIO HEREIN BELOW N 9nIATED M IHE OWO OF FRESNO, STALE OF AND IS DEKRBIEO 0.S FFAFL S- EEy c'Fr sno All OF LMB and portions d Lds Sand g In dock 1 d GnMM's Seomd AMMBon, aa'dding MMe map Moral rsnNed h Book I Page 9 d Plans, Friend county Electra, more Vergodaddy described as Mikis: cornmendrg at Me South dander d sd Lot ); U,ance Pladi along Me West Ilne asap Lot g, a More d 10.00 feel ma an leis, Ma yldd int saYkn With Me Mal A MWMJ widn and 35.00 Net NorM an Me Smah Me d let 0 d sant Block 1, sad print ado kMg the True PoUM a Beginning dMk Mescrlgbn; thence aRNnuing NwMeM ad, the West Lire d said tons ], 6 add 5, a Mhbnce of45AO find, mom or led, M a line Mat IS darelM wM and 45.00 Rai boM of Me NwM IM Of IM 4 d sad Bled 15; Meare ; Ea#thernm ee�aallag Ed Said Pmkl Ole, adBMnce d 160.00 Ret, more or ks, MME Fee pre dsad 6i Wt a ire2lat add W -O fearg Fee Mae Fortind Me South We d said Wt B; OMI ehaw mord aoa'Ma Me Parallel line a distance d UO.NRY{. more or las, M Me True Poim OF BNhnlrg. H/almgla#zad APN: 459 -M3 -W ZI 0 IEGPL OES@IRION R•r QyNF Sno Mid IM 4 and a potion d IM 5 I libtlr I& Griffith's Second Adddbn, accenting W the map thereof reradm In Beck Page 9 of P6lx Mena GvnW Records, nem paMvkM reWIpJ as fal lnn2asforpkaaoebalnddOMLots newa Mal Beginning at feel, more ron[6wrMeewIIMaM5.lSSeMofaModiline sw IM 4; Ment Fasferh along uW palate' fil a c lStamm of t60.W feet, more or ens, to tlx Fuf Ilrc dMW IM 5; Mens Nodmerly along Me F line d ssGI 5 and 4, a dbdMe Of 45.00 food, more or One W Me NpMrat comerOF ;a Id lot 4; thence Westerly along [Ice Noft line 0saki tat 4, a distanced 1W.W flet, rmre ar ass, W Me Pollrt IX Beginning. AM: 459-292-21 EXHIBIT B: PROJECT DESCRIPTION AND SCHEDULE I. PROJECT DESCRIPTION: The Project consists of Property acquisition and the construction of two (2) single family homes for occupancy by low-income families to be sold at affordable housing cost. The DEVELOPER, shall pay for on-site and off-site improvements, construct, market, and sell the homes. Consistent with the allched Budget, the DEVELOPER will fund all non -acquisition pre -construction and construction costs with non -HOME Program Funds. The DEVELOPER, or its CITY -approved lender, will qualify all households. Upon CITY approval and consistent with the Agreement to which this Exhibit "B" is an attachment, the hvo (2) affordable homes shall be sold to me low-income families. Both homes will feature solar panels and Universal Design features. Both homes will be three-bedroom hyo -bathroom Units. Maximum HOME funding for the Project is a total of One Hundred Seventy -Seven Thousand Dollars and 00/100 ($177,000.00), for acquisition of bath parcels which shall be assumable deed trust notes on me two (2) affordable homes, to be made through the sales escrow or as othervase directed by CITY for the affordability of the purchase of each home. II. PROJECT SCHEDULE: A. Commencement of Construction: Not later than August 1, 2009 B. Completion of Construction. Not later than January 30, 2010 C. Completion of Home Sales: Not later than March 30, 2010 Page 1 of Exhibit B EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS RECORDING REQUESTED BY AND for Me benefit of Me Cry of Fresno and is exempt nom Me payment of a recording fee In accordance with Government Core Sections 6103 and 27303 AND WHEN RECORDED MAIL TO CITY OF FRESNO Cry clam a OMce No Fee -GOO, CWe 6103 2600 Fresno Street Room 2133 Fresno. CA 93721 Tole Order No. Evirow Na. rax: DECLARATION OF RESTRICTIONS THIS DECLARATION OF RESTRICTIONS, ("Declaration"), is executed as of this by ( 1. ("DectaranC) in favor of Me City of Fresno, acting by and through its Planning and Development Department, Housing and Community Development Division (City") WHEREAS, Declarant is the owner of the real estate in the county of Fresno, state of Caldomia, consisting of APN: which is more particutady described In Exhibit "A", attached hereto and made a part hereof (the "Property"); and WHEREAS. Pursuant to a certain HOME Investment Partnerships Agreement dated 2009 incorporated! herein, ('HOME Agreement") and Instruments referenced therein, Declarant agrees to utilize and City agrees to provide certain HOME Program Funds from the United States Department of Housing and Urban Development, to Declarant for certain affordable housing (the "Project) upon the Property to be wld and maintained as affordable to low-income families, subject to the terms and cordi5ons set form in the HOME Agreement, and WHEREAS, Me HOME Program regulations promulgated by HUD, including without limitation 24 CFR Section 92.254, and the HOME Agreement impose certain affordability requirements upon property benefited thereby, which affordability restrictions shall be enforceable for a twenty (20) year period; and WHEREAS, these restrictions are intended to bind all purchasers and their successors. NOW THEREFORE. Declarant declares that the Project home upon the Property is Page 1 of Exhibit C L1 held and will be held, transferred, encumbered, used. sold, conveyed and occupied subject to the covenants, resolutions, and limitations set forts in this Declaration, all of which are declared! and agreed to be in furtherance of the plan for the construction, sale and occupancy of the home upon the Property. All of the restrictions, covenants and limitations will run with the land and will be bidding on all parties having or acquiring any right, title or interest in the Project home upon the Property or any part thereof, will inure to the benefit of the future Owners of the home or any part thereof, the United States and Me City, and will be enforceable by any of them. Any purchaser under a correct of sale covering any right, title or interest in any part of the Project Home upon the Property, by accepting a dead or a contract of sale or agreement of purchase. accepts Me document subject to, and agrees to be bound by, any and all restrictions, covenant, and limitations set forth in this Declaration for Me period of twenty (20) years constituting the Affordability Period. 1. Declarations. Declarant hereby declares that the home upon Me Property is and shall be subject to Me mvenants and restrictions hereinafter set forth, all of which are declared to be in furtherance of the Project and Me HOME Agreement Project, and are established and agreed upon for Me purpose of enhancing and protecting Me value of the Pmject Property and in consideration for City entering Into Me HOME Agreement with Declarant. All terns not otherwise defined herein shall have the meaning ascribed to such term in the HOME Agreement. 2. Restrictions. The following covenants and restrictions on the use and enjoyment of the Project home upon the Property shall be in addition M any other covenants and restrictions affecting the Project Property, and all such covenants and restrictions are for the benefit and protection of City, and shall run with the home upon the Property and be binding on any future comer's of the Project home upon the Property and inure to the benefit of and be enforceable by City. These covenants and restrictions are as follows: a. Dedaranl for Itself and Its successors) on title covenants and agrees that it shall cause the two (2) Project homes upon Me Property to be used as Affordable Housing for the duration of Me Affordability Period. Declarant further agrees to file a recordable document setting forth the Project Completion Date(s) and Me Affordability Pariotl when determined! by the City. Unless otherwise provided in Me HOME Agreement, the tens Affordable Housing shall Include, wiMout limitation, compliance with the fallowing requirements: Nondiscrimination. There shall be no discrimination against nor segregation of any penton or group of persons on amount 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 Project Property, nor shall Declarant or any person claiming under the Declarant, establish or permit any practice of discrimination or segregation with reference to the selection, location, number, use or occupancy of owner: or venders of the Project Property. Principal Residence. Each home constituting the Project upon the Property Page 2 of Exhibit C /I /I shall be sold only to natural persons, who shall occupy the home as the purchasers principal residence. The foregoing requirement that the purchaser of each home consti frog the Project Property occupy the home as the purchasers principal residence does not apply to persons, other than natural Persons, who acquire the Project Property or portion thereof by foreclosure or dead in lieu of foreclosure; or (ii) HUD qualified entities that acquire the Project Property or portion thereof, with the consent of the City. Homeowner Income Requirements. The homes constituting the Project upon the Property and each of them may be conveyed only to (a) natural persons) whose annual household income at the time is not greater than sixty percent (60%) of the most recent annual median income calculated and published by HUD for the Fresno Metropolitan Statistical Area applicable to such household's size. Recapture Requirements. Should each of the Mro (2) affordable homes upon the Property not continue to be the principal residence of the family purchasing the Property/home as affordable housing for the duration of the Period of affordability then the entire financial assistance provided by City and allocated to the Property/home including all HOME Program Funding assistance shall immediately come due and must be repaid to/recaptured by the City's HOME Program Trust Fund and thereupon the balance of the affordability restrictions shall be released. The affordability restrictions also may terminate upon occurrence of any of the following termination events: foreclosure, transfer in lieu of foreclosure or assignment of an FHA insured mortgage to HUD, provided the affordability restrictions shall be revived according to the original terms it, during the original affordability period, the owner of record before such termination events obtains an ownership Interest in the housing. The City 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 Me Covenant and Restrictions 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, and shall, in addition, be entitled to damages for any injuries or losses resulting from any violations thereof. 4. Acceptance and Ratification. All present and future owners of the Project home upon the Property and other persons claiming by, through, or under them shall be subject to and shall comply with the Covenant and Res ricfions. The acceptance of a deed of conveyance to the Project Property shall constitute an agreement that Me Covenant and Restrictions, as may be amended or supplemented from time to time, are accepted and ral fietl by such 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 Project 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 Page 3 of Exhibit C `] S lieu of foreclosure. or assignment of an FHA-insured mortgage to HUD, the Affordability Period shall be terminated a the foreclosure or other transfer in lieu of foreclosure or assignment recognizes any contractual of legal rights of public agencies, nonprofit sponsors, or others to take actions that would avoid me termination of low-income affordability. However, the requirements with respect to Affordable Housing shall be revived according to their original terms, if during the original Affordability Period, the owner of record before the forecosure or other transfer, or any entity that includes the former owner or those with whom the former owner has or had formerly, family or business ties, obtains an ownership interest in the Project or the Property, and the Affordability Period shall be revived according to its original terms. 5. Benefit. This Declaration shall run with and bind the two (2) Project homes upon the Property for a term commencing on the date this Declaration is recorded in the Office of the Recorder of the county Fresno, state of California, and expiring upon the expiration of the Affordability Period. The failure or delay at any time of City or any other person entitled to enforce this Declaration shall in no event be deemed a waiver of the same, or of the fight to enforce the same at any time or from time to time thereafter, or an estoppel against the enforcement thereof. & Costs and Attorney's Fees. In any proceeding arising because of failure of Declarant or any future owner of the Project homes upon the Property to comply with the Covenant and Restrictions required by this Declaration, as may be amended from time to time, City shall be entitled to recover its costs and reasonable attorney's fees incurred in connection with such default or failure. 7. Waiver. Neither Declarant nor any future owner of the Project homes uponthe Property may exempt itself from liability for failure to comply with the Covenant and Restrictions required in this Declaration. S. Severability. The invalidity of the Covenant and Restrictions 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 shell be enforceable to the greatest extent permitted by law. 9. Pronouns. Any reference to the masculine, feminine, or neuter gentler herein shall, unless the contain 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 tales 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 Nis Declaration shall be Page 4 of Exhibit C // / permitted without the prior written consent of City. 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 otherwise defined herein, shall have the meanings assigned to such terms in that certain HOME Agreement by and between Declarant and City, of even date. 14. Headings. 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. IN WITNESS WHEREOF, Declarant has executed this Declaration of Restrictions on the date first written above. "DELLA NT" By: � Date: /'7 o Page 5 of Exhibit C '' EXHIBIT D: BUDGET Page 1 of Exhibit D 40 otal HHa I_t R ry HOME Funds #1 $88500 i0- $88,500 #2 $88,500 $-0- $88,500 STS K tl Fees $00000 $30000 S0. ure and En ineen $8,000 $8,000 $-0. $-0. urance $1,400 $1 400 S-0. $10,800 $10800 SE CaeY $22],200 550,200 E177,000 HARD COSTS ene FropiGnaling S0-ON Site improvements o- SO- SO - On Site Improvements SO- $-0- $-o- Direct Construction $92,900 $92,800 1 -0 - Contingencies $30800 $30.800 $A - Contractor Overhead $-0-$-0- Other $32800 332,800 3 -0 - Total Hand Coab $155200 $158,200 S -0 - DEVELOPER FEE CONSTRUCTION FINANCING FEES OTHER SubdivisirMit Cw Wng Fees8-0- Marketing and Sales$ -0 - Total Other Coeb TOTAL EXPENSES SUMS 0 $208,400 $1]]000 PROJECTED SALES PRICE $280000 3000 $1]]000 PERMANENT FINANCING $280000 $83000 $1T000 Page 1 of Exhibit D 40 EXHIBIT E: EXEMPLAR CERTIFICATE OF COMPLETION RECORDED AT THE REQUEST OF AND WHEN RECORDED RE -URN TO: City W Fresno City CIeMs office No Fee- Goo Code 6103 2600 Fresno street, Roam 2133 Fresno, CA 93721 (SPACE ARGVET113 LINE FOR RECORDERS USE) This Certificate of Completion is recorded at the request and for the benefit of Me City of Fresno and is exempt from the payment M a recording fee pursuaM to Government Code Section 6103. APN' City of Fresno By: Keith Bergthold, Intemn Director Planning and Development Department Page 1 of Exhibit E �1 CERTIFICATE OF COMPLETION APN Recitals: A. By a HOME Investment Partnerships Program Agreement dated 2009, CHOME Agreement") between the City of Fresno, a municipal corporation (°CITY), and Habitat for Humanity Fresno, Inc, a California Corporation, ('DEVELOPER'), the DEVELOPER agreed to develop Nro (2) affordable single-family homes ('Project'), upon the premises legally described in EXHIBIT "A° attached to the HOME Agreement as amended from time to time, made a part hereof by this reference. (the "Property") for the sale of the Affordable Units to/occupancy by two (2) low-income homebuyers, with the assistance of HOME funds while meeting the affordable housing, income targeting and other requirements of 24 CFR 92 according to Me terms and conditions of the HOME Agreement and the Loan Documents and other documentMstruments referenced therein. B. The HOME Agreement or a memorandum of it was recorded on 2009 as Instrument No. in the Official Records of Fresno County, California. C. Under the terms of the HOME Agreement, after the DEVELOPER completes the construction of a Project Affordable Unit. the DEVELOPER may ask CITY to record a Certificate of Completion. D. The DEVELOPER has asked CITY to famish the DEVELOPER with a recordable Certificate of Completion. E. The CITY's issuance of this Certificate of Completion is conclusive evidence that Me DEVELOPER has completed construction the ProjecluProject Unit as set forth in the HOME Agreement. NOW THEREFORE'. 1, CITY certifies that the DEVELOPER commenced the construction M the Project Unit on 2009 and completed the construction work on the Project Unit on 2010, and has done so in full compliance with the HOME Agreement. 2. This Certificate of Completion is not evidence of the DEVELOPER compliance with, or satisfaction of, any obligation m 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 me Property or Project. 3. This Certificate of Completion is not a notice of completion as referred to In California Civil Code Section 3093. 4. Nothing contained herein modifies any provision of the HOME Agreement. Page 2 of Exhibit E J 0 IN WITNESS WHEREOF, CRY has executed this Certificate of Compiefion as of this day of , 20_ CITY OF FRESNO By: Keith Beigthold, Interim Director Planning and Development Department ATTEST: CITY CLERK By: Deputy Date. CONSENT OF OWNERIDEVELOPER APPROVED AS TO FORM: JAMES C. SANCHEZ By: Robert Coyle, Deputy City Attorney Data Owner/Developer Name: IHabitat for Humanity Fresno Inc By signing below, the owners) of the property consent(s) to recording this Certificate of Completion against the Property described herein. IAYaoh eamry anmoMa IF11 .hameq ue.a,w.gm 1' n.u.aw.egm..p Page 3 of Exhibit E EXHIBIT F: EXEMPLAR NOTE DO NOT DESTROY THIS NOTE: When paid, this note must be sun antlered to Borrower for Cancellation. PROMISSORY NOTE $88.50 Fresno, California, ai 2009 APN Loss-aga-est Promise to Pay. For value received, the undersigned, Habitat for Humanity Fresno, Inc., a California Corporation ('Developer' or'Borrower"), promises to pay to the order of the City of Fresno, a California municipal corporation, ('Lender'), the sum of Eighty -Eight Thousand Five Hundred Dollars ($88.500.00) along with Interest on unpaid principal at the rata of 2% per annum, all due and payable on or before March 30, 20(Ij],(the "Maturity Date') pursuant to the parties' Disposition and Development and HOME Investment Partnerships Program Agreement dated, 2009] ("HOME Agreement"). on which date the unpaid pnncipal balance together with nterest and unpaid penaRies or late charges where applicable thereon shall be due and payable, along with attorney's fees and costs of collection, without relief from valuation and appraisement laws; provided that, in the event the Developer is not then in default of the Home Agreement, the Developer may at any time prior to the Maturity Data convey the completed Unit securing the Note to a Low Income buyer through a purchase escrow that conforms to Me HOME Agreement. In that event there shall be forgiven from principal due hereunder the sum of Fifty -Three Thousand Dollars ($53,000.00) (provided the Developer confirms said reduction in a writing noticed to the City in the manner provided in the HOME Agreement), and the Developer shall be releasetl from any further liability to the Lender under this Note. Principal and interest payments in the amount of l$Gy994 sY l is due beginning on April 1, 2010 and annually thereafter and all principal antl interest outstanding shall be due on the Maturity Date. Any failure to make a payment required hereunder shall constitute a default under Nis Note. Definitions. All capitalized terms used in this Nate, unless otherwise defined, will have the respective meanings specified in the HOME Agreement. BusinessDa 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 Nate 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, shall be secured by a Deed of Trust, Security Agreement and Fixture Filing with Assignment of Rents on real estate in Page 1 of Exhibit F� Fresno County, California , that provides for acceleration upon stated events, dated as of the same date as this Note 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 Dead of Trust shall be subject to the terms of the Template Rider to the Dead of Trust attached hereto and such shall automatically be incorporated in the terms of the Dead of Trust that secures this Note. Time is of the Essence. It will be a default under this Note d 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. In the event of a default by Borrower, the Borrower shall pay a late charge equal to the lesser of 2% of any outstanding payment or the maximum amount allowed by law. All payments collected shall oe applied first to payment of any costs, fees or other charges due under this Note or any other Loan Documents men to the interest and then to principal balance. On me occurrence of a default or on the occurrence of any other event that under the terms of the Loan Documents give rise to Me 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 Payment 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 me United Slakes 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 Housing and Community Development Division 2600 Fresno Street, Suite 3070 Fresno, CA 93721 Borrower agrees to pay all costs including, without limitation attomey 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 underthis Note. All costs incurred by Me holder of this Nota in any action undertaken to obtain relief from me stay of bankruptcy statutes are specifically included in Mose costs and expenses to be paid by Borrower. Borrower will pay to Lender all attorney fees and other costs referred M in this paragraph on demand. Any notice, demand, or request relating M any matter set form herein shall be in writing and shall be given as provided in the HOME Agreement. Page 2 of Exhibit F /-� % 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 demand to be a waiver of Lenders 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 Security Instruments The Deed of Trust securing this note shall provide as follows: DUE ON SALE -CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare immediately due and payable all sums secured by this Dead of Trust upon the sale or transfer of all or any portion 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, dead, 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 file to the Property, or by any other method of conveyance of land interest. If 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 OF 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. Assignment 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 NOW, and the transferee will Men became 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 irensfered. Enforceabflty. If 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 Me benefit of Borrower, Lender, and their respective successors and assigns. Goveming 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 Mat none of ds 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. In witness whereof, Borrower has caused this Promissory Note to be executed by its authorized agent as of the date and year first above written. Page 3 of Exhibit F )U/ Habitat for Humanity Fren Fresno Inc., Borrower 9 By ri✓x^" f Date: Name'r Title: �.c. *t'A ~awn wmnmuaf .aweam..n Page 4 of Exhibil F CALIFORNIA Al 1 -PURPOSE ACKNOWLEDGMENT Slap of Glifomia Countyaf Or ApEu 1q, 2009 before Peaann,nr:+F»Urea laullGt a�—I`IYandrti �— Nnwr Pubue.one Sg Nammrs;,muw provedtomeon Nebasis ohapafacroryzidencetobe[M YAg[I�Ia14 yermKey:.he:w oam*foo caul bed to the within CO W , ttl>AI t and ckaowledged m me that he,ls' -11,1 YmyllOMt 1*Md canted the same in his{bnfMm autbomed Fw Cuab cepaeny(ime.. and lbalbyhis/hen/Wei gnemre(/l nNe Cann Nil pis2 vmeL NePm'aoa aecor utdthe shumevt aum I coldly under PENW OF PERJURY miler Nelaws of Ne3nteofGlrfomiathat the foregoing pamgraPhistme and maser wITNESi my (fi seal e4a xmrrrsea�nnme Signature m w "Nme l ------------OPfYONAL s meogn snow Ina`pl�h Ode ``km"aeael� mmr M"`e�u wmeaa mveama, t 41" omeaoo,.,m, qfMIlfbeP. nammt. neamiPmn ornrcaegam naeamenc Title or type of Demme nt DFnrment Date Number of Pagm Signer(a) DNer Than N amed Ahove: Cateacity(bad Claimed by Signer(s) ❑ mdmdual ❑ Corporate Officer—'[ItlK+I' ❑Pormer— timitetl Gmeml ❑ ARomeyin Fact E] Trustee n.rro�es ❑ CFa rd'wnmCnoarvamr ❑Oha signar la Repncenting: SonviName: ❑ individual ❑ Corporate Mcc r--Tide(a); ❑ Parreer—❑ dna ❑Gmered ❑Aaornrym Fact ❑ imrtee ❑ Guardian or Gweemtar ❑ other: Signer O Repmeter p EXHIBIT F: EXEMPLAR NOTE DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower for Cancellation. PROMISSORY NOTE $88.50 Fresno, California, 31 2008 APN: `9 -MA -C) Promise to Pay. For value received, the undersigned, Habitat for Humanity Fresno, Inc., a Calrfamia Corporation ("Developer" or "Borrower'), promises to pay to the order of the City of Fresno, a California municipal corporation, ("Lender"), the sum of Eighty -Eight Thousand Five Hundred Dollars ($88,500.00) along with interest on unpaid principal at the rate of 2% per annum, all due and payable on or before March 30, 20U,(the "Mahnty Date") pursuant to the parties' Disposition and Development and HOME Investment Partnerships Program Agreement dated II EjA , 2009] ("HOME Agreement'), on which date the unpaid principal balance together with interest and unpaid penalties or late charges where applicable thereon shall be due and payable, along with attomey's fees and costs of collection, without relief from valuation and appraisement laws; provided that, in the event the Developer is not then in default of the Home Agreement, the Developer may at any time prior to the Maturity Date convey the completed Unit securing the Note to a Low Income buyer through a purchase escrow that conforms to the HOME Agreement. In that event there shall be forgiven from principal due hereunder the sum of Fifty -Three Thousand Dollars ($53.000.00) (provided the Developer confines said reduclian in a writing noticed to the City in the manner provided in Me HOME Agreement), and the Developer shall be released from any further liability to the Lender under this Note. Principal and interest payments in the amount of I$ (e 994 1 is due beginning on April 1, 2010 and annually thereafter and all principal and Interest outstanding shall be due on the Maturity Date. Any failure to make a payment required hereunder shall constiMe a default under this Note. Definitions. All capitalized terns used in this Note, unless otherwise defined, will have the respective meanings specified in the HOME Agreement. Business Da v 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, g the extension would cause the payment to be made in a new calendar month, that payment will be made on Me next preceding Business Day. Securitv. This Note, and any extensions or renewats hereof, shatl be secured by a Dead of Trust, Security Agreement and Fixture Filing with Assignment of Rents on real estate in Page 1 of Exhibit F /) f Fresno County, California , that provides for acceleration upon stated events, dated as of the same date as this Note and executed in favor of the Lender ('Deed of TrusP), creating and insured as a not wome 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 Und on the Property. Said Dead of Trust shall be subject to the terms of the Template Rider to the Dead of Trust attached hereto and such shall automatically be incorporated In the terms of the Dead of Trust that secures this Note. Time is of the Essence. It will be a default under this Note If 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. In the event of a default by Borrower, the Borrower shall pay a late charge equal to the lesser of 2% 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 Men to the interest end then to pnnc0al balance. On the occurrenceof a default or on the occurrence of any other event that under the terms of the Loan Documents give nse to the right to accelerate the balance of the indebtedness, then, at the option of Lender, this Note or any nates or other instruments that may be taken in renewal or extension of all or any pan of the indebtedness will immediately become due without any further presentment, demand, protest, or notice of any kind. Terms of Payment The indebtedness evidenced by this Note may, at the option of the Bon -ower, be prepaid in whole or In part without penalty. Lender will appy 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 Men to the principal balance. All Loan payments are payable in lawful money of the United States of Amenca at any place that Lender or the legal holden of this Note may, from time to time, In writing designate, and in the absence of that designation. to CM of Fresno Housing and Community Development Division 2800 Fresno Street, Suite 3070 Fresno, CA 93721 Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by Me 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 undemigned that in anyway 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 Mose 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. Page 2 of Exhibit F J 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 pantal 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 Security Instruments. The Deed of Trust securing this note shall provide 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 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 Involurrli whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a tens greater than free (3) years, Ieaseaption contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding bile to the Property, or by any other method of mnveyance of land interest. If 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 mss may be, of Trustor. However, this option shall not be exercised by Beneficiary if such exercise is prohibited by applicable law. Assignment by Lender. Lender may transfer this Note and deliver to the transferee all or any part of the Property Men held by it as security under this Note, and the transferee will then become vested with all Me powers and rights given to Lentler; and Lender will Man 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. Enforceability. If any one or more of the provisions in this Note is held b 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 anyway be affected or impaired. This Note will be binding on and inure to Me 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 is terms or provisions may be waived, altered, modified, or amended except as Lender may consent to in a writing duly signed by Lender or ifs authorized agents. In witness whereof. Borrower has mused this Promissory Note to be executed by its authorized agent as of the data and year first above written. Page 3 of Exhibit F t,51 Habitat for Humanity Fresno Inc., Borrower ,( By: Dale Al '.O Name: 7 Title: a er tAs•u .wn �a w. a.weeem.•u Page 4 of Exhibit F 60 fpi IFORNLIALL-PURPOSE AC O%' DGMEIN I connnw YYGSN.d cL� Jyg On Apr,, 1g, C? roeoreme., s'ftt[[u I&Vf 8fgQ$OVI ,Notary Public, Isema]aU0l; MIGnmr famously appeared Ah,�G,O WI I JJl Y x.Nwsmay� Twpn non.ham,immwwl�'�aoawweoeli,n�.'aoracm�m Oesuiptlon of gttnMrd Ilocumen[ title ortype nr Nocommt. Ery, la,,e N„iG Gpauty(irs) Cleilhgt by $ipael(S) Signers Nameo D>odihdual ❑ Corporate O hdr--TitINaA D Partner— D Limbed Ll Gmeal ❑ Ahomey-in Fad OWNER ❑ Tvctee ?^^ ❑ Guardian or Cons rvetar D Other: Signer Is Representing SigoeJs Name ❑lnm%idwl D Corporate (Xffer—Tndds): ❑ Partner—p funded O Ganeal ❑ gtto[vry'In Fnet ❑Trustee ❑ Guvdiso or (naemn[or ❑ O[M1er: 6ignv la gxprasenting; elasefis tislatuoryendmte[obethe permn(() hn'Rname(J/is (sae bed m Ne wrtbin and to mo mowlmged to that h,/Aa tree e.: tea 5 d tia/awsign monn,a chsaam 0emml twwwam. twll[I rnstru teparmthyhis/hme Ne gad�l lW � ant ewt uponefudf instrument the entity upon of Go" emm. paw,i P) I! m Xad d, wNcbthepn'annjNALn.erecuhd ent nment. Yurd left order AENALT OFPFRSURY under Wel Lease Ne gfnte o[Cali(mnia that the foagoiag grsgaph is hue evd <omn. NTINESS myhan ffioal.ual. _ Sgnama I//� elvnxmervsealglr� gg Imy Twpn non.ham,immwwl�'�aoawweoeli,n�.'aoracm�m Oesuiptlon of gttnMrd Ilocumen[ title ortype nr Nocommt. Ery, la,,e N„iG Gpauty(irs) Cleilhgt by $ipael(S) Signers Nameo D>odihdual ❑ Corporate O hdr--TitINaA D Partner— D Limbed Ll Gmeal ❑ Ahomey-in Fad OWNER ❑ Tvctee ?^^ ❑ Guardian or Cons rvetar D Other: Signer Is Representing SigoeJs Name ❑lnm%idwl D Corporate (Xffer—Tndds): ❑ Partner—p funded O Ganeal ❑ gtto[vry'In Fnet ❑Trustee ❑ Guvdiso or (naemn[or ❑ O[M1er: 6ignv la gxprasenting; ITEMPLATE RIDER TO DEEIRS)OF TROaTI The Trustor (herein "Borrower") understands and agrees that the NOW 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 Me Borrower from the Borrower's home used as security for the Note described above, unless having obtained the written consent of the Beneficiary (herein "Lender'); (2) upon Me sale or transfer, without the Lenders 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, file 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, lease -option contract, or by sake. assignment, or transfer Of any beneficial interest in or to any land trust holding We to Me Property, or by any other method of conveyance of land interest. Borrower also assigns to Lender all rents, issues and profits from mid real property reserving, however, the right in 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 dead of trust, or such lender's assignee or successor in interest, to exercise its remedies under the deed of Must 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. In 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 or moderate income households or otherwise restricting the Borrowers 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 Lige to Me 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 this existing second mortgage lien that result in the combined loan -to -value ratio being more than 100% of Me 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 Mat reduces Me secured debt of the existing second mortgage by the amount of the new unsecured promissory note. Period of Affordability: The HOME Investment Partnerships Program sets periods of affordability as provided in 24 CFR 92 254 based on Me amount of HOME funds provi0ed. Page 5 of Exhibit F / ,� The minimum period of affordability for this program is twenty years (20 years.) Year one shall be the 12 -month period following issuance of the Certificate of Completion of the home which is the subject hereof, 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 26 CFR 92254(a)(5)(ii), the City of Fresno requires that HOME funds be recaptured Rthe home tices not continue to be the Borrower's principal residence or R all or any part of the property or any interest in R is sold rented, conveyed or transferred for the duration of the Period of Affordability. If the net proceeds are not sufficient to recapture the full HOME investment plus enable the homeowner to recover the amount of the homeowner's downpayment and any capital improvement investment made by the owner since purchase, the City of Fresno may share the net proceeds. The net proceeds are Me 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 x Net = HOME amount to be recaptured proceeds HOME investment t homeowner investment Homeowner investment x Net = amount to homeowner proceeds HOME investment t homeowner investment In the event of foreclosure, the amount subject to recapture is based on the amount of net proceeds (if any) from the foreclosure sale. THIS DEED OF TRUST IS SECOND AND SUBORDINATE TO THAT CERTAIN DEED OF TRUST RECORDED i(insert)] Page 6 of Eimibit F 0