HomeMy WebLinkAboutMINUTES - 08122014 - C.92RECOMMENDATION(S):
APPROVE and AUTHORIZE the Conservation and Development Interim Director, or designee, to execute required
legal documents to provide $1,500,000 in HOME Investment Partnership Act (HOME) funds to Habitat for Humanity
East Bay/Silicon Valley, for the Muir Ridge Homes project in Martinez.
FISCAL IMPACT:
No General Fund impact. HOME funds are provided to the County on a formula allocation basis through the U.S.
Department of Housing and Urban Development (HUD). CFDA# 14.239
BACKGROUND:
On February 25, 2014, the Board of Supervisors allocated $1,500,000 in HOME funds to Habitat for Humanity for
the Muir Ridge development. The purpose of the Muir Ridge project is to improve the supply of ownership housing
affordable to and occupied by lower income families in the Martinez area through the construction of a 12 home
development in unincorporated Martinez off of Pacheco Boulevard.
The twelve homes will be designated as HOME-assisted and sold to lower income families. Approximately $225,000
of the HOME funds will be loaned to the lower income families to assist with the purchase of the homes. The
remaining HOME funds ($1,275,000) will be a development subsidy. Affordability and use restrictions are
incorporated into the County loan documents.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 08/12/2014 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Karen Mitchoff, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Kara Douglas,
674-7880
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: August 12, 2014
David Twa, County Administrator and Clerk of the Board of Supervisors
By: Chris Heck, Deputy
cc:
C. 92
To:Board of Supervisors
From:John Kopchik, Interim Director, Conservation & Development Department
Date:August 12, 2014
Contra
Costa
County
Subject:APPROVAL OF HOME INVESTMENT PARTNERSHIPS ACT LEGAL DOCUMENTS FOR THE MUIR RIDGE
HOMES IN MARTINEZ
BACKGROUND: (CONT'D)
The project is fully entitled and Habitat expects to begin construction by the end of September, 2014.
County Counsel has approved to form the following attached documents:
• HOME Loan Agreement
• Promissory Notes (Phase 1 and Phase 2)
• Deed of Trust with Assignment Of Rents, Security Agreement, And Fixture Filing
CONSEQUENCE OF NEGATIVE ACTION:
Construction will be cancelled due to inadequate funds.
CHILDREN'S IMPACT STATEMENT:
This project will support indicator number three: Families are Economically Self Sufficient.
ATTACHMENTS
Loan Agreement
Phase 1 Promissory Note
Phase 2 Promissory Note
Deed of Trust
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Contra Costa County
Department of Conservation and Development
30 Muir Road
Martinez, CA 94553
Attn: Affordable Housing Program Manager
No fee for recording pursuant to
Government Code Section 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(Muir Ridge)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING ("Deed of Trust") is made as of ___________,2014,
by and among Habitat for Humanity East Bay/Silicon Valley, Inc., a California nonprofit public
benefit corporation ("Trustor"), Old Republic Title Company, a California corporation
("Trustee"), and the County of Contra Costa, a political subdivision of the State of California
("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property located in the County of Contra Costa,
State of California, that is described in the attached Exhibit A, incorporated herein by this
reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said property and intended to be installed therein;
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TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or will be, attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the
"Secured Obligations"):
A.Payment to Beneficiary of all sums at any time owing under or in connection with
the Note (defined in Section 1.4 below) until paid or cancelled and any other amounts owing
under the Loan Documents (defined in Section 1.3 below). Said principal and other payments
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are due and payable as provided in the Note or other Loan Documents, as applicable. The Note
and all its terms are incorporated herein by reference, and this conveyance secures any and all
extensions thereof, however evidenced;
B.Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
C.Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Loan Documents; and
D.All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a different rate of
interest, or (ii) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms have
the following meanings in this Deed of Trust:
Section 1.1 The term "Loan"means the loan made by the Beneficiary to the Trustor in
the amount of One Million Five Hundred Thousand Dollars ($1,500,000).
Section 1.2 The term "Loan Agreement"means that certain HOME Lo an Agreement
between Trustor and Beneficiary, of even date herewith, as such may be amended from time to
time, providing for the Beneficiary to loan to Trustor One Million Five Hundred Thousand
Dollars ($1,500,000).
Section 1.3 The term "Loan Documents"means this Deed of Trust, the Note, and the
Loan Agreement, and any other debt, loan or security instruments between Trustor and the
Beneficiary relating to the Loan.
Section 1.4 The term "Note"means the two promissory notes of even date herewith,
each in the principal amount of Seven Hundred Fifty Thousand Dollars ($750,000) and each
executed by Trustor in favor of the Beneficiary, as such notes may be amended or restated,
which obligation to repay One Million Five Hundred Thousand Dollars ($1,500,000) is secured
by this Deed of Trust.The terms and provisions of the Note are incorporated herein by
reference.
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Section 1.5 The term "Principal"means the amount required to be paid under the
Note.
ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE PROPERTY
AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agrees that at all times prior to full payment and performance of the Secured
Obligations, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the
Security or cause the Security to be maintained and preserved in good condition. The Trustor
will from time to time make or cause to be made all repairs, replacements and renewals deemed
proper and necessary by it. The Beneficiary has no responsibility in any of these matters or for
the making of improvements or additions to the Security.
Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security or any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary exercises its rights as agent of Trustor
only in the event that Trustor fails to take, or fails to diligently continue to take, those actions as
hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary specifies upon laborers, materialmen, subcontractors or other persons who
have furnished or claim to have furnished labor,services or materials in connection with the
Security. Nothing herein contained requires Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently contesting provided that Trustor
shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the
Recorder of Contra Costa County, a surety bond in an amount 1 and 1/2 times the amount of
such claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law, and
as approved, in writing, by Beneficiary.
863\95\1527408.2 5
Section 2.3 Assignment of Rents.
As part of the consideration for the indebtedness evidenced by the Note,Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable, subject to the rights of senior lenders. Trustor
hereby authorizes Beneficiary or Beneficiary's agents to collect the aforesaid rents and revenues
and hereby directs each tenant of the Property to pay such rents to Beneficiary or Beneficiary's
agents; provided, however, that prior to written notice given by Beneficiary to Trustor of the
breach by Trustor of any covenant or agreement of Trustor in the Loan Documents, Trustor shall
collect and receive all rents and revenues of the Property as trustee for the benefit of Beneficiary
and Trustor to apply the rents and revenues so collected to the Secured Obligations with the
balance, so long as no such breach has occurred, to the account of Trustor, it being intended by
Trustor and Beneficiary that this assignment of rents constitutes an absolute assignment and not
an assignment for additional security only. Upon delivery of written notice by Beneficiary to
Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents, and without the necessity of Beneficiary entering upon and taking and maintaining
full control of the Property in person, by agent or by a court-appointed receiver, Beneficiary shall
immediately be entitled to possession of all rents and revenues of the Property as specified in this
Section 2.3 as the same becomes due and payable, including but not limited to, rents then due
and unpaid, and all such rents will immediately upon delivery of such notice be held by Trustor
as trustee for the benefit of Beneficiary only; provided, however, that the written notice by
Beneficiary to Trustor of the breach by Trustor contains a statement that Beneficiary exercises its
rights to such rents. Trustor agrees that commencing upon delivery of such written notice of
Trustor's breach by Beneficiary to Trustor, each tenant of the Property shall make such rents
payable to and pay such rents to Beneficiary or Beneficiary's agents on Beneficiary's written
demand to each tenant therefor, delivered to each tenant personally, by mail or by delivering
such demand to each rental unit, without any liability on the part of said tenant to inquire further
as to the existence of a default by Trustor.
Trustor hereby covenants that Trustor has not executed any prior assignment of said
rents,that Trustor has not performed, and will not perform, any acts or has not executed and will
not execute, any instrument which would prevent Beneficiary from exercising its rights under
this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no
anticipation or prepayment of any of the rents of the Property for more than two (2) months prior
to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept
payment of any rents of the Property more than two (2) months prior to the due dates of such
rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further
assignments of rents and revenues of the Property as Beneficiary may from time to time request.
Upon Trustor's breach of any covenant or agreement of Trustor in the Loan Documents,
Beneficiary may in person, by agent or by a court-appointed receiver, regardless of the adequacy
of Beneficiary's security, enter upon and take and maintain full control of the Property in order to
perform all acts necessary and appropriate for the operation and maintenance thereof including,
but not limited to, the execution, cancellation or modification of leases, the collection of all rents
and revenues of the Property, the making of repairs to the Property and the execution or
863\95\1527408.2 6
termination of contracts providing for the management or maintenance of the Property, all on
such terms as are deemed best to protect the security of this Deed of Trust. In the event
Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of
any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to
the appointment of such receiver. Beneficiary or the receiver will be entitled to receive a
reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice by Beneficiary
to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents are to be applied first to the costs, if any, of taking control of and managing the
Property and collecting the rents, including, but not limited to, attorney's fees, receiver's fees,
premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies,
taxes, assessments and other charges on the Property, and the costs of discharging any obligation
or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this
deed of Trust. Beneficiary or the receiver is to have access to the books and records used in the
operation and maintenance of the Property and will be liable to account only for those rents
actually received. Beneficiary is not liable to Trustor, anyone claiming under or through Trustor
or anyone having an interest in the Property by reason of anything done or left undone by
Beneficiary under this Section 2.3.
If the rents of the Property are not sufficient to meet the costs, if any, of taking control of
and managing the Property and collecting the rents, any funds expended by Beneficiary for such
purposes will become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless
Beneficiary and Trustor agree in writing to other terms of payment, such amounts are payable by
Trustor to Beneficiary upon notice from Beneficiary to Trustor requesting payment thereof and
will bear interest from the date of disbursement at the rate stated in Section 3.3.
If the Beneficiary or the receiver enters upon and takes and maintains control of the
Property, neither that act nor any application of rents as provided herein will cure or waive any
default under this Deed of Trust or invalidate any other right or remedy available to Beneficiary
under applicable law or under this Deed of Trust. This assignment of rents of the Property will
terminate at such time as this Deed of Trust ceases to secure the Secured Obligations.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes,
assessments, charges and levies imposed by any public authority or utility company that are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor is
not required to pay and discharge any such tax, assessment, charge or levy so long as (a) the
legality thereof is promptly and actively contested in good faith and by appropriate proceedings,
and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this
Section 3.1. With respect to taxes, special assessments or other similar governmental charges,
Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of
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the Security; provided, however, if such taxes, assessments or charges can be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this Section 3.1 may not be construed to require that
Trustor maintain a reserve account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
In the event that Trustor fails to pay any of the items required by this Section to be paid
by Trustor, Beneficiary may (but is under no obligation to) pay the same, after the Beneficiary
has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within
seven (7) business days after receipt of such notice. Any amount so advanced therefor by
Beneficiary, together with interest thereon from the date of such advance at the maximum rate
permitted by law, will become part of the Secured Obligations secured hereby, and Trustor
agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
Trustor agrees to provide insurance conforming in all respects to that required under the
Loan Documents during the course of construction and following completion, and at all times
until all amounts secured by this Deed of Trust have been paid, all Secured Obligations secured
hereunder have been fulfilled, and this Deed of Trust has been reconveyed.
All such insurance policies and coverages are to be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, are to be delivered to the Beneficiary upon demand therefor at any time
prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances.
In the event the Trustor fails to maintain the full insurance coverage required by this
Deed of Trust or fails to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven (7) days prior notice to Trustor, may (but is under no obligation
to) (i) take out the required policies of insurance and pay the premiums on the same, and (ii)
make any repairs or replacements that are necessary and provide for payment thereof. All
amounts so advanced by the Beneficiary will become part of the Secured Obligations (together
with interest as set forth below) and will be secured hereby, which amounts the Trustor agrees to
pay on the demand of the Beneficiary, and if not so paid, will bear interest from the date of the
advance at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.
ARTICLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.
Subject to the rights of senior lenders, all judgments, awards of damages, settlements and
compensation made in connection with or in lieu of (1) the taking of all or any part of or any
interest in the Property by or under assertion of the power of eminent domain, (2) any damage to
or destruction of the Property or any part thereof by insured casualty, and (3) any other injury or
863\95\1527408.2 8
damage to all or any part of the Property (collectively, the "Funds") are hereby assigned to and
are to be paid to the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is
authorized and empowered (but not required) to collect and receive any Funds and is authorized
to apply them in whole or in part to any indebtedness or obligation secured hereby, in such order
and manner as the Beneficiary determines at its sole option. The Beneficiary is entitled to settle
and adjust all claims under insurance policies provided under this Deed of Trust and may deduct
and retain from the proceeds of such insurance the amount of all expenses incurred by it in
connection with any such settlement or adjustment. All or any part of the amounts so collected
and recovered by the Beneficiary may be released to Trustor upon such conditions as the
Beneficiary may impose for its disposition. Application of all or any part of the Funds collected
and received by the Beneficiary or the release thereof will not cure or waive any default under
this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights
of any senior mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to
reconstruct the improvements on the Property provided that Beneficiary reasonably determines
that Trustor (taking into account the Funds) has sufficient funds to rebuild the improvements in
substantially the form that existed prior to the casualty or condemnation.
ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor shall duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under the Loan Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys'Fees and Expenses.
In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the
Beneficiary employs attorneys or incurs other expenses for the collection of amounts due
hereunder or the enforcement of performance or observance of an obligation or agreement on the
part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay
to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so
incurred by the Beneficiary. Any such amounts paid by the Beneficiary will be added to the
Secured Obligations, and will bear interest from the date such expenses are incurred at the lesser
of ten percent (10%) per annum or the maximum rate permitted by law.
Section 5.3 Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust is deemed to be fixtures and part of the real property and this Deed of Trust constitutes a
863\95\1527408.2 9
fixtures filing under the California Commercial Code. As to any personal property not deemed
or permitted to be fixtures, this Deed of Trust constitutes a security agreement under the
California Commercial Code.
Section 5.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor shall
perform all acts that the Beneficiary reasonably requests so as to enable the Beneficiary to
maintain a valid perfected security interest in the Security in order to secure the payment of the
Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it deems appropriate from time to time in order to
protect the security interest established pursuant to this instrument.
Section 5.6 Operation of the Security.
The Trustor shall operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Loan Documents.
Section 5.7 Inspection of the Security.
At any and all reasonable times upon seventy-two (72) hours'notice, the Beneficiary and
its duly authorized agents, attorneys, experts, engineers, accountants and representatives, may
inspect the Security, without payment of charges or fees.
Section 5.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there will be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor will the Trustor itself
or any person claiming under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants
run with the land.
ARTICLE 6
HAZARDOUS WASTE
Trustor shall keep and maintain that portion of the Property that is subject to the Deed of
Trust in compliance with, and may not cause or permit such Property to be in violation of any
federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the
environmental conditions on, under or about such Property including, but not limited to, soil and
ground water conditions. Trustor may not use, generate, manufacture, store or dispose of on,
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under, or about such Property or transport to or from such Property any flammable explosives,
radioactive materials, hazardous wastes, toxic substances or related materials, including without
limitation, any substances defined as or included in the definition of "hazardous substances,"
hazardous wastes,""hazardous materials,"or "toxic substances"under any applicable federal or
state laws or regulations (collectively referred to hereinafter as "Hazardous Materials") except
such of the foregoing as may be customarily used in construction of single-family homes like the
development or kept and used in and about residential property of this type.
Trustor shall immediately advise Beneficiary in writing if at any time it receives written
notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions related to the Property instituted, completed or threatened against Trustor or the Property
pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any
Hazardous Materials, ("Hazardous Materials Law"), (ii) all claims made or threatened by any
third party related to the Property against Trustor or the Property relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials
(the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous
Materials Claims"), and (iii) Trustor's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Property that could cause the Property or any part
thereof to be classified as "border-zone property"(as defined in California Health and Safety
Code Section 25117.4) under the provision of California Health and Safety Code,Section 25220
et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability or use of the Property under any
Hazardous Materials Law.
Beneficiary has the right to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials Claims and to have
its reasonable attorneys'fees in connection therewith paid by Trustor. Trustor shall indemnify
and hold harmless Beneficiary and its board members, supervisors, directors, officers,
employees, agents, successors and assigns from and against any loss, damage, cost, expense or
liability directly or indirectly arising out of or attributable to the use, generation, storage, release,
threatened release, discharge, disposal, or presence of Hazardous Materials on or under the
Property, including without limitation: (i) all foreseeable consequential damages, (ii) the costs of
any required or necessary repair, cleanup or detoxification of the Property and the preparation
and implementation of any closure, remedial or other required plans, and (iii) all reasonable costs
and expenses incurred by Beneficiary in connection with clauses (i) and (ii), including but not
limited to reasonable attorneys'fees and consultant's fees. This indemnification applies whether
or not any government agency has issued a cleanup order. Losses, claims, costs, suits, liability,
and expenses covered by this indemnification provision include, but are not limited to: (1) losses
attributable to diminution in the value of the Property, (2) loss or restriction of use of rentable
space on the Property, (3) adverse effect on the marketing of any rental space on the Property,
and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by
any regulatory agency (including but not limited to the costs of any required testing, remediation,
repair, removal, cleanup or detoxification of the Property and surrounding properties, which
results from contamination emanating from the Property).
Without Beneficiary's prior written consent, which may not be unreasonably withheld,
Trustor may not take any remedial action in response to the presence of any Hazardous Materials
863\95\1527408.2 11
on, under or about the Property, nor enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Material Claims, which remedial action, settlement,
consent decree or compromise might, in Beneficiary's reasonable judgment, impairs the value of
the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent is not
necessary in the event that the presence of Hazardous Materials on, under, or about the Property
either poses an immediate threat to the health, safety or welfare of any individual or is of such a
nature that an immediate remedial response is necessary and it is not reasonably possible to
obtain Beneficiary's consent before taking such action, provided that in such event Trustor
notifies Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to
withhold its consent, where such consent is required hereunder, if (i) a particular remedial action
is ordered by a court of competent jurisdiction; (ii) Trustor will or may be subjected to civil or
criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the
reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial
action which would result in less impairment of Beneficiary's security hereunder; or (iv) the
action has been agreed to by Beneficiary.
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision"for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired"(as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected parcel"(as that term is defined in California Code of Civil Procedure Section
726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its
rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) any other rights and remedies permitted by law. For purposes of determining
the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced
in a release or threatened release of hazardous materials, within the meaning of California Code
of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials
was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any
portion of the Property and the Trustor knew or should have known of the activity by such
lessee, occupant, or user which caused or contributed to the release or threatened release. All
costs and expenses, including (but not limited to) attorneys'fees, incurred by the Beneficiary in
connection with any action commenced under this paragraph, including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to which the
Property is environmentally impaired, plus interest thereon at the default rate specified in the
Loan Agreement until paid, will be added to the indebtedness secured by this Deed of Trust and
863\95\1527408.2 12
will be due and payable to the Beneficiary upon its demand made at any time following the
conclusion of such action.
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
The following are events of default following the expiration of any applicable notice and
cure periods (each an "Event of Default"): (i) failure to make any payment to be paid by Trustor
under the Loan Documents; (ii) failure to observe or perform any of Trustor's other covenants,
agreements or obligations under the Loan Documents, including, without limitation, the
provisions concerning discrimination; (iii) failure to make any payment or observe or perform
any of Trustor's other covenants, agreements, or obligations under any Secured Obligations,
which default is not cured within the times and in the manner provided therein;and (iv) failure to
make any paym ents or observe or perform any of Trustor's other covenants, agreements or
obligations under any other debt instrument or regulatory agreement secured by the Property,
which default is not cured within the time and in the manner provided therein.
Section 7.2 Acceleration of Maturity.
If an Event of Default has occurred and is continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured
Obligations are immediately due and payable, and no omission on the part of the Beneficiary to
exercise such option when entitled to do so may be construed as a waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default has occurred and is continuing, the Beneficiary may:
(a)Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Property and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts that it deems necessary
or desirable to preserve the value or marketability of the Property, or part thereof or interest
therein, increase the income therefrom or protect the security thereof. The entering upon and
taking possession of the Security will not cure or waive any Event of Default or Notice of Sale
(as defined in Section 7.3(c), below) hereunder or invalidate any act done in response to such
Event of Default or pursuant to such Notice of Sale, and, notwithstanding the continuance in
possession of the Security, Beneficiary will be entitled to exercise every right provided for in this
Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise
the power of sale;
(b)Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c)Deliver to Trustee a written declaration of an Event of Default and
demand for sale, and a written notice of default and election to cause Trustor's interest in the
863\95\1527408.2 13
Security to be sold ("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly
filed for record in the Official Records of Contra Costa County; or
(d)Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with
Trustee this Deed of Trust which is secured hereby (and the deposit of which will be deemed to
constitute evidence that the Secured Obligations are immediately due and payable), and such
receipts and evidence of any expenditures made that are additionally secured hereby as Trustee
may require.
(a)Upon receipt of the Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as is then required
by law and by this Deed of Trust. Trustee shall, without demand on Trustor,after the lapse of
that amount of time as is then required by law and after recordation of such Notice of Sale as
required by law, sell the Security, at the time and place of sale set forth in the Notice of Sale,
whether as a whole or in separate lots or parcels or items, as Trustee deems expedient and in
such order as it determines, unless specified otherwise by the Trustor according to California
Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of
the United States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed or any matters
of facts will be conclusive proof of the truthfulness thereof. Any person, including, without
limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(b)After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured
Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured
hereby; and (iv) the remainder, if any, to Trustor.
(c)Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver.
If an Event of Default occurs and is continuing, Beneficiary, as a matter of right and
without further notice to Trustor or anyone claiming under the Security, and without regard to
the then value of the Security or the interest of Trustor therein, may apply to any court having
jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor
863\95\1527408.2 14
hereby irrevocably consents to such appointment and waives further notice of any application
therefor. Any such receiver or receivers will have all the usual powers and duties of receivers in
like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided
herein, and will continue as such and exercise all such powers until the date of confirmation of
sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy will be cumulative and concurrent and will be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a)No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default will exhaust or impair any such right, power or
remedy, and may not be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder will not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, will not constitute a waiver by the Beneficiary of
its right hereunder or impair any rights, power or remedies consequent on any Event of Default
by the Trustor.
(b)If the Beneficiary (i) grants forbearance or an extension of time for the
payment or performance of any Secured Obligation, (ii) takes other or additional security or the
payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the
Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents,
(v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or
consents to any agreement subordinating the lien hereof, any such act or omission will not
release, discharge, modify, change or affect the original liability under this Deed of Trust, or any
other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or
any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor will any such
act or omission preclude the Beneficiary from exercising any right, power or privilege herein
granted or intended to be granted in any Event of Default then made or of any subsequent Event
of Default, nor, except as otherwise expressly provided in an instrument or instruments executed
by the Beneficiary, will the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security.
The Beneficiary has the power to (a) institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
863\95\1527408.2 15
interest (as described in this Deed of Trust) in the Security, and (c)restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 7.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, will be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount that becomes due and payable by the
Trustor hereunder after such date.
Section 7.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in
taking any action to collect any Secured Obligations or in proceedings against the Security, in
connection with the delivery, acceptance, performance, default, endorsement or guaranty of this
Deed of Trust.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendments.
This Deed of Trust cannot be waived, changed, discharged or terminated orally, but only
by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all Secured Obligations have been paid
or forgiven, and all obligations under the Loan Documents have been performed in full, and
upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment
by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the
person or persons legally entitled thereto.
Section 8.3 Notices.
If at any time after the execution of this Deed of Trust it becomes necessary or
convenient for one of the parties hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication must be in writing and is to be served
personally or by depositing the same in the registered United States mail, return receipt
requested, postage prepaid and (1) if intended for Beneficiary is to be addressed to:
863\95\1527408.2 16
County of Contra Costa
Department of Conservation and Development
30 Muir Road
Martinez, CA 94553
Attention: Affordable Housing Program Manager
and (2) if intended for Trustor is to be addressed to:
Habitat for Humanity East Bay/Silicon Valley, Inc.,
2619 Broadway
Oakland, California 94612
Attn: President & CEO
Any notice, demand or communication will be deemed given, received, made or communicated
on the date personal delivery is effected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either
party may change its address at any time by giving written notice of such change to Beneficiary
or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the
date such change is desired to be effective.
Section 8.4 Successors and Joint Trustors.
Where an obligation created herein is binding upon Trustor, the obligation also applies to
and binds any transferee or successors in interest. Where the terms of the Deed of Trust have the
effect of creating an obligation of the Trustor and a transferee, such obligation will be deemed to
be a joint and several obligation of the Trustor and such transferee. Where Trustor is more than
one entity or person, all obligations of Trustor will be deemed to be a joint and several obligation
of each and every entity and person comprising Trustor.
Section 8.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity will not affect the balance of
the terms and provisions hereof, which terms and provisions will remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, will be considered to have been first
paid or applied to the full payment of that portion of the debt that is not secured or partially
secured by the lien of this Deed of Trust.
863\95\1527408.2 17
Section 8.7 Governing Law.
This Deed of Trust is governed by the laws of the State of California.
Section 8.8 Gender and Number.
In this Deed of Trust the singular includes the plural and the masculine includes the
feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage also refers to a deed of trust and any
reference to a deed of trust also refers to a mortgage.
Section 8.10 Actions.
Trustor shall appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11 Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter will be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution is to be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, will be conclusive proof of proper
appointment of the successor trustee.
Section 8.12 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 8.13 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law, the Trustee is not
obligated to notify any party hereto of a pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee is a party unless brought by Trustee.
Signature page
County Deed of Trust
863\95\1527408.2
18
IN WITNESS WHEREOF, Trustor is executing this Deed of Trust as of the day and year first
above written.
HABITAT FOR HUMANITY EAST
BAY/SILICON VALLEY, INC., a California
nonprofit public benefit corporation
By:____________________________
Janice Jensen, President and Chief
Executive Officer
863\95\1527408.2
STATE OF CALIFORNIA )
)
COUNTY OF CONTRA COSTA )
On ____________ __, 2014, before me, _______________, Notary Public, personally appeared,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name is
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ________________________________(seal)
A-1
863\95\1527408.2
EXHIBIT A
LEGAL DESCRIPTION
863\95\1527399.3 1
HOME LOAN AGREEMENT
Muir Ridge
This HOME Loan Agreement (the "Agreement") is dated __________, 2014, and is
between the County of Contra Costa, a political subdivision of the State of California (the
"County"), and Habitat for Humanity East Bay/Silicon Valley, Inc., a California nonprofit public
benefit corporation ("Borrower").
RECITALS
A.Defined terms used but not defined in these recitals are as defined in Article 1 of this
Agreement.
B.The County has received Home Investment Partnerships Act funds from the United
States Department of Housing and Urban Development ("HUD") pursuant to the Cranston-
Gonzales National Housing Act of 1990 ("HOME Funds"). The HOME Funds must be used by
the County in accordance with 24 C.F.R. Part 92 (the “HOME Regulations”).
C.Borrower owns certain real property located in Martinez, California that is more
particularly described in Exhibit A (the "Property"). Borrower intends to construct twelve (12)
single family homes (each a "Unit") and attendant improvements located on the Property for use
as housing affordable to low and very-low income households (the "Development"). Together,
the Development as well as any additional improvements on the Property, including all
landscaping, roads and parking spaces on the Property, are referred to as the "Improvements."
Borrower intends to construct the Development in two phases, each comprised of six Units.
Construction of the first six Units is “Phase One.” Construction of the final six Units is “Phase
Two.” Each Unit constructed as part of Phase One is a “Phase One Unit.” Each Unit
constructed as part of Phase Two is a “Phase Two Unit.”
D.Borrower desires to borrow from the County and the County desires to lend to
Borrower One Million Five Hundred Thousand Dollars ($1,500,000) of HOME Funds (the
"Loan") to finance the construction of the Development. Seven Hundred Fifty Thousand Dollars
($750,000) of the Loan is available to finance construction of Phase One (the “Phase One
Loan”). Seven Hundred Fifty Thousand Dollars ($750,000)is available to finance construction
of Phase Two (the “Phase Two Loan”). Construction of the Development will increase the
supply of affordable for-sale housing in Contra Costa County.
E.The Loan is (i) evidenced by the Phase One Note and the Phase Two Note, and (ii)
secured by the Deed of Trust.
F.Borrower intends to sell each Unit to an Eligible Purchaser. In accordance with the
HOME Regulations, if Borrower fails to sell a Unit to an Eligible Purchaser within six months of
the Completion Date, as defined below, Borrower must either rent the Unit to an Eligible Tenant
or repay the HOME Funds that were invested in the unsold Unit.
863\95\1527399.3 2
G.In accordance with the California Environmental Quality Act (Public Resources Code
Sections 21000 et seq.) ("CEQA"), on April 2, 1991, the County issued a Negative Declaration
stating the project will not have a significant environmental effect.
H.In accordance with the National Environmental Policy Act of 1969, as amended (42
U.S.C. 4321-4347) ("NEPA"), the County has completed and approved all applicable
environmental review for the activities proposed to be undertaken under this Agreement.
The parties therefore agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.The following terms have the following meanings:
(a)"Accessibility Requirements" has the meaning set forth in Section 3.10.
(b)"Adjusted Income" means the total anticipated annual income, as
calculated pursuant to 24 C.F.R. 92.203(b)(1), of all persons in the Homeowner's household, or
the household of the Eligible Purchaser, as applicable.
(c)"Agreement" means this HOME Loan Agreement.
(d)"Approved Development Budget" means the proforma development
budget, including sources and uses of funds, as approved by the County, and attached hereto and
incorporated herein as Exhibit B.
(e)"Approved Financing" means all of the following loans, grants and equity
obtained by Borrower or to be obtained by Borrower, and approved by the County or to be
approved by the County, for the purpose of financing the construction of the Development:
(i)an acquisition and construction loan from Heritage Bank of
Commerce, in the approximate amount of Three Million Dollars ($3,000,000);
(ii)private contributions and donations received by Borrower in the
approximate amount of Eight Hundred Fifty-Four Thousand Two Hundred Sixty-Two Dollars
($854,262);
(iii)other funding approved by the County.
(f)"Approved Purchase Price" has the meaning set forth in Section 4.2(b).
(g)"Bid Package" means the package of documents distributed to potential
bidders as part of the process of selecting subcontractors to construct the Development. The Bid
Package is to include the following: (i) an invitation to bid, (ii) a copy of the proposed
construction contract, and (iii) all Construction Plans.
863\95\1527399.3 3
(h)"Borrower" has the meaning set forth in the first paragraph of this
Agreement.
(i)"CEQA" has the meaning set forth in Paragraph F of the Recitals.
(j)"Commencement of Construction" has the meaning set forth in
Section 3.6.
(k)“Completion Date” means the date a final certificate of occupancy, or
equivalent document is issued by the County to certify that a Unit may be legally occupied.
(l)"Construction Plans" means all construction documentation upon which
Borrower and Borrower's contractors rely in constructing all the Improvements and includes, but
is not limited to, final architectural drawings, landscaping plans and specifications, final
elevations, building plans and specifications (also known as "working drawings").
(m)"County" has the meaning set forth in the first paragraph of this
Agreement.
(n)"County Mortgage Deed of Trust" means a deed of trust that (i) secures a
Homeowner’s obligation to repay a County Mortgage Loan, and (ii) is in a second lien position.
(o)"County Mortgage Loan" means a loan of HOME Funds that is (i) made
by the County to an Eligible Purchaser at the time the Eligible Purchaser purchases a Unit, (ii)
evidenced by a Homeowner Note, and (iii) secured by a County Mortgage Deed of Trust.
(p)"Deed of Trust" means the Deed of Trust with Assignment of Rents,
Security Agreement, and Fixture Filing of even date herewith among Borrower, as trustor, Old
Republic Title Company, as trustee, and the County, as beneficiary, that encumbers the Property
to secure repayment of the Loan and performance of the covenants of the Loan Documents.
(q)"Default Rate" means the lesser of the maximum rate permitted by law
and ten percent (10%) per annum.
(r)"Developer Fee" has the meaning set forth in Section 3.20.
(s)"Development" has the meaning set forth in Paragraph C of the Recitals.
(t)“Disposition Agreement” means a purchase and sale agreement between
Borrower and an Eligible Purchaser or a lease or rental agreement between Borrower and an
Eligible Tenant, in a form that is approved by the County.
(u)“Disposition Date” means, for each Unit, the date that is six months after
its Completion Date.
(v)"Eligible Purchaser" means a household that (i) is a First Time
Homebuyer that is either a Low Income Household or a Very Low Income Household, and (ii)
will occupy a Unit as its primary residence.
863\95\1527399.3 4
(w)“Eligible Tenant" means a household that (i) qualifies as either a Low
Income Household or a Very Low Income Household, and (ii) will occupy a Unit as its primary
residence.
(x)"Event of Default" has the meaning set forth in Section 8.1.
(y)"First Time Homebuyer" means a household of one or more individuals,
none of whom have owned a home during the three-year period before the purchase of a Unit,
except that:
(i)Any individual who is a Displaced Homemaker (as defined below)
may not be excluded from consideration as a First Time Homebuyer on the basis that the
individual, while a homemaker, owned a home with his or her spouse. For purposes of this
section a "Displaced Homemaker" means an individual who (i) is an adult; (ii) has not worked
full-time, full-year in the labor force for a number of years, but has, during such years, worked
primarily without remuneration to care for the home and family; and (iii) is unemployed or
under-employed and is experiencing difficulty in obtaining or upgrading employment.
(ii)Any individual who is a single parent may not be excluded from
consideration as a First Time Homebuyer on the basis that the individual, while married, owned
a home with his or her spouse or resided in a home owned by the spouse.
(iii)An individual may not be excluded from consideration as a First
Time Homebuyer on the basis that the individual owns or owned, as a principal residence during
the three (3) year period before the purchase of a Unit, a dwelling unit whose structure is: (i) not
permanently affixed to a permanent foundation in accordance with local or other applicable
regulations, or (ii) not in compliance with state, local or model building codes, or other
applicable codes, and cannot be brought into compliance with such codes for less than the cost of
constructing a permanent structure.
(z)"Habitat Partnership Agreement" means the agreement to be entered into
by and between the Eligible Purchaser and Borrower in connection with the purchase of a Unit.
(aa)"Hazardous Materials" has the meaning set forth in Section 6.6.
(bb)"Hazardous Materials Claims" has the meaning set forth in Section 6.6.
(cc)"Hazardous Materials Law" has the meaning set forth in Section 6.6.
(dd)"HOME" means Home Investment Partnership Act Program funded
pursuant to the Cranston-Gonzalez National Affordable Housing Act of 1990.
(ee)"HOME Funds" has the meaning set forth in Paragraph B of the Recitals.
(ff)“HOME Regulations” has the meaning set forth in Paragraph B of the
Recitals.
(gg)"Homeowner" is an Eligible Purchaser that has purchased a Unit.
863\95\1527399.3 5
(hh)"Homeowner Note" means a promissory note that evidences the obligation
of a Homeowner to repay a County Mortgage Loan.
(ii)"HUD" has the meaning set forth in Paragraph B of the Recitals.
(jj)"Improvements" has the meaning set forth in Paragraph C of the Recitals.
(kk)"Income Certification" means certifications of household income and
household size from either a Proposed Purchaser or a Proposed Tenant for the purpose of
determining that a Proposed Purchaser is an Eligible Purchaser and a Proposed Tenant is an
Eligible Tenant, as the case may be.
(ll)"Loan" has the meaning set forth in Paragraph D of the Recitals.
(mm)"Loan Documents" means this Agreement, the Phase One Note, the Phase
Two Note, and the Deed of Trust.
(nn)"Low Income Household" means a household with an Adjusted Income
that does not exceed eighty percent (80%) of Median Income, with adjustments for smaller and
larger families, except that HUD may establish income ceilings higher or lower than eighty
percent (80%) of Median Income on the basis of HUD findings that such variations are necessary
because of prevailing levels of construction costs or fair market rents, or unusually high or low
family incomes, as such definition may be amended pursuant to 24 C.F.R. Section 92.2. An
individual does not qualify as a Low Income Household if the individual is a student who is not
eligible to receive Section 8 assistance under 24 C.F.R. 5.612.
(oo)"Marketing Plan" has the meaning set forth in Section 3.12(a).
(pp)"Median Income" means the median gross yearly income in the County of
Contra Costa, California, as published from time to time by HUD. In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen (18)
months, the County shall provide Borrower with other income determinations that are reasonably
similar with respect to methods of calculation to those previously published by HUD.
(qq)"Mortgage Assistance" has the meaning set forth in Section 5.4.
(rr)"NEPA" has the meaning set forth in Paragraph H of the Recitals.
(ss)"Owner Occupancy Certification" has the meaning set forth in
Section 5.3(b).
(tt)“Phase” means Phase One or Phase Two, as applicable.
(uu)“Phase One” has the meaning set forth in Paragraph C of the Recitals.
(vv)“Phase One Loan” has the meaning set forth in Paragraph D of the
Recitals.
(ww)"Phase One Note" means the promissory note of even date herewith that
863\95\1527399.3 6
evidences Borrower's obligation to repay the Phase One Loan.
(xx)“Phase One Unit” has the meaning set forth in Paragraph C of the
Recitals.
(yy)“Phase Two” has the meaning set forth in Paragraph C of the Recitals.
(zz)“Phase Two Loan” has the meaning set forth in Paragraph D of the
Recitals.
(aaa)"Phase Two Note" means the promissory note of even date herewith that
evidences Borrower's obligation to repay the Phase Two Loan.
(bbb)“Phase Two Unit” has the meaning set forth in Paragraph C of the
Recitals.
(ccc)"Property" has the meaning set forth in Paragraph C of the Recitals.
(ddd)"Proposed Purchaser" means a household that proposes to purchase a Unit.
(eee)“Proposed Tenant” means a household that proposes to rent a Unit.
(fff)“Rental Unit” means any Unit that is leased or rented to an Eligible
Tenant.
(ggg)“Section 3” has the meaning set forth in Section 6.5(b)(x).
(hhh)“Tenant Rent” means: (i) for a Very Low Income Household, a monthly
rent not exceeding the maximum rent set forth in 24 C.F.R. 92.252(b) for a Very Low Income
Household for the applicable number of bedrooms, and (ii) for a Low Income Household, a
monthly rent not exceeding the maximum rent set forth in 24 C.F.R. 92.252(a) for a Low Income
Household for the applicable number of bedrooms.
(iii)"Term" means the period of time that commences on the date of this
Agreement, and expires on August 31, 2017; provided, however, (i) this Agreement may be
terminated prior to August 31, 2017 in accordance with this Agreement, and (ii) if a Unit is
rented, the expiration date will be determined in accordance with Section 4.1(b).
(jjj)"Transfer" has the meaning set forth in Section 6.11.
(kkk)"Unit" has the meaning set forth in Paragraph C of the Recitals.
(lll)“Unit Allocation” means, for each Unit, $125,000, which is equal to the
HOME Funds allocated to each Unit.
(mmm)"Very Low Income Household" means a household with an Adjusted
Income that does not exceed fifty percent (50%) of Median Income, with adjustments for smaller
and larger families, except that HUD may establish income ceilings higher or lower than fifty
percent (50%) of Median Income on the basis of HUD findings that such variations are necessary
863\95\1527399.3 7
because of prevailing levels of construction costs or fair market rents, or unusually high or low
family incomes, as such definition may be amended pursuant to 24 C.F.R. Section 92.2. An
individual does not qualify as a Very Low Income Household if the individual is a student who is
not eligible to receive Section 8 assistance under 24 C.F.R. 5.612.
Section 1.2 Exhibits. The following exhibits are attached to this Agreement and
incorporated into this Agreement by this reference:
Exhibit A:Legal Description of the Property
Exhibit B:Approved Development Budget
Exhibit C:NEPA Mitigations
ARTICLE 2
LOAN PROVISIONS
Section 2.1 Loan.Upon satisfaction of the conditions set forth in Section 2.6 of this
Agreement, the County shall lend to Borrower the Loan for the purposes set forth in Section 2.3
of this Agreement. Borrower's obligation to repay the Loan is evidenced by the Phase One Note
and the Phase Two Note.
Section 2.2 Interest.
(a)Subject to the provisions of Subsection (b) below, the outstanding
principal balance of the Loan will not accrue interest.
(b)Upon the occurrence of an Event of a Default, interest on the Loan will
begin to accrue, beginning on the date of such occurrence and continuing until the date the Loan
is repaid in full or the Event of Default is cured, at the Default Rate.
Section 2.3 Use of Loan Funds.
(a)Borrower shall use the Loan to fund construction of the Development,
consistent with the Approved Development Budget. Use of the Loan for reimbursement of costs
incurred prior to the date of this Agreement is subject to Section 92.206(d)(1) of the HOME
Regulations.
(b)Borrower may not use the Loan proceeds for any other purposes without
the prior written consent of the County.
Section 2.4 Security.Borrower shall secure its obligation to repay the Loan, as
evidenced by the Phase One Note and the Phase Two Note, by executing the Deed of Trust, and
causing or permitting it to be recorded as a lien against the Property.
Section 2.5 Subordination. Any agreement by the County to subordinate the Deed of
Trust to an encumbrance securing and/or evidencing a bank loan will be subject to the
satisfaction of each of the following conditions:
(a)All of the proceeds of the proposed bank loan, less any transaction costs,
863\95\1527399.3 8
are used to finance the acquisition or construction of the Development.
(b)The proposed lender of a bank loan (each a "Senior Lender") is a state or
federally chartered financial institution that is not affiliated with Borrower or any of Borrower's
affiliates, other than as a depositor or a lender.
(c)The proposed bank loan must be in an amount not less than $500,000.
(d)Borrower must provide to the County, in addition to any other information
reasonably required by the County, evidence that demonstrates to the County's satisfaction that
subordination of the Deed of Trust is necessary to secure adequate acquisition, construction
and/or homebuyer financing to ensure the viability of the Development, including the sale of the
Units as affordable housing, as required by the Loan Documents.
(e)The subordination agreement(s) is structured to minimize the risk that the
Deed of Trust will be extinguished as a result of a foreclosure by the Senior Lender or other
holder of the bank loan. To satisfy this requirement, the subordination agreement must provide
the County with adequate rights to cure any defaults by Borrower, including: (i)providing the
County or its successor with copies of any notices of default at the same time and in the same
manner as provided to Borrower; and (ii)providing the County with a cure period of at least
sixty (60) days to cure any default.
(f)The subordination(s) of the Loan is effective only during the original term
of the bank loan, unless the County is notified by Borrower of an extension of the term of the
bank loan.
(g)The subordination does not limit the effect of the Deed of Trust before a
foreclosure, nor require the consent of the Senior Lender prior to the County exercising any
remedies available to the County under the Loan Documents.
(h)Upon a determination by the County's Deputy Director –Department of
Conservation and Development that the conditions in this Section have been satisfied, the
Deputy Director –Department of Conservation and Development or his/her designee is
authorized to execute the approved subordination agreement without the necessity of any further
action or approval.
Section 2.6 Conditions Precedent to Disbursement of Loan Funds for Construction.
The County is not obligated to disburse any portion of the Loan, or to take any other action under
the Loan Documents unless all of the following conditions precedent are satisfied:
(a)There exists no Event of Default nor any act, failure, omission or
condition that would constitute an Event of Default under this Agreement.
(b)Borrower holds title to the Property.
(c)Borrower has delivered to the County a copy of a corporate resolution
authorizing Borrower to obtain the Loan and all other Approved Financing, execute the Loan
Documents, and construct the Development.
863\95\1527399.3 9
(d)There exists no material adverse change in the financial condition of
Borrower from that shown by the financial statements and other data and information furnished
by Borrower to the County prior to the date of this Agreement.
(e)Borrower has furnished the County with evidence of the insurance
coverage meeting the requirements of Section 6.12 below.
(f)Borrower has executed and delivered the Loan Documents to the County
and has caused all other documents, instruments, and policies required under the Loan
Documents to be delivered to the County.
(g)The Deed of Trust is recorded against the Property in the Office of the
Recorder of the County of Contra Costa prior to or simultaneously with the disbursement of the
Loan.
(h)A title insurer reasonably acceptable to the County is unconditionally and
irrevocably committed to issuing a 2006 ALTA Lender's Policy of title insurance insuring the
priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and
exclusions as may be reasonably acceptable to the County, and containing such endorsements as
the County may reasonably require. Borrower shall provide whatever documentation (including
an indemnification agreement), deposits or surety is reasonably required by the title company in
order for the County's Deed of Trust to be senior in lien priority to any mechanics liens in
connection with any start of construction that has occurred prior to the recordation of the Deed of
Trust against the Property in the Office of the Recorder of the County of Contra Costa.
(i)Borrower has furnished the County with a copy of the Marketing Plan.
(j)Borrower has furnished the County with evidence of marketing activity
consistent with the Marketing Plan, such as copies of flyers, list of media ads, list of agencies
and organizations receiving information on availability of such Units, as applicable.
(k)All environmental review necessary for the construction of the
Development has been completed, and Borrower has provided the County evidence of
compliance, or plan for compliance, with all NEPA requirements and mitigation measures, as set
forth in Exhibit C.
(l)The County has determined the undisbursed proceeds of the Loan,
together with other funds or firm commitments for funds that Borrower has obtained in
connection with the construction of the relevant Phase, are not less than the amount the County
determines is necessary to pay for the construction of the relevant Phase and to satisfy all of the
covenants contained in this Agreement.
(m)Borrower has signed commitments for the Approved Financing, as
applicable.
(n)Borrower has obtained all permits and approvals necessary for the
construction of the relevant Phase.
863\95\1527399.3 10
(o)The County has received and approved the Bid Package for the
subcontractors for the construction of the relevant Phase, pursuant to Section 3.3 below.
(p)The County has received and approved any construction contract for the
construction of the Development that exceeds One Hundred Thousand Dollars ($100,000),
pursuant to Section 3.4 below.
(q)Borrower has closed all loans that are part of the Approved Financing for
construction of the Development, as described in Section 1.1(e) (i), and has already received or is
eligible to receive the funds.
(r)The County has received reasonable evidence that the local match
requirement set forth in 24 C.F.R. Section 92.218 et seq., has been satisfied in accordance with
Section 3.22 of this Agreement.
(s)The County has received a written draw request from Borrower, including
(i) certification that the condition set forth in Section 2.6(a) continues to be satisfied, (ii)
certification that the proposed uses of funds is consistent with the Approved Development
Budget, (iii) the amount of funds needed, and, (iv) where applicable, a copy of the bill or invoice
covering a cost incurred or to be incurred. When a disbursement is requested to pay any
contractor in connection with improvements on the Property, the written request must be
accompanied by (i) certification by Borrower's architect or other third party consultant
reasonably acceptable to the County that the work for which disbursement is requested has been
completed (although the County reserves the right to inspect the Property and make an
independent evaluation); and (ii) lien releases and/or mechanics lien title insurance endorsements
reasonably acceptable to the County.
Section 2.7 Repayment of the Phase One Loan.
(a)Partial Payment. When a Phase One Unit is sold to an Eligible Purchaser,
the County shall:
(i)If the Eligible Purchaser is the recipient of a County Mortgage
Loan, credit Borrower with a partial repayment of the Phase One Loan in an amount equal to the
Unit Allocation for the Unit that is sold.
(ii)If the conditions set forth in Section 2.10 are satisfied, execute and
record a partial reconveyance of the Deed of Trust with respect to the Unit that was sold.
(b)Repayment in Full. Borrower shall pay all outstanding principal and
accrued interest on the Phase One Loan, in full, on (i) the date a Transfer occurs, (ii) the date the
sale of the last Phase One Unit to an Eligible Purchaser occurs in compliance with the terms of
this Agreement, or (iii) June 30, 2016, whichever occurs first; provided, however, if a Phase One
Unit becomes a Rental Unit, Borrower shall pay the outstanding principal and accrued interest on
the Unit Allocation for such Rental Unit upon the expiration of the Term.
(i)If all Phase One Units are sold to Eligible Purchasers, upon the
satisfaction of the conditions set forth in Section 2.11, the entire principal amount of the Phase
863\95\1527399.3 11
One Loan will be deemed by the County to be paid in full and the Phase One Note will be
cancelled and returned to Borrower.
(ii)If, pursuant to Section 4.1, Borrower elects to repay the Unit
Allocation of a Phase One Unit in cash, then, in accordance with Section 4.1(d), (i) the principal
balance of the Phase One Loan will be reduced by the amount of the Unit Allocation received,
and (ii) upon the sale of the remaining Phase One Units to Eligible Purchasers and the
satisfaction of the conditions set forth in Section 2.11, the entire principal amount of the Phase
One Loan will be deemed by the County to be paid in full and the Phase One Note will be
cancelled and returned to Borrower.
(iii)If one or more Phase One Units become Rental Units, (i) the Unit
Allocation for such Units will remain outstanding, and (ii) the Deed of Trust will remain in effect
with respect to the Rental Units. If the Rental Units are sold to Eligible Purchasers at the end of
the Term and the conditions set forth in Section 2.11 have been satisfied, the entire principal
amount of the Phase One Loan will be deemed by the County to be paid in full and the Phase
One Note will be cancelled and returned to Borrower. If the Rental Units are not sold to Eligible
Purchasers, Borrower may elect at any time to pay the Unit Allocation for such Units. Upon
receipt of such payment, following the sale of the remaining Phase One Units to Eligible
Purchasers and the satisfaction of the conditions set forth in Section 2.11, the Phase One Loan
will be deemed by the County to be paid in full and the Phase One Note will be cancelled and
returned to Borrower.
Section 2.8 Repayment of the Phase Two Loan.
(a)Partial Payment. When a Phase Two Unit is sold to an Eligible Purchaser,
the County shall:
(i)If the Eligible Purchaser is the recipient of a County Mortgage
Loan, credit Borrower with a partial repayment of the Phase Two Loan in an amount equal to the
Unit Allocation for the Unit that is sold.
(ii)If the conditions set forth in Section 2.10 are satisfied, execute and
record a partial reconveyance of the Deed of Trust with respect to the Unit that was sold.
(b)Repayment in Full. Borrower shall pay all outstanding principal and
accrued interest on the Phase Two Loan, in full, on (i) the date a Transfer occurs, (ii) the date the
sale of the last Phase Two Unit to an Eligible Purchaser occurs in compliance with the terms of
this Agreement, or (iii) August 31, 2017, whichever occurs first; provided, however, if a Phase
Two Unit becomes a Rental Unit, Borrower shall pay the outstanding principal and accrued
interest on the Unit Allocation for such Rental Unit upon the expiration of the Term.
(i)If all Phase Two Units are sold to Eligible Purchasers, upon the
satisfaction of the conditions set forth in Section 2.11, the entire principal amount of the Phase
Two Loan will be deemed by the County to be paid in full and the Phase Two Note will be
cancelled and returned to Borrower.
863\95\1527399.3 12
(ii)If, pursuant to Section 4.1, Borrower elects to repay the Unit
Allocation of a Phase Two Unit in cash, then, in accordance with Section 4.1(d), (i) the principal
balance of the Phase Two Loan will be reduced by the amount of the Unit Allocation received,
and (ii) upon the sale of the remaining Phase Two Units to Eligible Purchasers and the
satisfaction of the conditions set forth in Section 2.11, the entire principal amount of the Phase
Two Loan will be deemed by the County to be paid in full and the Phase Two Note will be
cancelled and returned to Borrower.
(iii)If one or more Phase Two Units become Rental Units, (i) the Unit
Allocation for such Units will remain outstanding, and (ii) the Deed of Trust will remain in effect
with respect to the Rental Units. If the Rental Units are sold to Eligible Purchasers at the end of
the Term and the conditions set forth in Section 2.11 have been satisfied, the entire principal
amount of the Phase Two Loan will be deemed by the County to be paid in full and the Phase
Two Note will be cancelled and returned to Borrower. If the Rental Units are not sold to Eligible
Purchasers, Borrower may elect at any time to pay the Unit Allocation for such Units. Upon
receipt of such payment, following the sale of the remaining Phase Two Units to Eligible
Purchasers and the satisfaction of the conditions set forth in Section 2.11, the Phase Two Loan
will be deemed by the County to be paid in full and the Phase Two Note will be cancelled and
returned to Borrower.
Section 2.9 Prepayment. Borrower may prepay the Phase One Loan and the Phase
Two Loan at any time without premium or penalty. Regardless of any prepayment, Borrower
acknowledges that the provisions of this Agreement, including but not limited to the requirement
that all Units be sold to Eligible Purchasers, remain in effect even though Borrower may have
prepaid all or a portion of the Loan.
Section 2.10 Conditions Precedent to Partial Reconveyance of Deed of Trust. The
County is not obligated to provide a partial reconveyance of the Deed of Trust upon the sale of a
Unit to an Eligible Purchaser, unless the County has received all of the following from Borrower
with respect to the Unit:
(a)A completion report from Borrower setting forth the following
information with respect to the Unit: (i) the income, household size, race and ethnicity of each
Homeowner, and (ii) the unit size, sales price and the amount of the first mortgage.
(b)A copy of the certificate of occupancy or equivalent final permit sign-off.
(c)A copy of the executed purchase and sale agreement between Borrower
and the Eligible Purchaser.
(d)Evidence that Borrower has provided the Eligible Purchaser with
homebuyer counseling in accordance with Section 4.2(c).
(e)If Borrower is required to pay prevailing wages under the Davis-Bacon
Act (40 U.S.C. 3141-3148), a confirmation from Borrower that Borrower has submitted all
certified payrolls to the County, and any identified payment issues have been resolved, or
Borrower is working diligently to resolve any such issues.
863\95\1527399.3 13
Section 2.11 Conditions Precedent to Note Cancellation. The County is not obligated
to cancel the Phase One Note upon the sale of the last Phase One Unit or to cancel the Phase
Two Note upon the sale of the last Phase Two Unit until the County has received all of the
following from Borrower with respect to the relevant Phase:
(a)A financial accounting of all sources and uses of funds used in the
construction.
(b)All relevant contract activity information, including compliance with
Section 3, and local hiring and MBE/WBE requirements as set forth in Section 3.14 below.
(c)If Borrower was required to comply with relocation requirements,
evidence of compliance with all applicable relocation requirements.
(d)If Borrower is required to pay prevailing wages under the Davis-Bacon
Act (40 U.S.C. 3141-3148), a confirmation from Borrower that Borrower has submitted all
certified payrolls to the County, and any identified payment issues have been resolved.
Section 2.12 Non-Recourse. Except as provided below, Borrower does not have any
direct or indirect personal liability for payment of the principal of, and interest on, the Loan.
Following recordation of the Deed of Trust, the sole recourse of the County with respect to the
principal of, or interest on, the Phase One Note and the Phase Two Note will be to the property
described in the Deed of Trust; provided, however, that nothing contained in the foregoing
limitation of liability limits or impairs the enforcement of all the rights and remedies of the
County against all such security for the Phase One Note and the Phase Two Note, or impairs the
right of County to assert the unpaid principal amount of the Phase One Note and the Phase Two
Note as demand for money within the meaning and intendment of Section 431.70 of the
California Code of Civil Procedure or any successor provision thereto. The foregoing limitation
of liability is intended to apply only to the obligation to repay the principal and interest on the
Phase One Note and the Phase Two Note. Except as hereafter set forth; nothing contained herein
is intended to relieve Borrower of its obligation to indemnify the County under Sections 3.9,
3.10, 3.11, 5.6, and 8.4 of this Agreement, or liability for (i) loss or damage of any kind resulting
from waste, fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other
charges which may create liens on the Property that are payable or applicable prior to any
foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other
charges); (iii) the fair market value of any personal property or fixtures removed or disposed of
by Borrower other than in accordance with the Deed of Trust; and (iv) the misappropriation of
any proceeds under any insurance policies or awards resulting from condemnation or the
exercise of the power of eminent domain or by reason of damage, loss or destruction to any
portion of the Property.
863\95\1527399.3 14
ARTICLE 3
CONSTRUCTION OF THE DEVELOPMENT
Section 3.1 Construction. Borrower shall complete the construction of the
Development in accordance with the Approved Development Budget.
Section 3.2 Permits and Approvals. Borrower shall obtain all permits and approvals
necessary for the construction of Phase One no later than September 30, 2014, or such later date
that the County approves in writing. Borrower shall obtain all permits and approvals necessary
for the construction of Phase Two no later than September 30, 2015, or such later date that the
County approves in writing. Nothing in this Agreement, and none of the County actions taken
pursuant to this Agreement, constitutes approval by the County of any required permit,
application, map, license, or other required approval, or in any way limits the discretion of the
County acting in its regulatory capacity with respect to the Property or the Development.
Section 3.3 Bid Package.
(a)Not later than thirty (30) days prior to Borrower's proposed date for
advertising the Bid Package for each phase of construction, Borrower shall submit to the County
a copy of Borrower's proposed Bid Package for contracts over One Hundred Thousand Dollars
($100,000). The County's Deputy Director –Department of Conservation and Development, or
his or her designee, shall approve or disapprove the Bid Package within fifteen (15) days after
receipt of the Bid Package by the County. If the County rejects the proposed Bid Package, the
reasons therefore must be given to Borrower. Borrower will then have fifteen (15) days to revise
the proposed Bid Package and resubmit it to the County. The County will then have fifteen (15)
days to review and approve Borrower's new or corrected Bid Package. The provisions of this
Section will continue to apply until a proposed Bid Package has been approved by the County.
Borrower may not publish a proposed Bid Package until it has been approved by the County.
Section 3.4 Construction Contract.
(a)Not later than thirty (30) days prior to commencing construction of Phase
One, and not later than thirty (30) days prior to commencing construction of Phase Two,
Borrower shall submit to the County for its approval a draft of the proposed construction
contract(s) for the relevant Phase that exceed One Hundred Thousand dollars ($100,000). All
construction work and professional services are to be performed by persons or entities licensed
or otherwise authorized to perform the applicable construction work or service in the State of
California. Each contract that Borrower enters for construction of the Development is to provide
that at least ten percent (10%) of the costs incurred will be payable only upon completion of the
contractor’s work, subject to early release of retention for specified subcontractors upon approval
by the County. The construction contract(s) will include all HOME requirements set forth in
Section 6.5 below. The County's approval of the construction contract(s) may not be deemed to
constitute approval of or concurrence with any term or condition of the construction contract
except as such term or condition may be required by this Agreement.
(b)Upon receipt by the County of the proposed construction contracts
exceeding One Hundred Thousand Dollars ($100,000), the County shall promptly review same
and approve or disapprove such contracts within ten (10) days. If the construction contract(s)
863\95\1527399.3 15
is/are not approved by the County, the County shall set forth in writing and notify Borrower of
the County's reasons for withholding such approval. Borrower shall thereafter submit revised
construction contract(s) for County approval, which approval is to be granted or denied in ten
(10) days in accordance with the procedures set forth above. Any construction contract(s) over
One Hundred Thousand Dollars ($100,000) executed by Borrower for the Development is to be
in the form approved by the County.
Section 3.5 Intentionally Omitted.
Section 3.6 Commencement of Construction. Borrower shall cause the
Commencement of Construction of Phase One to occur no later than October 31, 2014, or such
later date that the County approves in writing. Borrower shall cause the Commencement of
Construction of Phase Two to occur no later than October 31, 2015. For the purposes of this
Agreement, "Commencement of Construction" of each Phase is the date of the building permit
issued for the first Unit to be constructed.
Section 3.7 Completion of Construction.
(a)Borrower shall diligently prosecute construction of the Development to
completion. Borrower shall cause the Phase One Completion Date to be no later than January
31, 2016, or such later date that the County approves in writing. Borrower shall cause the Phase
Two Completion Date to be no later than June 30, 2017, or such later date that the County
approves in writing.
(b)For each Unit, Borrower shall notify the County of the Completion Date.
Upon receipt of such notice the County will perform an inspection of the Unit to determine if the
Unit was constructed in accordance with the HOME Regulations, including the property
standards set forth in 24 C.F.R. 92.251(a). If the County determines the Unit was not
constructed in accordance with the HOME Regulations, the County will provide Borrower with a
written report of the deficiencies. Borrower shall correct such deficiencies within the timeframe
set forth in the notice provided to Borrower by the County. The Unit may not be sold until such
deficiencies have been corrected to the satisfaction of the County.
Section 3.8 Changes; Construction Pursuant to Plans and Laws.
(a)Changes. Borrower shall construct the Development in conformance with
(i) the plans and specifications approved by the County Department of Conservation and
Development and (ii) the Approved Development Budget as such budget is modified pursuant to
Section 3.19. Borrower shall notify the County in a timely manner of any changes in the work
required to be performed under this Agreement, including any material additions, changes, or
deletions to the plans and specifications approved by the County. A written change order
authorized by the County must be obtained before any of the following changes, additions, or
deletions in the construction work may be performed: (i) any change in the work the cost of
which exceeds Twenty-Five Thousand Dollars ($25,000); or (ii) any set of changes in the work
the cost of which cumulatively exceeds One Hundred Thousand Dollars ($100,000); or (iii) any
material change in building materials or equipment, specifications, or the structural or
architectural design or appearance of the Development as provided for in the plans and
specifications approved by the County. The County's consent to any additions, changes, or
863\95\1527399.3 16
deletions to the work does not relieve or release Borrower from any other obligations under this
Agreement,or relieve or release Borrower or its surety from any surety bond.
(b)Compliance with Laws. Borrower shall cause all work performed in
connection with the Development to be performed in compliance with:
(i)all applicable laws, ordinances, codes (including building codes),
rules and regulations of federal, state, county or municipal governments or agencies now in force
or that may be enacted hereafter;
(ii)the property standards set out in 24 C.F.R. Section 92.251(a); and
(iii)all directions, rules and regulations of any fire marshal, health
officer, building inspector, or other officer of every governmental agency now having or
hereafter acquiring jurisdiction. Borrower may permit the work to proceed only after
procurement of each permit, license, or other authorization that may be required by any
governmental agency having jurisdiction, and Borrower is responsible to the County for the
procurement and maintenance thereof.
Section 3.9 Prevailing Wages.
(a)Davis Bacon. Borrower shall cause construction of the Development to be
in compliance with the prevailing wage requirements of the federal Davis-Bacon Act (40 U.S.C.
3141-3148). Borrower shall indemnify, hold harmless and defend (with counsel reasonably
acceptable to the County) the County against any claim for damages, compensation, fines,
penalties or other amounts arising out of the failure or alleged failure of any person or entity
(including Borrower, its contractor and subcontractors) to pay prevailing wages as determined
pursuant to the prevailing wage provisions of the federal Davis-Bacon Act and implementing
rules and regulations in connection with the construction of the Development or any other work
undertaken or in connection with the Property. The requirements in this Subsection survive
repayment of the Loan and the reconveyance of the Deed of Trust.
(b)State Prevailing Wages. To the extent applicable, Borrower shall pay and
shall cause its subcontractors to pay prevailing wages in the construction of the Development as
those wages are determined pursuant to California Labor Code Section 1720 et seq., to employ
apprentices as required by California Labor Code Sections 1777.5 et seq., and the implementing
regulations of the Department of Industrial Relations (the "DIR"). Borrower shall and shall
cause the subcontractors to comply with the other applicable provisions of California Labor
Code Sections 1720 et seq., 1777.5 et seq., and implementing regulations of the DIR. Borrower
shall and shall cause the contractor and subcontractors to keep and retain such records as are
necessary to determine if such prevailing wages have been paid as required pursuant to
California Labor Code Section 1720 et seq., and apprentices have been employed are required by
California Labor Code Section 1777.5 et seq. Copies of the currently applicable current per
diem prevailing wages are available from DIR. During the construction of the Development,
Borrower shall post at the Property the applicable prevailing rates of per diem wages. Borrower
shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the County)
the County against any claim for damages, compensation, fines, penalties or other amounts
arising out of the failure or alleged failure of any person or entity (including Borrower, its
863\95\1527399.3 17
contractor and subcontractors) to pay prevailing wages as determined pursuant to California
Labor Code Section 1720 et seq., to employ apprentices pursuant to California Labor Code
Section 1777.5 et seq., and implementing regulations of the DIR or to comply with the other
applicable provisions of California Labor Code Sections 1720 et seq., 1777.5 et seq., and the
implementing regulations of the DIR in connection with the construction of the Development or
any other work undertaken or in connection with the Property. The requirements in this
Subsection survive the repayment of the Loan, and the reconveyance of the Deed of Trust.
Section 3.10 Accessibility. Borrower shall construct the Development in compliance
with all applicable federal and state disabled persons accessibility requirements including but not
limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act of 1973 ("Section
504"); Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the
California Code of Regulations (collectively, the "Accessibility Requirements"). In compliance
with Section 504, a minimum of one (1) Unit of all Units must be constructed to be fully
accessible to households with a mobility impaired member and an additional one (1) Unit of all
Units must be constructed to be fully accessible to hearing and/or visually impaired persons. In
compliance with Section 504 Borrower shall provide the County with a certification from the
Development architect that to the best of the architect's knowledge, the Development complies
with all federal and state accessibility requirements applicable to the Development. Borrower
shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the County)
the County against any claim for damages, compensation, fines, penalties or other amounts
arising out of the failure or alleged failure of any person or entity (including Borrower, its
architect, contractor and subcontractors) to construct the Development in accordance with the
Accessibility Requirements. The requirements in this Subsection survive repayment of the Loan
and the reconveyance of the Deed of Trust.
Section 3.11 Relocation.
(a)Borrower represents and warrants to the County that the Property was
vacant at the time it was acquired by Borrower. If and to the extent that construction of the
Improvements results in the permanent or temporary displacement of residential tenants,
homeowners, or businesses, Borrower shall comply with all applicable local, state, and federal
statutes and regulations with respect to preparation of a relocation plan, relocation planning,
advisory assistance, and payment of monetary benefits, including, without limitation, the
requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act
of 1970 (42 USC 4601 et seq.) and implementing regulations at 49 C.F.R. 24 et seq.; Section
104(d) of the Housing and Community Development Act of 1974 and implementing regulations
at 24 C.F.R. Part 42 and 24 C.F.R. 92.353; and California Government Code 7260 et seq., and
implementing regulations at 25 California Code of Regulations 6000 et seq. (together, the
"Relocation Laws").
(b)Borrower shall prepare and submit a relocation plan to the County for
approval as required by the Relocation Laws.
(c)Borrower is solely responsible for payment of any relocation benefits to
any displaced persons and for compliance with the Relocation Laws.
(d)Borrower shall indemnify, defend and hold harmless, (with counsel
863\95\1527399.3 18
reasonably acceptable to the County), the County and its board members, supervisors, directors,
officers, employees, agents, successors and assigns, against any claim for damages,
compensation, fines, penalties, relocation payments or other amounts and expenses (including
reasonable attorneys' fees) arising out of the failure or alleged failure of any person or entity
(including Borrower, or the County) to satisfy relocation obligations related to the Development.
This obligation to indemnify shall survive termination of this Agreement.
Section 3.12 Marketing Plan.
(a)No later than three (3) months prior to the date construction of each Phase
is projected to start, Borrower shall submit to the County for approval its plan for marketing such
Phase to income-eligible households as required pursuant to this Agreement (the "Marketing
Plan").
(b)The Marketing Plan must include information on affirmative marketing
efforts, compliance with fair housing laws and 24 C.F.R. 92.351(a), and a description of the
homebuyer counseling to be provided to Eligible Purchasers. Borrower shall cause the
homebuyer counseling procedures to be in compliance with policies and guidelines provided by
the County.
(c)The Marketing Plan must identify the criteria that applicants must satisfy
to become Eligible Purchasers and qualified to receive a County Mortgage Loan.
(d)Upon receipt of the Marketing Plan, the County will promptly review the
Marketing Plan and will approve or disapprove it within fifteen (15) days after submission. If
the Marketing Plan is not approved, the County will give Borrower specific reasons for such
disapproval and Borrower shall submit a revised Marketing Plan within fifteen (15) days after
the County issues its notification. Borrower shall follow this procedure for resubmission of a
revised Marketing Plan until the Marking Plan is approved by the County. If Borrower does not
submit a revised Marketing Plan that is approved by the County by three (3) months prior to the
projected date of the completion of the relevant Phase, Borrower will be in default of this
Agreement.
Section 3.13 Equal Opportunity. During the construction of the Development,
discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital
status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any
person engaged in the construction work is not allowed.
Section 3.14 Minority and Women-Owned Contractors; Local Hiring. Borrower shall
use its best efforts to afford minority-owned and women-owned business enterprises the
maximum practicable opportunity to participate in the construction of the Development.
Borrower shall, at a minimum, notify applicable minority-owned and women-owned business
firms located in Contra Costa County of bid opportunities for the construction of the
Development. Documentation of such notifications must be maintained by Borrower and
available to the County upon request.
Section 3.15 Progress Reports. Until such time as Borrower has received certificates of
occupancy from the County for the Units, Borrower shall provide the County with quarterly
863\95\1527399.3 19
progress reports regarding the status of the construction of the Development, including a
certification that the actual construction costs to date conform to the Approved Development
Budget, as it may be amended from time to time pursuant to Section 3.19 below.
Section 3.16 Construction Responsibilities.
(a)Borrower is responsible for coordinating and scheduling the work to be
performed so that commencement and completion of the construction of the Development takes
place in accordance with this Agreement.
(b)Borrower is solely responsible for all aspects of Borrower's conduct in
connection with the Development, including (but not limited to) the quality and suitability of the
plans and specifications, the supervision of construction work, and the qualifications, financial
condition, and performance of all architects, engineers, contractors, subcontractors, suppliers,
consultants, and property managers. Any review or inspection undertaken by the County with
reference to the Development is solely for the purpose of determining whether Borrower is
properly discharging its obligations to the County, and may not be relied upon by Borrower or by
any third parties as a warranty or representation by the County as to the quality of the design or
construction of the Development.
Section 3.17 Mechanics Liens, Stop Notices, and Notices of Completion.
(a)If any claim of lien is filed against the Property or a stop notice affecting
the Loan is served on the County or any other lender or other third party in connection with the
Development, then Borrower shall, within twenty (20) days after such filing or service, either
pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by
delivering to the County a surety bond in sufficient form and amount, or provide the County with
other assurance satisfactory to the County that the claim of lien or stop notice will be paid or
discharged.
(b)If Borrower fails to discharge any lien, encumbrance, charge, or claim in
the manner required in this Section, then in addition to any other right or remedy, the County
may (but is under no obligation to) discharge such lien, encumbrance, charge, or claim at
Borrower's expense. Alternately, the County may require Borrower to immediately deposit with
the County the amount necessary to satisfy such lien or claim and any costs, pending resolution
thereof. The County may use such deposit to satisfy any claim or lien that is adversely
determined against Borrower.
(c)Borrower shall file a valid notice of cessation or notice of completion
upon cessation of construction work on the Development for a continuous period of thirty (30)
days or more, and take all other steps necessary to forestall the assertion of claims of lien against
the Property. Borrower authorizes the County, but the County has no obligation, to record any
notices of completion or cessation of labor, or any other notice that the County deems necessary
or desirable to protect its interest in the Development and Property.
Section 3.18 Inspections. Borrower shall permit and facilitate, and shall require its
contractors to permit and facilitate during reasonable business hours during the Term, County
863\95\1527399.3 20
and other public authorities to observe and inspect that portion of the Development that is subject
to the Deed of Trust, for the purpose of determining compliance with this Agreement.
Section 3.19 Approved Development Budget; Revisions to Budget. As of the date of
this Agreement, the County has approved the Approved Development Budget set forth in
Exhibit B. Borrower shall submit any required amendments to the Approved Development
Budget to the County for approval within five (5) days after the date Borrower receives
information indicating that actual costs of the Development vary or will vary from the costs
shown on the Approved Development Budget. Written consent of the County will be required to
amend the Approved Development Budget.
Section 3.20 Developer Fee. The maximum cumulative Developer Fee that may be
paid to any entity or entities providing development services to the Development, whether paid
up-front or on a deferred basis, is not to exceed Thirty-Three Three Thousand Dollars ($33,000)
per Unit (the "Developer Fee").
Section 3.21 NEPA Mitigation Requirements. Borrower shall comply with the NEPA
mitigation requirements set forth in the attached Exhibit C in the construction of the
Development.
Section 3.22 Match Requirement. Borrower shall cause the Loan to be matched with a
minimum of Three Hundred Seventy-Five Dollars ($375,000) in other, non-federal sources,
pursuant to and eligible under applicable HOME Regulations.
ARTICLE 4
DISPOSITION OBLIGATION
Section 4.1 Obligation to Sell, Rent or Repay. Borrower shall use best efforts to sell
each Unit to an Eligible Purchaser no later than the Disposition Date applicable to the Unit. If
Borrower fails to sell a Unit by its Disposition Date, on or before the Disposition Date, Borrower
must either (i)rent the Unit to an Eligible Tenant, or (ii) pay the County the Unit Allocation for
the unsold Unit.
(a)A Unit will be deemed to have been sold or rented on the date that a
Disposition Agreement for the Unit has been executed by both Borrower and the Eligible
Purchaser or Eligible Tenant, as applicable.
(b)If a Unit is rented, the Term of this Agreement will expire on the date
established by the County in accordance with the HOME Regulations and HUD policies. As of
the date of this Agreement, the parties anticipate that if one or more Units are rented, the Term of
this Agreement will expire twenty-five years after the date the last Unit to be rented is rented.
(c)The conditions that apply to renting a Unit are set forth in Section 4.3.
(d)If a Unit is not sold and Borrower elects to repay the Unit Allocation for
such Unit, upon County’s receipt of the Unit Allocation, the County shall (i) credit Borrower
with a partial repayment of the Phase One Loan or the Phase Two Loan, as applicable, in the
863\95\1527399.3 21
amount of the Unit Allocation received (excluding any interest, discussed in Section 4.5 below),
(ii) execute and record a partial reconveyance of the Deed of Trust with respect to the Unit that
was not sold or rented, and (iii) deem Borrower’s obligations under this Agreement to be fully
satisfied with respect to such Unit.
(e)If a Unit has not been sold by the date that is three (3) months after its
Completion Date, Borrower shall submit to County evidence satisfactory to County that
Borrower is making affirmative marketing efforts, in accordance with Section 3.12.
Section 4.2 Conditions Precedent to the Sale of a Home. When Borrower sells a Unit,
Borrower shall cause all of the following conditions to be satisfied:
(a)The Unit must be sold to an Eligible Purchaser. When selecting an
Eligible Purchaser to purchase a Unit, Borrower shall apply the selection criteria set forth in the
Marketing Plan approved by the County pursuant to Section 3.12.
(b)The purchase price must be approved by the County. Once approved by
the County, the purchase price of a Unit is the "Approved Purchase Price." The Approved
Purchase Price must: (i) meet applicable HOME Regulations, and (ii) not exceed ninety-five
percent (95%) of the median purchase price for the area as described in 24 C.F.R.
92.254(a)(2)(iii).
(c)Prior to the sale of a Unit, Borrower shall provide the purchaser with
homebuyer counseling in accordance with policies and guidelines provided by the County, as
outlined in the Marketing Plan. Borrower shall cause its homebuyer counseling to include a
description of the County’s homebuyer assistance program for the development. Borrower may
charge a reasonable fee to persons who receive homebuyer counseling from Borrower.
(d)Borrower shall obtain an Income Certification from the Proposed
Purchaser (i) at or shortly after the date the Proposed Purchaser and Borrower execute the
Habitat Partnership Agreement, and again (ii) no more than six months prior to the date the sale
of the Unit occurs. In addition, Borrower must satisfy the requirements of Section 4.4 below.
Section 4.3 Conditions to the Rental of Homes. If Borrower elects to rent a Unit,
Borrower shall cause all of the following conditions to be satisfied:
(a)The Rental Unit must be rented to an Eligible Tenant.
(b)The form of lease or rental agreement must be approved by the County.
(c)The terms of the lease or rental agreement must comply with the HOME
Regulations.
(d)Borrower shall obtain an Income Certification from the Proposed Tenant
no more than six months prior to the date the Rental Unit is rented or leased. In addition,
Borrower must satisfy the requirements of Section 4.4 below.
(e)If requested by the County, Borrower shall enter into an agreement that
restricts the use of the rented property (a “Regulatory Agreement”) and cause or permit the
863\95\1527399.3 22
Regulatory Agreement to be recorded against the rented property.
(f)All rent received from a Rental Unit will be applied first to the actual costs
incurred by Borrower in managing and maintaining the Rental Unit, and second to the County.
The County shall apply any amounts received pursuant to this Section to the reduction of the
outstanding Phase One Loan or Phase Two Loan, as applicable. If requested by the County,
Borrower shall provide the County with an accounting of the receipt and application of all rent
received as a result of renting or leasing a Rental Unit.
Section 4.4 Income Certification. With respect to each member of the Proposed
Purchaser household, or Proposed Tenant household, as applicable, Borrower must verify that
the information provided in an Income Certification is accurate by taking two or more of the
following steps: (i) obtaining a pay stub for his or her most recent pay period; (ii) obtaining a
copy of his or her income tax return for the three (3) most recent tax years; (iii) conducting a
credit agency search or similar search; (iv) obtaining an income certification from his or her
current employer verifying income; (v) obtaining an income verification form from the Social
Security Administration and/or the California Department of Social Services, if he or she
receives assistance from either agency; or (vi) if he or she is unemployed and has no such tax
return, obtaining another form of independent income verification. Where applicable, Borrower
shall examine at least two (2) months of relevant source documentation.
Section 4.5 Acceleration of Unit Allocation. If Borrower fails to satisfy its obligation
to sell or rent a Unit or to pay the Unit’s Unit Allocation by the Unit’s Disposition Date, then:
(a)The Unit Allocation for the subject Unit will be immediately due and
payable;
(b)An Event of Default will be deemed to have occurred in accordance with
Section 8.1(b) and the County will be entitled to exercise any and all remedies available to it
under this Agreement and under law; and
(c)Notwithstanding any remedies the County elects to exercise in accordance
with Section 4.5(b), the Unit Allocation for the subject Unit will accrue interest at the Default
Rate beginning on the day after the Unit’s Disposition Date and continuing until the Unit
Allocation is paid in full with interest.
ARTICLE 5
COUNTY MORTGAGE LOAN ASSISTANCE
Section 5.1 Borrower Obligation. Borrower shall cause each purchaser of a Unit to
obtain a County Mortgage Loan.
Section 5.2 Mortgage Loan Availability.For each Eligible Purchaser that is acquiring
a Unit, the principal amount of the County Mortgage Loan made to such Eligible Purchaser is
equal to the result obtained by subtracting the Mortgage Assistance obtained by such Eligible
Purchaser from the Approved Purchase Price of the applicable Unit, provided that in no event
863\95\1527399.3 23
may (i) the amount of any County Mortgage Loan exceed Forty Thousand Dollars ($40,000), or
(ii) the sum of all County Mortgage Loans, when aggregated, exceed the principal amount of the
Loan. Notwithstanding the above, the County may consider the overall debt and monthly
expenses of the Eligible Purchaser, the appropriateness of the amount of the County Mortgage
Loan, and financial resources of the Eligible Purchaser to sustain homeownership in determining
the amount of each County Mortgage Loan.
Section 5.3 Conditions To County Mortgage Loans. In each instance, the obligation
of the County to make a County Mortgage Loan is subject to the following conditions:
(a)A Proposed Purchaser is disqualified as an Eligible Purchaser if, after
initially qualifying as an Eligible Purchaser, the Proposed Purchaser experiences an increase in
household income that results in the Proposed Purchaser's income exceeding the maximum
income level for a Low-Income Household.
(b)Borrower must obtain a certification from the Proposed Purchaser that he
or she will occupy the Unit as his or her principal place of residence and that in no event will he
or she lease the Unit to another (the "Owner Occupancy Certification"), using a form provided
by the County.
(c)Borrower must transmit to the County at least five (5) working days prior
to the sale of a Unit to an Eligible Purchaser, the Eligible Purchaser's Income Certification (with
required documentation attached), and the Owner Occupancy Certification, all executed by the
Eligible Purchaser.
(d)The County shall have received, in form and substance reasonably
satisfactory to the County, (i) the Homeowner Note duly executed by the Eligible Purchaser, (ii)
the County Mortgage Deed of Trust duly executed by the Eligible Purchaser, (iii) an executed
borrower's disclosure statement, which explains the requirements of the County Mortgage Loan,
and (iv) any other documents required by the County in its reasonable discretion.
Section 5.4 Borrower First Mortgage Assistance and Other Homebuyer Financing.
Borrower must obtain the County's approval of the terms of (i) any first mortgage assistance
provided to an Eligible Purchaser by Borrower or by any other loan provider and (ii) any other
financial assistance to an Eligible Purchaser (once approved by County, all such assistance is the
"Mortgage Assistance"). If the County disapproves the terms of the proposed financial
assistance, the County shall give specific reasons for its disapproval and Borrower shall, within
ten (10) calendar days of disapproval, submit a revised financial assistance plan to the County for
approval. The County's approval of the Mortgage Assistance provided to a particular Eligible
Purchaser is a condition precedent to the County making a County Mortgage Loan to that
Eligible Purchaser.
863\95\1527399.3 24
ARTICLE 6
LOAN REQUIREMENTS
Section 6.1 Financial Accountings and Post-Completion Audits. No later than sixty
(60) days following the Completion Date of Phase One and no later than sixty (60) days
following the Completion Date of Phase Two, Borrower shall provide to the County for its
review and approval a financial accounting of all sources and uses of funds used in the relevant
Phase.
Section 6.2 Information. Borrower shall provide any information reasonably
requested by the County in connection with the Development, including (but not limited to) any
information required by HUD in connection with Borrower's use of the Loan funds.
Section 6.3 Records.
(a)Borrower shall keep and maintain at the principal place of business of
Borrower set forth in Section 9.9 below, or elsewhere with the County's written consent, full,
complete and appropriate books, records and accounts relating to the Development. Books,
records and accounts relating to its compliance with the terms, provisions, covenants and
conditions of this Agreement to be kept and maintained in accordance with generally accepted
accounting principles consistently applied, and to be consistent with requirements of this
Agreement. Borrower shall cause all books, records, and accounts are to be open to and
available for inspection and copying by HUD, the County, its auditors or other authorized
representatives at reasonable intervals during normal business hours. Borrower shall cause
copies of all tax returns and other reports that Borrower may be required to furnish to any
government agency to be open for inspection by the County at all reasonable times at the place
that the books, records and accounts of Borrower are kept. Borrower shall preserve such records
for a period of not less than five (5) years after their creation in compliance with all HUD records
and accounting requirements. If any litigation, claim, negotiation, audit exception, monitoring,
inspection or other action relating to the use of the Loan is pending at the end of the record
retention period stated herein, then Borrower shall retain the records until such action and all
related issues are resolved. Borrower shall cause the records to include all invoices, receipts, and
other documents related to expenditures from the Loan funds. Borrower shall cause records to
be accurate and current and in such a form as to allow the County to comply with the record
keeping requirements contained in 24 C.F.R. 92.508. Such records are to include but are not
limited to:
(i)Records providing a full description of the activities undertaken
with the use of the Loan funds.
(ii)Records demonstrating the eligibility of activities under the HOME
Regulations and that use of the HOME Funds meets one of the eligible activities of the HOME
program set forth in 24 C.F.R. 92.205;
(iii)Records demonstrating compliance with the HUD property
standards and lead-based paint requirements;
863\95\1527399.3 25
(iv)Records documenting compliance with the fair housing, equal
opportunity, and affirmative fair marketing requirements;
(v)Financial records as required by 24 C.F.R. 92.508, and OMB
Circular A-110 (24 C.F.R. Part 84);
(vi)Records demonstrating compliance with local hiring and
MBE/WBE requirements;
(vii)Records demonstrating compliance with Section 3;
(viii)Records demonstrating compliance with applicable acquisition and
relocation requirements, which must be retained for at least five (5) years after the date by which
persons displaced from the property have received final payments;
(ix)Records demonstrating compliance with labor requirements
including certified payrolls from Borrower's contractors evidencing that applicable prevailing
wages have been paid.
(b)The County shall notify Borrower of any records it deems insufficient.
Borrower has fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the County in such notice, or if a period longer than fifteen
(15) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct
the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
Section 6.4 County Audits.
(a)Each year, Borrower shall provide the County with a copy of Borrower's
annual audit, which is to include information on all of Borrower's activities and not just those
pertaining to the Development. Borrower shall also follow audit requirements of the Single
Audit Act and OMB Circulars A-122 and 110.
(b)In addition, the County may, at any time, audit all of Borrower's books,
records, and accounts pertaining to the Development. Any such audit is to be conducted during
normal business hours at the principal place of business of Borrower wherever records are kept.
Immediately after the completion of an audit, the County shall deliver a copy of the results of the
audit to Borrower.
(c)If, as a result of an audit, it is determined that there has been a deficiency
in a Loan repayment to the County, then such deficiency will become immediately due and
payable with interest at the Default Rate, from the date the deficient amount should have been
paid.
Section 6.5 HOME Requirements.
(a)Borrower shall comply with all applicable laws and regulations governing
863\95\1527399.3 26
the use of the HOME Funds as set forth in 24 C.F.R. 92 et seq. In the event of any conflict
between this Agreement and applicable laws and regulations governing the use of the Loan
funds, the applicable laws and regulations govern.
(b)The laws and regulations governing the use of the Loan include (but are
not limited to) the following:
(i)Environmental and Historic Preservation. 24 C.F.R. Part 58,
which prescribes procedures for compliance with the National Environmental Policy Act of 1969
(42 U.S.C. 4321-4361), and the additional laws and authorities listed at 24 C.F.R. 58.5.
(ii)Applicability of OMB Circulars. The applicable policies,
guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and
A-133.
(iii)Debarred,Suspended or Ineligible Contractors. The prohibition on
the use of debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24.
(iv)Civil Rights, Housing and Community Development, and Age
Discrimination Acts.The Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing
regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII
of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the
Housing and Community Development Act of 1974 as amended; Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794, et seq.); the Age Discrimination Act of 1975 (42
U.S.C. 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and
implementing regulations at 24 C.F.R. Part 107; Executive Order 11246 as amended by
Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by
Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by
Executive Order 12608.
(v)Lead-Based Paint. The requirement of the Lead-Based Paint
Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.), the Residential Lead-Based
Paint Hazard Reduction Act (42 U.S.C. 4851 et seq.), and implementing regulations at 24 C.F.R.
Part 35.
(vi)Relocation. The requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601, et seq.), and
implementing regulations at 49 C.F.R. Part 24; 24 C.F.R. 92.353; Section 104(d) of the Housing
and Community Development Act of 1974 and implementing regulations at 24 C.F.R. 42 et seq.;
and California Government Code Section 7260 et seq. and implementing regulations at 25
California Code of Regulations Sections 6000 et seq.
(vii)Discrimination against the Disabled. The requirements of the Fair
Housing Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100;
Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), and federal regulations issued
pursuant thereto, which prohibit discrimination against the disabled in any federally assisted
program, the requirements of the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157) and
863\95\1527399.3 27
the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of
1990 (42 U.S.C. 12131 et seq.), and federal regulations issued pursuant thereto.
(viii)Clean Air and Water Acts. The Clean Air Act, as amended, 42
U.S.C. 7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et
seq., and the regulations of the Environmental Protection Agency with respect thereto, at 40
C.F.R. Part 1500, as amended from time to time.
(ix)Uniform Administrative Requirements. The provisions of 24
C.F.R. 92.505 regarding cost and auditing requirements to the extent applicable.
(x)Training Opportunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u ("Section 3"),
requiring that to the greatest extent feasible opportunities for training and employment be given
to lower income residents of the project area and agreements for work in connection with the
project be awarded to business concerns which are located in, or owned in substantial part by
persons residing in, the areas of the project. Borrower agrees to include the following language
in all subcontracts executed under this Agreement:
(1)The work to be performed under this contract is subject to
the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended,
12 U.S.C. 1701u. The purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall,
to the greatest extent feasible, be directed to low-and very low-income persons, particularly
persons who are recipients of HUD assistance for housing.
(2)The parties to this contract agree to comply with HUD's
regulations in 24 C.F.R. Part 135, which implement Section 3. As evidenced by their execution
of this contract, the parties to this contract certify that they are under no contractual or other
impediment that would prevent them from complying with the Part 135 regulations.
(3)The contractor agrees to send to each labor organization or
representative of workers with which the contractor has a collective bargaining agreement or
other understanding, if any, a notice advising the labor organization or workers' representative of
the contractor's commitments under this Section 3 clause; and will post copies of the notice in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3 preference;
shall set forth minimum number and job titles subject to hire; availability of apprenticeship and
training positions; the qualifications for each; the name and location of the person(s) taking
applications for each of the positions; and the anticipated date the work shall begin.
(4)The contractor agrees to include this Section 3 clause in
every subcontract subject to compliance with regulations in 24 C.F.R. Part 135, and agrees to
take appropriate action, as provided in an applicable provision of the subcontract or in this
Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24
C.F.R. Part 135. The contractor will not subcontract with any subcontractor where the contractor
863\95\1527399.3 28
has notice or knowledge that the subcontractor has been found in violation of the regulations in
24 C.F.R. Part 135.
(5)The contractor will certify that any vacant employment
positions, including training positions, that are filled (A) after the contractor is selected but
before the contract is executed, and (B) with persons other than those to whom the regulations of
24 C.F.R. Part 135 require employment opportunities to be directed, were not filled to
circumvent the contractor's obligations under 24 C.F.R. Part 135.
(6)Noncompliance with HUD's regulations in 24 C.F.R. Part
135 may result in sanctions, termination of this contract for default, and debarment or suspension
from future HUD assisted contracts.
(7)With respect to work performed in connection with Section
3 covered Indian housing assistance, section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract.
Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of contracts
and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises.
parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to
comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with
section 7(b).
(xi)Labor Standards.The labor requirements set forth in 24 C.F.R.
Section 92.354; the prevailing wage requirements of the Davis-Bacon Act and implementing
rules and regulations (40 U.S.C. 3141-3148); the Copeland "Anti-Kickback" Act (40 U.S.C.
276(c))which requires that workers be paid at least once a week without any deductions or
rebates except permissible deductions; the Contract Work Hours and Safety Standards Act –
CWHSSA (40 U.S.C. 3701-3708) which requires that workers receive "overtime" compensation
at a rate of 1-1/2 times their regular hourly wage after they have worked forty (40) hours in one
(1) week; and Title 29, Code of Federal Regulations, Subtitle A, Parts 1, 3 and 5 are the
regulations and procedures issued by the Secretary of Labor for the administration and
enforcement of the Davis-Bacon Act, as amended.
(xii)Drug Free Workplace. The requirements of the Drug Free
Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 C.F.R. Part 24.
(xiii)Anti-Lobbying; Disclosure Requirements. The disclosure
requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 C.F.R.
Part 87.
(xiv)Historic Preservation. The historic preservation requirements set
forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. Section 470) and
the procedures set forth in 36 C.F.R. Part 800. If archeological, cultural, or historic period
resources are discovered during construction, all construction work must come to a halt and
Borrower shall immediately notify the County. Borrower shall not alter or move the discovered
material(s) until all appropriate procedures for "post-review discoveries" set forth in Section 106
863\95\1527399.3 29
of the National Historic Preservation Act have taken place, which include, but are not limited to,
consultation with the California State Historic Preservation Officer and evaluation of the
discovered material(s) by a qualified professional archeologist.
(xv)Religious Organizations. If Borrower is a religious organization,
as defined by the HOME Regulations,all conditions prescribed by HUD for the use of HOME
Funds by religious organizations, including the First Amendment of the United States
Constitution regarding church/state principles and the applicable constitutional prohibitions set
forth in 24 C.F.R. 92.257.
(xvi)Violence Against Women. The requirements of the Violence
Against Women Reauthorization Act of 2013 (Pub. L. 113–4, 127 Stat. 54) applicable to HUD-
funded programs.
(xvii)HUD Regulations. Any other HUD regulations present or as may
be amended, added,or waived in the future pertaining to the Loan funds.
Section 6.6 Hazardous Materials.
(a)Borrower shall keep and maintain that portion of the Property that is
subject to the Deed of Trust in compliance with, and may not cause or permit such Property to be
in violation of any federal, state or local laws, ordinances or regulations relating to industrial
hygiene or to the environmental conditions on, under or about such Property including, but not
limited to, soil and ground water conditions. Borrower may not use, generate, manufacture, store
or dispose of on, under, or about such Property or transport to or from such Property any
flammable explosives, radioactive materials, hazardous wastes, toxic substances or related
materials, including without limitation, any substances defined as or included in the definition of
"hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under
any applicable federal or state laws or regulations (collectively referred to hereinafter as
"Hazardous Materials") except such of the foregoing as may be customarily used in construction
of single-family homes like the Development or kept and used in and about residential property
of this type.
(b)Borrower shall immediately advise the County in writing if at any time it
receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions related to the Property instituted, completed or threatened against Borrower or
the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations
relating to any Hazardous Materials, ("Hazardous Materials Law"), (ii) all claims made or
threatened by any third party related to the Property against Borrower or the Property relating to
damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as
"Hazardous Materials Claims"), and (iii) Borrower's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Property that could cause the Property or any
part thereof to be classified as "border-zone property" (as defined in California Health and Safety
Code Section 25117.4) under the provision of California Health and Safety Code, Section 25220
et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability or use of the Property under any
863\95\1527399.3 30
Hazardous Materials Law.
(c)The County has the right to join and participate in, as a party if it so elects,
any legal proceedings or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attorneys' fees in connection therewith paid by Borrower. Borrower
shall indemnify and hold harmless the County and its board members, supervisors, directors,
officers, employees, agents, successors and assigns from and against any loss, damage, cost,
expense or liability directly or indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on
or under the Property, including without limitation: (i) all foreseeable consequential damages,
(ii) the costs of any required or necessary repair, cleanup or detoxification of the Property and
the preparation and implementation of any closure, remedial or other required plans, and (iii) all
reasonable costs and expenses incurred by the County in connection with clauses (i) and (ii),
including but not limited to reasonable attorneys' fees and consultant's fees. This
indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision
include, but are not limited to: (1) losses attributable to diminution in the value of the Property,
(2) loss or restriction of use of rentable space on the Property, (3) adverse effect on the marketing
of any rental space on the Property, and (4) penalties and fines levied by, and remedial or
enforcement actions of any kind issued by any regulatory agency (including but not limited to
the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the
Property and surrounding properties, which results from contamination emanating from the
Property). This obligation to indemnify will survive termination of this Agreement.
(d)Without the County's prior written consent, which will not be
unreasonably withheld, Borrower may not take any remedial action in response to the presence
of any Hazardous Materials on, under or about the Property, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
which remedial action, settlement, consent decree or compromise might, in the County's
judgment, impair the value of the County's security hereunder; provided, however, that the
County's prior consent is not necessary in the event that the presence of Hazardous Materials on,
under, or about the Property either poses an immediate threat to the health, safety or welfare of
any individual or is of such a nature that an immediate remedial response is necessary and it is
not reasonably possible to obtain the County's consent before taking such action, provided that in
such event Borrower shall notify the County as soon as practicable of any action so taken. The
County agrees not to withhold its consent, where such consent is required hereunder, if (i) a
particular remedial action is ordered by a court of competent jurisdiction, (ii) Borrower will or
may be subjected to civil or criminal sanctions or penalties if it fails to take a required action,
(iii) Borrower establishes to the satisfaction of the County that there is no reasonable alternative
to such remedial action which would result in less impairment of the County's security
hereunder, or (iv) the action has been agreed to by the County.
(e)Borrower hereby acknowledges and agrees that (i) this Section is intended
as the County's written request for information (and Borrower's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Agreement (together with any
indemnity obligation applicable to a breach of any such representation and warranty) with
863\95\1527399.3 31
respect to the environmental condition of the Property is intended by the parties to be an
"environmental provision" for purposes of California Code of Civil Procedure Section 736.
(f)In the event that any portion of the Property is determined to be
"environmentally impaired" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of
Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the
County's or the trustee's rights and remedies under the Deed of Trust, the County may elect to
exercise its rights under California Code of Civil Procedure Section 726.5(a) to (i) waive its lien
on such environmentally impaired or affected portion of the Property and (ii) exercise (1) the
rights and remedies of an unsecured creditor, including reduction of its claim against Borrower
to judgment, and (2) any other rights and remedies permitted by law. For purposes of
determining the County's right to proceed as an unsecured creditor under California Code of
Civil Procedure Section 726.5(a), Borrower will be deemed to have willfully permitted or
acquiesced in a release or threatened release of Hazardous Materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
Hazardous Materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and Borrower knew or should have known of the
activity by such lessee, occupant, or user which caused or contributed to the release or threatened
release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the
County in connection with any action commenced under this paragraph, including any action
required by California Code of Civil Procedure Section 726.5(b) to determine the degree to
which the Property is environmentally impaired, plus interest thereon at the Default Rate, until
paid, will be added to the indebtedness secured by the Deed of Trust and is due and payable to
the County upon its demand made at any time following the conclusion of such action.
Section 6.7 Maintenance and Damage.
(a)During the construction, marketing, and sale of the Units, and during any
period of time Borrower owns one or more Rental Units, Borrower shall maintain the
Development and that portion of the Property that is subject to the Deed of Trust in good repair
and in a neat, clean and orderly condition. If there arises a condition in contravention of this
requirement, and if Borrower has not cured such condition within thirty (30) days after receiving
a County notice of such a condition, then in addition to any other rights available to the County,
the County may perform all acts necessary to cure such condition, and to establish or enforce a
lien or other encumbrance against the Property, subject to the provisions provided in subsection
(b) below.
(b)Subject to the requirements of senior lenders, and if economically feasible
in the County's judgment after consultation with Borrower, if any improvement now or in the
future on that portion of the Property that is subject to the Deed of Trust is damaged or
destroyed, then Borrower shall, at its cost and expense, diligently undertake to repair or restore
such improvement consistent with the plans and specifications approved by the County with such
changes as have been approved by the County. Such work or repair is to be commenced no later
than the later of one hundred twenty (120) days, or such longer period approved by the County in
writing, after the damage or loss occurs or thirty (30) days following receipt of the insurance
proceeds, and is to be complete within one (1) year thereafter. Any insurance proceeds collected
for such damage or destruction are to be applied to the cost of such repairs or restoration and, if
863\95\1527399.3 32
such insurance proceeds are insufficient for such purpose, then Borrower shall make up the
deficiency. If Borrower does not promptly make such repairs then any insurance proceeds
collected for such damage or destruction are to be promptly delivered by Borrower to the County
as a special repayment of the Loan, subject to the rights of the Senior Lenders, if any.
Section 6.8 Fees and Taxes. Borrower is solely responsible for payment of all
fees, assessments, taxes, charges, and levies imposed by any public authority or utility company
with respect to the Property or the Development, and shall pay such charges prior to
delinquency. However, Borrower is not required to pay and discharge any such charge so long
as (i) the legality thereof is being contested diligently and in good faith and by appropriate
proceedings, and (ii) if requested by the County, Borrower deposits with the County any funds or
other forms of assurance that the County in good faith from time to time determines appropriate
to protect the County from the consequences of the contest being unsuccessful.
Section 6.9 Notice of Litigation. Borrower shall promptly notify the County
in writing of any litigation that has the potential to materially affect Borrower or the Property and
of any claims or disputes that involve a material risk of such litigation.
Section 6.10 Nondiscrimination. Borrower covenants by and for itself and its
successors and assigns that there will be no discrimination against or segregation of a person or
of a group of persons on account of race, color, religion, creed, age (except for lawful senior
housing in accordance with state and federal law), familial status, disability, sex, sexual
orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Property, nor may Borrower or any person claiming under
or through Borrower establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the Property. The foregoing covenant will run with
the land.
Section 6.11 Transfer.
(a)For purposes of this Agreement, "Transfer" means any sale, assignment,
or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this
Agreement, and/or (ii) any interest in the Development, including (but not limited to) a fee
simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a
security interest, or an interest evidenced by a land contract by which possession of the
Development is transferred and Borrower retains title. The term "Transfer" excludes the sale of
a Unit to an Eligible Purchaser in compliance with this Agreement.
(b)No Transfer is permitted without the prior written consent of the County,
which the County may withhold in its sole discretion. The Loan will automatically accelerate
and be due in full upon any Transfer made without the prior written consent of the County.
(c)The County hereby approves the grant of the security interests in the
Development for Approved Financing.
Section 6.12 Insurance Requirements.
863\95\1527399.3 33
(a)Borrower shall maintain the following insurance coverage throughout the
Term:
(i)Workers' Compensation insurance to the extent required by law,
including Employer's Liability coverage, with limits not less than One Million Dollars
($1,000,000) each accident.
(ii)Commercial General Liability insurance with limits not less than
Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and
Property Damage, including coverage for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations.
(iii)Commercial Automobile Liability insurance with limits not less
than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverage for owned, non-owned and hired vehicles, as
applicable.
(iv)Builder's Risk insurance during the course of construction, and
beginning on the Phase One Completion Date, property insurance covering the Development, in
form appropriate for the nature of such property, covering all risks of loss, excluding earthquake,
for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to
the County, naming the County as a Loss Payee, as its interests may appear. Flood insurance
must be obtained if required by applicable federal regulations.
(v)Commercial crime insurance covering all officers and employees,
for loss of Loan proceeds caused by dishonesty, in an amount approved by the County, naming
the County a Loss Payee, as its interests may appear.
(b)Borrower shall cause any general contractor, agent, or subcontractor
working on the Development under direct contract with Borrower or subcontract to maintain
insurance of the types and in at least the minimum amounts described in subsections (i), (ii), and
(iii) above, except that the limit of liability for comprehensive general liability insurance for
subcontractors must be One Million Dollars ($1,000,000), and must require that such insurance
will meet all of the general requirements of subsections (d) and (e) below.
(c)The required insurance must be provided under an occurrence form, and
Borrower shall maintain the coverage described in subsection (a) continuously throughout the
Term. Should any of the required insurance be provided under a form of coverage that includes
an annual aggregate limit or provides that claims investigation or legal defense costs be included
in such annual aggregate limit, such annual aggregate limit must be three times the occurrence
limits specified above.
(d)Commercial General Liability, Commercial Automobile Liability and
Property insurance policies must be endorsed to name as an additional insured the County and its
officers, agents, employees and members of the County Board of Supervisors.
(e)All policies and bonds are to contain (i) the agreement of the insurer to
give the County at least thirty (30) days' notice prior to cancellation (including, without
863\95\1527399.3 34
limitation, for non-payment of premium) or any material change in said policies; (ii) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the County; (iii) a provision that no act or omission of Borrower shall affect or limit
the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a waiver
by the insurer of all rights of subrogation against the County and its authorized parties in
connection with any loss or damage thereby insured against.
Section 6.13 Anti-Lobbying Certification.
(a)Borrower certifies, to the best of Borrower's knowledge or belief, that:
(i)No Federal appropriated funds have been paid or will be paid, by
or on behalf of it, to any person for influencing or attempting to influence an officer or employee
of any agency, a Member of Congress,an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification of any Federal contract,
grant, loan, or cooperative agreement;
(ii)If any funds other than Federal appropriated funds have been paid
or will be paid to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, grant, loan, or
cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to
Report Lobbying, in accordance with its instructions.
(b)This certification is a material representation of fact upon which reliance
was placed when this Agreement was made or entered into. Submission of this certification is a
prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, U.S.
Code. Any person who fails to file the required certification shall be subject to a civil penalty of
not less than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars
($100,000) for such failure.
Section 6.14 Covenants Regarding Approved Financing.
(a)Borrower shall promptly pay the principal and interest when due on any
Approved Financing.
(b)Borrower shall promptly notify the County in writing of the existence of
any default under any documents evidencing Approved Financing whether or not a default has
been declared by the lender and provide the County copies of any notice of default.
(c)Borrower may not amend, modify, supplement, cancel or terminate any
documents related to any financing that is part of the Approved Financing without the prior
written consent of the County.
(d)Borrower may not incur any indebtedness where Borrower provides a
security interest in the Property in connection with such indebtedness of any kind other than
863\95\1527399.3 35
Approved Financing or encumber the Development with any liens (other than liens for Approved
Financing approved by the County) without the prior written consent of the County.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 7.1 Representations and Warranties.Borrower hereby represents and warrants
to the County as follows and acknowledges, understands, and agrees that the representations and
warranties set forth in this Article 7 are deemed to be continuing during all times when any
portion of the Loan remains outstanding:
(a)Organization. Borrower is duly organized, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted.
(b)Authority of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and
observe the terms and provisions of all of the above.
(c)Authority of Persons Executing Documents. This Agreement and the
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Borrower,and all
actions required under Borrower's organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the Loan
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement, have been duly taken.
(d)Valid Binding Agreements. The Loan Documents and all other
documents or instruments executed and delivered pursuant to or in connection with this
Agreement constitute or, if not yet executed or delivered, will when so executed and delivered
constitute, legal, valid and binding obligations of Borrower enforceable against it in accordance
with their respective terms.
(e)No Breach of Law or Agreement. Neither the execution nor delivery of
the Loan Documents or of any other documents or instruments executed and delivered, or to be
executed or delivered, pursuant to this Agreement, nor the performance of any provision,
condition, covenant or other term hereof or thereof, will (i) conflict with or result in a breach of
any statute, rule or regulation, or any judgment, decree or order of any court, board, commission
or agency whatsoever that is binding on Borrower, or conflict with any provision of the
organizational documents of Borrower, or conflict with any agreement to which Borrower is a
party, or (ii) result in the creation or imposition of any lien upon any assets or property of
Borrower, other than liens established pursuant hereto.
(f)Compliance with Laws; Consents and Approvals. The construction of the
863\95\1527399.3 36
Development will comply with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government
or agency.
(g)Pending Proceedings. Borrower is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened
against or affecting Borrower or the Development, at law or in equity, before or by any court,
board, commission or agency whatsoever which might, if determined adversely to Borrower,
materially affect Borrower's ability to repay the Loan or impair the security given to the County
pursuant hereto.
(h)Title to Land. At the time of recordation of the Deed of Trust, Borrower
will have good and marketable fee title to the Development and there will exist thereon or with
respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever
other than liens for current real property taxes and liens in favor of the County or approved in
writing by the County, or Approved Financing, as defined in Section 1.1(e).
(i)Financial Statements. The financial statements of Borrower and other
financial data and information furnished by Borrower to the County fairly and accurately present
the information contained therein. As of the date of this Agreement, there has not been any
material adverse change in the financial condition of Borrower from that shown by such financial
statements and other data and information.
(j)Sufficient Funds. Borrower holds sufficient funds and/or binding
commitments for sufficient funds to complete the acquisition of the Property and the
construction of the Development in accordance with the terms of this Agreement.
(k)Taxes. Borrower and its subsidiaries have filed all federal and other
material tax returns and reports required to be filed, and have paid all federal and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them or their
income or the Property otherwise due and payable, except those that are being contested in good
faith by appropriate proceedings and for which adequate reserves have been provided in
accordance with generally accepted accounting principles. There is no proposed tax assessment
against Borrower or any of its subsidiaries that could, if made, be reasonably expected to have a
material adverse effect on the property, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of Borrower and its subsidiaries, taken as a whole, or which
could result in (i) a material impairment of the ability of Borrower to perform under any loan
document to which it is a party, or (ii) a material adverse effect upon the legality, validity,
binding effect or enforceability against Borrower of any Loan Document.
(l)Hazardous Materials. To the best of Borrower's knowledge, except as
disclosed in writing by Borrower to the County prior to the date of this Agreement: (i) no
Hazardous Material has been disposed of, stored on, discharged from, or released to or from, or
otherwise now exists in, on, or under, the Property; (ii)neither the Property nor Borrower is in
violation of any Hazardous Materials Law; and (iii) neither the Property nor Borrower is subject
to any existing, pending or threatened Hazardous Materials Claims.
863\95\1527399.3 37
ARTICLE 8
DEFAULT AND REMEDIES
Section 8.1 Events of Default. Any one or more of the following constitutes an
"Event of Default" by Borrower under this Agreement:
(a)Failure to Construct. If Borrower fails to obtain permits, or to commence
and prosecute construction of the Development to completion, within the times set forth in
Article 3 above.
(b)Failure to Make Payment. If Borrower fails to make any payment when
such payment is due pursuant to the Loan Documents.
(c)Failure to Submit Plans. If Borrower fails to submit a Marketing Plan that
is approved by the County in accordance with Section 3.12.
(d)Breach of Covenants. If Borrower fails to duly perform, comply with, or
observe any other condition, term, or covenant contained in this Agreement (other than as set
forth in Section 8.1(a) through Section 8.1(c) and Section 8.1(e) through Section 8.1(l)), or in
any of the other Loan Documents, and Borrower fails to cure such default within thirty (30) days
after receipt of written notice thereof from the County to Borrower; provided, however, that if a
different period or notice requirement is specified under any other section of this Article 8, the
specific provisions shall control.
(e)Default Under Other Loans. If a default is declared under any other
financing for the Development by the lender of such financing and such default remains uncured
following any applicable notice and cure period.
(f)Insolvency. If a court having jurisdiction makes or enters any decree or
order: (i) adjudging Borrower to be bankrupt or insolvent; (ii) approving as properly filed a
petition seeking reorganization of Borrower, or seeking any arrangement for Borrower under the
bankruptcy law or any other applicable debtor's relief law or statute of the United States or any
state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower
in bankruptcy or insolvency or for any of their properties; (iv) directing the winding up or
liquidation of Borrower if any such decree or order described in clauses (i) to (iv), inclusive,is
unstayed or undischarged for a period of ninety (90) calendar days; or (v) Borrower admits in
writing its inability to pay its debts as they fall due or will have voluntarily submitted to or filed
a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The
occurrence of any of the Events of Default in this paragraph will act to accelerate automatically,
without the need for any action by the County, the indebtedness evidenced by the Note.
(g)Assignment; Attachment. If Borrower assigns its assets for the benefit of
its creditors or suffers a sequestration or attachment of or execution on any substantial part of its
property, unless the property so assigned, sequestered, attached or executed upon is returned or
released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to
such sequestration, attachment, or execution. The occurrence of any of the events of default in
this paragraph shall act to accelerate automatically, without the need for any action by the
863\95\1527399.3 38
County, the indebtedness evidenced by the Note.
(h)Suspension; Termination. If Borrower voluntarily suspends its business or
is business is dissolved or terminated.
(i)Liens on Property and the Development. If any claim of lien (other than
liens approved in writing by the County) is filed against the Development or any part thereof, or
any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds
of the Loan and the continued maintenance of said claim of lien or notice to withhold for a
period of twenty (20) days, without discharge or satisfaction thereof or provision therefor
(including, without limitation, the posting of bonds) satisfactory to the County.
(j)Condemnation. If there is a condemnation, seizure, or appropriation of all
or the substantial part of the Property and the Development.
(k)Unauthorized Transfer. If any Transfer occurs other than as permitted
pursuant to Section 6.11.
(l)Representation or Warranty Incorrect. If any Borrower representation or
warranty contained in this Agreement, or in any application, financial statement, certificate, or
report submitted to the County in connection with any of the Loan Documents, proves to have
been incorrect in any material respect when made.
Section 8.2 Remedies. Upon the occurrence of an Event of Default and until such
Event of Default is cured or waived, the County is relieved of any obligation to disburse any
portion of the Loan. In addition, upon the occurrence of an Event of Default and following the
expiration of all applicable notice and cure periods the County may proceed with any and all
remedies available to it under law, this Agreement and the other Loan Documents. Such
remedies include but are not limited to the following:
(a)Acceleration of Note. The County may cause all indebtedness of
Borrower to the County under this Agreement and the Note, together with any accrued interest
thereon, to become immediately due and payable. Borrower waives all right to presentment,
demand, protest or notice of protest or dishonor. The County may proceed to enforce payment of
the indebtedness and to exercise any or all rights afforded to the County as a creditor and secured
party under the law including the Uniform Commercial Code, including foreclosure under the
Deed of Trust. Borrower is liable to pay the County on demand all reasonable expenses, costs
and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred
by the County in connection with the collection of the Loan and the preservation, maintenance,
protection, sale, or other disposition of the security given for the Loan.
(b)Specific Performance. The County has the right to mandamus or other
suit, action or proceeding at law or in equity to require Borrower to perform its obligations and
covenants under the Loan Documents or to enjoin acts on things that may be unlawful or in
violation of the provisions of the Loan Documents.
(c)Right to Cure at Borrower's Expense. The County has the right (but not
the obligation) to cure any monetary default by Borrower under any financing other than the
863\95\1527399.3 39
Loan. Upon demand therefor, Borrower shall reimburse the County for any funds advanced by
the County to cure such monetary default, together with interest from the date of expenditure
until the date of reimbursement at the Default Rate.
Section 8.3 Right of Contest. Borrower may contest in good faith any claim, demand,
levy, or assessment the assertion of which would constitute an Event of Default hereunder. Any
such contest is to be prosecuted diligently and in a manner unprejudicial to the County or the
rights of the County hereunder.
Section 8.4 Remedies Cumulative. No right, power, or remedy given to the County by
the terms of this Agreement or the other Loan Documents is intended to be exclusive of any
other right, power, or remedy; and each and every such right, power, or remedy is cumulative
and in addition to every other right, power, or remedy given to the County by the terms of any
such instrument, or by any statute or otherwise against Borrower and any other person. Neither
the failure nor any delay on the part of the County to exercise any such rights and remedies will
operate as a waiver thereof, nor does any single or partial exercise by the County of any such
right or remedy preclude any other or further exercise of such right or remedy, or any other right
or remedy.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 Relationship of Parties.Nothing contained in this Agreement is to be
interpreted or understood by any of the parties, or by any third persons, as creating the
relationship of employer and employee, principal and agent, limited or general partnership, or
joint venture between the County and Borrower or its agents, employees or contractors, and
Borrower will at all times be deemed an independent contractor and to be wholly responsible for
the manner in which it or its agents, or both, perform the services required of it by the terms of
this Agreement. Borrower has and retains the right to exercise full control of employment,
direction, compensation, and discharge of all persons assisting in the performance of services
under the Agreement. In regards to the construction and marketing of the Development,
Borrower is solely responsible for all matters relating to payment of its employees, including
compliance with Social Security, withholding, and all other laws and regulations governing such
matters, and must include requirements in each contract that contractors are solely responsible
for similar matters relating to their employees. Borrower is solely responsible for its own acts
and those of its agents and employees.
Section 9.2 No Claims. Nothing contained in this Agreement creates or justifies any
claim against the County by any person that Borrower may have employed or with whom
Borrower may have contracted relative to the purchase of materials, supplies or equipment, or
the furnishing or the performance of any work or services with respect to the purchase of the
Property, the construction or marketing of the Development, and Borrower shall include similar
requirements in any contracts entered into for the construction or marketing of the Development.
Section 9.3 Amendments. No alteration or variation of the terms of this Agreement is
valid unless made in writing by the parties. The County Deputy Director –Department of
Conservation and Development is authorized to execute on behalf of the County amendments to
863\95\1527399.3 40
the Loan Documents or amended and restated Loan Documents as long as any discretionary
change in the amount or terms of this Agreement is approved by the County's Board of
Supervisors.
Section 9.4 Indemnification. Borrower shall indemnify, defend and hold the County
and its board members, supervisors, directors, officers, employees, agents, successors and
assigns harmless against any and all claims, suits, actions, losses and liability of every kind,
nature and description made against it and expenses (including reasonable attorneys' fees) which
arise out of or in connection with this Agreement, including but not limited to the purchase of the
Property, the development, construction and marketing of the Development and the sale of the
Units, except to the extent such claim arises from the gross negligence or willful misconduct of
the County, its agents, and its employees. The provisions of this Section will survive the
expiration of the Term and the reconveyance of the Deed of Trust.
Section 9.5 Non-Liability of County Officials, Employees and Agents. No member,
official, employee or agent of the County is personally liable to Borrower in the event of any
default or breach of this Agreement by the County or for any amount that may become due from
the County pursuant to this Agreement.
Section 9.6 No Third Party Beneficiaries. There are no third party beneficiaries to this
Agreement.
Section 9.7 Discretion Retained By County. The County's execution of this
Agreement in no way limits discretion the County may have in the permit and approval process
related to the construction of the Development.
Section 9.8 Conflict of Interest.
(a)Except for approved eligible administrative or personnel costs, no person
described in Section 9.8(b) below who exercises or has exercised any functions or
responsibilities with respect to the activities funded pursuant to this Agreement or who is in a
position to participate in a decision-making process or gain inside information with regard to
such activities, may obtain a financial interest or benefit from the activity, or have a financial
interest in any contract, subcontract or agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with whom they have immediate family or business
ties, during, or at any time after, such person's tenure. Borrower shall exercise due diligence to
ensure that the prohibition in this Section 9.8(a) is followed.
(b)The conflict of interest provisions of Section 9.8(a) above apply to any
person who is an employee, agent, consultant, officer, or elected or appointed official of the
County.
(c)In accordance with California Government Code Section 1090 and the
Political Reform Act, California Government Code section 87100 et seq., no person who is a
director, officer, partner, trustee or employee or consultant of Borrower, or immediate family
member of any of the preceding, may make or participate in a decision, made by the County or a
County board, commission or committee, if it is reasonably foreseeable that the decision will
have a material effect on any source of income, investment or interest in real property of that
863\95\1527399.3 41
person or Borrower. Interpretation of this section is governed by the definitions and provisions
used in the Political Reform Act, California Government Code Section 87100 et seq., its
implementing regulations manual and codes, and California Government Code Section 1090.
(d)Borrower shall comply with the conflict of interest provisions set forth in
24 C.F.R. 92.356.
Section 9.9 Notices, Demands and Communications. All notices required or permitted
by any provision of this Agreement must be in writing and sent by registered or certified mail,
postage prepaid, return receipt requested, or delivered by express delivery service, return receipt
requested, or delivered personally, to the principal office of the parties as follows:
County:County of Contra Costa
Department of Conservation and Development
30 Muir Road
Martinez, CA 94553
Attention: Affordable Housing Program Manager
Borrower: Habitat for Humanity East Bay/Silicon Valley, Inc.
2619 Broadway
Oakland, CA 94612
Attn: President and Chief Executive Officer
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section. Receipt will be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 9.10 Applicable Law. This Agreement is governed by the laws of the State of
California.
Section 9.11 Parties Bound. Except as otherwise limited herein, this Agreement binds
and inures to the benefit of the parties and their heirs, executors, administrators, legal
representatives, successors,and assigns. This Agreement is intended to run with the land and to
bind Borrower and its successors and assigns in the Property and the Development for the entire
Term, and the benefit hereof is to inure to the benefit of the County and its successors and
assigns.
Section 9.12 Attorneys' Fees. If any lawsuit is commenced to enforce any of the terms
of this Agreement, the prevailing party will have the right to recover its reasonable attorneys'
fees and costs of suit from the other party.
Section 9.13 Severability. If any term of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions will
continue in full force and effect unless the rights and obligations of the parties have been
materially altered or abridged by such invalidation, voiding or unenforceability.
863\95\1527399.3 42
Section 9.14 Force Majeure. In addition to specific provisions of this Agreement,
performance by either party will not be deemed to be in default where delays or defaults are due
to war, insurrection, strikes,lock-outs, riots, floods, earthquakes, fires, quarantine restrictions,
freight embargoes, lack of transportation, or court order. An extension of time for any cause will
be deemed granted if notice by the party claiming such extension is sent to the other within ten
(10) days from the commencement of the cause and such extension of time is not rejected in
writing by the other party within ten (10) days after receipt of the notice. In no event will the
County be required to agree to cumulative delays in excess of one hundred eighty (180) days.
Section 9.15 County Approval. The County has authorized the County Deputy
Director-Department of Conservation and Development to execute the Loan Documents and
deliver such approvals or consents as are required by this Agreement, and to execute estoppel
certificates concerning the status of the Loan and the existence of Borrower defaults under the
Loan Documents.
Section 9.16 Waivers. Any waiver by the County of any obligation or condition in this
Agreement must be in writing. No waiver will be implied from any delay or failure by the
County to take action on any breach or default of Borrower or to pursue any remedy allowed
under this Agreement or applicable law. Any extension of time granted to Borrower to perform
any obligation under this Agreement does not operate as a waiver or release from any of its
obligations under this Agreement. Consent by the County to any act or omission by Borrower
may not be construed to be consent to any other or subsequent act or omission or to waive the
requirement for the County's written consent to future waivers.
Section 9.17 Title of Parts and Sections. Any titles of the sections or subsections of this
Agreement are inserted for convenience of reference only and are to be disregarded in
interpreting any part of the Agreement's provisions.
Section 9.18 Entire Understanding of the Parties. The Loan Documents constitute the
entire agreement of the parties with respect to the Loan.
Section 9.19 Multiple Originals; Counterpart. This Agreement may be executed in
multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
[signatures on following page]
863\95\1527399.3 43
This Agreement is being executed as of the date first above written.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By:___________________________________
John Kopchik, Interim Director
Department of Conservation and
Development
APPROVED AS TO FORM:
SHARON L. ANDERSON
County Counsel
By: ______________________
Kathleen Andrus
Deputy County Counsel
BORROWER:
HABITAT FOR HUMANITY EAST
BAY/SILICON VALLEY, INC., a California
nonprofit public benefit corporation
By:_____________________________
Janice Jensen, President and Chief
Executive Officer
Date: ______________________
A-1
863\95\1527399.3
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
863\95\1527399.3 B-1
EXHIBIT B
APPROVED DEVELOPMENT BUDGET
863\95\1527399.3 C-1
EXHIBIT C
NEPA MITIGATIONS
TABLE OF CONTENTS
Page
863\95\1527399.3
ARTICLE 1 DEFINITIONS AND EXHIBITS ...........................................................................2
Section 1.1 Definitions...................................................................................................2
Section 1.2 Exhibits.......................................................................................................7
ARTICLE 2 LOAN PROVISIONS .............................................................................................7
Section 2.1 Loan.............................................................................................................7
Section 2.2 Interest.........................................................................................................7
Section 2.3 Use of Loan Funds......................................................................................7
Section 2.4 Security.......................................................................................................7
Section 2.5 Subordination..............................................................................................7
Section 2.6 Conditions Precedent to Disbursement of Loan Funds for
Construction................................................................................................8
Section 2.7 Repayment of the Phase One Loan...........................................................10
Section 2.8 Repayment of the Phase Two Loan..........................................................11
Section 2.9 Prepayment. ..............................................................................................12
Section 2.10 Conditions Precedent to Partial Reconveyance of Deed of Trust.............12
Section 2.11 Conditions Precedent to Note Cancellation..............................................13
Section 2.12 Non-Recourse............................................................................................13
ARTICLE 3 CONSTRUCTION OF THE DEVELOPMENT ..................................................14
Section 3.1 Construction..............................................................................................14
Section 3.2 Permits and Approvals..............................................................................14
Section 3.3 Bid Package...............................................................................................14
Section 3.4 Construction Contract...............................................................................14
Section 3.5 Intentionally Omitted................................................................................15
Section 3.6 Commencement of Construction...............................................................15
Section 3.7 Completion of Construction......................................................................15
Section 3.8 Changes; Construction Pursuant to Plans and Laws.................................15
Section 3.9 Prevailing Wages......................................................................................16
Section 3.10 Accessibility..............................................................................................17
Section 3.11 Relocation.................................................................................................17
Section 3.12 Marketing Plan..........................................................................................18
Section 3.13 Equal Opportunity.....................................................................................18
Section 3.14 Minority and Women-Owned Contractors; Local Hiring.........................18
Section 3.15 Progress Reports.......................................................................................18
Section 3.16 Construction Responsibilities...................................................................19
Section 3.17 Mechanics Liens, Stop Notices, and Notices of Completion....................19
Section 3.18 Inspections................................................................................................19
Section 3.19 Approved Development Budget; Revisions to Budget.............................20
Section 3.20 Developer Fee...........................................................................................20
Section 3.1 NEPA Mitigation Requirements...............................................................20
Section 3.2 Match Requirement...................................................................................20
ARTICLE 4 DISPOSITION OBLIGATION ............................................................................20
Section 4.1 Obligation to Sell, Rent or Repay.............................................................20
Section 4.2 Conditions Precedent to the Sale of a Home. ...........................................21
Section 4.3 Conditions to the Rental of Homes...........................................................21
Section 4.4 Income Certification..................................................................................22
Section 4.5 Acceleration of Unit Allocation................................................................22
TABLE OF CONTENTS
(continued)
Page
863\95\1527399.3
ARTICLE 5 COUNTY MORTGAGE LOAN ASSISTANCE .................................................22
Section 5.1 Borrower Obligation.................................................................................22
Section 5.2 Mortgage Loan Availability......................................................................22
Section 5.3 Conditions To County Mortgage Loans....................................................23
Section 5.4 Borrower First Mortgage Assistance and Other Homebuyer
Financing...................................................................................................23
ARTICLE 6 LOAN REQUIREMENTS ....................................................................................24
Section 6.1 Financial Accountings and Post-Completion Audits................................24
Section 6.2 Information................................................................................................24
Section 6.3 Records......................................................................................................24
Section 6.4 County Audits...........................................................................................25
Section 6.5 HOME Requirements................................................................................25
Section 6.6 Hazardous Materials..................................................................................29
Section 6.7 Maintenance and Damage.........................................................................31
Section 6.8 Fees and Taxes..........................................................................................32
Section 6.9 Notice of Litigation...................................................................................32
Section 6.10 Nondiscrimination.....................................................................................32
Section 6.11 Transfer.....................................................................................................32
Section 6.12 Insurance Requirements............................................................................32
Section 6.13 Anti-Lobbying Certification.....................................................................34
Section 6.14 Covenants Regarding Approved Financing..............................................34
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF BORROWER .......................35
Section 7.1 Representations and Warranties................................................................35
ARTICLE 8 DEFAULT AND REMEDIES ..............................................................................37
Section 8.1 Events of Default.......................................................................................37
Section 8.2 Remedies...................................................................................................38
Section 8.3 Right of Contest........................................................................................39
Section 8.4 Remedies Cumulative...............................................................................39
ARTICLE 9 GENERAL PROVISIONS ...................................................................................39
Section 9.1 Relationship of Parties..............................................................................39
Section 9.2 No Claims.................................................................................................39
Section 9.3 Amendments.............................................................................................39
Section 9.4 Indemnification.........................................................................................40
Section 9.5 Non-Liability of County Officials, Employees and Agents......................40
Section 9.6 No Third Party Beneficiaries....................................................................40
Section 9.7 Discretion Retained By County................................................................40
Section 9.8 Conflict of Interest....................................................................................40
Section 9.9 Notices, Demands and Communications..................................................41
Section 9.10 Applicable Law.........................................................................................41
Section 9.11 Parties Bound............................................................................................41
Section 9.12 Attorneys' Fees..........................................................................................41
Section 9.13 Severability...............................................................................................41
Section 9.14 Force Majeure...........................................................................................42
Section 9.15 County Approval.......................................................................................42
Section 9.16 Waivers.....................................................................................................42
TABLE OF CONTENTS
(continued)
Page
863\95\1527399.3
Section 9.17 Title of Parts and Sections........................................................................42
Section 9.18 Entire Understanding of the Parties..........................................................42
Section 9.19 Multiple Originals; Counterpart................................................................42
EXHIBIT A Legal Description of the Property
EXHIBIT B Approved Development Budget
EXHIBIT C NEPA Mitigations
863\95\1527399.3
HOME LOAN AGREEMENT
Between
COUNTY OF CONTRA COSTA
and
HABITAT FOR HUMANITY EAST BAY/SILICON VALLEY, INC.
dated _________, 2014
863\95\1527411.2 1
PHASE ONE PROMISSORY NOTE
(Muir Ridge HOME Loan)
$750,000 Martinez, California
_________,2014
FOR VALUE RECEIVED, the undersigned Habitat for Humanity East
Bay/Silicon Valley, Inc., a California nonprofit public benefit corporation ("Borrower") hereby
promises to pay to the order of the County of Contra Costa, a political subdivision of the State of
California ("Holder"), the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000) plus interest thereon pursuant to Section 2 below.
All capitalized terms used but not defined in this Note have the meanings set forth in the
Loan Agreement.
1.Borrower's Obligation.This Note evidences Borrower's obligation to repay
Holder the principal amount of Seven Hundred Fifty Thousand Dollars ($750,000)for the funds
loaned to Borrower by Holder to finance the construction of the Phase One of the Development
pursuant to the HOME Loan Agreement between Borrower and Holder of even date herewith
(the "Loan Agreement").
2.Interest.
(a)Subject to the provisions of Subsection (b) below, this Note bears no
interest.
(b)If an Event of Default occurs, interest will accrue on all amounts due
under this Note at the Default Rate until such Event of Default is cured by Borrower or waived
by Holder.
3.Term and Repayment Requirements.Principal and interest under this Note is due
and payable as set forth in Section 2.7 of the Loan Agreement. The unpaid principal balance
hereunder, together with accrued interest thereon, is due and payable no later than June 30, 2016.
4.No Assumption.This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder, except as provided in the Loan
Agreement.
5.Security.This Note, with interest, is secured by the Deed of Trust. Upon
execution, the Deed of Trust will be recorded in the official records of Contra Costa County,
California. Upon recordation of the Deed of Trust, this Note will become nonrecourse to
Borrower, pursuant to and except as provided in Section 2.12 of the Loan Agreement. The terms
of the Deed of Trust are hereby incorporated into this Note and made a part hereof.
863\95\1527411.2 2
6.Terms of Payment.
(a)Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at Department of Conservation and Development, 30 Muir
Road, Martinez, CA 94553, Attention: Affordable Housing Program Manager, or to such other
place as Holder may from time to time designate.
(b)All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including re-conveyance fees and reasonable attorney's fees of
Holder, incurred in connection with the payment of this Note and the release of any security
hereof.
(c)Notwithstanding any other provision of this Note, or any instrument
securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment
of any sums by Borrower pursuant to the terms of this Note would result in the payment of
interest that exceeds the amount that Holder may legally charge under the laws of the State of
California, then the amount by which payments exceed the lawful interest rate will automatically
be deducted from the principal balance owing on this Note, so that in no event is Borrower
obligated under the terms of this Note to pay any interest that would exceed the lawful rate.
(d)The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7.Event of Default; Acceleration.
(a)Upon the occurrence of an Event of Default, the entire unpaid principal
balance, together with all interest thereon, and together with all other sums then payable under
this Note and the Deed of Trust will, at the option of Holder, become immediately due and
payable without further demand.
(b)Holder's failure to exercise the remedy set forth in Subsection 7(a) above
or any other remedy provided by law upon the occurrence of an Event of Default does not
constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the
same or any other Event of Default. The acceptance by Holder of any payment that is less than
the total of all amounts due and payable at the time of such payment does not constitute a waiver
of the right to exercise any of the foregoing remedies or options at that time or at any subsequent
time, or nullify any prior exercise of any such remedy or option, without the express consent of
Holder, except as and to the extent otherwise provided by law.
8.Waivers.
(a)Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
863\95\1527411.2 3
(b)Any extension of time for payment of this Note or any installment hereof
made by agreement of Holder with any person now or hereafter liable for payment of this Note
must not operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
9.Miscellaneous Provisions.
(a)All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may
therein designate.
(b)Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c)This Note is governed by the laws of the State of California.
(d)The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e)The Loan Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the parties.
IN WITNESS WHEREOF, Borrower is executing this Promissory Note as of the day and
year first above written.
HABITAT FOR HUMANITY EAST
BAY/SILICON VALLEY, INC., a California
nonprofit public benefit corporation
By:_________________________________
Janice Jensen, President and Chief
Executive Officer
863\95\1527410.2 1
PHASE TWO PROMISSORY NOTE
(Muir Ridge HOME Loan)
$750,000 Martinez, California
_________,2014
FOR VALUE RECEIVED, the undersigned Habitat for Humanity East
Bay/Silicon Valley, Inc., a California nonprofit public benefit corporation ("Borrower") hereby
promises to pay to the order of the County of Contra Costa, a political subdivision of the State of
California ("Holder"), the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000) plus interest thereon pursuant to Section 2 below.
All capitalized terms used but not defined in this Note have the meanings set forth in the
Loan Agreement.
1.Borrower's Obligation.This Note evidences Borrower's obligation to repay
Holder the principal amount of Seven Hundred Fifty Thousand Dollars ($750,000)for the funds
loaned to Borrower by Holder to finance the construction of the Phase Two of the Development
pursuant to the HOME Loan Agreement between Borrower and Holder of even date herewith
(the "Loan Agreement").
2.Interest.
(a)Subject to the provisions of Subsection (b) below, this Note bears no
interest.
(b)If an Event of Default occurs, interest will accrue on all amounts due
under this Note at the Default Rate until such Event of Default is cured by Borrower or waived
by Holder.
3.Term and Repayment Requirements.Principal and interest under this Note is due
and payable as set forth in Section 2.8 of the Loan Agreement. The unpaid principal balance
hereunder, together with accrued interest thereon, is due and payable no later than August 31,
2017.
4.No Assumption.This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder, except as provided in the Loan
Agreement.
5.Security.This Note, with interest, is secured by the Deed of Trust. Upon
execution, the Deed of Trust will be recorded in the official records of Contra Costa County,
California. Upon recordation of the Deed of Trust, this Note will become nonrecourse to
Borrower, pursuant to and except as provided in Section 2.12 of the Loan Agreement. The terms
of the Deed of Trust are hereby incorporated into this Note and made a part hereof.
863\95\1527410.2 2
6.Terms of Payment.
(a)Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at Department of Conservation and Development, 30 Muir
Road, Martinez, CA 94553, Attention: Affordable Housing Program Manager, or to such other
place as Holder may from time to time designate.
(b)All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including re-conveyance fees and reasonable attorney's fees of
Holder, incurred in connection with the payment of this Note and the release of any security
hereof.
(c)Notwithstanding any other provision of this Note, or any instrument
securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment
of any sums by Borrower pursuant to the terms of this Note would result in the payment of
interest that exceeds the amount that Holder may legally charge under the laws of the State of
California, then the amount by which payments exceed the lawful interest rate will automatically
be deducted from the principal balance owing on this Note, so that in no event is Borrower
obligated under the terms of this Note to pay any interest that would exceed the lawful rate.
(d)The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7.Event of Default; Acceleration.
(a)Upon the occurrence of an Event of Default, the entire unpaid principal
balance, together with all interest thereon, and together with all other sums then payable under
this Note and the Deed of Trust will, at the option of Holder, become immediately due and
payable without further demand.
(b)Holder's failure to exercise the remedy set forth in Subsection 7(a) above
or any other remedy provided by law upon the occurrence of an Event of Default does not
constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the
same or any other Event of Default. The acceptance by Holder of any payment that is less than
the total of all amounts due and payable at the time of such payment does not constitute a waiver
of the right to exercise any of the foregoing remedies or options at that time or at any subsequent
time, or nullify any prior exercise of any such remedy or option, without the express consent of
Holder, except as and to the extent otherwise provided by law.
8.Waivers.
(a)Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
863\95\1527410.2 3
(b)Any extension of time for payment of this Note or any installment hereof
made by agreement of Holder with any person now or hereafter liable for payment of this Note
must not operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
9.Miscellaneous Provisions.
(a)All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may
therein designate.
(b)Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c)This Note is governed by the laws of the State of California.
(d)The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e)The Loan Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the parties.
IN WITNESS WHEREOF, Borrower is executing this Promissory Note as of the day and
year first above written.
HABITAT FOR HUMANITY EAST
BAY/SILICON VALLEY, INC., a California
nonprofit public benefit corporation
By:_________________________________
Janice Jensen, President and Chief
Executive Officer