Loading...
HomeMy WebLinkAbout2008 CON CDC San Diego Habitat for Humanity - DDA 1820 G StreetDISPOSITION ANI) DEVELOPMENT AGREEMENT By and Between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY and SAN DIEGO HABITAT FOR HUMANITY, INC. C:\Documents and Settings\ areny\ ocal SettingsVl emporary Internet Files\OLKEA\DDA v2 1820 CI.doc TABLE OF CONTENTS Page 100. DEFINITIONS 6 200. CONVEYANCE OF THE SITE 13 201. Purchase Price Error! Bookmark not defined. 202. Developer's Promissory Note l3 202.1 Principal and Interest 13 202.2 Repayment of the Developer Note 13 202.3 Default 25 203. Escrow 14 203.1. Costs of Escrow 14 203.2 Escrow Instructions 14 203.3 Authority of Escrow Agent 15 203.4 Closing 16 203.5 "Termination 16 203.6 Closing Procedure 16 204. Review of Title 30 205. Title Insurance 17 205.1 Developer Title Policy 17 205.2 CDC Title Policy 18 206. Conditions of Closing 32 206.1 CDC's Conditions of Closing 32 206.2 Developer's Conditions of Closing 19 207. Representations and Warranties 35 207.1 CDC Representations 35 207.2 Developer's Representations 21 208. Studies and Reports 7") 209. Condition of the Site. 22 209.1 Disclosure 22 209.2 No Further Warranties As To Site 22 209.3 Developer Precautions After Closing 22 209.4 Required Disclosures After Closing 22 209.5 Developer Indemnity 73 300. DEVELOPMENT OFF THE SITE 23 301. Scope of Development 23 302. Design Review 23 302.1 Concept Drawings 302.2 CDC Review and Approval 23 302.3 Standards for Disapproval 24 302.4 Revisions 24 302.5 Defects in Plans 24 303. Land Use Approvals 74 304. Schedule of Performance 25 305. Cost of Construction 25 306. Insurance Requirements 25 73 7 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc 307. Developer's Indemnity 26 308. Rights of Access 26 309. Compliance With Laws 26 309.1 Nondiscrimination in Employment 27 309.2 Taxes and Assessments 27 309.3 Liens and Stop Notices 27 310. Completion of the Project 28 31.1. Release of Construction Covenants 28 312. Financing of the Improvements 28 312.1 No Encumbrances Except Mortgages or Deeds of Trust �8 312.2 Right of CDC to Cure Mortgage or Deed of Trust Default 29 400. COVENANTS AND RESTRICTIONS 29 401. Use in Accordance with Redevelopment Plan 29 402. Buyer Assistance 29 403. Affordable Units. 30 403.1 Developer Covenants Concerning Affordable Units 30 403.2 Timing 30 403.3 Execution and Recordation of the Declaration 30 403.4 45-Year Affordability .30 403.5 No Sales to Related Parties .31 403.6 CDC Consent to Sales .31 404. Maintenance Covenants 31 405. Obligation to Refrain from Discrimination 31 406. Nondiscrimination Covenants 31 407. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction 32 500. DEFAULTS AND REMEDIES 32 501. Default Generally 32 502. Institution of Legal Actions 33 503. "Termination by Developer 33 504. Termination by CDC 33 505. Reentry and Revesting of "Title in CDC After the Closing and Prior to Completion of Construction 33 505.1 Right of Reentry 34 505.2 Limitations on Right of Reentry 34 505.3 Right of Reentry Referenced in Grant Deed 34 505.4 Resale by CDC After Revesting 34 505.5 Application of Resale Proceeds 34 506. Acceptance of Service of Process 35 507. Rights and Remedies are Cumulative 35 508. Inaction Not a Waiver of Default 36 600. GENERAL PROVISIONS 36 601. Notices, Demands and Communications Between the Parties 36 602. Enforced Delay; Extension of Times of Performance 36 603. Transfers of Interest in Site or Agreement 37 3 C \Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc 603.1 Prohibition 37 603.2 Permitted Transfers 37 603.3 Successors and Assigns 38 603.4 Assignment by CDC 38 604. Non -Liability of Officials and Employees of CDC and Developer 38 605. Relationship Between CDC and Developer 38 606. CDC Approvals and Actions 38 607. Counterparts 38 608. Integration 38 609. No Real Estate Brokerage CDCs 39 610. Attorneys' Fees 39 61.1. Titles and Captions 39 612. Interpretation 39 613. No Waiver 39 614. Modifications 39 615. Severability 39 616. Computation of Time 39 617. Legal Advice 40 618. Time of Essence 40 619. Cooperation 40 620. Conflicts of Interest 40 621. Exhibits Attachments and Recitals Incorporated 40 622. Applicable Law 40 623. Authority to Sign 41 ATTACHMENTS Attachment No. 1 Developer Note Attachment No. 2 Developer Deed of "Trust Attachment No. 3 Grant Deed Attachment No. 4 Release of Construction Covenants Attachment No. 5 Schedule of Performance Attachment No. 6 Scope of Development Attachment No. 7 Site Plan Attachment No. 8 Site Legal Description Attachment No. 9 Proforrna Attachment No. 10 Resale Restriction Attachment No. 11 Agreement Affecting Real Property Attachment No. 12 Environmental Indemnity Attachment No. 13 Notice of Affordability Restrictions 4 C.Documents and Settings\IcarenyU..ocal Settings\Temporary Internet Files \O1,KEA\DDA v2 1820 G.doc DISPOSITION AND DEVELOPMENT AGREEMENT TIIIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is entered into this 1_ day of OCAT) X _, 2008 by and between the Community Development CDC of the City of National City, a public body, corporate and politic ("CDC"), and San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Developer"). RECITAI.,S A. In furtherance of the objectives of the California Community Redevelopment Law, CDC and Developer desire to redevelop a certain approximately 15,625 square foot parcel . located in the National City Redevelopment Project (the "Project") at 1820 G Street in the City of National City, County of San Diego, California (the "Site"), which is more particularly described on the Site Legal Description, as defined below. The CI)C currently owns the Site. The Site is unimproved. B. CDC and Developer desire by this Agreement for CDC to agree to sell the Site to Developer and for Developer to agree to construct on the Site eight (8) two-story for -sale townhomes (the "Affordable Units"), as set forth on the Site Plan attached hereto as Attachment No. 7, together with certain off -site improvements (collectively, the "Improvements"). C. The CDC purchased the Site with I IUD HOME funds. Such funds are to be used solely for the construction, use and occupancy of affordable housing in accordance with 24 Code of Federal Regulations Part 92. Developer and the CDC agree to take any and all steps necessary to ensure compliance with the HUD HOME program, including without limitation compliance with 24 Code of Federal Regulations Part 92. The CDC agrees to sell the Site to Developer for the sum of One and No/100 Dollars ($1.00) (the "Purchase Price") and to provide gap funding to assist in development of the Affordable Units, as defined below, in the original amount of up to Eight Hundred Thirty -Five Thousand and No/100 Dollars ($835,000.00) (the "Developer Note"). D. Upon the timely completion of the Affordable Units in accordance with this Agreement, the Developer Note will be partially forgiven and the remaining balance will convert to first-time homebuyer loans to Low -Income Households to assist those L.ow-Income Households with the purchase of Affordable Units, as provided in more detail herein. A portion of the Developer Note will be assumed by each eligible low income purchaser of an Affordable Unit, concurrently with the purchase of an Affordable Unit. At such time the purchaser of the Affordable Unit shall execute a promissory note in favor of the CDC (the "First -Time Homebuyer Note"), in an amount to be determined as set forth in this Agreement. The Affordable Units shall also be subject to a Resale Restriction in the form set forth herein as Attachment 10, secured by a deed of trust. The First -Time Homebuyer Notes shall not require monthly payments and will be due arid owing only upon sale, transfer, further encumbrance, refinancing, the failure of the Low -Income Households to occupy the Affordable Unit, or other transfer, as defined in the First -Time Homebuyer Note and Resale Restrictions. The initial sale price of the Affordable Units shall not exceed the Maximum Purchase Price, as defined below. 5 C:\Documents and Settings \kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc E. CDC's sale of the Site to Developer and Developer's purchase of the Site and construction of the Improvements on the Site pursuant to the terms of this Agreement, are in the vital and best interest of the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the redevelopment of the Project has been undertaken. F. The qualifications and identity of Developer, and its principals, are of particular concern to the community and CDC. Developer further recognizes that it is because of such qualifications and identity that CI)C is entering into the Agreement with Developer. No voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, CDC and Developer hereby agree as follows: 100. Definitions. "Affordable Units" shall mean the eight (8) two-story for -sale townhomes, whose sale and occupancy are restricted as specified in this Agreement and the Resale Restriction. Developer shall ensure that each of the Affordable Units meets all of the requirements set forth in Code of Federal Regulations §92.254(a). Each of the Affordable Units shall initially be sold only to a First -Time Homebuyer that is a Low -Income Household for an amount less than or equal to the then applicable Maximum Purchase Price. "Agreement" means this Disposition and Development Agreement between CDC and Developer. "Agreement Affecting Real Property" shall mean the Agreement Affecting Real Property to be recorded against the Site upon Closing, substantially in the form attached to this Agreement as Attachment No. 11. "Area Median Income" shall mean the area median income defined by the Department of IIousing and Urban Development (HUD) as the then current area median income for the San Diego Standard Metropolitan Statistical Area, established periodically by IIUD arid published in the Federal Register, as adjusted for family size. In the event IIUD ceases to publish an established area median income as aforesaid, CDC may, in its sole discretion, use any other reasonably comparable method of computing area median income. "CDC" means the Community Development CDC of the City of National City, CDC, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, and any assignee of or successor to its rights, powers and responsibilities. "CDC's Conditions Precedent" means the conditions precedent to the Closing to the benefit of CDC, as set forth in Section 207.1 hereof. 6 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc "CDC Title Policy" is defined in Section 206.2 hereof. "City" means the City of National City, a California municipal corporation. "Closing" means the close of Escrow for the conveyance of the Site from CDC to Developer, as set forth in Section 204.4 hereof. "Closing Date" means the date of the Closing as set forth in Section 204.4 hereof. "Concept Drawings" means the plans and drawings to be submitted and approved by CDC, as set forth in Section 302.1 hereof. "Conditions of Title" is defined in Section 205 hereof. "Construction Deed of Trust" means any deed of trust recorded against the Site for purposes of obtaining construction financing for the Site. "Construction Drawings" means the plans and drawings to he submitted and approved by CDC, as set forth in Section 302.3 hereof. "Construction Lender" means the beneficiary under the Construction Deed of Trust. "Date of Agreement" means the date upon which this Agreement shall have been signed by CDC. "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 501. hereof. "Developer" means San Diego I labitat for I lumanity, Inc., a California nonprofit, public benefit corporation. Where the term Developer is used herein, such term shall include any permitted nominee, assignee or successor in interest as herein provided. "Developer's Conditions Precedent" means the conditions precedent to the Closing to the benefit of Developer, as set forth in Section 207.2. "Developer Deed of Trust" means the deed of trust securing the Developer Note, in the form and format attached hereto as Attachment No. 2, which shall be subordinated to any Construction Deed of Trust, such subordination shall he in a form acceptable to the CDC in its reasonable discretion. "Developer Note" means the recourse promissory note, in the form and format attached hereto as Attachment No. 1, executed by Developer in favor of CDC. 7 (':\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc "Developer Title Policy" is defined in Section 206.1 hereof. "Environmental Indemnity" shall mean the Unsecured Environmental Indemnity Agreement to be executed by Developer and CDC at Closing, substantially in the form attached to this Agreement as Attachment No. 12. "Environmental Laws" means any federal, state or local law, statute, ordinance or regulation pertaining to environmental regulation, contamination or cleanup of any Hazardous Materials, including, without limitation, (i) the California Hazardous Waste Control Act (California Health and Safety Code §25100 et seq.), (ii) the Carpenter -Presley -Tanner Hazardous Substance Account Act (California Health and Safety Code §25300 et seq.), (iii) the Hazardous Materials Release Response Plans and Inventory (California Health and Safety Code §25500 et seq.), (iv) Underground Storage of Hazardous Substances (California Health and Safety Code, §25280 et seq.), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi) the Safe Drinking Water and Toxic Enforcement Act (California I-Iealth and Safety Code, §25249 et seq.), (vii) the Porter -cologne Water Quality Control Act (California Water Code, 03000 et seq.), (viii) the Federal Water Pollution Control Act (33 U.S.C. §1271 et seq.), (ix) the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), (x) the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601 et seq.), (xi) the Safe Drinking Water Act (14 U.S.C. §300f et seq.), (xii) the hazardous Materials Transportation Act (49 U.S.C. §51.01 et seq.), (xiii) the Toxic Substances Control Act (15 U.S.C. §2601 et seq.), (xiv) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136, et seq.), (xv) the Clean Air Act, 42 U.S.C. (§7401 et seq.) or (xvi) any state or federal lien or "superlien" law, any environmental cleanup statute or regulation, or any permit, approval, authorization, license, variance or permission required by any governmental authority having jurisdiction. "Escrow" is defined in Section 204 hereof. "Escrow Agent" is defined in Section 204 hereof. "Exceptions" is defined in Section 205 hereof. "First -Time Ilomebuyer" means a purchaser (a) that has not owned a home within the three-year (3-year) period immediately preceding the date of the purchase of the Affordable Unit, (b) a displaced homemaker; or (c) a single parent. "First -Time Homebuyer Note" means the promissory note in favor of the CDC to be executed by each Low -Income Household purchaser of an Affordable Unit, which shall be on terms and conditions acceptable to the CDC in its sole discretion. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over CDC, Developer or the Site. 8 C:\Documents and Settings\kareny\l.ocal Settings\Temporary Internet Piles\OLKEA\DDA v2 1820 G.doc "Grant Deed" means the grant deed for the conveyance of the Site from CDC to Developer, in the form of Attachment No. 3 hereto which is incorporated herein. "Hazardous Materials" means: (a) 'I'liose substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," "pollutant" or "contaminant" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq.); the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.); the Clean Water Act (33 U.S.C. §2601 et seq.); the Toxic Substances Control Act (15 U.S.C. §9601 et seq.); the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.); or under any other Environmental Laws; (b) Those substances included within the definitions of "Extremely Hazardous Waste," "Hazardous Waste," or "Restricted Hazardous Waste," under §§25115, 25117 or 25122.7 of the California Health and Safety Code, or is listed or identified pursuant to §§25140 or 44321 of the California I lealth and Safety Code; (c) Those substances included within the definitions of "Hazardous Material", "Ilazardous Substance", "Hazardous Waste", "Toxic Air Contaminant", or "Medical Waste" under §§25281, 25316, 25501, 25501.1, 25023.2 or 39655 of the California Ilealth and Safety Code; (d) Those substances included within the definitions of "Oil" or a "Hazardous Substance" listed or identified pursuant to §311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1321, as well as any other hydrocarbonic substance or by-product; (e) Those substances included within the definitions of "I lazardous Waste," Extremely Ilazardous Waste," or an "Acutely Hazardous Waste" pursuant to Chapter 1.1 of Title 22 of the California Code of Regulations; (f) Those substances listed by the State of California as a chemical known by the State to cause cancer or reproductive toxicity pursuant to §25249.9(a) of the California Health and Safety Code; (g) Those substances or defined as a "Hazardous Waste," Extremely Hazardous Waste," or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California Code of Regulations; (h) Any material which due to its characteristics or interaction with one or more other substances, chemical compounds, or mixtures, damages or threatens to damage, health, safety, or the environment, or is required by any law or public agency to be remediated, including remediation which such law or public agency requires in order for the property to be put to any lawful purpose; 9 C:\Documents and Settings\kareny\I.ocal Settings\Temporary Internet Files\OI.KEA\DDA v2 1820 Gdoc (i) Any material whose presence would require remediation pursuant to the guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual, whether or not the presence of such material resulted from a leaking underground fuel tank; (j) Pesticides regulated under the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; (k) Asbestos, PCBs, and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. §2601 et seq.; (I) Any radioactive material including, without limitation, any "source material," "special nuclear material," "by-product material," "low-level wastes," "high-level radioactive waste," "spent nuclear fuel" or "transuranic waste," and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act, 42 U.S.C. §§2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. §§ 10101 et seq., or pursuant to the California Radiation Control Law, California Health and Safety Code §§25800 et seq.; (m) Any material regulated under the Occupational Safety and Health Act, 29 U.S.C. §§651 et seq., or the California Occupational Safety and Health Act, California Labor Code §§6300 et seq.; (n) Any material regulated under the Clean Air Act, 42 U.S.C. §§7401 et seq. or pursuant to Division 26 of the California Health and Safety Code; (o) Those substances listed in the United States Department of Transportation Table (49 CFR Part 172.101), or by the Environmental Protection Agency, or any successor agency, as hazardous substances (40 CFR Part 302); (p) Other substances, materials, and wastes that arc or become regulated or classified as hazardous or toxic under federal, state or local laws or regulations; and ((1) Any material, waste or substance that is: (i) a petroleum or refined petroleum product; (ii) asbestos; (iii) polychlorinated biphenyl; (iv) designated as a hazardous substance pursuant to 33 U.S.C. § 1321 or listed pursuant to 33 U.S.C. § 1317; (v) a flammable explosive; or (vi) a radioactive material. "Improvements" means the new improvements to he constructed by Developer upon the Site and all approvals and permits required for completion of the Improvements, all more particularly described herein and in the Scope of Development. 10 C:\Documents and Settings\karcny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc "Landscape and Grading Plans" means the plans and drawings to be submitted and approved by CDC, as set forth in Section 302.2 hereof. "Low Income Household" means persons and families whose income does not exceed sixty percent (60%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in Section 4 of the Agreement Affecting Real Property. "Maximum Purchase Price" shall mean the maximum amount of consideration, of any kind whatsoever, that the Developer may receive for any Affordable Unit, which amount shall not exceed the lesser of: (i) the sum of (A) the purchase price which would result in a Monthly Housing Cost, as determined by the CDC, which does not exceed the product of one twelfth (1/12) of thirty percent (30%) times sixty percent (60%) of the then Area Median Income as adjusted for household size appropriate for the unit, plus (B) the amount of the Developer Note assumed by the Low Income Household that purchases such Affordable Unit; or (ii) the Single Family Mortgage Limit for the County of San Diego under Section 203(h) of the National Housing Act (12 U.S.C. § 1709(b)) or any other limitation then provided by Code of Federal Regulations §92.254(a) or any successor law or regulation. "Monthly I-Iousing Cost" shall mean all of the following associated with the Affordable Unit, estimated or known as of the date of the close of escrow of the sale of the Affordable Unit: (i) principal and interest payments on the 20-30 year, fixed-rate mortgage loan actually obtained by the purchaser, and any loan insurance fees associated therewith; (ii) property taxes, assessments, including Mello Roos fees, if applicable; (iii) fire and casualty insurance covering replacement value of property improvements (to the extent not covered by the homeowner association encompassing the Site); (iv) any homeowner association fees; (v) private mortgage insurance, if applicable; and (vi) reasonable costs of utilities. Monthly Housing Cost shall he an average of estimated costs for the next twelve (12) month period as of the date of the close of escrow of the sale of the Affordable Unit. "Notice" shall mean a notice in the form prescribed by Section 601 hereof. "Notice of Affordability Restrictions" shall mean the Notice of Affordability Restrictions on Transfer of Property to he recorded against the Site upon Closing, substantially in the form attached to this Agreement as Attachment No. 13. "Outside Date" shall mean the last date the Closing shall occur, as set forth in Section 204.4 hereof. "Proforma" means the proforma which is attached hereto as Attachment No. 9 and incorporated herein. "PTR" means the preliminary title report, as described in Section 205 hereof. 11 C:\Docurnents and Settings\kareny\Local Settings\Temporary Internet Files\OL.KEA\DDA v2 1820 G.doc "Purchase Price" means the price to be paid by Developer to CDC in consideration for the conveyance of fee title to the Site, as provided in Section 201 hereof. "Redevelopment Plan" means the Redevelopment Plan for the National City Redevelopment Project, adopted by Community Development CDC of the City of National City on July 18, 1995, and incorporated herein by reference. "Redevelopment Project" means the National City Redevelopment Project, adopted by CDC pursuant to the Redevelopment Plan. "Release of Construction Covenants" means the document which evidences Developer's satisfactory completion of Improvements, as set forth in Section 312 hereof, in the form of Attachment No. 4 hereto which is incorporated herein. "Resale Restriction" means the Resale Restriction that will be recorded as an encumbrance against each Affordable Unit, in the form attached hereto as Attachment "10". "Schedule of Performance" means the Schedule of Performance attached hereto as Attachment No. 5 and incorporated herein, setting out the dates and/or time periods by which certain obligations set forth in this Agreement must he accomplished. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between Developer and CDC's Executive Director, and CDC's Executive Director is authorized to make such revisions as he or she deems reasonably necessary. "Scope of Development" means the Scope of Development attached hereto as Attachment No. 6 and incorporated herein, which describes the scope, amount and quality of development Improvements to he constructed by Developer pursuant to the terms and conditions of this Agreement. "Site" means the approximately 15,625 square foot parcel located in the National City Redevelopment Project (the "Project") at 1820 G Street in the City of National City, County of San Diego, California, which is more particularly described on the Site Legal Description. "Site Legal Description" means the legal description of the Site, as described on Attachment 8. "Site Plan" means the map of the Site, which shows the location of all dwelling units arid roads to be constructed on the Site, and which is attached hereto as Attachment No. 7 and incorporated herein. ""Title Company" means Stewart Title Company. 200. Conveyance of the Site. 12 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files \OLKE.A\DDA v2 1820 Gdoc 201. Purchase Price. Subject to all of the terms and conditions of this Agreement, CDC shall sell the Site to Developer, and Developer shall purchase the Site from CDC for One and No/100 Dollar ($1.00) (`'Purchase Price"). 202. CDC Loan. 202.1 Developer Promissory Note. Concurrently herewith, the CDC is making a loan to Developer as set forth in more detail in the Developer Note. 202.2 Forgiveness of the Developer Note. Upon the timely completion of the Affordable Units in accordance with this Agreement, the Developer Note will be partially forgiven and the remaining balance will convert to first-time homebuyer loans to Low -Income Households to assist those Low -Income Households with the purchase of Affordable Units, as follows: (a) Upon the closing of the sale of each Affordable Unit, the purchaser of such Affordable Units shall execute a First -Time Homebuyer Note in an amount equal to the sum of: (i) the Single Family Mortgage Limit for the County of San Diego under Section 203(b) of the National Housing Act (12 U.S.C. § 1709(b)) or any other limitation then provided by Code of Federal Regulations §92.254(a) or any successor law or regulation; less (ii) the Maximum Purchase Price. In the event the foregoing calculation results in an amount equal to zero or a negative number, then the requirement that the purchaser of the Affordable Unit execute a First - Time I lomebuyer Note as set forth herein, shall be null and void. (b) Any amount of the Developer Note that is not assumed by the purchasers of the Affordable Units as set forth in Section 202.2(a), above, shall be forgiven in its entirety. (c) In addition each purchaser of an Affordable Units shall execute a Resale Restriction, a deed of trust securing the Resale Restriction and the First -Time Ilomebuyer Note, and any other instruments as the CDC may require in its reasonable discretion. (d) 'l'hc CDC shall partially reconvey the Developer Deed of Trust, with respect to each Affordable Unit, upon the last to occur of: (i) the sale of the Affordable Unit; (ii) the Low -Income Ilousehold's execution of the First -Time Ilomebuyer Note; (iii) the recordation against the individual Affordable Unit of the Resale Restriction; and (iv) the recordation against the individual Affordable Unit of the deed of trust securing the First -Time Ilomehuyer Note and the Resale Restriction. 203. Default. Notwithstanding Section 202.2(h), above, or anything contained herein to the contrary, in the event of any default in the performance of any of the terms, covenants and conditions contained in: (i) this Agreement, the Developer Note, the Developer Deed of Trust, including without limitation the failure by Developer to complete all of the Improvements on or before , 200; (ii) any other instrument executed by the Developer in conjunction with this Agreement; (iii) any prior or junior note secured by an encumbrance on the Site or any 13 C:U)ocuments and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 Griot: portion of it; (iv) any note or deed of trust given in conjunction herewith; or (v) in the event of the filing of a Bankruptcy proceeding by or against Developer, then (w) at the option of the CDC the Site shall revert back to the CDC; (x) all sums owing by Developer to the CDC shall at the option of CDC immediately become due and payable; (y) CDC shall have no obligation to disburse any further funds to Developer or any other person: and (z) CDC shall be released from any and all obligations to Developer under the terms of this Agreement. These remedies shall be in addition to any and all other rights and remedies available to CDC, either at law or in equity. Further, default interest shall accrue on the principal balance of the Developer Note from the date of the Developer Note at the rate of ten percent (10%) simple interest per annum or the maximum rate than allowed by law, whichever is less. 204. Escrow. 'l'he parties shall open escrow ("Escrow") with Title Company, or another escrow company mutually satisfactory to both parties (the "Escrow Agent"). 204.1 Costs of Escrow. Developer shall pay the premiums for the Title Policy, for the documentary transfer taxes, if any, due with respect to the conveyance of the Site, and all other fees, charges, and costs which arise from Escrow. 204.2 Escrow Instructions. This Agreement constitutes the joint escrow instructions of Developer and CDC, and the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do all acts reasonably necessary to close this Escrow in the shortest possible time. Insurance policies for fire or casualty are not to he transferred, arid CDC will cancel its own policies after the Closing, if any. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account. If in the opinion of either party it is necessary or convenient in order to accomplish the Closing of this transaction, such party may require that the parties sign supplemental escrow instructions. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. The Closing shall take place when both CDC's Conditions Precedent and Developer's Conditions Precedent have been satisfied. Escrow Agent is instructed to release CDC's escrow closing statement and Developer's escrow closing statement to the respective parties. 204.3 Authority of Escrow Agent. Escrow Agent is authorized to, and shall: (a) Pay, and charge Developer, for the amount equal to the premium for the Developer Title Policy and any amount necessary to place title in the condition necessary to satisfy Section 205 of this Agreement. (b) Pay, and charge Developer and CDC, for their respective shares of any escrow fees, charges, and costs payable under Section 204.1 of this Agreement. 14 C:\Documents and Settings\kareny\I.ocal Settings\Ternporary Internet Files\OLKEA\DDA v2 1820 G.doc (c) Pay, and charge Developer, for any endorsements to the Developer Title Policy which are requested by Developer. (d) Disburse funds, and deliver and record the Grant Deed, Agreement Affecting Real Property, Environmental Indemnity, Notice of Affordability Restrictions and the Developer Deed of Trust, when both Developer's Conditions Precedent and CDC's Conditions Precedent have been fulfilled or waived by Developer and CI)C. (e) Do such other actions as necessary, including obtaining the CDC Title Policy and/or the Developer "Title Policy, to fulfill its obligations under this Agreement. (f) Within the discretion of Escrow Agent, direct CDC and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state act and regulation promulgated thereunder. CDC agrees to execute a Certificate of Non -Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to be supplied by Escrow Agent. (g) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law. (h) Pay, and charge Developer, for the amount equal to the premium for the CDC Title Policy. (i) Pay, and charge Developer, for any endorsements to the CDC Title Policy which are requested by CDC. 204.4 Closing. This transaction shall close ("Closing") within thirty (30) days of the parties' satisfaction of all of CDC's and Developer's Conditions Precedent to Closing as set forth in Section 207 hereof, but in no event later than , 200__ (the "Outside Date"). The Closing shall occur at a location within San Diego County at a time and place reasonably agreed on by the parties. The "Closing" shall mean the time and day the Grant Deed is filed for record with the San Diego County Recorder. The "Closing Date" shall mean the day on which the Closing occurs. 204.5 Termination. If Escrow is not in condition to close by the Outside Date, then either party which has fully performed under this Agreement may, in writing, demand the return of money or property and terminate this Agreement. If either party makes a written demand for return of documents or properties, this Agreement shall not terminate until five (5) days after Escrow Agent shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said five (5) day period, Escrow Agent is authorized to hold all papers and documents until instructed by a 15 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc court of competent jurisdiction or by mutual written instructions of the parties. Termination of this Agreement shall be without prejudice as to whatever legal rights either party may have against the other arising from this Agreement. If no demands arc made, the Escrow Agent shall proceed with the Closing as soon as possible. 204.6 Closing Procedure. Escrow Agent shall close Escrow for the Site as follows: (a) Record the Grant Deed with instructions for the Recorder of San Diego County, California to deliver the Grant Deed to Developer; (b) Record the Developer Deed of Trust, Notice of Affordability Restrictions and Agreement Affecting Real Property with instructions for the Recorder of San Diego County, California to deliver the same to the CDC; (c) Instruct the Title Company to deliver the Developer Title Policy to Developer; (d) File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; (e) Deliver the FIRPTA Certificate, if any, to Developer; (f) Forward to both Developer and CDC a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon; and (g) Instruct the Title Company to deliver the CDC Title Policy to CDC. 205. Review of Title. CDC shall cause Title Company, or another title company mutually agreeable to both parties, to deliver to Developer a standard preliminary title report (the "PTR") with respect to the title to the Site, together with legible copies of the documents underlying the exceptions ("Exceptions") set forth in the PTR, within thirty (30) days from the date of this Agreement. Developer shall have the right to reasonably approve or disapprove the Exceptions; provided, however, that Developer herein approves the following Exceptions: (a) The National City Redevelopment Project (b) Utility easements of record Developer shall have thirty (30) days from the date of its receipt of the PTR and Exceptions to give written notice to CDC and Escrow Holder of Developer's approval or disapproval of any of such Exceptions. Developer's failure to give written disapproval of the PTR within such time limit shall be deemed approval of the PTR by Developer. If Developer 16 C:\Documents and Settings \kareny\I.ocal Scttings\Temporary Internet Files\OI_KEA\DDA v2 1820 G.doc notifies CDC of its disapproval of any Exceptions in the PTR, CDC shall have the right, but not the obligation, to remove any disapproved Exceptions within sixty (60) business days after receiving written notice of Developer's disapproval or provide assurances satisfactory to Developer that such Exception(s) will be removed on or before the Closing. If CDC cannot or does not elect to remove any of the disapproved Exceptions within that period, Developer shall have ten (10) business days after the expiration of such sixty (60) business day period to either give CDC written notice that Developer elects to proceed with the purchase of the Site subject to all of the Exceptions or to give CDC written notice that Developer elects to terminate this Agreement. The Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the "Conditions of Title." Developer shall have the right to approve or disapprove any additional Exceptions reported by the "Title Company after Developer has approved the Conditions of Title for the Site (which are not created by Developer), in the same manner as stated above in this paragraph. CDC shall not voluntarily create any new exceptions to title following the Date of Agreement. 206. Title Insurance. 206.1 Developer Title Policy. Concurrently with recordation of the Grant Deed conveying title to the Site, there shall be issued to Developer a CLTA owner's policy of title insurance (the "Developer 'Title Policy"), together with such endorsements as are reasonably requested by Developer, issued by the Title Company, insuring that the title to the Site is vested in Developer in the condition required by Section 205 of this Agreement. The Title Company shall provide the CDC with a copy of the Developer Title Policy. The Developer Title Policy shall be for the amount of the Purchase Price. Developer shall pay for the Developer Title Policy. 206.2 CDC Title Policy. Concurrently with recordation of the Developer Deed of Trust against the Site, there shall he issued to CDC a CLTA lender's policy of title insurance (the "CI)C Title Policy"), together with such endorsements as are reasonably requested by the CDC, issued by the Title Company, insuring that the Developer Deed of Trust is a valid encumbrance against the Site. The Title Company shall provide Developer with a copy of the CDC Title Policy. The CDC Title Policy shall be for the amount of the Developer Note. Developer shall pay for the CI)C Title Policy. 207. Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 207.1 CDC's Conditions of Closing. CDC's obligation to proceed with the Closing of the sale of the Site is subject to the fulfillment by Developer or waiver by CDC of each and all of the conditions precedent (a) through (h), inclusive, described below ("CDC's Conditions Precedent"), which are solely for the benefit of CDC, and which shall be fulfilled or waived by the time periods provided for herein: 17 C:\Documents and Settings\kareny\I.ocal Settingsvremporary Internet Files\OLKEA\DDA v2 1820 G.doc (a) No Default. Prior to the Closing, Developer is not in default in any of its obligations under the terms of this Agreement and all representations arid warranties of Developer contained herein shall be true and correct in all material respects. (b) Execution of Documents. Developer shall have executed any documents required hereunder and delivered such documents into Escrow, including without limitation the Developer Note, Environmental Indemnity, Agreement Affecting Real Property, Notice of Affordability Restrictions and the Developer Deed of Trust. (c) Payment of Closing Costs. Prior to the Closing, Developer has paid all required costs of Closing into Escrow in accordance with Section 204.1 hereof. (d) Design Approvals. Developer shall have obtained approval by CDC of the Concept Drawings, Landscape and Grading Plans and Construction Drawings as set forth in Section 302 hereof. (e) Insurance. Developer shall have provided proof of insurance as required by Section 307 hereof. (f) Other Financing. Developer shall have obtained commitments which meet the requirements of Section 313.1 of this Agreement, from all financing sources to be used for financing the construction of the Improvements which are sufficient to complete construction of the Improvements. (g) CDC Title Policy. The Title Company shall, upon payment by Developer of Title Company's premium, have agreed to issue the CI)C Title Policy to the CI)C upon the Closing, in accordance with Section 206.2 hereof. (h) Final Map. Developer shall have obtained approval by the City of a final subdivision map allowing for the construction of at least eight (8) two-story for -sale townhomes. In the event that one or more of the above conditions arc not satisfied on or before the Closing Date then (i) the CDC can waive satisfaction of such condition or conditions in writing (delivered to Developer and Escrow Holder) on or prior to the Closing Date, and the Closing shall proceed, or (ii) the CDC can immediately terminate this Agreement in writing (delivered to Developer and Escrow holder), and pursue all of its rights and remedies against the Developer as set forth herein, or as otherwise available at law or in equity. 207.2 Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of the Site is subject to the fulfillment by CI)C or waiver by Developer of each and all of the conditions precedent (a) through (d) inclusive, described below ("Developer's Conditions Precedent"), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein: 18 C:\Docurnents and Settings\kareny\Local Settings\Temporary Internet Files\OLKF.A\DDA v2 1820 G.doc (a) No Default. Prior to the Closing, CDC is not in default in any of its obligations under the terms of this Agreement and all representations and warranties of CDC contained herein shall be true and correct in all material respects. (b) Execution of Documents. CDC shall have executed the Grant Deed and any other documents required hereunder, and delivered such documents into Escrow. (c) Review and Approval of Title. Developer shall have reviewed and approved the Conditions of Title of the Site, as provided in Section 205 hereof. (d) Developer Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to issue the Developer Title Policy for the Site upon the Closing, in accordance with Section 206.1 hereof. In the event that one or more of the above conditions are not satisfied on or before the Closing Date then (i) the Developer can waive satisfaction of such condition or conditions in writing (delivered to the CDC and Escrow Holder) on or prior to the Closing Date, and the Closing shall proceed, or (ii) the Developer, provided the Developer is not then in default hereunder, can immediately terminate this Agreement in writing, and neither CDC nor Developer shall have any further obligations to one another under this Agreement. 208. Representations and Warranties. 208.1 CDC Representations and Warranties. CDC represents and warrants to Developer as follows: (a) Authority. CDC is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. CDC has full right, power and lawful authority to grant, sell and convey the Site as provided herein and the execution, performance and delivery of this Agreement by CI)C has been fully authorized by all requisite actions on the part of CDC. (b) FIRPTA. CDC is not a "foreign person" as defined by FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA and any similar state statute, or that CDC has complied and will comply with all the requirements under FIRPTA and any similar state statute. Until the Closing, CDC shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 208.1 not to he true as of Closing, immediately give written notice of such fact or condition to Developer. Such representation(s) shall not be deemed a breach by CDC hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove. If Developer elects to close Escrow following disclosure of such information, CDC's representations and warranties contained herein shall be deemed to have been made as of the closing, subject to such exception(s). If, following 19 C:\Documents and Settings\Itareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc the disclosure of such information, Developer elects not to close Escrow, then this Agreement and the Escrow shall automatically terminate, in which event neither CDC nor Developer shall have any further obligations to one another under this Agreement. The representations and warranties set forth in this Section 208.1 shall survive the Closing. 208.2 Devcloper's Representations and Warranties. Developer represents and warrants to CDC as follows: (a) Authority. Developer is a California nonprofit, public benefit corporation. The persons executing this Agreement on behalf of the Developer have all necessary corporate authority to execute this Agreement on behalf of the Developer and this Agreement is a binding obligation of Developer. Copies of the Articles of Incorporation and bylaws of Developer will be delivered to CDC within sixty (60) days of final approval of the Agreement or prior to execution of the Grant Deed, whichever occurs first. These copies will be true, complete and fully -executed copies of the originals, as amended to the date of this Agreement. Developer will have full right, power and lawful authority to purchase and accept the conveyance of the Site and to undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by resolution of and all requisite actions on the part of Developer. (b) No Conflict. Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is hound. (c) No Developer Bankruptcy. Developer is not the subject of a bankruptcy proceeding. (d) Proforma. The proforma attached hereto as Attachment No. 10 ("Proforma"), is a true and correct copy of the Proforma. Notwithstanding the foregoing, it has not yet been determined by the City whether or not undergrounding the utilities will he required, therefor the cost thereof cannot he calculated at this time and is not included in the Proforma. Except as provided in the immediately foregoing sentence, the amounts shown on the Proforma are accurate and arc the amounts for which Developer is able to and shall design and construct all of the Improvements in a workmanlike and defect -free manner in accordance with the Scope of Development. Until the Closing, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 208.2 not to be true as of Closing, immediately give written notice of such fact or condition to CDC. Such representation(s) shall not be deemed a breach by Developer hereunder, but shall constitute an exception which CDC shall have a right to approve or disapprove. If CDC elects to close Escrow following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, CI)C elects to not close Escrow, then this Agreement and the 20 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc Escrow shall automatically terminate, in which event the CDC may pursue all of its rights and remedies against the Developer as set forth herein, or as otherwise available at law or in equity. The representations and warranties set forth in this Section 208.2 shall survive the Closing and any termination or cancellation of this Agreement. 209. Studies and Reports. Prior to the Closing, representatives of Developer shall have the right of access to all portions of the Site for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. Any preliminary work undertaken on the Site by Developer prior to the Closing shall he done at the sole risk and expense of Developer. Any preliminary work shall be undertaken only after securing all necessary permits from the appropriate governmental agencies. 210. Condition of the Site. 210.1 Disclosure. The CDC has not investigated and makes no representations or warranties whatsoever regarding the condition of the Site. Developer hereby agrees to take title to the Site "as is". Developer further agrees to perform any and all investigation that it deems necessary with respect to the Site, including without limitation any and all soils testing "Phase 1" and/or "Phase 2" environmental investigations of the Site and hereby waives any and all claims Developer may have against CDC with respect to the condition of the Site. 210.2 No Further Warranties As To Site. Except as otherwise provided in this Agreement, the physical condition, possession or title of the Site is and shall be delivered from CDC to Developer in an "as -is" condition, with no warranty expressed or implied by CI)C, including without limitation, the presence of Hazardous Materials on, in, under or adjacent to the Site or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the Site for the development purposes intended hereunder. 210.3 Developer Precautions After Closing. Upon the Closing, Developer shall take all necessary precautions to prevent the release in, on or under the Site of any Hazardous Materials. Such precautions shall include compliance with all Governmental Requirements with respect to Ilazardous Materials. In addition, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Ilazardous Materials. Developer's obligation to take such precautions with respect to the release of Hazardous Materials shall terminate with respect to each Unit, upon the sale of such Unit, and shall cease with respect to the entire Site following the sale of all of the Units, provided Developer is then not in possession of any portion of the Site. 210.4 Required Disclosures After Closing. After the Closing, Developer shall notify CDC, and provide to CDC a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to I-Iazardous Materials and underground tanks. Developer 21 C:\Documents and Settings\karenp\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc shall report to CDC, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Site. Developer's obligation to report such incidents shall terminate with respect to each Unit, upon the sale of such Unit, and shall cease with respect to the entire Site following sale of all of the Units, provided Developer is then not in possession of any portion of the Site. In the event of a release of any I-Iazardous Materials into the environment, Developer shall, as soon as possible after the release, furnish to CDC a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Developer shall furnish to CDC a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 210.5 Developer Indemnity. Upon the Closing, Developer agrees to indemnify, defend and hold CDC harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon any of the following: (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Site, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of hazardous Materials on, under, in or about, to or from, the Site. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. This indemnity does not include any condition arising solely as a result of the negligence or willful misconduct of the CDC or its employees, agents, representatives, successors or assigns. 300. Development of the Site. 301. Scope of Development. Developer shall develop the Improvements as provided in Attachment No. 6 and in accordance with the plans, drawings and documents submitted by Developer and approved by CDC as set forth herein. 302. Design Review. 302.1 Concept Drawings. Developer shall prepare and submit conceptual drawings for the Improvements, including a site plan, floor plans, exterior elevations, materials, color board, and elevations of all four sides of Improvements (collectively, the "Concept Drawings"). The Concept Drawings shall be prepared and submitted within the times established in the Schedule of Performance. 22 C:\Documents and Settings\karcny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 (2 doc 302.2 Landscape and Grading Plans. The Developer shall prepare and submit to the Agency preliminary and final landscaping and preliminary and finish grading plans for the Site (collectively, the "Landscape and Grading Plans"). The Landscape and Grading Plans shall be prepared and submitted within the times established in the Schedule of Performance. 302.3 Construction Drawings. The Developer shall prepare and submit to the Agency 50% and final construction drawings and related documents (collectively called the "Construction Drawings") to the Agency for review (including but not limited to architectural review). The Construction Drawings shall be prepared and submitted within the times established in the Schedule of Performance. Final construction drawings are hereby defined as those in sufficient detail to obtain a building permit. 303. CDC Review and Approval. CDC shall have the right to review and approve or disapprove all aspects of the Concept Drawings, Landscape and Grading Plans and Construction Drawings. Developer acknowledges and agrees that CDC is entitled to approve or disapprove the Concept Drawings, Landscape and Grading Plans or Construction Drawings in order to satisfy CDC's obligation to promote the sound development and redevelopment of land within the Project, to promote a high level of design which will impact the surrounding development, and to provide an environment for the social, economic and psychological growth and well-being of the citizens of the City and the Project. Developer shall not he entitled to any monetary damages or compensation as a result of CDC's disapproval or failure to approve or disapprove the Concept Drawings, Landscape and Grading Plans or Construction Drawings. 303.1 Standards for Disapproval. CDC shall have the right to disapprove -in its reasonable discretion any of the Concept Drawings, Landscape and Grading Plans or Construction Drawings, as set forth in Section 303, above, including without limitation if the same do not conform to the Scope of Development or this Agreement, or are incomplete. In the event the Concept Drawings, Landscape or Grading Plans and Construction Drawings are not approved, the CDC shall state in writing provided to the Developer the reasons for disapproval. Developer, upon receipt of notice of disapproval from CDC, shall revise such portions and resubmit to CDC by the time established therefor in the Schedule of Performance. CDC and Developer agree to work together in good faith to resolve any disagreements and disputes regarding the Concept Drawings, Landscape and Grading Plans and Construction Drawings. 303.2 Revisions. If Developer desires to propose any revisions to CDC - approved Concept Drawings, Landscape and Grading Plans or Construction Drawings after approval, it shall submit such proposed changes to CDC, and shall also proceed in accordance with any and all State and local laws and regulations regarding such revisions, within the time frame set forth in the Schedule of Performance. At the reasonable discretion of CDC, if Developer proposes any change from the basic use of the Site for anything other than a residential development consisting of townhomes, as provided for in this Agreement, then this Agreement is subject to renegotiation of all terms and conditions, including without limitation, the economic terms of the Agreement. If the Concept Drawings, Landscape and Grading Plans or Construction Drawings, as modified by the proposed change, generally and substantially conform to the requirements of the Scope of Development and this Agreement, the CDC shall 23 C:\Documents and Settings\karen}\Local Settings\Temporary Internet Piles\OLKEA\DDA v2 1820 G.doc review the proposed change and notify Developer in writing within thirty (30) days after submission to CDC as to whether the proposed change is approved or disapproved. CDC's Executive Director is authorized to approve changes to CDC -approved Concept Drawings, Landscape and Grading Plans and Construction Drawings. 303.3 Defects in Plans. CDC shall not be responsible or liable in any way, either to Developer or to any third parties, for any defects in the Concept Drawings, Landscape and Grading Plans or Construction Drawings, or for any structural or other defects in any work done according to the approved Concept Drawings, Landscape and Grading Plans or Construction Drawings, or for any delays reasonably caused by the review and approval processes established by this Section 303. Developer shall hold harmless and indemnify CDC, the City and their officers, employees, agents and representatives from and against any and all claims, demands and suits for damages to property or injuries to persons arising out of or in any way relating to the Site, including without limitation any defects in the Concept Drawings, Landscape and Grading Plans or Construction Drawings, violation of any laws, and for defects in any work done according to the approved Concept Drawings, Landscape and Grading Plans or Construction Drawings or for defects in work performed by Developer or any contractor or subcontractor of Developer. 304. Land Use Approvals. Before commencement of construction of the Improvements or other works of improvement upon the Site, Developer shall, at Developer's sole expense, secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for the Improvements by the City or any other governmental agency affected by such construction or work, except for those which are the responsibility of CDC as set forth herein. Neither CDC, nor the City shall be responsible in any way for, the processing of Developer's building permits or other permit applications with the City and the execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals. 305. Schedule of Performance. Developer shall submit all Concept Drawings, commence and complete all construction of Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefor in the Schedule of Performance (Attachment No. 5). 306. Cost of Construction. All costs whatsoever, except for costs of Escrow, as provided above, shall be borne by Developer, including without limitation the cost of planning, designing, developing arid constructing of all of the Improvements, as well as site preparation and grading. 307. Insurance Requirements. Developer shall take out and maintain and shall cause its contractor and subcontractors to take out and maintain until the issuance of the Release of Construction Covenants pursuant to Section 312 of this Agreement, a comprehensive general liability policy in the amount of not less than $2,000,000 combined single limit policy, and a comprehensive automobile liability policy in the amount of $1,000,000 combined single limit, or such other policy limits as CDC may approve at its discretion, including contractual liability, as 24 C:\Documents and Settings\kareny\Local Settings\1'emporary Internet Files\OLKEA\DDA v2 1820 G.doc shall protect Developer, City and CDC from claims for such damages. Such policy or policies shall be written on an occurrence form. Developer shall also furnish or cause to be furnished to CDC evidence satisfactory to CDC that Developer, and any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement, carries workers' compensation insurance as required by law. Developer shall furnish a notarized certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by CDC setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and CDC and their respective officers, agents, and employees as additionally insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and CDC of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by Developer shall be primary insurance and not be contributing with any insurance maintained by CDC or City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City and CDC. The required certificate shall he furnished by Developer at the time set forth therefor in the Schedule of Performance. 308. Developer's Indemnity. Developer shall be responsible for all injuries to persons and/or all damages to real or personal property of CDC or others, caused by or resulting from the negligence and/or breach of this Agreement, of itself, its employees, subcontractors and/or its agents during the construction of or arising out of the construction of the Project and/or the breach of this Agreement. Developer shall defend and hold harmless and indemnify CI)C, the City, and all of their officers and employees from all costs, damages, judgments, expenses and claims to any third party resulting from the negligence and/or breach of this Agreement, by Developer, its employees, subcontractors and/or its agents, arising out of the construction of the Project and/or the breach of this Agreement, except those arising from the sole negligence or willful misconduct of CDC or the City. 309. Rights of Access. Prior to the issuance of a Release of Construction Covenants pursuant to Section 312 of this Agreement, for purposes of monitoring compliance with this Agreement and to perform the CDC's monitoring duties under the provisions of 24 CFR Part 92, CDC and its representatives shall have the right of reasonable access to the Site, without charges or fees, at normal construction hours during the period of construction, including but not limited to, the inspection of the work being performed in constructing the Improvements. 310. Compliance With Laws. Developer represents and warrants that during the term of this Agreement that it will comply with each and every provision and requirement contained within CFR 92.354, as amended from time to time, to the extent applicable, and will pay not less than the wages prevailing in the locality, as predetermined by the Secretary of Labor pursuant to the Davis -Bacon Act (40 U.S.C. 276a-276a-5), to all laborers and mechanics employed in the development of any part of the Project in accordance with the terms and provisions of CFR 92.354 and will comply with the overtime provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-332). Prevailing wages need not be paid to 25 C:Wocuments and Settings\kareny\L.ocal Settings\Temporary Internet Files\OI .KEA\DDA v2 1820 U.doc "Volunteers" or for "Sweat Equity" as defined in 24 CFR 92.354(b) and (c). Developer shall carry out the design and construction of the Improvements in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the Title 24 of the California Code of Regulations, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. Developer hereby agrees to carry out development, construction (as defined by applicable law) and operation of the Improvements on the Site, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). Developer hereby expressly acknowledges and agrees that neither City nor Agency has ever previously affirmatively represented to the Developer or its contractor(s) for the Improvements in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not a "public work," as defined in Section 1720 of the Labor Code. Developer hereby agrees that Developer shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby agrees that Developer shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Developer hereby agrees that the Developer shall have the obligation, at the Developer's sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may he enacted, adopted or amended from time to time, or any other provision of law. Developer shall indemnify, protect, defend and hold harmless the Agency, City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Improvements, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (i) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (ii) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (iii) failure by Developer to provide any required disclosure, representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (iv) failure by Developer to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may he required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended 26 C:\Documents and Settings\kareny\Local SettingsVremporary Internet Files\OLKEA\DDA v2 1820 (i.doc from time to time, or any other provision of law; and/or (v) failure by the Developer to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development, construction (as defined by applicable law) and operation of the Improvements, including, without limitation, any public work (as defined by applicable law), Developer shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after recordation of the Release of Construction Covenants. 310.1 Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti- discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. Developer shall allow representatives of CDC access to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by CDC. 310.2 Taxes and Assessments. After the Closing, Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site. Developer shall remove or have removed any levy or attachment made after the Closing on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time. Developer shall not apply for or receive any exemption from the payment of property taxes or assessments on any interest in or to the Site or the Improvements. If the Terms and conditions of this Agreement are deemed to create a possessory interest in Developer such as to subject Developer to a Possessory Interest Tax pursuant to Revenue and Tax Code Section 107.6, then Developer shall be solely responsible for satisfying that obligation, and Developer shall not look to CDC or the City for reimbursement or set off. 310.3 Liens and Stop Notices. Developer shall not allow to he placed on the Site or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Improvements, Developer shall, within thirty (30) days of such recording or service or within five (5) days of CDC's demand, whichever last occurs: 27 C:\Documents and Settings\kareny\Local SettingsVI'emporary Internet I ilex\OLKEA\DDA v2 1820 G.doc (a) pay and discharge the same; (b) effect the release thereof by recording and delivering to CDC a surety bond in sufficient form and amount as approved by CDC in its sole discretion; or (c) provide CDC with other assurance which CDC deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of CDC from the effect of such lien or bonded stop notice. 311. Completion of the Project. All of the Improvements shall be completed in accordance with the schedule attached hereto as Attachment 5. Failure to complete all of the Improvements in accordance with the schedule attached hereto as Attachment 5, shall be a default under the Developer Note entitling the CDC to exercise all of its rights and remedies, including without limitation foreclosure of the Developer Deed of Trust. 312. Release of Construction Covenants. Promptly after completion of the Improvements in conformity with this Agreement, CDC shall furnish Developer with a "Release of Construction Covenants," substantially in the form of Attachment No. 4 hereto, for the entire Site upon written request therefor by the Developer. The Agency shall not unreasonably withhold any such Release of Construction Covenants. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the applicable portion of the Improvements and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as set forth in Sections 401 through 406 of this Agreement. If CDC refuses or fails to furnish the Release of Construction Covenants, after written request from Developer, CDC shall, within thirty (30) days of written request therefor, provide Developer with a written statement of the reasons CDC refused or failed to furnish the Release of Construction Covenants or partial reconveyance. 'l'he statement shall also delineate the actions Developer must take to obtain the Release of Construction Covenants or partial reconveyance. The Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. 313. Financing of the Improvements. 313.1 No Encumbrances Except Mortgages or Deeds of Trust. Mortgages and deeds of trust may be permitted prior to the issuance of a Release of Construction Covenants pursuant to Section 312 of this Agreement, only with CDC's prior written approval, and only for the purpose of securing loans of funds to be used for financing the acquisition of the Site, construction of the Improvements (including architecture, engineering, legal, and related direct 28 C:\llocuments and Settings\kareny\I.ocal Settings\Temporary Intent Files\OL,KEA\DDA v2 1820 Gdoc costs as well as indirect costs) on or in connection with the Site, and any other purposes necessary and appropriate in connection with development under this Agreement. Developer shall notify CDC in advance of any mortgage or deed of trust, if Developer proposes to enter into the same before completion of the construction of the Improvements. Developer shall not enter into any such mortgage or deed of trust for financing without the prior written approval of CDC, which approval CDC agrees to give if any such mortgage or deed of trust for financing is given to a responsible financing lending institution or person or entity, as determined by CI)C in its reasonable discretion. If CDC shall disapprove any such evidence of financing, CDC shall do so by Notice to Developer stating the reasons for such disapproval and Developer may elect either to obtain and submit to CDC new evidence of financing or to terminate this Agreement. CDC agrees that the Developer Deed of Trust shall be subordinated to any Construction Deed of Trust, such subordination shall be in a form acceptable to the CDC in its reasonable discretion. 313.2 Right of CDC to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by Developer prior to the issuance of a Release of Construction Covenants pursuant to Section 312 of this Agreement, Developer shall immediately deliver to CDC a copy of any mortgage holder's notice of default. CDC shall have the right but not the obligation to cure the default. In such event, CDC shall be entitled to reimbursement from Developer of all costs and expenses incurred by CDC in curing such default, including without limitation attorneys' fees. 314. Administrative Requirements. Developer shall strictly comply with the administrative requirements contained within 24 CFR Section 92.505, including, but not limited to, the requirements of OMB Circular No. A-87 and the requirements of 24 CFR Part 85, Section 85.6, 85.12, 85.20, 8.5.22, 85.26, 85.35, 85.36, 85.44, 85.51, and 85.52. Further, Developer covenants to comply with the OMB Circular No. A-122 and the applicable provisions of OMB Circular No. A-1 10. Copies of said OMB Circulars are on file in the offices of CDC and are available for inspection and copying by Developer. Developer further agrees that should the administrative requirements contained in Section 92.505 be amended and/or changed from time to time by HUI), that Developer will comply with the terms and conditions of such changed and/or amended administrative requirements. Developer hereby advises the CDC that Developer's IRS-990 forms and audits are completed on the basis of Developer's fiscal year, which is July 1 June 30. 314.1 Records and Reports. Developer shall supply CDC, annually, on May 1st, of each year during the term of this Agreement, for the calendar year ending the immediately previous December 31 s`, with such records and reports as are required and are requested by CDC to aid it in complying with the reports and record keeping provisions, terms and conditions of 24 CFR 92.508 and 92.509, as amended from time to time, and any and all other requirements of this Agreement. The records and reports include, but are not limited to the following: (a) Amount of funds expended pursuant to this Agreement; (b) On -site inspection results; 29 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files\O1.KEA\DDA v2 1820 G.doc (c) Intentionally omitted; (4) Affirmative marketing records; (d) Insurance policies and notices; (e) Equal Employment Opportunity and Fair Housing records; (f) Labor costs and records; (g) An audited income and expense statement and balance sheets for Developer; (h) An audited income and expense statement and balance sheets for the Site; (i) Federal and State income tax returns for the calendar year, ending on the preceding December 31 st; (j) A report or reports, certifying compliance with the terms and provisions of the Section 3 requirements, as set forth in Section 314.8 of this Agreement and certifying compliance with the provisions of federal law as it relates to Section 3, whether or not specifically set forth in Section 314.8; and (j) Such other and further information and records as CDC shall reasonably request and/or HUD shall request in writing from Developer. 314.2 Federal and State Requirements. Developer represents, warrants and agrees that Developer will fully comply, during the term of this Agreement, with any and all HOME program requirements including, but not limited to the requirements of 24 CFR Part 92, 24 CFR Section 92.351 (Affirmative Marketing), 92.352 (Environmental Review), 92.353 (Displacement, Relocation and Acquisition Residential, Antidisplacernent and Relocation Plan), 92.354 (Labor), 92.356 (Conflict of Interest), and 92.358 (Flood Insurance). Developer further warrants, represents and agrees that should said IIOME program requirements be changed by HUD, from time to time, that Developer will comply with said changed and amended regulations. 314.3 Lead Based Paint. Developer represents and warrants that during the term of this Agreement that it will comply with each and every provision and requirement contained within CFR 92.355, as amended from time to time, to the extent applicable. 314.4 Certification Concerning Debarment and Suspension. Developer represents, warrants and hereby certifies, pursuant to 24 CFR 92.357, that it will not use a contractor that has been debarred and or suspended, nor that is proposed for debarment, declared ineligible or voluntarily excluded from participation in construction of the Improvements. 30 C:\Documents and Scttings\kareny\L.ocal Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc Developer agrees to execute such further certifications required by CDC and/or HUD including, if necessary, that certification included as Appendix B of CFR Part 24, to verify the certification made in this Section 314.4. 314.5 Hood Insurance. Developer represents, warrants, and certifies, pursuant to 24 CFR 92.358, that no portion of the Site, is located within a Flood Plain or Flood Hazard Zone or Area, as indicated on a FEMA Map; or that the Site is located within a community participating in the National Flood Insurance Program and Developer agrees to purchase and maintain flood insurance for the duration of the term of this Agreement. 314.6 Fire Protection and Safety. Developer represents and warrants that it will comply with all requirements and regulations of the Fire Administration Act of 1992 and the Federal Fire and Prevention Control Act. Developer will use and install all fire and safety related equipment pursuant to the National Fire Protection Association standards. 314.7 Accessibility Standards. Developer represents and warrants that it will comply with all federal, state and local requirements and regulations concerning access to the units by the disabled and handicapped persons, including, but not limited to, those requirements of the HOME Program. 314.8 Section 3 Requirements. Developer shall comply with the following requirements during the term of the Agreement: (a) The work to be performed under this Agreement is subject to the requirements of section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. §1701u (section 3). 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. (b) The parties to this Agreement agree to comply with IIUD's regulations in 24 CFR part 135, which implement section 3. As evidenced by their execution of this Agreement, the parties to this Agreement certify that they are under no contractual or other impediment that would prevent them from complying with the part 135 regulations. (c) Developer agrees to send to each labor organization or representative of workers with which Developer has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of Developer'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, and qualifications for each; and the name and location of the persons taking applications for each of the positions; and the anticipated date the work shall begin. 31 C:\Documents and Settings\kareny\Local Settings\Ternporary Internet Files\OLKEA\DDA v2 1820 G.doc (d) Developer agrees to include this section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 1.35, 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 CFR part 135. Developer will not subcontract with any subcontractor where Developer has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 135. (e) Developer will certify that any vacant employment positions, including training positions, that are filled (1) after Developer is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed, were not filled to circumvent Developer's obligations under 24 CFR part 135. (f) Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions, termination of this Agreement for default, and debarment or suspension from future !IUD assisted contracts. 314.9 Drug Free Workplace. Developer shall comply with all applicable State and Federal rules, laws and regulations to ensure a drug free workplace at all times during the term of this Agreement. Further, Developer shall incorporate such federal provisions as are required in each contract or subcontract that it enters into in connection with the Site. 314.10 Lobbying Prohibition. Developer hereby certifies to CDC, under penalty of perjury, under the terms of applicable federal law, that at all applicable times before, during and after the term of this Agreement, that: (a) No Federal appropriated funds have been paid or will he paid, by or on behalf of it, to any person for influencing or attempting to influence 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; (b) If any funds other than Federal appropriated funds have been 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 this Federal contract, grant, loan or cooperative agreement, it will complete and submit Standard Form-LL.L, "Disclosure Form to Report Lobbying," in accordance with its instructions; (c) Developer will require that the above stated language be included in the award documents for all subawards at all tiers, including subcontracts, subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this Agreement; and 32 C:\Documents and Settings\kareny\Local Setting s\Temporary Internet Files\OLKF,A\DDA v2 1820 G.doc (d) Further, Developer and all subrecipients, at all times, shall certify compliance with the provisions of 31 U.S.C. § 1352 and any and all terms and conditions of the Byrd Anti -Lobbying Amendment, as amended from time to time. 400. Covenants and Restrictions. 401. Use in Accordance with Redevelopment Plan. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that upon the Closing and during construction and thereafter, Developer shall devote the Site to the uses specified in the Redevelopment Plan, Agreement Affecting Real Property and this Agreement for the periods of time specified herein. All uses conducted on the Site, including, without limitation, all activities undertaken by Developer pursuant to this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City of National City Municipal Code. The foregoing covenants shall run with the land. Developer's obligations under this Section 401, shall terminate with respect to each Affordable Unit, upon the sale of such Affordable Unit, and shall cease with respect to the entire Site following the sale of all of the Affordable Units, provided Developer is then not in possession of any portion of the Site. 402. Affordable Units. 402.1 Developer Covenants Concerning Affordable Units. Developer covenants and agrees that it will construct the eight (8) Affordable Units. Developer further covenants and agrees that it will sell the Affordable Units only to Low Income Households for a total consideration that does not exceed the Maximum Purchase Price. 402.2 Timing. Completion of construction of the Affordable Units shall occur on or before , 200. 402.3 Execution and Recordation of the Resale Restriction. The closing of the sale of each Affordable Unit shall not occur, unless at least fifteen (15) days prior to closing escrow for the sale of such Affordable Unit Developer shall cause the buyer of such Affordable Unit to execute, acknowledge and deliver to CDC the: (a) First Time llomebuyer Note, (b) the Resale Restriction, (c) the deed of trust securing the First Time Ilomebuyer Note and the Resale Restriction, and (d) any other documents required by the CDC in its sole discretion. Developer shall then cause the Resale Restriction to be recorded in first lien priority position and cause the deed of trust securing the First Time tlomebuyer Note and the Resale Restriction to be recorded thereafter. Notwithstanding the foregoing, the Resale Restriction and such deed of trust may be recorded in second lien priority position subordinate to the deed of trust securing financing provided by Developer to the purchaser. Under no circumstances shall Developer sell an Affordable Unit, unless the Resale Restriction and the deed of trust securing the First Time Ilomehuyer Note and the Resale Restriction have been recorded as an encumbrance against such Affordable Unit. 402.4 45-Year Affordability. The Resale Restriction shall ensure that the Affordable Unit will be sold and resold to Low Income I louseholds for a period of forty-five (45) 33 C:\Documents and Settings\Icareny\Local Settings\Temporary Internet Files\OI.KE:A\DDA v2 1820 G.doc years, measured from the date of the initial sale of the Affordable Unit to a Low Income Household as provided in the Resale Restriction. 402.5 No Sales to Related Parties. None of the Affordable Units shall he sold to: (i) any person that is an employee, officer, director, investor, shareholder, partner, member, manager or other principal of Developer, or any divisions, subsidiaries or affiliates of Developer or (ii) any person that is the spouse, mother, fattier, sister, brother, child, aunt, uncle, niece, nephew, stepchild, mother in-law, father in-law, brother in-law, sister in-law, ex -spouse, grandchild or grandparent of any employee, officer, director, investor, shareholder, partner, member, manager or other principal of Developer, or any parent companies, divisions, subsidiaries or affiliates of Developer. 402.6 CDC Consent to Sales. Developer shall not sell any Affordable Unit, unless and until, the CDC has consented in writing to all of the terms and conditions of such sale, including without limitation, the sales price of the Affordable Unit which amount shall not exceed the Maximum Purchase Price. 403. Maintenance Covenants. Throughout the sales period, Developer shall maintain the Site and all improvements of any unsold Affordable Units thereon, including all landscaping, in compliance with the terms of the Redevelopment Plan and with all applicable provisions of the City of National City Municipal Code. 404. Obligation to Refrain from Discrimination. 404.1 State and Federal Requirements. Developer shall, at all times during the term of this Agreement, comply with all of the provisions of Section 24 CFR 92.351 and the affirmative marketing procedures adopted by CDC, including, but not limited to, all requirements and procedures referenced in said Section 24 CFR 92.351(b), amended from time to time. Developer shall maintain records to verify compliance with the applicable affirmative marketing procedures and compliance. Such records are subject to inspection by CDC during regular business hours upon five (5) days written notice. Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Developer or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 1.2955, and Section 12955.2 of the Government Code, with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site or the rental, lease sale of the Site and any dwelling unit thereon. The foregoing covenants shall run with the Site. 34 C:\Documents and Settings \kareny\Local Settings\Temporary Internet Piles\OLKNA\DDA v2 1820 G.doc 404.2 Additional Requirements. Developer hereby agrees to comply with the Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment Practices Act, and any other applicable Federal and State laws and regulations. CDC will provide technical assistance and copies of the referenced programs upon request pursuant to 24 CFR Section 92.350. 404.3 Fair Housing Laws. All activities carried out by Developer and/or agents of Developer shall he in accordance with the requirements of the Federal Fair Housing Act. The Fair Ilousing Amendments Act of 1988 became effective on March 12, 1989. The Fair Housing Amendments Act of 1988 and Title VIII of the Civil Rights Act of 1968, taken together, constitute the Fair Housing Act. The Fair Housing Act provides protection against the following discriminatory housing practices if they are based on race, sex, religion, color, handicap, familial status, or national origin: denying or refusing to rent housing, denying or refusing to sell housing, treating differently applicants for housing, treating residents differently in connection with terms and conditions, advertising a discriminatory housing preference or limitation, providing false information about the availability of housing, harassing, coercing or intimidating people from enjoying or exercising their rights under the Fair Housing Act, blockbusting for profit, persuading owner to sell or rent housing by telling them that people of a particular race, religion, etc. are moving into the neighborhood, imposing different terms for loans for purchasing, constructing, improving, repairing, or maintaining a home, or loans secured by housing; denying use or participation in real estate services, e.g., brokers' organizations, multiple listing services, etc. The Fair Housing Act gives HUD the authority to hold administrative hearings unless one of the parties elects to have the case heard in U.S. District Court and to issue subpoenas. Both civil and criminal penalties are provided. The Fair Ilousing Act also provides protection for people with disabilities and proscribes those conditions under which senior citizen housing is exempt from the prohibitions based on familial status. The following State of California Laws also govern housing discrimination and shall be complied with by Developer: Fair Employment and Housing Act, Unruh Civil Rights Act of 1959, Ralph Civil Rights Act of 1976, and Civil Code Section 54.1. 405. Nondiscrimination Covenants. Developer shall refrain from restricting the rental, lease and sale of the Site and any dwelling unit thereon on the basis of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) Deeds. In deeds "l'he grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, 35 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Filcs\OLKEA\DDA v2 1820 G.doc subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) Leases. In leases "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." (c) Contracts. In contracts "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee 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 of the land." 406. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. CDC is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether CDC has been, remains or is an owner of any land or interest therein in the Site or in the Project. CDC shall have the right, if this Agreement or its covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. 500. Defaults and Remedies. 501. Default Generally. Subject to the extensions of time set forth in Section 602 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not he in Default if such party within 36 C.\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OI.KEA\DDA v2 1820 G.doc thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. 502. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the County of San Diego, State of California, in an appropriate court in that county, or in the District of the United States District Court in which such county is located. 503. Termination by Developer. In the event that Developer is not in default under this Agreement and one or more of Developer's Conditions Precedent to the Closing is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by Developer; or in the event any Default of CDC prior to the Closing is not cured within the time set forth in Section 501 hereof, or any such failure is not cured within the applicable time period after written demand by Developer, then this Agreement may, at the option of Developer be terminated by written notice thereof to CDC. From the date of the written notice of termination of this Agreement by Developer to CDC and thereafter this Agreement shall be terminated and there shall be no further rights or obligations between the parties, except that the parties may pursue any other remedies they may have hereunder. 504. Termination by CDC. In the event that CDC is not in Default under this Agreement and prior to the issuance of the Release of Construction Covenants Developer (or any successor in interest) assigns or attempts to assign this Agreement or any rights therein or in the Site in violation of this Agreement; or one or more of CDC's Conditions Precedent to the Closing is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by CDC; or Developer is otherwise in Default of this Agreement and fails to cure such Default within the time set forth in Section 501 hereof, then this Agreement and any rights of Developer or any assignee or transferee with respect to or arising out of the Agreement or the Site, shall, at the option of CDC, be terminated by CDC by written notice thereof to Developer in addition to all other rights and remedies available to developer. From the date of the written notice of termination of this Agreement by CDC to Developer and thereafter this Agreement shall be terminated and there shall be no further rights or obligations between the parties, except that the parties may pursue any other remedies they may have hereunder. 505. Reentry and Revesting of Title in CDC After the Closing and Prior to Completion of Construction. 505.1 Right of Reentry. In additional to all other rights and remedies the CDC may have at law or in equity, the CDC has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest the Site in the CDC if after the Closing and prior to the issuance of the Release of Construction Covenants, Developer (or its successors in interest): 37 C:\Docurnents and Scttings'kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc (a) fails to start the construction of the Improvements as required by this Agreement for a period of thirty (30) days after written notice thereof from CDC; or (b) abandons or substantially suspends construction of the Improvements required by this Agreement for a period of thirty (30) days after written notice thereof from CDC; or (c) transfers or suffers any involuntary transfer of the Site or any part thereof in violation of contrary to the provisions of Section 603 or any other section of this Agreement. 505.2 Limitations on Right of Reentry. Such right to reenter, terminate and revest shall be subject to arid be limited by and shall not defeat, render invalid or limit: (a) Any mortgage or deed of trust permitted by this Agreement; or (b) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust. 505.3 Right of Reentry Referenced in Grant Deed. The Grant Deed shall contain appropriate reference and provision to give effect to CDC's rights as set forth in this Section 505, to reenter and take possession of the Site, with all improvements thereon, and to terminate and revest in CDC the estate conveyed to Developer. 505.4 Resale By CDC After Revesting. Upon the revesting in CDC of title to the Site as provided in this Section 505, CDC shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as CDC shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by CDC) who will assume the obligation of making or completing the Improvements, or such improvements in their stead as shall be satisfactory to CDC and in accordance with the uses specified for the Site or part thereof in the Redevelopment Plan. 505.5 Application of Resale Proceeds. Upon such resale of the Site by CDC, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by this Agreement, shall be applied: (a) First, to reimburse CDC, on its own behalf or on behalf of the City, all costs and expenses incurred by CDC or the City, including, but not limited to: any expenditures by CDC or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by CDC or the City from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which Developer has not paid (or, in the event that Site is exempt from taxation or assessment of such charges 38 C.\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc during the period of ownership thereof by CDC, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time of revesting of title thereto in CDC, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing CDC, and in the event thereafter available; and (b) Second, to reimburse Developer, its successor or transferee, up to the amount equal to the sum of (i) the costs incurred for the acquisition and development of the Site and for the improvements existing on the Site at the time of the reentry and possession, less (ii) any gains or income withdrawn or made by Developer from the Site or the improvements thereon. Notwithstanding the foregoing or anything to the contrary contained herein, to the extent the reimbursement of the net proceeds set forth above is not allowed under any I -IUD regulation(s), the parties agree that the parties shall be reimbursed in a manner that conforms with the HUD regulations. Any balance remaining after such reimbursements shall he retained by CDC as its property. The rights established in this Section 505 arc not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. The rights are to be interpreted in light of the fact that CDC will have conveyed the Site to Developer for redevelopment purposes, particularly for development of the Project and not for speculation. 506. Acceptance of Service of Process. In the event that any legal action is commenced by Developer against CDC, service of process on CDC shall be made by personal service upon the Executive Director of CDC or in such other manner as may be provided by law. In the event that any legal action is commenced by CDC against Developer, service of process on Developer shall be made by personal service upon Developer or in such other manner as may he provided by law. 507. Rights and Remedies arc Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 508. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies shall govern the interpretation and enforcement of this Agreement. 39 C:Wocurnents and Settings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc 600. General Provisions. 601. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must he in writing and may he given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. To CDC: To Developer: Community Development CDC of the City of National City 1243 National City Boulevard National City, CA 91950-4397 Attention: Executive Director San Diego Habitat for Humanity, Inc. 10222 San Diego Mission Road San Diego, CA 92108 Attention: Executive Director Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 602. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not he deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; or any other causes beyond the control and without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within five (5) days of the commencement of the cause. "Times of performance under this Agreement may also be extended in writing by the mutual agreement of Executive Director of the CDC and Developer. 603. Transfers of Interest in Site or Agreement. 603.1 Prohibition. The qualifications and identity of Developer are of particular concern to CDC. It is because of those qualifications and identity that CDC has entered into this Agreement with Developer. For the period commencing upon the date of this Agreement and until all Units are sold, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement, nor shall Developer make any total or partial 40 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files \OLKEA\DDA v2 1820 G.doc sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Improvements thereon without prior written approval of CDC, except as expressly set forth herein. Any proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Improvements, other than those permitted in Section 603.2, will entitle CDC to its right of reentry and revesting as set forth in Section 505 hereof. For the reasons cited above, Developer represents and agrees for itself, each member and any successor in interest of itself and each member that prior to issuance by City of a Certificate of Completion and without the prior written approval of CDC, there shall be no significant change in the ownership of Developer or in the relative proportions thereof, or with respect to the identity of the parties in control of Developer or the degree thereof, by any method or means. Developer shall promptly notify CDC of any and all changes whatsoever in the identity of the parties in control of Developer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may he terminated by CDC if there is any significant change (voluntary or involuntary) in membership, management or control, of Developer or its associates (other than such changes occasioned by the death or incapacity of any individual prior to issuance of a Certificate of Completion). 603.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, CDC approval of an assignment of this Agreement or conveyance of the Site or Improvements, or any part thereof, will be granted in connection with any of the following, subject to CDC and Developer executing appropriate documents of transfer which contain any exceptions or reservation of rights permitted under this Agreement: (a) Any transfers to an entity or entities in which Developer retains a minimum fifty-one percent (51%) of the ownership and beneficial interest and retains management and control of the transferee entity or entities. (h) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Improvements (as defined herein). (c) Any requested assignment for financing purposes (subject to such financing being approved by CDC), including the grant of a deed of trust to secure the funds necessary for construction of the Improvements. (d) Any sale of the Affordable Units as provided herein. In the event of any assignment by Developer under subparagraphs (a) through (c), inclusive, above, not requiring CDC's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such assignment it shall give written notice to CDC of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer the obligations of this Agreement. 41 C:\Documents and Settings\kareny\Local Settings\Temporary Internet Files\OI.KFA\DDA v2 1820 G.doc 603.3 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 603.4 Assignment by CDC. CDC may assign or transfer this Agreement in its entirety, or any of its rights or obligations hereunder. 604. Non -Liability of Officials and Employees of CDC. No member, official or employee of CDC or the City of National City shall be personally liable to Developer, or any successor in interest, in the event of any Default or breach of this Agreement or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement. 605. Relationship Between CDC and Developer. It is hereby acknowledged that the relationship between CDC and Developer is that of independent contractors and not that of a partnership or joint venture and that CDC and Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, CDC shall have no rights, powers, duties or obligations with respect to the operation, maintenance or management of the Improvements. Developer agrees to indemnify, hold harmless and defend CDC from any claim made against CDC arising from a claimed relationship of partnership or joint venture between CDC and Developer with respect to the period of development through the sale of the units on the Site or the Improvements. 606. CDC Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by CDC, the Executive Director of CDC or his or her designee is authorized to act on behalf of CDC unless specifically provided otherwise or the context should require otherwise. 607. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. 608. Integration. This Agreement contains the entire understanding between the parties relating to the subject matter of this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral and written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. All exhibits and attachments referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated in this Agreement by this reference. 609. No Real Estate Brokerage Commissions. CDC and Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in 42 C:\Documents and Settings\karcny\Local Settings\Temporary Internet Piles\OLKEA\DDA v2 1820 G.doc connection with Developer's acquisition of the Site from CDC. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any broker, agent or finder with respect to this Agreement which is payable by such party. With respect to the sale of individual units, however, Developer may employ brokers at its discretion. 610. Attorneys' Fees. The parties agree that the prevailing party in litigation for the breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and reasonable attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5 and any other applicable provisions of California law, including, without limitation, the provisions of CCP Section 998. 611. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise. 612. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others where arid when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall he interpreted as though prepared jointly by both parties. 613. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not he construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 614. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 615. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 616. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 43 C':\Documents and Settings \kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc 617. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 618. Time of Essence. Time is expressly made of the essence with respect to the performance by CDC and Developer of each and every obligation and condition of this Agreement. 619. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 620. Conflicts of Interest. No member, official or employee of CDC shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 621. Exhibits, Attachments and Recitals Incorporated. All exhibits and attachments referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The recitals to this Agreement are hereby incorporated in this Agreement by this reference. 622. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 623. Authority to Sign. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the CDC that they have the necessary capacity and authority to act for, sign and hind the respective entity or principal on whose behalf they are signing. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. CDC: Community Development CDC of the City of National City 44 C:\Documents and Settings\karenyU.ocal Settings\Temporary Internet Files \ol .KF.A\DDA v2 1820 Gdoc By: Print Name: Ron Morrison Its: Chairman APPROVED AS TO FORM: alter F. Special "ou DEVELOPER: San Diego Habitat for Humanity, Inc., a California nonprofit corporation By: Print Name: Its: : re. cam/ By: Print Name: Its: 45 C:\Documents and Settings\karcny\Local Settings\Temporary Internet Filcs\OLKEA\DDA v2 1820 G.doc CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of StaN D\ E C-51� } On-AU.AvS-ttg`'• 2LC before me, CP'RUt--1N-) G E5OL-L_t-A( Date _ \ Here Insert Name and Tale of the Officer personally appeared Cis-!e—IR L Name(s) of Signer(s) CAROLYN JANE BOLIMAN Commission di 1776907 Notary Public - California Ion Diego County Corm. 0c1.2011 I Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS hand and official seal- Signatur Signat e of • ublic OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: _ Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: L. Individual 1 i Corporate Officer — Title(s): Partner — L; Limited i General : Attorney in Fact I i Trustee Guardian or Conservator Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thu' h here Signer's Name:.. L J Individual Corporate Officer — Title(s): Partner — i Limited [-I General I .i Attorney in Fact !Trustee Guardian or Conservator _I Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of th,,mb here `t-4.; 4.:,..K%c7--c:`C c.^t A.X.fc`(AX A.X,%" :x,4"Wg3Qc .7(- 7-es.^(%csLw 6,.. "f-c:`K-c; 'c. .^ ccf-7:3-4;0.4::#-.V.%,"(-cf,<A:G<=c.^t: .."w `(-4A%G"£=c:€4:X 4 ©2007 National Notary Association •9350DeSoto Ave ..PO.Box 2402•Chatsworth,CA 91313-2402•www.NationalNotary.org Item #5907 Reorder. Call Toll-Free1-800-876-6827 09-17-'08 08:31 FROM- T-924 P002/002 F-365 San Diego Fh Habitat for Humanity® RESOLUTION OF THE BOARD OF DIRECTORS OF SAN DIEGO HABITAT FOR HUMANITY, INC. This resolution, duly executed by the governing Board of San Diego Habitat for Humanity was made during the Board's regular meeting on January 22, 2008. Upon motion and second it was unanimously resolved that the Executive Director be authorized to all execute agreements, construction contracts, and bonds in regards to the development of the G Street Condominiums located at 1820 G Street and the Harding Avenue Homes located at 1441 Harding Avenue in National City. Secretary Date 10222 San Diego Mission Rd. • San Diego CA 92108 • (619) 283-HOME • (619) 516-5264 Fax • www.sdhfh.org 09/17/2008 WED 8:42 [JOB NO. 8900i 0002 CONSENT OF ESCROW AGENT The undersigned Escrow Agent hereby agree to (i) accept the foregoing Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said Agreement in the performance of its duties as Escrow Agent; provided, however, the undersigned shall have no obligation or liability or responsibility under (a) this Consent or otherwise unless and until said Agreement is fully signed by the parties and has been delivered to the undersigned or (b) any amendment to said Agreement unless and until the same shall be accepted by the undersigned in writing. Dated: , 2008 Title Company By: Print Name: Its: 46 C:\Documents and Scttings\kareny\Local Settings\Temporary Internet Files\OLKEA\DDA v2 1820 G.doc Attachment No. 1 Developer Note 47 HAI labitat\DDA v2 1820 G.doc DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND THE DEED OF TRUST SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE MADE. NOTE SECURED BY DEED OF TRUST ("Developer Note") National City, California , 2008 1. Principal; No Interest Except Upon Default. For value received and in consideration of the Development and Disposition Agreement dated , 2008 ("DDA"), by and between the Community Development Commission of the City of National City ("CDC") and San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Maker"), Maker promises to pay to CDC, or order, at 1243 National City Boulevard, National City, California 91950-4397, or such other place as the holder may from time to time designate by written notice to Maker, the principal sum of Eight Hundred Thirty -Five Thousand and No/100 Dollars ($835,000.00), or so much as is advanced. No interest shall be charged hereunder, except in the event of a default by Maker, in which case interest shall be deemed to have accrued beginning on the date first set forth above at the rate of 10% simple interest per annum or the maximum rate than allowed by law, whichever is less. This Note is issued pursuant to: (i) the DDA; (ii) the Deed of Trust (the "Deed of Trust") being executed concurrently herewith by Maker in favor of the CDC, to be recorded in the office of the County Recorder of San Diego County; and (iii) the Agreement Affecting Real Property (the "AARP") being executed concurrently herewith by Maker and the CDC, to be recorded in the office of the County Recorder of San Diego County. All capitalized terms which are not defined herein shall have the meaning ascribed to them in the DDA. 2. Terms. (a) Term of Loan; Forgiveness. Upon the timely completion of the Affordable Units in accordance with the DDA, this Developer Note will be partially forgiven and the remaining balance will convert to first-time homebuyer loans to Low -Income Households to assist those Low -Income Households with the purchase of Affordable Units, as follows: (1) Upon the closing of the sale of each Affordable Unit, as defined in the DDA, the purchaser of such Affordable Unit shall execute a First -Time Homebuyer Note in a form approved by the CDC in an amount equal to the sum of: (i) the Single Family Mortgage Limit for the County of San Diego under Section 203(b) of the National Housing Act (12 U.S.C. § 1709(b)) or any other limitation then provided by Code of Federal Regulations §92.254(a) or any successor law or regulation; less (ii) the Maximum Purchase Price, as defined in the DDA. In the event the foregoing calculation results in an amount equal to zero or a negative number, then the requirement that the 1 H:\1-Iabitat\Developer Note vl 1820 G.doc purchaser of the Affordable Unit execute a First -Time Homebuyer Note as set forth herein, shall be null and void. (2) Any amount of this Developer Note that is not assumed by the purchasers of the Affordable Units as set forth in Section 2(a)(1), above, shall be forgiven in its entirety. (b) No Prepayments. This Note may not be prepaid in whole or in part. (c) No Transfers Without CDC Consent. Should the undersigned sell, convey, transfer, further encumber, or dispose of the real property described in the Deed of Trust ("Property"), or any part of it, or any interest in it, without first obtaining the written consent of CDC, or the then holder of this Developer Note, then all obligations secured by this Developer Note may be declared due and payable, at the option of CDC, or the then holder of this Developer Note, as provided in Section 4, below. CDC reserves the right to approve all sales, transfers, conveyances, additional encumbrances, or dispositions of the Property. Consent to one transaction of this type will not constitute a waiver of the right to require consent to future or successive transactions. If such a sale, transfer, further encumbrance, disposition, conveyance or transfer is approved by CDC, then upon the sale, transfer, further encumbrance, conveyance, transfer all accrued but unpaid interest on this Developer Note shall be paid to CDC, at CDC's option. 3. Security for Note. This Note is secured by the Deed of Trust of even date herewith executed by Maker, which creates a lien on the Property. The CDC shall partially reconvey the Deed of Trust as provided therein. 4. Acceleration Upon Default. Notwithstanding Section 2(a), above, or anything contained herein to the contrary, in the event of any default in the performance of any of the terms, covenants and conditions contained in: (i) this Developer Note, the DDA, AARP or Deed of Trust, including without limitation the failure by Maker to complete all of the Improvements, as defined in the DDA, on or before , 200_; (ii) any other instrument executed by the Maker in conjunction with this Developer Note; (iii) any prior or junior note secured by an encumbrance on the Property or any portion of it; or (iv) in the event of the filing of a Bankruptcy proceeding by or against Maker, then (w) at the option of the CDC the Property shall revert back to the CDC; (x) all sums owing by Maker to the CDC shall at the option of CDC immediately become due and payable; (y) CDC shall have no obligation to disburse any further funds to Maker or any other person: and (z) CDC shall be released from any and all obligations to Maker under the terms of this Developer Note. These remedies shall be in addition to any and all other rights and remedies available to CDC, either at law or in equity. Further, default interest shall accrue on the principal balance of this Developer Note from the date of this Developer Note at the rate of ten percent (10%) simple interest per annum or the maximum rate than allowed by law, whichever is less. Failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 5. Costs Paid by Maker. Maker agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by the holder of this Developer Note, or adjudged by a court: (a) reasonable costs of collection, costs, and expenses, and attorneys' fees paid or incurred in connection with the collection 2 H:\Habitat\Developer Note v1 1820 G.doe or enforcement of this Developer Note, whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this Developer Note or any part of it. 6. Payment and Interest Calculation. Principal and interest shall be payable in lawful money of the United States of America. Interest shall be computed based on a 360-day year and 30-day month and the actual number of days elapsed. Payments shall be applied to interest first and then to any unpaid principal balance. 7. Incorporation of Documents. The provisions of the DDA, AARP and Deed of Trust are expressly incorporated in this Developer Note by this reference. 8. Waiver. Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Developer Note, and expressly agrees that, without in any way affecting the liability of Maker hereunder, CDC may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Developer Note. Maker further waives, to the full extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Developer Note, or on any deed of trust, security agreement, guaranty or other agreement now or hereafter securing this Developer Note. 9. Recourse. (a) This Note is recourse to Maker. (b) Maker shall indemnify, defend, protect and hold CDC harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) incurred by CDC as a result of any (i) fraud or material misrepresentation under or in connection with the Loan or any Loan Document; (ii) intentional bad faith waste of the Property; (iii) losses resulting from Maker's failure to maintain insurance as required under the Deed of Trust; and (iv) misapplication of any rents, security deposits, insurance proceeds, condemnation awards or any other proceeds derived from the collateral security in a manner prohibited by the DDA, Deed of Trust or AARP. CDC shall promptly provide Maker with written notice of any event for which Maker has an indemnification obligation as provided in this Paragraph 9(b). 10. Late Charge. In addition to the foregoing, if any installment due hereunder, is not paid within fifteen (15) days from the date due, Maker promises to pay a "late charge" of five percent (5%) of the installment so overdue to defray the expense incident to handling any such delinquent payment or payments. 11. Severability. If any provision of this Developer Note is determined to be void by court of competent jurisdiction, such determination shall not affect any other provision of this Developer Note, and such other provisions shall remain in full force and effect. 3 H:Uiabitat\lleveloper Note v 1 1820 G.doc 12. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall constitute a waiver by holding of its right to subsequently demand such performance or to exercise any remedies for any default hereunder. Further, in order to be effective, any waiver of any of CDC's rights and remedies hereunder shall be expressed in a writing signed by CDC. Further waiver by CDC of any right hereunder shall not constitute a waiver of any other right, including but not limited to the right to exercise any and all remedies for a different or subsequent event of default hereunder. 13. Replacement Note. The undersigned agrees that, in the event that this Developer Note shall become lost or stolen, upon request of CDC, the undersigned shall execute a replacement Note incorporating the terms hereof, provided that CDC shall furnish a written agreement to indemnify the undersigned against all losses, costs, and damages arising from a duplicative demand for payment under this Developer Note. 14. Interpretation. This Note shall be governed and interpreted in accordance with applicable California law. Maker: San Diego Habitat for Humanity, Inc., a California nonprofit corporation By: Print Name: Its: By: Print Name: Its: 4 H:\Habitat\Devcloper Note v 1 1820 G.doc Attachment No. 2 Developer Deed of Trust 48 11:\Habitat\DJ)A v2 1820 G.doc Recording Requested By: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. DEED OF TRUST THIS DEED OF TRUST is made this_. day of , 2008, between San Diego Habitat for Humanity, Inc., a California nonprofit corporation, whose address is 10222 San Diego Mission Road, San Diego, CA 92108 ("Trustor"), Stewart Title Company ("Trustee"); and the Community Development Commission of the City of National City ("Beneficiary"), whose address is 1243 National City Boulevard, National City, California 91950-4397; TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale, all that property in the City of National City, County of San Diego, State of California, described as: (See Legal Description - Exhibit "A") FOR THE PURPOSE OF SECURING: (a) Payment of the indebtedness evidenced by that certain Promissory Note of even date herewith executed by Trustor, in the principal sum of Eight Hundred Thirty -Five Thousand and No/100 Dollars ($835,000.00), and any renewal, extension, or modification of the promissory note (the "Note"); (b) Any additional sums and interest that may hereafter be loaned to the then record owner of the Property by Beneficiary, when evidenced by another note or notes reciting that it or they are so secured; (c) That certain Development and Disposition Agreement of even date herewith executed by Trustor and Beneficiary, and any renewal, amendment, extension, or modification of the Development and Disposition Agreement (the "DDA"); 1 H:\Habitat\Developer Deed of Trust v2 1820 G.doc (d) That certain Agreement Affecting Real Property of even date herewith executed by Trustor and Beneficiary, and any renewal, amendment, extension, or modification of the Agreement Affecting Real Property (the "AARP"); (e) The performance of each agreement contained in this Deed of Trust. A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Maintenance and Repair. To keep the Property in good condition and repair; to pay when due all claims for labor performed and materials furnished for the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made on the Property; not to commit or permit waste of the Property; not to commit, suffer, or permit any act upon the Property in violation of law; and to cultivate, maintain the landscaping, and do all other acts that from the character or use of the Property may be reasonably necessary. 2. Fire Insurance. To provide, maintain, and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary as its interest may appear. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured by this Deed of Trust and in any order determined by Beneficiary, or at the option of Beneficiary the entire amount so collected or any part of that amount may be released to Trustor, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property and such repair and/or restoration is physically and legally possible, then the Trustor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. This application or release shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. 3. Defense of Security. To appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 4. Payment of Liens and Taxes. To pay, at least ten (10) days before delinquency, all taxes and assessments affecting the Property, including assessments on appurtenant water stock, all encumbrances, charges, and liens, with interest, on the Property or any part of the Property, which appear to be prior or superior to this Deed of Trust; and all costs, fees, and expenses of this Trust. If Trustor fails to make any payment or to do any act as provided in this Deed of Trust, then Beneficiary or Trustee may (but is not obligated to) make the payment or do the act in the required manner and to the extent deemed necessary by Beneficiary or Trustee to protect the security of this Deed of Trust. The performance by Beneficiary or Trustee of such an act shall not require notice to or demand upon Trustor and shall not release Trustor from any obligation under this Deed of Trust. Beneficiary or Trustee shall also have the following related rights and powers: to enter upon the 2 H:\Habitat\Developer Deed of Trust v2 1820 G.doc Property for the foregoing purposes; to appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest, or compromise any encumbrance, charge, or lien that in the judgment of either appears to be prior or superior to this Deed of Trust; to employ counsel; and to pay necessary expenses and costs, including attorneys' fees. 5. Reimbursement of Costs. To pay immediately and without demand all sums expended by Beneficiary or Trustee pursuant to this Deed of Trust, with interest from date of expenditure at the amount allowed by law in effect at the date of this Deed of Trust, and to pay any reasonable amount demanded by Beneficiary (up to the maximum allowed by law at the time of the demand) for any beneficiary statement requested by Trustor or any other beneficiary of a Deed of Trust encumbering the Property regarding the obligation secured by this Deed of Trust. 6. Use. That Trustor will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed. 7. Incorporation of DDA and AARP. That the DDA and AARP are incorporated herein by reference and made a part of this Deed of Trust. 8. Performance of Other Obligations. To perform, in a timely manner, each agreement and covenant by and between Trustor on any and all notes, loans and deeds of trust that are senior and/or junior to this Deed of Trust. A default in any of these obligations, beyond any applicable cure period, shall constitute a default under this Deed of Trust. B. THE PARTIES AGREE THAT: 9. Waiver of Late Payments. By accepting payment of any sum secured by this Deed of Trust after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure to pay any indebtedness secured by this Deed of Trust. 10. Trustee's Powers. Upon written request of Beneficiary and presentation of this Deed of Trust, Trustee may (a) reconvey all or any part of the Property; (b) consent to the making and recording, or either, of any map or plat of all or any part of the Property; (c) join in granting any easement on the Property; or (d) join in or consent to any extension agreement or any agreement subordinating the lien, encumbrance, or charge of this Deed of Trust. Trustee need not provide Trustor with notice before taking any of the foregoing actions, and shall not be liable for the proper performance of the act. The exercise by Trustee of any of the foregoing powers shall not affect the personal liability of any person for payment of the indebtedness secured by this Deed of Trust, or the lien of this Deed of Trust on the remaining property as security for the repayment of the full amount secured by this Deed of Trust. 11. Partial Reconveyance. Beneficiary shall cause Trustee to partially reconvey this Deed of Trust, with respect to each Affordable Unit, upon the last to occur of: (i) the sale of the Affordable Unit; (ii) the Low -Income Household's execution of the First -Time Homebuyer Note; (iii) the 3 H:\Habitat\Developer Deed of Trust v2 1820 G.doc recordation against the individual Affordable Unit of the Resale Restriction; and (iv) the recordation against the individual Affordable Unit of the deed of trust securing the First -Time Homebuyer Note and the Resale Restriction. 12. Full Reconveyance. Upon written request of Beneficiary stating that all obligations secured by this Deed of Trust have been performed in full, surrender of this Deed of Trust, any notes secured by this Deed of Trust to the Trustee for cancellation and retention, and payment of Trustee's fees and charges, Trustee shall reconvey, without warranty, the Property then subject to this Deed of Trust. Absent manifest error, the recitals in the reconveyance shall be conclusive proof of the truthfulness of the recitals. The grantee in the reconveyance may be described as "the person or persons legally entitled thereto." Five years after issuance of the full reconveyance, Trustee may destroy the Note and this Deed of Trust, unless directed in the request to retain them. 13. Assignment of Rents. As additional security, Trustor hereby gives to and confers upon Beneficiary the right, power, and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, but reserves the right, prior to any default by Trustor in payment of any indebtedness secured by this Deed of Trust or in the performance of any agreement under this Deed of Trust, to collect and retain these rents, issues, and profits as they become due and payable. Upon any such default for which cure has not been commenced within thirty (30) days and thereafter completed with diligence, Beneficiary may, without notice and without regard to the adequacy of the security for the indebtedness secured by this Deed of Trust, either personally or by agent or court -appointed receiver, do the following: enter upon and take possession of the Property or any part of the Property; sue for or otherwise collect all rents, issues, and profits, including those past due and unpaid; and apply these rents, issues, and profits, less costs and expenses of operation and collection (including reasonable attorneys' fees), upon any indebtedness secured by this Deed of Trust, in any order determined by Beneficiary. The exercise of the foregoing rights by Beneficiary shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. 14. Default in Foreclosure. Upon default by Trustor in the payment of any indebtedness secured by this Deed of Trust or in the performance of any obligation under this Deed of Trust, the DDA and/or the AARP for which cure has not been commenced within thirty (30) days and thereafter completed with diligence, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Trustee shall cause the notice of default and election to sell to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, a copy of the Agreement, and all other documents evidencing obligations secured by this Deed of Trust. After the required time period has lapsed following the recordation of the notice of default, and after notice of sale has been given as required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place specified in the notice of sale, either as a whole or in separate parcels, and in any order determined by Trustee, at public auction to the highest bidder for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser at the auction its deed conveying the Property 4 11:\Habitat\Developer Deed of Trust v2 1820 G.doc sold, but without any covenant or warranty, express or implied. Absent manifest error, the recital in the deed of any matter or fact shall be conclusive proof of the truthfulness of the recital. Any person, including Trustor, Trustee, or Beneficiary, may purchase at the sale. After deducting all costs, fees, and expenses of Trustee and Beneficiary under this paragraph, including costs of procuring evidence of title incurred in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms of this Deed of Trust, not then repaid, with accrued interest at the amount allowed by law in effect at the date of this Deed of Trust; all other sums then secured by this Deed of Trust; and the remainder, if any, to the person or persons legally entitled to the remaining proceeds. 15. Further Encumbrances. Should the undersigned agree to or actually sell, convey, transfer, or dispose of, or further encumber the Property, or any part of it, or any interest in it (each, a "Transfer"), without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may be declared due and payable, at the option of the Beneficiary, unless such Transfer is permitted under Section 603 of the DDA. Consent to one transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions. 16. General Provisions. This Deed of Trust applies to, inures to the benefit of, and binds all parties to this Deed of Trust and their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall mean the Community Development Commission of the City of National City, and the heirs, legatees, devisees, administrators, executors, and assigns of any such person. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 17. Acceptance by Trustee. Trustee accepts this Trust when this Deed, duly executed and ack- nowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 18. Substitution of Trustees. Beneficiary, or any successor in ownership of any indebtedness secured by this Deed of Trust, may from time to time, by written instrument, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust. The substitution instrument shall contain the name of the original Trustor, Trustee, and Beneficiary under this Deed of Trust, the book and page where this Deed is recorded, and the name and address of the new Trustee. When executed by Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, the substitution instrument shall be conclusive proof of proper substitution of the successor Trustee or Trustees. Any successor Trustee or Trustees shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties. 19. Cumulative Powers and Remedies. The powers and remedies conferred in this Deed of Trust are concurrent and cumulative to all other rights and remedies provided in this Deed of Trust or given by law. These powers and remedies may be exercised singly, successively, or together, and as often as deemed necessary. 5 H:Uiabitat\Developer Deed of Trust v2 1820 G.doc 20. Conclusiveness of Recitals. The recitals contained in any reconveyance, trustee's deed, or any other instrument executed by the Trustee from time to time under the authority of this Deed of Trust or in the exercise of its powers or the performance of its duties under this Deed of Trust, shall be conclusive evidence of their truth, whether stated as specific and particular facts, or in general statements or conclusions absent manifest error. Further, the recitals shall be binding and conclusive upon the Trustor, its heirs, executors, administrators, successors, and assigns, and all other persons. 21. Attorneys' Fees. If any action is brought for the foreclosure of this Deed of Trust or for the enforcement of any provision of this Deed of Trust (whether or not suit is filed), Trustor agrees to pay all costs and expenses of Beneficiary and Trustee, including reasonable attorneys' fees; and these sums shall be secured by this Deed of Trust. 22. Co -trustees. If two or more persons are designated as Trustees in this Deed of Trust, any, or all, power granted in this Deed of Trust to Trustee may be exercised by any of those persons, if the other person or persons are unable, for any reason, to act. Any recital of this inability in any instrument executed by any of those persons shall be conclusive against Trustor and Trustor's heirs and assigns. 23. Request for Notices of Default and Sale. In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under that Deed of Trust executed by the Trustor concerning this Property be mailed to: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale under this Deed of Trust be mailed to Trustor at the address of Trustor set forth above. 24. Inspections. Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any and all reasonable times, with at least 24 hours advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. 25. Hazardous Materials Defined. For purposes of this Deed of Trust, "Hazardous Materials" mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), and those substances defined as hazardous wastes in §25117 of the California 6 H:U-Tabitat\Dcvcloper Deed of Trust v2 1820 G.doc Health and Safety Code or as hazardous substances in §25316 of the California Health and Safety Code or in any regulations promulgated under either such law, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. 26. Trustor's Hazardous Materials Representations and Warranties and Indemnity. In addition to the general and specific representations, covenants and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by the Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials) regardless of whether or not caused by or within the control of Trustor. Notwithstanding the foregoing, Trustor's obligations under this section shall not apply to any losses, liabilities, damages, injuries, costs, expenses, or claims which arise out of or relate to Hazardous Materials which (1) were present, generated, released, or stored on the Property on or before the date that Trustor acquired title to the Property or (2) are generated, released or stored on the Property after the date that Beneficiary takes possession thereof. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge, or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property ("Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection Agency ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. 7 H:\Habitat\Developer Deed of Trust v2 1820 G.doc (d) Without limitation of Beneficiary's rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the note secured hereby. (e) The foregoing representation, covenants, indemnities and warranties shall be continuing and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations, covenants, indemnities and warranties shall survive such release. 27. Choice of Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. 28. Authority to Sign. All individuals signing this Deed of Trust for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the Beneficiary that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they are signing. TRUSTOR: San Diego Habitat for Humanity, Inc., a California nonprofit corporation By: Print Name: Its: By: Print Name: Its: 8 H:U-IabitatU)eveloper Deed of Trust v2 1 t 20 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 9 1I:11labitat'Developer Deed of Trust v2 1820 G.doc Exhibit "A" Legal Description All that certain real property situated in the City of National City, County of San Diego, State of California, described as follows: 10 H:\Habitat\Developer Deed of Trust v2 1820 G.doc Attachment No. 3 Grant Deed 49 H:\Habitat\DDA v2 1820 G.doc Recording Requested By And When Recorded Mail To And Mail Tax Statements To: San Diego Habitat for Humanity, Inc., 10222 San Diego Mission Road San Diego, CA 92108 This document is exempt from payment of a recording fee pursuant to government Code Section 6103. GRANT DEED For valuable consideration, receipt of which is hereby acknowledged, The Community Development Commission of the City of National City ("CDC"), a public body, corporate and politic, acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the National City Redevelopment Project (the "Project"), under the Community Redevelopment Law of California, hereby grants to San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Developer"), the real property hereinafter referred to as the "Site," described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there. 1. The Site is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by the Community Development Commission of the City of National City, and a Disposition an Development Agreement entered into between CDC and Developer dated , 2008 (the "DDA"), a copy of which is on file with the CDC at its offices as a public record and which is incorporated herein by reference. The DDA generally requires the Developer to construct eight (8) two-story for -sale townhomes on the Site (the "Developer Improvements"), and other requirements as set forth therein. All terms used herein shall have the same meaning as those used in the DDA. 2. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof, that upon the date of this Grant Deed and during construction and thereafter, the Developer shall devote the Site to the uses specified in the Redevelopment Plan and the DDA for the periods of time specified therein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to the DDA, shall conform to the Redevelopment Plan and all applicable provisions of the City of National City Municipal Code. The foregoing covenants shall run with the land. 3. Except as provided in the DDA and Section 10 of this Grant Deed: (a) The Developer shall not make any sale, transfer, conveyance, subdivision, refinancing or assignment of the Site or any part thereof or any interest therein, without the prior written consent of the CDC except as permitted by Section 603 of the DDA. FI:\Habitat\Grant Deed vl 1820 G.doc (b) The Developer shall not place or suffer to be placed on the Site any lien or encumbrance other than mortgages, deeds of trust, or any other form of conveyance required for financing of the construction of the Improvements on the Site, and any other expenditures necessary and appropriate to develop the Site pursuant to the DDA, except as provided in Section 313 of the DDA. (c) All of the terms, covenants and conditions of this Grant Deed shall be binding upon the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used in this Grant Deed, such term shall include any other permitted successors and assigns as herein provided. 4. All documents of transfer shall contain clauses that shall state that there will be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Developer himself or herself or any transferee in interest or any person claiming under or through him or her, 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 land herein conveyed. The foregoing covenants shall run with the land. 5. The CDC has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the CDC the estate conveyed to the Developer if after the Closing and prior to the issuance of the Release of Construction Covenants, the Developer (or its successors in interest) shall: (a) fail to start the construction of the Improvements as required by the DDA for a period of sixty (60) days after written notice thereof from the CDC; (b) abandon or substantially suspend construction of the Improvements required by the DDA for a period of ninety (90) days after written notice thereof from the CDC; (c) fail to complete construction of improvements as required by the DDA; (d) contrary to the provisions of Section 603 of the DDA transfer or suffer any involuntary transfer of the Site or any part thereof in violation of the DDA; or (e) file bankruptcy or an insolvency arrangement with creditors. Such right to re-enter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit: (1) Any mortgage or deed of trust permitted by the DDA; or (2) Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust. 7 1-1:Ufabitat\Grant Deed vl 1820 G.doc Upon the revesting in the CDC of title to the Site as provided in this Section 5, the CDC shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as the CDC shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the CDC) who will assume the obligation of making or completing the Improvements, or such improvements in their stead as shall be satisfactory to the CDC and in accordance with the uses specified for such Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by Grant Deed, shall be applied: (i) First, to reimburse the CDC, on its own behalf or on behalf of the City, all reasonable costs and expenses incurred by the CDC, excluding City and CDC staff costs, but specifically, including, but not limited to, any expenditures by the CDC or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the CDC from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which the Developer has not paid; any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time or revesting of title thereto in the CDC, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the CDC, and in the event additional proceeds are thereafter available, then (ii) Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred for the acquisition and development of the Site and for the improvements existing on the Site at the time of the reentry and possession, less (b) any gains or income withdrawn or made by the Developer from Site or the improvements thereon. Any balance remaining after such reimbursements shall be retained by the CDC as its property. The rights established in this Section 5 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the CDC will have conveyed the Site to the Developer for redevelopment purposes, particularly for development of eight (8) two-story for -sale townhomes and appurtenant uses, and not for speculation in undeveloped land. 6. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by paragraph 4 of this Grant Deed; provided, however, that any subsequent owner of the Site shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 3 H:\Habitat\Grant Deed vl 1820 G.doe 7. All covenants contained in this Grant Deed are covenants running with the land and shall be included in all deeds. 8. All covenants without regard to technical classification or designation shall be binding for the benefit of the CDC, and such covenants shall run in favor of the CDC for the entire period during which such covenants shall be in force and effect, without regard to whether the CDC is or remains an owner of any land or interest therein to which such covenants relate. The CDC, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. 9. Both CDC, its successors and assigns, and Developer and the successors and assigns of Developer in and to all or any part of the fee title to the Site shall have the right with the mutual consent of the CDC to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. However, Developer and CDC are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having any interest in any other such realty. Any amendment to the Redevelopment Plan which proposes to change the uses or development permitted on the Site, or otherwise proposes a change of any of the restrictions or controls that apply to the Site, shall require the written consent of the first mortgagee and the Developer or the successors and assigns of Developer in and to all or any part of the fee title to the Site, but any such amendment which proposes a change affecting the Site shall not require the consent of any tenant, lessee, easement holder, licensee, mortgagee (other than the first mortgagee), trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. 10. Notwithstanding anything contained herein to the contrary, all restrictions against and obligations of Developer set forth herein shall terminate with respect to Developer, but not its successors and assigns, with respect to any Unit upon the sale of such Unit for residential purposes and shall cease with respect to the entire Site following the sale of all of the Units. CDC: Community Development Commission of the City of National City By: Print Name: Its: 4 Dated: , 2008 H:\Habitat\Grant Deed vl 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the persons) 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) 5 H:\llabitat\Grant Deed vl 1820 G.doc Exhibit "A" Legal Description 6 H:Ulabitat\Grant Deed vl 1820 G doc Attachment No. 4 Release of Construction Covenants 50 H:\Habitat\DUA v2 1820 G.doc Recording Requested By: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS ("Release") is made by the Community Development Commission of the City of National City, a public body corporate and politic ("CDC"), in favor of San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Developer"), as of this day of , 20. RECITALS A. CDC and Developer have entered into that certain Disposition and Development Agreement (the "DDA") dated , 2008 concerning the redevelopment of certain real property situated in the City of National City, California as more fully described in Exhibit "A" attached hereto and made a part hereof (the "Site"). B. As referenced in Section 312 of the DDA, CDC is required to furnish Developer or its successors with a Release of Construction Covenants upon completion of construction of the Improvements, as defined in the DDA, on the Site; which Release of Construction Covenants is required to be in such form as to permit it to be recorded in the Recorder's Office of San Diego County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA with respect the Site. C. CDC has conclusively determined that such construction and development of the site has been satisfactorily completed. NOW, THEREFORE, CDC hereby certifies as follows: 1. The Improvements have been fully and satisfactorily completed in conformance with the DDA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in the DDA shall remain in effect and enforceable according to their terms. 1 H:\I-labitat\Release of Construction Covenants v 11820 G.doc 2. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. CDC: Community Development Commission of the City of National City By: Print Name: Its: 2 H:\flabitat\Rclease of Construction Covenants vl 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 3 I-l:Uiabitat\Release of Construction Covenants v 1 1820 G.doc Attachment No. 5 Schedule of Performance Item Closing of Sale of Site to Developer Building Permit Issuance Commencement of Construction Completion of Construction Closing of Sales and Occupancy of Affordable Units 51 Completion Date November 13, 2008 January 2, 2009 January 5, 9 March 1, 2010 March 31, 2010 H:\Habitat\DDA v2 1820 G.doc Attachment No. 6 Scope of Development 52 F1:\Habitat\DDA v2 1820 G.doc Scope of Development Habitat for Humanity 1820 G Street Site Characteristics The 0.33-acre project site is zoned Multi -family Residential - Planned Development (RM- 1-PD). The parcel is situated 2-3 feet above the sidewalk at the southwest corner of the intersection of 18th Street and G Avenue, (see attached Location Map). Bordered by G Avenue, 18th Street, and improved alley, the parcel contains an existing unoccupied residence constructed in 1926 and a shed constructed in 1945. The adjacent property to the south and west contain single family residences, John Otis Elementary School is directly across 18th Street, and a commercial building is located to the east, across G Avenue. Description Habitat for Humanity proposes to construct an eight -unit one -lot condominium subdivision. The 0.33-acre site contains an existing unoccupied residence constructed in 1926 and a shed constructed prior to 1945. The proposal involves demolishing the existing structures and constructing four, two-story duplex units, each containing 1,300 square feet, 3-bedrooms, and 160-square foot private rear yards. Eleven parking spaces with access from the alley on 18th Street and an interior courtyard would be available for the residents. A trash enclosure would be located along the alley. All eight units would be offered to low income households at 60% Area Median Income (AM1) or less. Attachment No. 7 Site Plan 53 H:V iabitat\DDA v2 1820 G.doc awEHU A - J 4111111 pH I il lip; pi °g 1 I dililIP 9'"R 00zz 0 CO n?a m�T C , m NOT FOR CONSTRUCTION VIVO 1O3rOad Attachment No. 8 Site Legal Description All that certain real property located in the City of National City, County of San Diego, State of California, more particularly described as follows: 54 H:Ulabitat\DDA v2 1820 G.doc Legal Description: LOTS 16, 17, 18, 19 AND 20 IN BLOCK 3 OF SUBDIVISION OF W.S. BULLIS, OF TEN ACRE LOT FOURTEEN, IN QUARTER SECTION 153, OF THE RANCHO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 201, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY MAY 27, 1881. APN# 560-233-06 Attachment No. 9 Proforma 55 11:Uiabitat\1DA v2 1820 G.doc TABLE 2 DEVELOPMENT COSTS/SOURCES AND USES OF FUNDS COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY 182o G STREET Total Development Costs DEVELOPER SOURCES Construction Loan Equity DONATIONS Grants/ Sponsorships/C ash Donation In -Kind Labor In -Kind Materials COMMISSION CDC Loan I. Direct Costs Off -Sites Demolition On-Sites/Landscaping Parking Shell Construction Amenities/FF&E Contingency Total Direct Costs II. Indirect Costs Architecture & Engineering Permits & Fees Legal & Accounting Taxes & Insurance Developer Fee Marketing/Sales Contingency Total Indirect Costs [II. Financing Costs Loan Fees Interest During Construction Interest During Sales HOA Dues on Unsold Units Total Financing Costs $219,643 S11,000 $234,000 So $1,028,465 $16,225 $75,000 $1,584,333 $94,272 Sioo,00o $24,000 $80,000 $155,251 $i6,432 $23,000 $492,955 $o $o So So $o S S $ $ S $ S $ S S S S $ $ $ S $ S S $ 34,000 S $ . S $ 883,812 $ 48,000 $ 16,225 $ $ 75,000 $ $ 24,000 '. $ S $ $ 80,251 $ $ 23,000 $ $ S S $ $ S S $ S 48,00o $ $ 219,643 $ 200,000 S $ 48,653 $ $ $ 94,272 $ 100,000 $ 80,000 $ 75,000 $ 16,432 $ $ IV. Total Sources and Uses $2,077,288 $ 1,136,288 $ 48,000 $ 48,000 834,000 Attachment No. 10 Resale Restriction 56 I I:wabitat\DDA v2 1820 G.doc Recording Requested By: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (HEALTH AND SAFETY CODE §33334.3(f)(3)(B)) NOTICE IS HEREBY PROVIDED AS FOLLOWS: 1. San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Habitat"), is the owner of that certain real property located in the City of National City, California, more particularly described in the attached Exhibit "A" ("Property"). 2. The Community Development Commission of the City of National City ("CDC") is providing partial financing for the Property with moneys from allocation of HOME funds from the US Department of Housing and Urban Development. 3. Concurrently herewith Habitat and the CDC are causing the Property to be encumbered by that certain AGREEMENT AFFECTING REAL PROPERTY ("Restrictions"), which generally restrict the sale and occupancy of eight (8) two-story townhomes at the Property to persons at or below 60% of AMI, as set forth in more detail therein. 4. The Restrictions expire forty-five (45) years from completion of construction of the Affordable Units as set forth in the Restrictions. 5. The Property is generally located at 1820 G Street, National City, California. 1 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc 6. The Property assessor's parcel number is 7. In the event of any conflict between one or more provisions of this document and one or more provisions of the Restrictions, the provisions of the Restrictions shall apply. HABITAT: San Diego Habitat for Humanity, Inc., a California nonprofit corporation By: Print Name: Its: By: Print Name: Its: CDC: Community Development Commission of the City of National City By: Print Name: Its: 2 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 2008, before me, personally appeared, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ACKNOWLEDGMENT State of California ) County of San Diego ) On , 2008, before me, personally appeared, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 3 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 2008, before me, personally appeared, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 4 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc Exhibit "A" Property Description The land referred to is situated in the City of National City, County of San Diego, State of California, described as follows: 5 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc Attachment No. 11 Agreement Affecting Real Property 57 H:vlabitat\DDA v2 1820 G.doc Recording Requested By: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. AGREEMENT AFFECTING REAL PROPERTY THIS AGREEMENT AFFECTING REAL PROPERTY is made this day of 2008, between San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Developer"), and the Community Development Commission of the City of National City ("CDC"). A. Developer is the owner of that certain real property located in the City of National City, County of San Diego, State of California, described in Exhibit "A" attached hereto and made a part hereof (referred to herein as the "Property"). B. Developer has acquired the Property from the CDC pursuant to that certain Development and Disposition Agreement dated , 2008 ("DDA"), in furtherance of the Redevelopment Plan for the National City Redevelopment Project ("Redevelopment Plan"), adopted by Community Development Commission of the City of National City on July 18, 1995. One of the components of the Redevelopment Plan for the National City Redevelopment Project, adopted by Community Development Commission of the City of National City on July 18, 1995, is to provide affordable housing opportunities for households earning eighty percent (80%) or less of the area medium income, adjusted for family size and revised annually by the U.S. Department of Housing and Urban Development for the San Diego Metropolitan Statistical Area. C. In order to further assist in the development of below market rate affordable housing, the CDC and Owner have agreed to enter into this Agreement Affecting Real Property to be covenants, conditions and restrictions and equitable servitudes running with the land with respect to the Property. 1 H:\Habitat\AARP vl 1820 G.doe NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, CDC and Developer hereby agree and declare as follows and each subsequent owner of the Property and their successors are deemed to covenant and agree, that the Property shall be held, sold and conveyed subject to the following covenants and conditions which shall run with the land and be binding on all parties having any right, title or interest in the Property, their respective heirs, legatees, devisees, administrators, executors, successors and assigns, and shall inure to the benefit of the CDC, its successors and assigns: 1. Construction of Affordable Units. Under the terms of the DDA, Developer is obligated to construct on the Property a total of eight (8) two-story for -sale townhomes (the "Affordable Units"), as set forth in more detail therein. No other dwelling units will be constructed on the Property. 2. Definitions. The following terms shall have the following meanings: (a) Area Median Income. "Area Median Income" shall mean the area median income defined by the Department of Housing and Urban Development (HUD) as the then current area median income for the San Diego Standard Metropolitan Statistical Area, established periodically by HUD and published in the Federal Register, as adjusted for family size. In the event HUD ceases to publish an established area median income as aforesaid, CDC may, in its sole discretion, use any other reasonably comparable method of computing area median income. (b) Low Income Household. "Low Income Household" means persons and families whose income does not exceed sixty percent (60%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in Section 4 of this Agreement Affecting Real Property. (c) Maximum Sales Price. "Maximum Sales Price" shall mean the maximum amount of consideration, of any kind whatsoever, that the Developer may receive for any Affordable Unit, which amount shall not exceed the lesser of: (i) the sum of (A) the purchase price which would result in a Monthly Housing Cost, as determined by the CDC, which does not exceed the product of one twelfth (1/12) of thirty percent (30%) times sixty percent (60%) of the then Area Median Income as adjusted for household size appropriate for the unit, plus (B) the amount of the Developer Note assumed by the Low Income Household that purchases such Affordable Unit; or (ii) the Single Family Mortgage Limit for the County of San Diego under Section 203(b) of the National Housing Act (12 U.S.C. §1709(b)) or any other limitation then provided by Code of Federal Regulations §92.254(a) or any successor law or regulation. 2 H:'Habitat\AARP v 1 1820 G.doc 3. Covenants Concerning Sales of Affordable Units and HUD HOME Program. Developer represents and warrants to the CDC that Developer shall sell the eight (8) Affordable Units (all of the units at the Property) only to Low Income Households for an amount that does not exceed the Maximum Sales Price and that future sales of the Affordable Units for a period of 45 years shall be only to Low Income Households for an amount that does not exceed the Maximum Sales Price. The Affordable Units will be restricted for twenty (20) years from initial occupancy under the HUD HOME Program, Redevelopment Plan and the California Community Redevelopment Law. In the event of conflict during such 20 year period between the statutes, provisions or regulations of the HUD HOME Program, Redevelopment Plan or the California Community Redevelopment Law, the HUD HOME Program shall apply. Thereafter, the Affordable Units will be restricted for the remainder of the term under the Redevelopment Plan and the California Community Redevelopment Law. Developer shall comply with all regulations, policies and procedures promulgated by HUD, or the CDC in connection with the HOME Program, including without limitation all applicable provisions of 24 CFR Part 92. Developer's failure to so comply shall constitute a material default hereunder. 4. Additional Definition of Low Income Households. (a) No Relationship With Developer. The term Low Income Household shall not include any person employed by Developer, or any individuals who are members, principals, officers, directors, partners, employees, agents or shareholders of Developer, or any entity having an ownership interest in the Property or in any Affordable Unit. (b) No Full -Time Students. The term Low Income Household shall not include any person who is a full-time student, or a household comprised exclusively of persons who are full-time students, unless such persons are married and eligible to file a joint federal income tax return. The term "full-time student" shall be defined as any person who will be or has been a full-time student during five calendar months of the calendar year in question at an educational institution (other than a correspondence school) with regular faculty and students. (c) No Student Dependents. Notwithstanding the provisions of subparagraph 4(b), the term Low Income Household shall not include any student dependent as defined in the U.S. Internal Revenue Code, unless the taxpayer (upon whom the student in question is dependent) will reside in the same Affordable Unit. (d) No Owners of Real Property. The term Low Income Household shall not include any person or any household comprised of one or more persons who own real property. (e) Liquid Asset Limitation. The term Low Income Household shall not include any person or household holding, directly or indirectly, liquid assets whose aggregate value exceeds, at the time of determination of eligibility, one hundred percent (100%) of the then -current annual Area Median Income. As used herein, the term "liquid assets" refers to cash and assets which are readily convertible to cash within a reasonable period, including but not limited to savings and checking accounts, certificates of deposit of any term, marketable securities, money market and similar accounts, mutual fund shares, and insurance policy cash values. The term "liquid assets" shall not 3 11:U labitat\AARP v 1 1820 G.doc include retirement funds which are not readily accessible or which cannot be accessed by the buyer without the buyer incurring a penalty. (f) Income of Co -Purchasers. The income of all co -purchasers and/or occupants shall be taken into account in determining whether a household is a Low Income Household. (g) Principal Place of Residence. A purchaser of an Affordable Unit shall not qualify as a Low Income Household, unless that purchaser agrees to reside in the Affordable Unit as such purchaser's principal place of residence during the entire period that the Affordable Unit is owned by such purchaser. 5. Release and Termination. The CDC shall partially release and terminate this Agreement Affecting Real Property, with respect to each Affordable Unit, upon the last to occur of: (i) the sale of the Affordable Unit; (ii) the Low -Income Household's execution of the First -Time Homebuyer Note, as defined in the DDA; (iii) the recordation against the individual Affordable Unit of the Resale Restriction, as defined in the DDA; and (iv) the recordation against the individual Affordable Unit of the deed of trust securing the First -Time Homebuyer Note and the Resale Restriction. 6. Foreclosure by Court Action. The CDC may in its sole and absolute discretion foreclose the lien created hereby by foreclosing on the Deed of Trust securing this Agreement Affecting Real Property or by court action in the manner provided by the laws then applicable to this Agreement Affecting Real Property, in either case the Developer agrees to pay all costs and expenses thereof, including reasonable attorneys' fees as the court may determine. 7. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and will be effectively served upon personal delivery or, if mailed, no later than 48 hours after deposit in first class or certified United States mail, postage prepaid, sent to: To CDC: To Developer: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 Attention: Executive Director San Diego Habitat for Humanity, Inc. 10222 San Diego Mission Road San Diego, CA 92108 Attention: Executive Director which addresses may be changed by written notice. 4 I l:\I labitat\AARP v 1 1820 G.doc 8. Standing, Equitable Remedies; Cumulative Remedies. Developer expressly agrees and declares that the CDC or its successors shall be the proper party and shall have standing to initiate and pursue any and all actions or proceedings, at law or in equity, to enforce the provisions hereof and/or to recover damages for any default hereunder, notwithstanding the fact that such damages or the detriment arising from such a default may have actually been suffered by some other person or by the public at large. Further, Developer expressly agrees that receivership, injunctive relief and specific performance are proper pre-trial and/or post -trial remedies hereunder, and that, upon any default, and to assure compliance with this Agreement Affecting Real Property. Nothing in this paragraph, and no recovery to the CDC, shall restrict or limit the rights or remedies of persons or entities other than the CDC, against Developer in connection with the same or related acts by Developer, the Property or this Agreement Affecting Real Property. 9. General Provisions. (a) Integration. The undersigned, and each of them, acknowledge and represent that no promise or inducement not expressed in this Agreement Affecting Real Property has been made in connection with this Agreement Affecting Real Property. This Agreement Affecting Real Property contains the entire agreement and understanding between the parties as to its subject matter. (b) Waiver and Amendment. No provision of this Agreement Affecting Real Property, or breach of any provision, can be waived except in writing. Waiver of any provision or breach shall not be deemed to be a waiver of any other provision, or of any subsequent breach of the same or other provision. Except as otherwise provided herein, this Agreement Affecting Real Property may be amended, modified or rescinded only in writing signed by Developer and the CDC. (c) Time of Essence. Time is expressly declared to be of the essence in this Agreement Affecting Real Property, and of every provision in which time is an element. (d) Captions. Paragraph titles and captions contained in this Agreement Affecting Real Property are inserted as a matter of convenience and for reference, and are not a substantive part of this Agreement Affecting Real Property. (e) Further Assurances. The parties each agree to sign any additional documents, which are reasonably necessary to carry out this Agreement Affecting Real Property or to accomplish its intent. (f) Benefit and Burden. This Agreement Affecting Real Property shall be binding upon and inure to the benefit of the parties and their respective heirs, representatives, successors and assigns. This Agreement Affecting Real Property is not intended to benefit any person other than the parties hereto. (g) Governing Law. This Agreement Affecting Real Property has been entered into in the State of California, and shall be interpreted and enforced under California law. 5 H:\Habitat\AARP vl 1820 G.doe (h) Attorneys' Fees. The prevailing party in any action, including, but not limited to, arbitration, a petition for writ of mandate, and/or an action for declaratory relief, brought to enforce, interpret or reform the provisions of this Agreement Affecting Real Property shall be entitled to reasonable attorneys' fees and costs (including, but not limited to, experts' fees and costs and trustee's fees, and including "costs" regardless of whether recoverable as such under statute) incurred in such action. (i) Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement Affecting Real Property are hereby incorporated in this Agreement Affecting Real Property by this reference, regardless of whether or not the exhibits are actually attached to this Agreement Affecting Real Property. The Recitals to this Agreement Affecting Real Property are hereby incorporated in this Agreement Affecting Real Property by this reference. (j) Signatures. This Agreement Affecting Real Property may be signed in counterparts. All individuals signing this Agreement Affecting Real Property for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the CDC that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they are signing. CDC: Community Development Commission of the City of National City By: Print Name: Its: APPROVED AS TO FORM: Walter F. Spath III Special Counsel to CDC DEVELOPER: San Diego Habitat for Humanity, Inc., a California nonprofit corporation By: Print Name: Its: By: 6 11:\Habitat\HARP v 1 1820 G.doc Print Name: Its: 7 H:\Habitat\AARP v 1 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 8 f l:\E labitat\AARP v l 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 200_ before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 9 }1:\Habitat\AARP vl 1820 G.doc Attachment No. 12 Environmental Indemnity 58 HAIlabitat\DDA v2 1820 G.doc UNSECURED ENVIRONMENTAL INDEMNITY AGREEMENT THIS UNSECURED ENVIRONMENTAL INDEMNITY AGREEMENT ("Indemnity") is dated as of this day of , 2008, by San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Indemnitor"), to and for the benefit of the Community Development Commission of the City of National City ("CDC"), its successors and assigns and, to the extent not otherwise referenced, the Indemnified Parties (as hereinafter defined). RECITALS A. CDC has agreed to make a loan ("Loan") to Indemnitor as described in that certain Development and Disposition Agreement between CDC and Indemnitor, dated as of 2008 ("DDA") and that certain Note Secured by Deed of Trust made by Indemnitor in favor of CDC, dated as of , 2008 ("Promissory Note"), which Loan is secured by, among other things, a Deed of Trust executed by Indemnitor in favor of CDC ("Deed of Trust"). The Deed of Trust encumbers the real property described on Exhibit A attached hereto (the "Property"). B. It is a condition of CDC's making the Loan that this Indemnity be executed and delivered by Indemnitor. CDC is making the Loan in reliance upon this Indemnity. C. This Indemnity is unsecured and is separate from the security and other collateral being delivered by Indemnitor in connection with the making of the Loan. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of CDC making the Loan, and other valuable consideration, the receipt of which is hereby acknowledged, Indemnitor agrees as follows: 1. Indemnity. (a) Subject to Sections 2, 3 and 4 below, Indemnitor hereby agrees to defend, protect, indemnify and hold harmless CDC, CDC's affiliates, directors, officers, shareholders, agents and employees, and CDC's participants, successors and assigns specified in Section 4 hereof (hereinafter, collectively, the "Indemnified Parties"), from and against, and shall reimburse the Indemnified Parties for, any and all actual out-of-pocket costs (including, without limitation, attorneys' fees, expenses and court costs), expenses or losses arising from any claim, liability, damage, injunctive relief, injury to person, property or natural resources, fine, penalty, action or cause of action (collectively, "Costs and Liabilities"), incurred by or asserted against any Indemnified Party and arising directly or indirectly, in whole or in part, out of the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence, of any Hazardous Materials at, on, within, under, about or from the Property, or in or adjacent to any part of the Property, or in the soil, groundwater or soil vapor on or under the Property, or elsewhere in connection with the H:\Habitat\Environmental Indemnity v2 1820 G.doc 1 transportation of Hazardous Materials to or from the Property in violation of any Hazardous Materials Laws, whether or not known to Indemnitor or Indemnified Parties, whether foreseeable or unforeseeable, regardless of the source of such release, discharge, deposit or presence or, except as expressly provided to the contrary in Sections 2 and 4 hereof, regardless of when such release, discharge, deposit or presence occurred or is discovered. Without limiting the generality of the foregoing indemnity, such Costs and Liabilities shall include, without limitation, all actual out-of- pocket costs incurred by Indemnified Parties in connection with (i) determining whether the Property is in compliance with this Indemnity and with all applicable Hazardous Materials Laws or the amount of money required to remediate any environmental contamination, and causing the Property to be or become in compliance, with all applicable Hazardous Materials Laws, (ii) any removal or remediation of any kind and disposal of any Hazardous Materials present at, on, under or within the Property or released from the Property to the extent required by applicable Hazardous Materials Laws in effect at the time of such removal, remediation or disposal, and (iii) repair of any damage to the Property or any other property caused by any removal, remediation or disposal. (b) Upon demand by any Indemnified Party, Indemnitor shall defend any investigation, action or proceeding in connection with any claim or liability, or alleged claim or liability, that would, if determined adversely to such Indemnified Party, be covered by the foregoing indemnification provisions, such defense to be at Indemnitor's sole cost and expense and by counsel reasonably approved by such Indemnified Party, which counsel may, without limiting the rights of an Indemnified Party pursuant to the next succeeding sentence of this Section 1(b), also represent Indemnitor in such investigation, action or proceeding. If any Indemnified Party determines reasonably and in good faith that its defense by Indemnitor is being conducted in a manner which is prejudicial to its interests, such Indemnified Party may elect to conduct its own defense through counsel of its own choosing and at the expense of Indemnitor. (c) As used herein, the term "Hazardous Materials" means and includes any flammable, explosive, or radioactive materials or hazardous, toxic or dangerous wastes, substances or related materials or any other chemicals, materials or substances, exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, may or could pose a hazard to the health and safety of the occupants of the Property or of property adjacent to the Property, including, but not limited to, asbestos, PCBs, petroleum products and byproducts, substances defined or listed as "hazardous substances" or "toxic substances" or similarly identified in, pursuant to, or for purposes of, the California Solid Waste Management, Resource Recovery and Recycling Act (California Government Code §66700 et seq.), the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), Section 25117 or Section 25316 of the California Health & Safety Code; and any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material; or any substances or mixture regulated under the Toxic Substance Control Act of 1976, as now or hereafter amended (15 U.S.C. §2601 et sec .); and any "toxic pollutant" under the Clean Water Act, as now or hereafter amended (33 U.S.C. § 1251 et seq.); and any hazardous air pollutant under the Clean Air Act, as now or hereafter amended (42 U.S.C. §7901 et seq.). II: \liabitatEnvironmental Indemnity v2 1820 G.doe 2 Notwithstanding the above, the term "Hazardous Materials" shall not include small amounts of chemicals, cleaning agents and the like commonly employed in routine household uses in a manner typical of occupants in other similar residential properties provided they are used in compliance with applicable laws. The term "Hazardous Materials Laws" means any federal, state or local law, code, statute, ordinance, rule, regulation, rule of common law or guideline relating to Hazardous Materials now or hereafter enacted or promulgated (collectively, and including, without limitation, any such laws which require notice of the use, presence, storage, generation, disposal or release of any Hazardous Materials to be provided to any party). 2. Time Limits on Claims. Notwithstanding the foregoing provisions: (a) No claim shall be made hereunder by any Indemnified Party unless and until any one of the following events shall have occurred: (i) repayment in full of the Loan (as evidenced by the release and reconveyance of the Deed of Trust); or (ii) vesting of title to the Property in CDC or any Indemnified Party through judicial or non judicial foreclosure or acceptance of a deed in lieu thereof. (b) Indemnitor shall not have any obligation under this Indemnity to an Indemnified Party with respect to any Costs and Liabilities that, prior to the first to occur of the events described in Section 2(a)(i) or (ii) above: (i) were actually known to CDC; (ii) were liquidated in amount, or were otherwise readily determinable in amount without undue delay; and (iii) would have been lawfully and properly includable as part of the secured indebtedness under the Deed of Trust in an action for a deficiency judgment following a judicial foreclosure sale of the Property. (c) If any Indemnified Party or any affiliate of any Indemnified Party has acquired ownership of the Property through foreclosure or deed in lieu of foreclosure, the obligations of Indemnitor hereunder shall apply, without limitation, to all Costs and Liabilities that arise out of or are attributable to, whether directly or indirectly, ownership of the Property or any part thereof by any Indemnified Party or any such affiliate, or to the position of such Indemnified Party or such affiliate as an owner in the chain of title to the Property or any part thereof. (d) If the Loan has been repaid in full, whether by voluntary payment or by foreclosure or deed in lieu of foreclosure, the obligations of Indemnitor hereunder shall continue to apply, without limitation, to all Costs and Liabilities that arise out of or are attributable to, whether directly or indirectly, any claim or allegation against an Indemnified Party relating to any act or omission of such Indemnified Party in respect of the Loan or the Property, or in connection with any exercise of such Indemnified Party's rights under any of the Loan Documents. 3. Acts of Indemnified Parties. (a) Notwithstanding anything to the contrary herein, Indemnitor shall not be liable hereunder to an Indemnified Party to the extent of that portion of any Costs and Liabilities which Indemnitor establishes is attributable to an affirmative act of such Indemnified Party, its agent or any successor in interest of an Indemnified Party at the Property which causes (i) the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence of a I-Iazardous Material at the Property, or (ii) material aggravation of a then existing Hazardous Material condition H:\Habitat\Environmental Indemnity v2 1820 G.doc 3 or occurrence at the Property, if and only if, in either such case referred to in (i) or (ii) above, such act was in violation of any Hazardous Materials Laws or was carried out without reasonable care under the circumstances. (b) In addition, Indemnitor shall not be liable hereunder for that portion of any Costs and Liabilities which Indemnitor establishes is attributable to the introduction and initial release, discharge or deposit, or alleged or suspected introduction, initial release, discharge or deposit of a Hazardous Material at the Property by any party, other than Indemnitor or an affiliate of Indemnitor, at any time after Indemnitor's ownership interest in the Property terminates. Notwithstanding the foregoing, but subject to Sections 2 and 3(a) above and Section 4 below, the liability of Indemnitor hereunder shall otherwise remain in full force and effect after CDC or such affiliate of CDC so acquires title to the Property, including without limitation with respect to any Hazardous Materials which are discovered at the Property after the date CDC or such affiliate of CDC acquires title but which were actually introduced to the Property prior to the date of such acquisition. 4. Indemnified Parties. This Indemnity and Indemnitor's obligations hereunder shall inure to the benefit of and be enforceable only by (a) CDC, CDC's directors, officers, shareholders, agents and employees, (b) any person or entities to which any CDC participates, assigns or sells all or any portion of its interest in the Loan, or which otherwise succeeds to the interest of CDC under the Deed of Trust, whether by purchase or otherwise, and (c) any affiliate of CDC which acquires title to the Property at a foreclosure sale or by deed in lieu of foreclosure. 5. Unsecured Obligations. The obligations of Indemnitor hereunder are unsecured. This Indemnity is not intended to be, nor shall it be, secured by the Deed of Trust or any other instrument or agreement executed by Indemnitor or any other entity or person in favor of CDC or any Indem- nified Party relating to the Loan (except for any guaranty) (such documents together with the Deed of Trust being referred to collectively herein as the "Loan Documents"). The obligations of Indemnitor under this Indemnity are independent of any indemnification or other obligations of Indemnitor under the Loan Documents with respect to any Hazardous Materials. The rights and remedies of the Indemnified Parties under this Indemnity shall be in addition to any other rights and remedies of such Indemnified Parties under the Loan Documents. In no event shall any provision of this Indemnity be deemed to be waiver of or to be in lieu of any right or claim, including without limitation any right of contribution or other right of recovery, that any person entitled to enforce this Indemnity might otherwise have against Indemnitor under any Hazardous Materials Laws. Any sums payable hereunder shall not be deemed to be based upon any diminution in or other impairment of the value of any collateral held by CDC to secure the Loan. 6. Interest on Unpaid Amounts. Any amount claimed hereunder by an Indemnified Party not paid by Indemnitor within thirty (30) days after written demand made by such Indemnified Party and accompanied by a reasonable summary of the amounts claimed, shall bear interest at the rate of ten percent (10%) per annum or the highest interest rate permitted by law, whichever is less. 7. Limitations on Liability. The liability of Indemnitor under this Indemnity shall in no way be limited or impaired by (a) any amendment or modification of the provisions of any of the Loan Documents; (b) except as set forth in Sections 2, 3 and 4, any participation in or sale or assignment I i:\ilabitat\Environmental Indemnity v2 1820 G.doc 4 of the Loan Documents or any sale or transfer of all or part of the Property; (c) the release of Indemnitor or any person or entity from performance or observance of any of the agreements, covenants, terms, or conditions contained in any of the Loan Documents by operation of law; and, in any such case, whether with or without notice to Indemnitor and with or without consideration. Except as provided in Sections 2, 3 and 4, Indemnitor's obligations hereunder shall in no way be impaired, reduced or released by reason of (i) an Indemnified Party's omission or delay in exercising any right described herein or (ii) any act or omission of an Indemnified Party in connection with any notice, demand, warning, or claim regarding violations of codes, laws or ordinances governing the Property. 8. Recourse Obligations. Notwithstanding anything to the contrary in the Loan Documents, Indemnitor shall be personally liable on a recourse basis for the obligations of Indemnitor set forth herein. 9. Successors and Assigns. This Indemnity shall be continuing, irrevocable and binding upon each of the persons and entities comprising Indemnitor and their respective heirs, successors, and assigns. 10. Inconsistencies. In the event of any inconsistencies or conflicts between the terms of this Indemnity and the terms of the other Loan Documents (including any exculpatory language contained therein), the terms of this Indemnity shall control. 11. Separate Causes of Action. A separate right of action hereunder shall arise each time an Indemnified Party acquires knowledge of any matter described herein. Separate and successive actions may be brought hereunder to enforce any of the provisions hereof at any time and from time to time. No action hereunder shall preclude any subsequent action. 12. Severability. if any provision of this Indemnity shall be determined to be unenforceable in any circumstances by a court of competent jurisdiction, then the balance of this Indemnity never- theless shall be enforceable, and the subject provision shall be enforceable in all other circumstances. 13. Attorneys' Fees. In any action or proceeding brought by the Indemnified Parties to enforce any rights under this Indemnity, the prevailing party shall be entitled to all reasonable attorneys' fees and all costs, expenses and disbursements in connection with such action. 14. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and will be effectively served upon personal delivery or, if mailed, no later than 48 hours after deposit in first class or certified United States mail, postage prepaid, sent to: To CDC: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 To Developer: San Diego Habitat for Humanity, Inc. H:\Habitat\Environmental Indemnity v2 1820 G.doc 5 10222 San Diego Mission Road San Diego, CA 92108 which addresses may be changed by written notice. 15. Governing Law. This Indemnity shall be governed by and construed in accordance with the laws of the State of California. 16. Counterparts. This Indemnity may be executed in any number of counterparts and, as so executed, the counterparts shall constitute one and the same agreement. The parties agree that each such counterpart is an original and shall be binding upon all the parties, even though all of the parties are not signatories to the same counterpart. 17. Exhibits and Recitals Incorporated. All exhibits referred to in this Indemnity, if any, are hereby incorporated in this Indemnity by this reference, regardless of whether or not the exhibits are actually attached to this Indemnity. The Recitals to this Indemnity are hereby incorporated in this Indemnity by this reference. 18. Signature Authority. All individuals signing this Indemnity for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the CDC that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they arc signing. IN WITNESS WHEREOF, this Indemnity is executed as of the day and year above written. CDC: Community Development Commission of the City of National City By: Print Name: Its: APPROVED AS TO FORM: Walter F. Spath I1I Special Counsel to CDC DEVELOPER: San Diego Habitat for Humanity, Inc., a California nonprofit corporation H:\Habitat\Environmental Indemnity v2 1820 G.doc 6 By: Print Name: Its: By: Print Name: Its: 11:\Habitat\Environmental Indemnity v2 1820 G.doc 7 Exhibit "A" Legal Description All that certain real property situated in the City of National City, County of San Diego, State of California, described as follows: H:\Habitat\Environmental Indemnity v2 1820 G.doc 8 Attachment No. 13 Notice of Affordability Restrictions 59 11:\Habitat\DDA v2 1820 G.doc Recording Requested By: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (HEALTH AND SAFETY CODE §33334.3(f)(3)(B)) NOTICE IS HEREBY PROVIDED AS FOLLOWS: 1. San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Habitat"), is the owner of that certain real property located in the City of National City, California, more particularly described in the attached Exhibit "A" ("Property"). 2. The Community Development Commission of the City of National City ("CDC") is providing partial financing for the Property with moneys from allocation of HOME funds from the US Department of Housing and Urban Development. 3. Concurrently herewith Habitat and the CDC are causing the Property to be encumbered by that certain AGREEMENT AFFECTING REAL PROPERTY ("Restrictions"), which generally restrict the sale and occupancy of eight (8) two-story townhomes at the Property to persons at or below 60% of AMI, as set forth in more detail therein. 4. The Restrictions expire forty-five (45) years from completion of construction of the Affordable Units as set forth in the Restrictions. 5. The Property is generally located at 1820 G Street, National City, California. 1 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc 6. The Property assessor's parcel number is 7. In the event of any conflict between one or more provisions of this document and one or more provisions of the Restrictions, the provisions of the Restrictions shall apply. HABITAT: San Diego Habitat for Humanity, Inc., a California nonprofit corporation By: Print Name: Its: By: Print Name: Its: CDC: Community Development Commission of the City of National City By: Print Name: Its: 2 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 2008, before me, personally appeared, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ACKNOWLEDGMENT State of California ) County of San Diego ) On , 2008, before me, personally appeared, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 3 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc ACKNOWLEDGMENT State of California ) County of San Diego ) On , 2008, before me, personally appeared, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 4 H:\Habitat\Notice of Affordability Restrictions 1820 G.doc Exhibit "A" Property Description The land referred to is situated in the City of National City, County of San Diego, State of California, described as follows: 5 }i:\Habitat\Notice of Affordability Restrictions 1820 G.doc RESOLUTION NO. 2008 — 218 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH SAN DIEGO HABITAT FOR HUMANITY TO DEVELOP AN AFFORDABLE HOUSING PROJECT AT 1820 G AVENUE WHEREAS, the Community Development Commission of the City of National City ("CDC") is implementing the Redevelopment Plan for the National City Redevelopment Project; and WHEREAS, the CDC acquired the property located at 1820 G Avenue using $875,000 in federal HOME funds to develop an affordable housing project; and WHEREAS, San Diego Habitat for Humanity is a certified Community Housing Development Organization qualified to develop an affordable housing project utilizing federal HOME funds, and was selected on December 19, 2006, by the CDC to develop said property; and WHEREAS, the CDC desires to partner with San Diego Habitat for Humanity by transferring title to the property at the price of one dollar; and WHEREAS, the CDC further desires to assist San Diego Habitat for Humanity to develop eight for -sale townhomes affordable to families earning 60-percent of the Area Median Income as defined by the U.S. Department of Housing and Urban Development by clearing the property of existing structures, providing $335,000 in Fiscal Year 2008-2009 HOME funds, and providing $500,000 in prior year HOME funds; and WHEREAS, San Diego Habitat for Humanity has worked diligently to process land use entitlements and permits for the project; and WHEREAS, on September 15, 2008, the National City Planning Commission recommended approval of the Project; and WHEREAS, on October 7, 2008, the City Council of the City of National City approved the project and review of the project per the California Environmental Quality Act and the National Environmental Protection Act. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City hereby authorizes the Chairman to execute a Disposition and Development Agreement with San Diego Habitat for Humanity to develop an affordable housing project at 1820 G Street, National City. -- Signature Page to Follow -- Resolution No. 2008 — 218 October 7, 2008 Page 2 PASSED and ADOPTED this 7th day of October, 2008. Ron Morrison, Chairman APPROVED AS TO FORM: / ,)2 George H. Eiser, Ill City Attorney Passed and adopted by the Community Development Commission of the City of National City, California, on October 7, 2008, by the following vote, to -wit: Ayes: Commissioners Morrison, Natividad, Parra, Ungab, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman, Community Development Commission Secretary, evelopment Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2008-218 of the Community Development Commission of the City of National City, California, passed and adopted on October 7, 2008. Secretary, Community Development Commission By: Deputy City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT MEETING DATE October 7, 2008 AGENDA ITEM NO. 36 /ITEM TITLE A resolution approving a Disposition and Development Agreement with San Diego Habitat for Humanity Inc for an affordable housing project to be located at 1820 G Street. PREPARED BY Patricia Beard (ext 4255) Redevelopment Manager DEPARTMENT Redevelopment Housing and Grants EXPLANATION The Community Development Commission ("CDC") acquired the 15,246 square feet parcel at 1820 G Street using $875,000 in HOME funds from the US Department of Housing and Urban Development ("HUD") for the purpose of developing an affordable housing project on the site. HUD requires that a certified Community Housing Development Organization ("CHDO") be selected as the developer. Since the 2004 CDC acquisition, a competitive recruitment for such a qualified CHDO was conducted and San Diego Habitat for Humanity was selected for the project. This Agreement would allow transfer of the land to Habitat for Humanity for the price of $1 for the development of eight (8) two-story for sale townhomes to be sold as affordable to buyers earning at or below 60-percent Average Median Income ("AMI") as defined by HUD and to be restricted in price to remain affordable to those earning at or below 60-percent of AMI for a period of 45 years. An additional subsidy of $835,000 would also be provided to achieve the desired affordability levels - $335,000 in FY 08-09 HOME funds allocation and $500,000 in prior year HUD HOME funds. Environmental Review Review per the California Environmental Quality and National Environmental Protection Acts were approved by the City Council on October 7, 2008. Financial Statement The property located at 1820 G was acquired by the CDC for $875,000 using HUD HOME funds. The sale of the property to San Diego Habitat for Humanity will be for $1. An additional $835,000 will be provided - $335,000 in allocated HOM�fu •s and $500,000 in prior year HUD HOME funds. Account No. 5 -4 62-6 0-3738 STAFF RECOMMENDATION Adopt the resolution. BOARD / COMMISSION RECOMMENDATION The Planning Commission unanimously approved the project at its meeting of September 15, 2008. STRATEGIC GOAL 6c. Develop affordable housing by leveraging 20-percent TIF set aside, HOME funds, and other affordable housing financing programs. ATTACHMENTS 1. Proposed DDA 2. Project proforma Resolution No. OFFICE OF THE CITY CLERK San Diego Habitat for Humanity Resolution No. 2008-218 DDA Housing Project -1820 G Avenue Alfredo (Housing & Grants) Forwarded Copy of DDA to Developer 1243 National City Blvd., National City, CA 91950 619-336-4228 phone • 619-336-4229 fax