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HomeMy WebLinkAbout13 DISPOSITION & DEVELOPMENT AGREEMENT WITH HABITAT FOR HUMANITY FOR 140 S A STREETMEETING DATE: TO: FROM: SUBJECT: SUMMARY Agenda Item 13 Reviewed: AGENDA REPORT City Manager Finance DirectorN/A JULY 5, 2016 JEFFREY C. PARKER, CITY MANAGER & HOUSING AUTHORITY EXECUTIVE DIRECTOR TUSTIN HOUSING AUTHORITY DISPOSITION AND DEVELOPMENT AGREEMENT WITH HABITAT FOR HUMANITY FOR 140 S A STREET Request for approval to enter into a Disposition and Development Agreement (DDA) between the City of Tustin (City), Tustin Housing Authority (Housing Authority) and Habitat for Humanity of Orange County, Inc., (Developer) for 140 S A Street. The Developer will build two (2) affordable units to be sold to income -eligible Veterans. RECOMMENDATION Authorize the City Manager and Housing Authority Executive Director to execute the DDA between the City, Housing Authority and Habitat for Humanity of Orange County, Inc., subject to any non -substantive modifications as may be deemed necessary and/or recommended by the City Attorney and approved by the City Manager/Executive Director. FISCAL IMPACT Upon fulfillment of the DDA terms, the City will be conveying the property to the Developer at no cost in order to facilitate the development of two (2) affordable ownership units for Veterans. 140 S A Street carries a value of $131,817.81 on the City's financial statements, listed under Property Held for Sale. CORRELATION TO THE STRATEGIC PLAN The DDA fosters a strong relationship with Habitat for Humanity of Orange County, Inc. and provides leadership within the region by creating affordable ownership opportunities for Veterans, aligning with Goal D: Strong Community and Regional Relationships. BACKGROUND In 2009, the City purchased 140 S A Street as part of bankruptcy proceedings. The property had received numerous City Code violations dating back to 2000. The property is vacant and, in 2015, the Developer approached the City about a partnering to build two (2) affordable ownership units for the benefit of Veterans. Agenda Report July 5, 2016 Page 2 Upon City Council direction, staff began negotiating a DDA with the Developer for the development of two affordable ownership units to be sold to income -eligible Veterans. The Developer will build 2 detached units: 1) 4 -bedroom and 2 % Bath, 2 story, 2 car garage home; and 2) 3 -bedroom and 2'/2 Bath, 2 story, 2 car garage home. The Developer will sell each unit to income -qualified Veterans. The 4 -bedroom home will be sold to a Veteran who qualifies as a moderate income household and the 3 -bedroom home will be sold to a Veteran who qualifies as a low income household. The DDA requires the Developer to restrict affordability on the homes for 60 years. Typically, when the City enters into a DDA with a developer, the developer is receiving simultaneous approval for entitlements and their site plan. While the Developer has conducted their due diligence of the site, they have not submitted plans or a Subdivision map. The Developer anticipates submittal in the next 60 days. It has come to the City's attention that tying the DDA to entitlement and site plan approvals will delay the Developer's fundraising efforts. The Developer cannot begin raising funds until they have an executed agreement to show to their prospective donors. In order to expedite the project and allow the Developer to begin raising funds for the project, staff are recommending the Council approve the attached DDA. Upon DDA approval, the Developer anticipates it will take six to eight months to raise the necessary funds for construction. While they are raising funds, they will submit plans and seek entitlements and site plan approvals. Once they provide evidence of financial capability, and meet the other conditions of the DDA's Schedule of Performance, the property will then be conveyed and construction is to commence shortly thereafter. The DDA and the disposition of the Site for affordable housing is exempt from the California Environmental Quality Act pursuant to Title 14, California Code of Regulations, sections 15194 and 15195. Staff is available for any questions the Commission may have. Jerry Craig Economic D elo e t ousing Manager Tustin Ho inc uthon v chment: Disposition and Development Agreement (DDA) DISPOSITION AND DEVELOPMENT AGREEMENT FOR AFFORDABLE HOUSING (] 40 SOUTH "A" STREET) This Disposition and Development Agreement for Affordable Housing ("Agreement") is entered into this day of , 2016, by and between the City of Tustin, a municipal corporation ("City"), the Tustin Housing Authority, a local housing authority ("Authority"), and Habitat for Humanity of Orange County, Inc., a California non-profit, public benefit corporation ("Developer"). RECITALS A. The City owns Assessor's Parcel No. 401-36103 located in the City of Tustin, County of Orange, State of California, commonly referred to as 140 South "A" Street, which is depicted in the site map attached hereto as Attachment 1 and described in the legal description attached hereto as Attachment 2. B. The Authority is a local housing authority organized and acting pursuant to the Housing Authorities Law, Part 2 of Division 24 of the California Health and Safety Code, §§ 34200 et seq., the purpose of which is to provide safe and sanitary housing opportunities for Tustin residents. C. The City and the Authority are authorized to enter into agreements for the production, improvement, or preservation of affordable housing to households of limited income, with such housing to be available at Affordable Housing Cost (as defined below). D. The City and the Authority desire to honor the men and women who have served our country in the anned forces by entering into this Agreement with Developer to provide affordable ownership housing for veterans who qualify for affordable housing. D. The Developer is experienced in the development and operation of affordable single and multi -family housing in southern California. E. The Developer has proposed to enter into this Agreement under which the Developer shall develop homes, which shall be designed to be consistent with the surrounding properties within the immediate neighborhood and sold to Qualified Households at prices that do not exceed Affordable Housing Cost throughout the Covenant Period. These undertakings of the Developer are material to this Agreement and but for these undertakings by the Developer, the City and Authority would not have entered into this Agreement. F. This Agreement is in the best interests of the City and the Authority, and the health, safety and welfare of their residents. -1- Disposition and Development Agreement 1172216.1 G, The Agreement and the disposition of the Site for affordable housing is exempt from the California Environmental Quality Act pursuant to Title 14, California Code of Regulations, sections 15194 and 15195. AGREEMENT NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, the parties hereto agree as follows: 1. DEFINITIONS As used in this Agreement, the following capitalized terms shall have the following meanings: "Affordability Covenants" means Attachment 3 to this Agreement referencing a Declaration of Affordability Covenants and Restrictions. "Affordable Housing Cost", as more particularly set forth in Section 50052.5 of the California Health and Safety Code, means a Housing Cost that does not exceed: a) For a Moderate Income Household, a Housing Cost which is not less than 28% of the gross income of the household, nor more than the product of 35 percent times 110 percent of area median income adjusted for family size appropriate for the unit; and b) For a Low Income Household, a Housing Cost which does not exceed the product of 30% times 70% of the area median income adjusted for family size appropriate for the unit. "Affordable Sales Price" shall mean a sales price that will result in a Housing Cost meeting the definition of Affordable Housing Cost. "Area" means the Orange County Primary Metropolitan Statistical Area, as periodically defined by HUD. "Certificate of Completion" means Attachment 5 to this Agreement. "Closing Date" means the date the Deed is recorded, "Conditions Precedent" as set forth in Section 3 of this Agreement, "Conveyance" means the conveyance of the Site by recordation of the Deed. "Covenant Period" means a period of sixty (60) years, as more particularly set forth in the Affordability Covenants and as my be extended by the Parties. -2- Disposition and Development Agreement 1172216.1 "Date of Agreement" means the date that all signatories have signed and executed this Agreement. "Deed" means a grant deed in the form of Attachment 4 to this Agreement. "Default" as defined in Section 7.1 of this Agreement. "Development" means the Homes and associated improvements that are required by this Agreement to be: (i) constructed by the Developer upon the Site, with related offsite improvements, and (ii) operated in conformity with the Deed and the Affordability Covenants. "Director" means the Executive Director of the Housing Authority or his or her designee. "Event of Default" as defined in Section 7.1 of this Agreement. "Hazardous Materials" means any flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substances defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials" or "toxic substances" now or subsequently regulated under any applicable federal, state or local laws or regulations, including without limitation petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the enviromnent or the health and safety of persons. "Home(s)" means the homes required to be developed by the Developer under this Agreement and as more fully set forth in the Affordability Covenants. "Housing Cost" means the annual cost of the principal and interest on a mortgage loan, property taxes, fire and casualty insurance, property maintenance and reasonable allowance for utilities and as is further defined in Title 25, California Code of Regulations, § 6920. "Improvements" means all of the improvements required by the Development. "Low Income Household" means households earning not greater than 80% of median income for the area, as may be adjusted for family size and as is further defined in Health and Safety Code section 50079.5. "Moderate Income Household" means households earning not greater than 120% of median income for the area, as may be adjusted for family size and as is further defined in Health and Safety Code Section 50093. -3- Disposition and Development Agreement 1172216.1 "Notice" shall mean a notice in the form prescribed by Section 9.2 of this Agreement. "Notice of Affordability Restrictions" means Attachment 6 to this Agreement. "Project Documents" means, collectively, this Agreement, the Affordability Covenants, the Deed, all other Attachments to this Agreement, and any other agreement, document, or instrument that are required in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement. "Qualified Household" is a person or a household whom Developer determines is qualified to participate in the ownership of a Horne in the Development in accordance with the Affordability Covenants. This includes persons or families who meet the income qualifications for either a Low Income Household or a Moderate Income Household, as set forth in this Agreement. "Request for Verification of Proposed Buyer" means a fully executed and recorded copy of the Habitat Affordable Housing Agreement as described in Section 5.2(g) herein. "Site" means that real property depicted on Attachment 1 and described with greater particularity by the legal description on Attachment 2. "Veteran" means any person who served or serves honorably on active duty in the armed forces of the United States. "Year" means the period commencing as of the Closing Date and ending as of December 31 of that calendar year, then each succeeding calendar year thereafter during the Covenant Period. 2. DISPOSITION OF THE SITE 2.1 Conveyance of the Site. Subject to the satisfaction of those conditions set forth in Section 3 hereof, the City is prepared to convey the Site to the Developer in consideration of the performance by Developer under all terms and conditions of this Agreement. In consideration of the City and Authority entering into this Agreement and conveying the Site, the Developer shall initiate fundraising/financing efforts to pay the costs of developing the Improvements, develop the Improvements and comply with and cause the use of the Site to conform to the Affordability Covenants throughout the Covenant Period. Subject to the covenants and conditions herein, the City shall convey to Developer title to the Site free and clear of any and all encumbrances, liens, leases, easements, and other exceptions to or defects in title, excepting only the following: (i) the lien of any non -delinquent property taxes and assessments (to be prorated at the close of Escrow); (ii) the covenants and conditions set forth in the Affordability Covenants and Deed for the Site; (iii) property interests held by a public body or public utility including without limitation easements, franchises, licenses, or other property -4- Disposition and Development Agreement 1172216.1 interests of said public body or public utility; and (iv) the approved title exceptions and such other exceptions to title as may hereafter be mutually approved by the City and Developer. 2.2 Fundraisin Financing. Developer does not have sufficient funds on hand to pay the costs for developing the Site. Upon execution of this Agreement, Developer shall initiate fund-raising/financing efforts to pay the costs associated with developing the Site. Developer shall provide Director evidencing of financing in accordance with Section 4.16(a) hereof, when it has the financing to construct the Improvements within the time set forth in the Schedule of Performance (Attachment 7). If Developer has not provided such written evidence of financing within the time set forth in the Schedule of Performance, then this Agreement shall, unless extended by mutual agreement of the Parties, be terminated by its own terms. No further action is required by either Party. The indemnity provisions of this Agreement shall survive such termination. 2.2 Closing Procedure. After Developer has provided the Director with evidence of financing in accordance with Section 4.16(a) and obtains all land use approvals for the Improvements, City, Authority and Developer shall cause to be recorded the following documents in this order: (i) the Affordability Covenants; (ii) the Notice of Affordability Restrictions; (iii) the Deed; and (iv) such other instruments, if any, as shall be approved by Director as necessary or convenient to effectuate and implement the Improvements. 2.3 Deliver of Property "As Is". Developer acknowledges that the City and Authority are not familiar with the condition of the Site and have never occupied the Site, and agrees that they are under no obligation hereunder to perform any tests, studies or other investigation of the Site prior to the Closing. The physical condition of the Site is and shall be delivered from City to Developer in an "as is" condition, with no warranty expressed or implied by either the City or Authority, including without limitation, the presence of Hazardous Materials 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. The Developer hereby waives, releases and discharges forever the Authority and the City, and their employees, officers, agents, volunteers and representatives (hereafter collectively, the "Indemnitees"), from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future, arising out of or in any way connected with the City, the Authority's or the Developer's use, maintenance, ownership or operation of the Site, any Hazardous Materials on the Site, or the existence of Hazardous Materials in any state on the Site, however they came to be placed there, except that arising out of the negligence or misconduct of the Indemnitees. The Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." -5- Disposition and Development Agreement 1172216.1 As such relates to this Section 2.3, the Developer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. 2.4 Hazardous Materials Indemnification and Release. Following the Closing Date, Developer agrees to indemnify, defend and hold harmless the Indemnitees from and against any claim, action, suit, proceeding, damage, liability, deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys' fees), resulting from, arising out of, or based upon (i) the 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 which occurs after the Closing and is not caused by, the Indemnitees, or (ii) the violation, or alleged violation by anyone other than the Indemnitees 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 which occurs after the Closing Date. At the request of the Developer, the City and Authority shall cooperate with and assist the Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that the City and Authority shall not be obligated to incur any expense in connection with such cooperation or assistance. 3. CONDITIONS TO CLOSING 3.1 Conditions Precedent. The City shall not execute the Deed or proceed with the Closing as provided pursuant to this Agreement, unless all of the following conditions precedent (the " conditions precedent") have been fully satisfied, as determined in good faith by the Director (which condition, if it requires action by Developer, shall also be a covenant of Developer): (a) Execution of Documents. The Affordability Covenants and the Deed have been executed by the Developer (where such documents so provide) and are ready to be recorded. (b) Evidence of Financing. Within the time set forth in the Schedule of Performance, Developer shall have provided written proof acceptable to the Director that the Developer has sufficient funds and/or has obtained a loan or financing, subject to customary conditions and the Director has approved such evidence of financing, in accordance with Sections 2.2 and 4.16 hereof. In the event Developer obtains a loan or financing for the construction of the Improvements, such construction loan or financing for the Improvements shall be ready to close, and shall close and shall be immediately available for use in constructing the Improvements. (c) Construction Contract. City and Authority acknowledge that Developer is a California licensed contractor and may perform the construction of the Development. Developer shall have confirmed to the Director in writing of its intention to act as the general contractor for the construction of the Development. -6- Disposition and Development Agreement 117223 6,1 (d) Performance and Completion Bonds. Developer shall obtain performance and completion bonds to the satisfaction of the Director to ensure performance and completion of all Improvements required under this Agreement. All bonds shall be issued by good and solvent sureties qualified to do business in California and shall have a rating of A or better in the most recent edition of Best's Key Rating Guide. (e) Insurance. The Director shall have received satisfactory insurance certificates and endorsements that all of the insurance required by Section 4.5 below are in full force and effect. (f) Land Use Approvals. The Developer shall have applied and received all applicable land use approvals, including Design Review, necessary for the completion of the Development. (g) The City's Planning Commission shall have made a finding that the disposition of the Site is in conformance with the City's General Plan in accordance with Government Code section 65402. 3.2 Waiver, Approval or Disapproval. All conditions set forth in Section 3.1, are for the City's and Authority's benefit only and Director may waive all or any part of such rights by written notice to Developer. If the Director shall, within the applicable periods set forth herein, disapprove of any of the items which are subject to the Director's approval, or if any of the conditions set forth in this Agreement are not met within the times called for, the City and Authority may thereafter terminate this Agreement without any further liability on the part of the City and Authority by giving written notice of termination to the Developer. 4. SCOPE OF DEVELOPMENT; INSURANCE AND INDEMNITY 4.1 Scope of Development. The Developer shall develop the Improvements in accordance with the approved plans, drawings and documents for the Improvements. 4.2 Design Review. (a) Developer Submissions. Before commencement of construction of the Improvements or other works of improvement upon the Site, the Developer shall submit to the City any plans and drawings (collectively, the "Design: Development Drawings") which may be required by the City with respect to any permits and entitlements which are required to develop the Improvements. Developer, on or prior to the date set forth in the Schedule of Performance, (Attachment 7) shall submit to the City such plans for the Improvements as required by the City in order for Developer to obtain building permits for the Improvements. _7_ Disposition and Development Agreement 1172216.1 (b) City Review and Approval. The City shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the City Municipal Code and for consistency with the surrounding properties within the neighborhood, and nothing set forth in this Agreement shall be construed to constitute the City's approval of any or all of the Design Development Drawings or to limit or affect the City's review and right to approve, approve subject to conditions, or disapprove Design Development Drawings, plans, drawings, applications, or submittals. (c) Revisions. Any and all revisions required by the City and its inspectors under the City Municipal Code and under other applicable laws and regulations shall be included by the Developer in its Design Development Drawings and other required submittals and shall be completed during the construction of the Improvements. (d) Defects in Plans. The City and Authority shall not be responsible either to the Developer or to third parties in any way for any defects in the Design Development Drawings, nor for any structural or other defects in any work done according to the approved Design Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 4.2. 4.3 Time of Performance; Progress Reports. The Developer shall submit all Design Development Drawings, commence and complete all construction of the Improvements, and satisfy all other obligations and conditions of this Agreement within the times established in this Agreement. Construction of the Improvements shall be commenced on or before the time established in the Schedule of Performance. Once construction is commenced, it shall continuously and diligently be pursued to completion and shall not be abandoned for more than fifteen (15) days except when due to causes beyond the control and without the fault of Developer. During the course of construction and prior to issuance of the Certificate of Completion, Developer shall provide timely reports of the progress of construction when requested by the Director. Developer shall complete construction of all of the Improvements on the Site as specified in the Schedule of Performance, and no later than twenty-four (24) months after the execution of this Agreement. 4.4 Cost of Construction. The cost of planning, designing, developing, and constructing the Improvements to completion shall be borne solely by the Developer. All fees imposed by any governmental entity in connection with the Site or the development of the Improvements shall be borne by Developer and shall be paid when due by Developer. 4.5 Insurance. Except as provided below, commencing as of the Closing Date and continuing through Certificate of Completion, Developer shall maintain at Developer's sole expense, with insurers authorized to do business in the State of California with a current A.M. Best's rating of no less than A-, VII and reasonably approved by the Director, the following policies of insurance in form and substance reasonably satisfactory to the Director: -S- Disposition and Development Agreement 1172216.1 (a) Workers' compensation insurance and any other insurance required by law in connection with the Improvements or other work performed on the Site; (b) upon commencement of construction of the Improvements through execution of a Certificate of Completion, builder's risk -all risk insurance covering 100% of the replacement cost of all Improvements (including offsite and the materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Site is located (including loss by flood if the Site is in an area designated as subject to the danger of flood); (c) following execution of the Certificate of Completion until close of escrow on a home, fire and hazard "all risk" insurance covering 100% of the replacement cost of the Improvements, including any code upgrades, in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Site is located (including loss by flood if the Site is in an area designated as subject to the danger of flood); (d) Public liability or commercial general liability insurance written on an occurrence basis in amounts reasonably required by the Director from time to time, and in no event less than $1,000,000 per occurrence; and (e) All other insurance reasonably required by the Director from time to time. 4.6 Waiver of Subromation. Developer hereby waives all rights to recover against the City or Authority and their respective officers, employees, agents and representatives for any loss incurred by Developer from any cause insured against or required by any Project Document to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if any coverage would be materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation. 4.7 Obligation to Repair and Restore Damage Due to Casualty. If during the period of construction the Improvements shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, Developer shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Improvements to substantially the same condition as the improvements are required to be constructed pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration. Developer shall complete the same as soon as possible thereafter so that the Improvements can be occupied as an affordable housing project in accordance with this Agreement. In no event shall the repair, replacement, or restoration period exceed twenty-four (24) months from the date Developer obtains insurance proceeds unless the Director, in his or her sole and absolute ..9_ Disposition and Developmeiat ,Agreement 1172216.1 discretion, approves a longer period of time. The City and Authority shall cooperate with Developer, at no expense to City and Authority, in obtaining any governmental permits required for the repair, replacement, or restoration. 4.8 Indemnity. (a) Developer shall defend (by counsel satisfactory to City and Authority), indemnify and save and hold harmless the Indemnitees from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, attorneys' fees and court costs) arising from or relating to: (i) a claim, demand or cause of action that any person has or asserts against Developer arising out of this Agreement; (ii) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person retained by Developer with respect to the Site; (iii) from and against any taxes, assessments, mechanic's liens, claims of materialmen and suppliers, or other claims by private parties in connection with activities undertaken by the Developer on the Site; or (iv) Developer's ownership, occupancy or use of the Site. Notwithstanding the foregoing, Developer shall not be obligated to indemnify the Indemnitees with respect to the consequences of any act of active negligence or willful misconduct of the Indemnitees. Developer's obligations under this Section 4.8 shall survive the issuance of the Certificate of Completion and termination of this Agreement. The requirements under this Section 4.8 are in addition to and do not limit the obligations of the Developer under the Deed and Affordability Covenants. (b) The Developer shall reimburse the City or the Authority, as applicable, immediately upon written demand for all costs reasonably incurred by the City or the Authority (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of) in connection with the enforcement of the Project Documents and all related matters including the following: (i) the City's or Authority's commencement of, appearance in, or defense of any action or proceeding purporting to affect the rights or obligations of the parties to any Project Document, and (ii) all claims, demands, causes of action, liabilities, losses, commissions and other costs against which the Indemnitees are indemnified under the Project Documents. Such reimbursement obligations shall survive the issuance of the Certificate of Completion and termination of this Agreement. (c) The Developer shall indemnify the City and Authority from any real estate commissions or brokerage fees which may arise from this Agreement or the Site, including without limitation the sale of the Homes on the Site. The Developer represents that it has engaged no broker, agent, or finder in connection with this transaction, and the Developer agrees to hold the City or Authority harmless from any claim by any broker, agent or finder in connection with this Agreement, the activities by the Developer, or the Site. -10- Disposition and Development Agreement 1172216.1 4.9 Rights of Access. Prior to the issuance of the Certificate of Completion, for purposes of assuring compliance with this Agreement, representatives of the City or Authority shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Improvements so long as such representatives comply with all safety rules. Such representatives shall, except in emergency situations, notify the Developer prior to exercising its rights pursuant to this Section 4.9. 4.10 Compliance with Laws. Developer shall carry out the design, construction and operation of the Improvements in conformity with all applicable laws, including all applicable state labor standards (including payment of prevailing wages if not exempted), the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and the Fair Housing Act, 42 U.S.C. Section 3601 et seq. (and 24 C.F.R. Part 100), the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. The Developer does hereby and shall indemnify and hold each of the Indemnitees harmless from and against any and all claims, demands, causes of action, obligations, damages, liabilities, costs and expenses, including reasonable attorneys' fees, that may be asserted against or incurred by the Indemnitees with respect to or in any way arising from Developer's and Developer's compliance with or failure to comply with applicable laws, including all applicable federal and state labor standards including without limitation the requirements of Labor Code Section 1720, if applicable. 4.11 Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition or physical or mental disability. 4.12 Taxes and Assessments. Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site during any period that Developer owns the Site. Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof which is owned or leased by Developer, or assure the satisfaction thereof within a reasonable time, but in no event to exceed sixty (60) days. The Developer's duties to make payments of taxes and assessments under this Section 4.12 shall cease with respect to properties sold to homebuyers in accordance with this Agreement as of the time of each such sale. 4.13 Liens. If a claim of a lien is given or recorded affecting the Improvements the Developer shall within forty-five (45) days of such recording or service or within five (5) days of the Director's demand whichever last occurs: (i) pay and discharge the same; or (ii) provide the City with indemnification from the Title Company against such lien or other assurance which the City deems, in its sole discretion, to be satisfactory for the payment of such lien and for the full and continuous protection of City and Authority from the effect of such lien. -11- Disposition and Development Agreement 1172216.1 4.14 Certificate of Completion. Promptly after completion of the Improvements in conformity with this Agreement, the Director shall furnish the Developer with a Certificate of Completion, substantially in the form attached hereto as Attachment 5. The Director shall not unreasonably withhold such Certificate of Completion. The Certificate of Completion shall be a conclusive determination of satisfactory completion of the Improvements and the Certificate of Completion shall so state. If the Director refuses or fails to furnish a Certificate of Completion after written request from Developer, the Director shall, within fifteen (15) days of receipt of written request therefor, provide Developer with a written statement of the reasons the Director refused or failed to furnish the Certificate of Completion. The statement shall also contain the Director's opinion of the actions Developer must take to obtain the Certificate of Completion. 4.15 Further Assurances. Developer shall execute and acknowledge (or cause to be executed and acicnowledged) and deliver to the Director all documents, and take all actions, reasonably required by City or Authority from time to time to confirm the rights created or now or hereafter intended to be created under the Project Documents or otherwise to carry out the purposes of the Project Documents. 4.16 Financing of the Improvements. (a) Evidence of Financial Capability. Within the time set forth in the Schedule of Performance, Developer shall submit to the Director, evidence reasonably satisfactory to the Director that Developer has the financial capability necessary for the construction of the Development pursuant to this Agreement. Such evidence of financial capability shall include a copy of the commitment or commitments obtained by Developer for each source of funds to assist in financing the construction of the Development. All copies of commitments submitted by Developer to the Director shall be certified by Developer to be true and correct copies thereof. Each commitment for financing shall be in such form and content acceptable to the Director as reasonably evidences a firm and enforceable commitment, with only those conditions which are standard or typical for the lender involved for similar projects. (b) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer as to the Site as provided herein, whenever the Director may deliver any notice or demand to Developer with respect to any breach or default by the Developer under this Agreement, the Director shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand; provided that the failure to notify any holder of record shall not vitiate or affect the effectiveness of notice to the Developer. Each such holder shall (insofar as such rights are held thereby) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage or deed of trust. Nothing contained -12- Disposition and Development Agreement 1172216.1 in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Improvements, or any portion thereof (beyond the extent necessary to conserve or protect the Improvements) without first having expressly assumed the Developer's obligations under this Agreement in writing satisfactory to the Director. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the Improvements to which the lien or title of such holder relates, but on a schedule which takes into account the time reasonably required for the holder to obtain title to and possession of the Site, analyze and negotiate amendments to plans, specifications, construction contracts and operating contracts or to negotiate new construction contracts and operating contracts. Any such holder properly completing the Improvements shall be entitled, upon compliance with the requirements of Section 4.14 of this Agreement, to a Certificate of Completion. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Site (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (c) Failure of Holder to Complete Improvements. In any case where, sixty (60) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice of a default by the Developer in completion of construction of any of the Improvements, and such holder is not vested with ownership of the Site and has not exercised the option to construct as set forth in Section 4.16, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the City or Authority may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the City or Authority, if it so desires, shall be entitled to a conveyance from the holder upon payment to the holder of an amount equal to the sum of the following: (1) The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (2) All actual and necessary expenses with respect to foreclosure; (3) The net expense, if any, incurred by the holder as a direct result of the subsequent management of the Site or part thereof; -13- Disposition and Development Agreement 1172216.1 (4) The costs of any improvements made by such holder; (5) An amount equivalent to the interest that would have accrued at the rate(s) specified in the holder's loan documents on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the City or Authority; and (6) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer. The foregoing rights shall be in addition to those measures set forth in an inter -creditor agreement, and shall be considered supplement to any other rights the City or Authority may possess by law. (d) Right of the City or Authority to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Developer whether prior to or after the completion of the construction of any of the Improvements or any part thereof (continuing until the expiration of the term of the Deed), Developer shall immediately deliver to the Director a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, the City or Authority shall have the right but no obligation to cure the default. In such event, the City or Authority shall be entitled to reimbursement from the Developer of all proper costs and expenses incurred by either in curing such default. (e) Failure to Obtain Financing. In the event this Agreement is terminated, upon such termination the Developer shall deliver to the Director an executed assignment in a form reasonably acceptable to the Director of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the construction of the Improvements on the Site (the "Plans"), together with copies of all of the Plans. Upon such assignment, the parties agree that they shall have no further obligations or liability to the other pursuant to this Agreement. 5. COVENANTS AND RESTRICTIONS 5.1 Use Covenants. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that the Developer shall devote the Site to the uses specified in and shall operate in conformity with: (i) this Agreement; (ii) the Affordability Covenants; (iii) the Notice of Affordability Restrictions and (iv) the Deed, whichever is the more restrictive in each case unless expressly provided to contrary effect herein. All uses conducted on the Site, including, without limitation, all activities undertaken by the -14- Disposition and Development Agreement 1172216.1 Developer pursuant to this Agreement, shall conform to all applicable provisions of the City Municipal Code. 5.2 Affordable Housing Requirements. (a) Affordability Restrictions. Developer agrees to make available and restrict occupancy to the Homes to a qualifying Veteran constituting one Low and one Moderate Household as more particularly set forth in the Affordability Covenants. (b) Duration of Affordability Requirements. The Homes shall be maintained as an owner -occupied unit available at and owned by a qualifying Veteran constituting one Low and one Moderate Income Households throughout the Covenant Period, as more particularly set forth in the Affordability Covenants. (c) Selection of Buyers. Developer shall be responsible for the selection of homebuyers for the Homes in compliance with the criteria set forth in Section 5.3 of this Agreement. (d) Income of Owners. Each homebuyer shall be a Veteran who qualifies as Low or Moderate Income Household which meets the eligibility requirements established for the Homes, and Developer shall obtain a certification from each prospective purchaser which substantiates such fact. Developer shall verify the income certification of each homebuyer as set forth in Section 5.3. Prior to entering into an agreement for sale of the Holmes on the Site to a homebuyer, the Developer shall cooperate in obtaining substantiation of income, including tax returns. (e) Affordability. Developer shall sell the Homes at an Affordable Sales Price to a Qualified Household. (f) Developer's Continuing Obligations to Qualify Proposed Buyers. The Developer acknowledges that the City and Authority have entered into this Agreement with the expectation that the Developer shall affirmatively manage and ensure the continued affordability of each of the Homes during the term of the Agreement and the Affordability Covenants, whether or not the Developer owns any portion of the Site. In furtherance thereof, the Developer shall be responsible to actively assist any owner of a Home to identify, and resell the Home to, a Qualified Household. Such assistance shall include, but not be limited to, the Developer's repurchase from the owner and resale to another Qualified Household, of the Home and completing and submitting to the City and Authority all documentation required for the transfer of a Horne, and performing all tasks necessary to qualify proposed buyers, all as more fully described herein and in the Affordability Covenants. In addition to implementing the affordability restrictions at the Site, the Developer shall monitor and submit annual compliance reports to the Director as required. -15- Disposition and Development Agreement 1172216.1 (g) Developer shall require every homebuyer to enter into and record in the official Orange County records an Affordable Housing Agreement in the form attached hereto as Attachinent 8, which Affordable Housing Agreement shall name the City and Authority as intended third party beneficiaries with all rights to enforce the provisions of the Affordable Housing Agreement should Developer fail to do so. Developer shall provide City with a conformed copy of the recorded Affordable Housing Agreement at least 10 days prior to the sale or transfer (as the term "transfer" is defined in the Affordable Housing Agreement) of any Home. 5.3 Verifications. (a) Developer shall verify the income of each proposed and existing homebuyer of the Homes in a form and manner that complies with Exhibit "C" of the Affordable Housing Agreement and shall provide City with a copy of thereof, including all information required therein, at least five days prior to the transfer of a Home to a prospective buyer. (b) The Developer shall maintain on file sale agreements, income verifications, development costs and all other relevant records for the Homes developed on the Site. The Developer shall maintain complete and accurate records pertaining to the Homes. Upon the transfer of title to a Home, Developer shall provide the Director with a certified copy of the recorded documents, a copy of the final sales agreement, settlement statement, escrow instructions, and any other documents which the Director may request. Developer will further permit any duly authorized representative of the City or Authority to inspect the books and records of the Developer pertaining to this Agreement and the Home. 5.4 Maintenance of Site. The Developer shall maintain the Homes in conformity with the City Municipal Code and the requirements of the Agreement and Affordability Covenants, and shall beep the Site free from any accumulation of debris or waste materials. If, at any time, the Developer fails to maintain the Site or any portion thereof, and said condition is not corrected as soon as reasonably possible after written notice from the City or Authority, the City or Authority may perform the necessary maintenance and the Developer shall pay such costs as are reasonably incurred for such maintenance. Upon the close of escrow transferring title to a Home from the Developer to a Qualified Household, the Developer's obligations under this Section 5.4 with respect to such Home shall transfer, upon the execution of an assumption of such obligations by the Developer and Qualified Household of such Home. This covenant shall run with the land and shall remain in effect for 60 -years from the date of the Certificate of Completion and through any extension agreed upon by the Parties. -16- Disposition and Development Agreement 1172216.1 5.5 Nondiscrimination Covenants. (a) 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, marital status, sexual preference, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer 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 homebuyers of the Site or any portion thereof. The foregoing covenants shall run with the land. (b) Developer shall refrain from restricting the sale of the Site on the basis of race, color, religion, sex, marital status, sexual preference, handicap, ancestry or national origin of any person. All such deeds shall contain or be subject to substantially the following nondiscrimination or non -segregation clause: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators 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, creed, religion, sex, marital status, sexual preference, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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 homebuyers in the land herein conveyed. The foregoing covenants shall run with the land." 5.6 Effect of Violation after Completion of Construction. The City and Authority are deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land. The City and Authority shall have the right, if the Agreement or any covenants in any agreement pursuant to this Agreement, including without limitation the Affordability Covenants and the Deed, 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 such covenants may be entitled. 6. DEVELOPER'S GENERAL REPRESENTATIONS AND WARRANTIES As a material inducement to City and Authority to enter into this Agreement, Developer represents and warrants that: -17- Disposition and Development Agreement 1172216.1 6.1 Execution and Performance_ of Project Documents. Developer has all requisite authority to execute and perform its obligations under the Project Documents. The execution and delivery by Developer of, and the performance by Developer of its obligations under, each Project Document has been authorized by all necessary action and do not and will not violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by-laws or other governing document applicable to Developer, 6.2 Covenant Not to Transfer Except in Conformity. Except for the sale of the Homes in conformity with this Agreement, the Developer shall not sell, lease, or otherwise transfer or convey all or any part of the Site, or any interest therein, unless the Developer has first obtained the prior written consent of the Director. 7. DEFAULTS, REMEDIES, AND TERMINATION 7.1 Default Remedies. Subject to the extensions of time set forth in Section 7.8 of this Agreement, failure by either parry 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. Except as otherwise expressly provided in this Agreement, and without limiting or affecting rights of parties hereto to terminate this Agreement, a party shall not institute any proceedings against any other party, and the other party shall not be in Default if such party within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy the specified Default and shall complete such cure, correction or remedy with diligence. 7.2 Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, any 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. 7.3 Termination by the Developer. In the event that: (i) the Developer is not in default under this Agreement and the City does not execute the Deed and attempt to convey the Site to the Developer in the manner and condition and by the date provided in this Agreement; or (ii) in the event of any default of the City or Authority prior to the Conveyance which is not cured within the time set forth in Section 7.1 hereof, and any such failure is not cured within the applicable time period after written demand by the Developer, then this Agreement may, at the option of the Developer, be terminated by Notice thereof to the Director. From the date of the notice of termination of this Agreement by the Developer, this Agreement shall be deemed terminated and there shall be no further rights or obligations among the parties. 7.4 Termination by the City or Authority. If prior to the time established in the Schedule of Performance for the satisfaction of the Conditions Precedent: (i) Developer assigns this Agreement or any rights therein or in the Site in violation of this Agreement; or (ii) Developer does not fulfill the Conditions Precedent and such failure is not caused by the City or Authority; or (iii) Developer fails to execute the Affordability Covenants or the Deed; or (iv) -18- Disposition and Development Ad eement 1172216.1 Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 7.1 hereof, then this Agreement and any rights of the Developer or any assignee or transferee with respect to or arising out of the Agreement or the Site, shall, at the option of the City or Authority, be terminated by Notice thereof to the Developer. From the date of the Notice of termination of this Agreement to the Developer and thereafter, this Agreement shall be deemed terminated and there shall be no further rights or obligations among the parties, except that they may pursue any remedies they have hereunder. 7.5 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by a 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 another party. 7.6 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. 7.7 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7.8 Forced Delay; Extension of Times of _Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be 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, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, acts or omissions of another party, or acts or failures to act by any other public or governmental authority or entity (except acts or failures to act of the Authority or City). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the forced 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 fifteen (J 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 the Director and Developer. The Director shall have the authority to approve extensions on behalf of the City and Authority of time not to exceed a cumulative total of one hundred eighty (18 0) days. 8. TRANSFERS OR ASSIGNMENTS 8.1 Prohibition on Transfers or Assignments. The qualifications and identity of the Developer are of particular concern to the City and Authority. Until the completion of the Improvements and the sale of the Homes to be developed on the Site under this Agreement, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or -19- Disposition and Development Agreement 1172216,1 the Development thereon (excepting the sale of the Homes to homebuyers in conformity with this Agreement) without prior written approval of the Director, except as expressly set forth herein. 8.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the City and Authority shall not unreasonably withhold their approval of an assignment of this Agreement or conveyance of the Site, or any part thereof, in connection with any of the following: (a) Any transfers to an entity or entities in which the Developer retains a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) 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 Development. In the event of a proposed assignment by Developer under this Section, Developer agrees that at least thirty (30) days prior to such assignment it shall give written notice to the Director including a request for approval of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer the Obligations of this Agreement. 8.3 Assignment by City/Authority. The City and/or Authority may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be unreasonably withheld. 9. MISCELLANEOUS 9.1 Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of the City or Authority to Developer, or any other claim by Developer against , in connection with the Site or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer's obligations under this Agreement (including without limitation the attachments hereto), or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Project Documents. 9.2 Notices. Any approval, disapproval, demand, document or other notice which either party may desire to give to the other party under this Agreement must be in writing and may be 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: Tustin Housing Authority 300 Centennial Way Tustin, California 92780 Attention: Executive Director -20- Disposition and Development Agreement 1172216.1 Phone: (714) 573-3117 Fax No.: (714) 669-0976 with a copy to: The City of Tustin 300 Centennial Way Tustin, California 92780 Attention: City Manager Phone: (714) 573-3010 Fax No.: (714) 8381602 To Developer: Habitat for Humanity of Orange County 2200 Ritchey Street Santa Ana, CA 92705 Attention: President/CEO Phone: (714) 434-6200 Fax No.: (714) 434-1222 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. 9.3 No Third Parties Benefited. This Agreement is made for the purpose of setting forth rights and obligations of Developer, City and Authority, and no other person shall have any rights hereunder or by reason hereof and there shall be no third party beneficiaries of this Agreement. 9.4 Counterparts. Any Project Document may be executed in counterparts, all of which, taken together, shall be deemed to be one and the same document. Furthermore, each counterpart may be signed and delivered by facsimile, each of which shall be deemed an original if the original is also immediately deposited and sent via registered or certified mail. 9.5 Venue. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange any legal action or proceeding arising out of or relating to this Agreement or the other Project Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue. 9.6 Severability of Provisions. No provision of any Project Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Project Documents are hereby declared to be severable. 9.7 Headings. Article and section headings are included in the Project Documents for convenience of reference only and shall not be used in construing the Project Documents. 9.8 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Project Document, this Agreement shall prevail. The fact that one -21- Disposition and Development Agreement 1172216.1 document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and cannot be simultaneously performed. 9.9 Intemretaton. As used in the Project Documents, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by all Parties. 9.10 No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under the Project Documents to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of the Project Documents. 9.11 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. 9.12 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. 9.13 Time of the Essence. Time is of the essence in performance of this Agreement. 9.14 Warranty gainst Payment of Consideration. Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement. 9.15 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Parties and their permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such telyn shall include any other permitted successors and assigns as herein provided. 9.16 Authority and City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by the City or Authority, the Director is authorized to act on behalf of same unless specifically provided otherwise or the law otherwise requires. 9.17 Real Estate Brokers. The City, Authority and Developer each represent and warrant to each other that no broker or finder is entitled to any commission or finder's fee in -22- Disposition and Development Agreement 1172216.1 connection with this transaction, and each agrees to defend and hold harmless the other from any claim to any such commission or fee resulting from any action on its part. 9.18 Attorneys' Fees. In any action among the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. 9.19 Entire Agreement, This Agreement, including all exhibits and attachments referenced herein, integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth. DEVELOPER: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation C Its: Sharon Ellis President/CEO By: Mark Korando Its: Senior Vice President CITY OF TUSTIN, a municipal corporation, i John Nielsen, Mayor ATTEST: Erica Rabe, City Clerk Signatures continued on nextpage -23- Disposition and Development Agreement 1172216,1 TUSTIN HOUSING AUTHORITY, a local housing authority, In John Nielsen, Chairman ATTEST: By: Erica Rabe, Clerk of the Board APPROVED AS TO FORM: David Kendig, City Attorney Housing Authority General Counsel -24- Disposition and Development Agreement 1172216.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE } On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to rrle that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) _26_ Disposition and Development Agreement 1172216.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) -26- Disposition and Development Agreement 1172216.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ORANGE On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) -27- Disposition and Development Agreement 1172216.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) -28- Disposition and Development Agreement 1172216.1 SITE MAP ATTACHMENT I 110 Q 1i 133eY1S OWN l5 Lf{ Lh yl 4 f Cl 4, yQ Q .. m7 -t Al ;ofiA :zsJOj"}' n This mapiplat is,being furnished as an aid in tgcakjbq the hera(n described Land in relation to adjoining streats.,natural br}b darle5 and,(Aher land, and is nota suNey of the land depicted. Excapt'to the extent a policy a0 title insurance Is expressly modified by ehdcrso.meni, It any,.the CompAny does ,na} nslire:dimensions,.-distario IaaatiDri.b9 oasemsnks, ecr age pr tither m attars sNwh thecean. LEGAL DESCRIPTION ATTACHMENT 2 File No; 216591211 EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT 6 OF BLOCK B OF MRS, A,B, LEWIS'S ADDITION TO TUSTIN, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGES 618 AND 619 OF MISCELLANEOUIS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; ALSO ACCORDING TO MAP ENTITLED "A PART OF TUSTIN CITY", AS PER MAP THEREOF RECORDED IN SOOK 4, PAGES 218 AND 219 OF MISCELLANEOUS MAPS OF LOS ANGELES COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER: 401-361-03 CLIA Preliminary Report Form — Modified (11-17-06) Page 3 DECLARATION OF COVENANTS ATTACHMENT 3 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of Tustin Tustin Housing Authority 300 Centennial Way Tustin, CA 92780 Attention: Director No Fee for Recording Pursuant to Government Code Section 27383 SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE DECLARATION OF COVENANTS AND RESTRICTIONS (Veterans Affordable Housing 140 South "A" Street) This Declaration of Covenants, Conditions and Restrictions ("Affordability Covenants") is made as of this day of , 2016, by Habitat for Humanity of Orange County, Inc., a California non-profit public benefit corporation ("Habitat"), and the City of Tustin, a municipal corporation ("City") and the Tustin Housing Authority, a local housing authority ("Authority"), with reference to the following facts: A. The City is the previous owner of that certain real property (with all improvements thereon) described in Exhibit "A" attached hereto and incorporated herein ("Property"). B. The City, Authority and Habitat entered into a Disposition and Development Agreement for Affordable Housing dated as of , 2016, (the "DDA"). Pursuant to the DDA, the City conveyed the Property to Habitat and Habitat agreed to develop the Property as housing for veterans of low and moderate income. C. The following covenants and restrictions are recorded against the Property as consideration of the DDA. NOW, THEREFORE, the City, Authority and Habitat hereby declare that the following express covenants are to be taken and construed as running with the Property, including as set forth in California Civil Code section 1460, and, except as set forth below, shall pass to and be binding upon Habitat and its successors, assigns, heirs, grantees or lessees to the Property or any part thereof from the date of recordation of this Affordability Covenants and shall continue for sixty (60) years from the Date of Recordation of this Affordability Covenants, including any extensions thereof. Each and every contract, deed, lease or other instrument covering or conveying the Property or any portion thereof shall be held conclusively to have been executed, delivered and accepted this Affordability Covenants and be subject to the covenants and -1- Declarations of Covenants and Restrictions 1088470.1 restrictions contained herein regardless of whether such covenants and restrictions are set forth in such contract, deed, lease or other instruments. Section 1. Definitions. The following definitions shall apply in this Affordability Covenants: (a) "Affordable Housing Cost", as more particularly set forth in Section 50052.5 of the California Health and Safety Code, means a sales price that would result in a Housing Cost that: (i) For a Moderate Income Household, a Housing Cost not less than 28% of the gross income of the household, nor more than the product of 35% times 110% of area median income adjusted for family size appropriate for the unit; and (ii) For a Low Income Household a Housing Cost which does not exceed the product of 30% times 70% of the area median income adjusted for family size appropriate for the unit. (b) "Agreement Documents" shall mean the Affordability Covenants, the DDA, and any other debt, loan, security instrument, or contract between Habitat on the one hand and City and/or Authority on the other, relating to the Property. (c) "Area" means the Orange County Primary Metropolitan Statistical Area, as periodically defined by HUD. (d) "Director" shall mean the Tustin Housing Authority's Executive Director, or as otherwise designated by the City. (e) "Home(s)" shall mean the two units to be developed on the Property. (f) "Housing Cost means the annual cost of the principal and interest on a mortgage loan, property taxes, fire and casualty insurance, property maintenance and reasonable allowance for utilities and as is further defined in Title 25, California Code of Regulations, § 6920. (g) "Low Income Household" means households earning not greater than 80% of median income for the area, as may be adjusted for family size and as is further defined in Health and Safety Code section 50079.5. (h) "Moderate Income Household" means households carning not great than 120% of median income for the area, as may be adjusted for family size and as is further defined in Health and Safety Code Section 50093. (i) "Project" shall mean the development of two homes and associated improvements for Veterans' Affordable Housing on the Property as is further described in the DDA. -2- Declarations of Covenants and Restrictions 1088470.1 (j} "Term" shall mean the term of this Affordability Covenants, which shall commence on the date of recordation of this Affordability Covenants and shall continue until the sixtieth (60") anniversary thereof, including any extension thereof as agreed upon by the Parties. (k) "Qualifying Household" shall mean a Veteran who qualifies as a Low Income Household or Moderate Income Household as defined in this Affordability Covenants. (1) "Veteran" means any person who served or serves honorably on active duty in the armed forces of the United States. Section 2. Residential Use. The Project shall be operated continually and sold solely for residential use to a Qualifying Household for the Term. The Homes may not be rented by a homeowner to another party. Section 3. Sale of Homes. (a) The Project shall be developed and the Homes sold at all times in compliance with all applicable provisions of. (a) the Unruh Act, (b) the United States Fair Housing Act, as amended, excluding 42 U.S.C. Section 3607(a) and 24 CFR 100; (c) the California Fair Employment and Housing Act, Government Code Section 12900 et seq. and (d) any other applicable law or regulation (including the Americans With Disabilities Act, to the extent applicable to the Project). Habitat shall develop and implement appropriate verification procedures to ensure compliance with the requirements of this Section. If requested by City or Authority, Habitat shall provide City or Authority with a copy of its written verification procedures. (b) The Homes shall be sold solely to a Qualified Household. One of the Homes shall be sold to a Veteran qualifying as a Low Income Household and one of the Homes shall be sold to a Veteran qualifying as a Moderate Income Household. Each subsequent sale of a Home, shall be restricted to a prospective purchaser which meets the qualifying standard applicable to that Home. Habitat shall have an ongoing obligation to assist any owner of a Home to identify and resell the Home to a qualified purchaser or in the alternative, Habitat may re -purchase a Home for the express purpose of re- selling it to a Qualifying Household. (c) Habitat agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to City and Authority) City, the Authority and their respective city council, board members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Habitat's failure to comply with applicable legal requirements related to housing for persons with disabilities. The provisions of this subsection shall survive expiration of the Term, and shall remain in full force and effect. -3- Declarations of Covenants and Restrictions 1088470.1 Section 4. Records. Habitat shall maintain complete, accurate and current records pertaining to the Project and sufficient to support the information provided in the annual and fiscal performance reports and shall permit any duly authorized representative of City or Authority to inspect such records. All such information shall at all times be kept separate and identifiable from any other business of Habitat and shall be maintained in a reasonable condition for proper audit and subject to examination during business hours by representatives of City and Authority. Habitat shall retain copies of all such materials for a period of at least five (5) years. Section S. Performance. Habitat shall fulfill the reporting requirements specified in this Affordability Covenants for the full Term of this Affordability Covenants, unless otherwise specifically provided. (a) Specifically, Habitat shall verify the income of each proposed and existing homebuyer in a form that substantially complies with the Request for Verification of Proposed Buyer prior to the transfer of a Horne to a prospective buyer. The Developer shall maintain complete and accurate records pertaining to the Homes. Upon the transfer of title to a Home, Developer shall provide the Director with a certified copy of the recorded documents, a copy of the final sales agreement, settlement statement, escrow instructions, and any other documents which the Director may request. Developer will further permit any duly authorized representative of the City and Authority to inspect the books and records of the Developer pertaining to this Agreement and the Home. (b) Performance Monitoring City and/or Authority shall monitor the performance of Habitat to ensure Habitat's compliance with this Affordability Covenants. Non-compliance, as reasonably determined by City or Authority, will constitute non-compliance with this Affordability Covenants, and shall be considered a default under the Agreement Documents, entitling the City and Authority to exercise the remedies provided therein. Section 6. Maintenance of Site. Habitat agrees, for the entire Term to maintain the Property in compliance with the City Municipal Code and this Affordability Covenants. It shall constitute an event of default herein if Habitat fails to do so as to the Property, and if such default continues for a period of thirty (30) days after written notice from the Director with respect to graffiti, debris, waste material, general maintenance or other condition that the Director determines to constitute a nuisance, or sixty (60) days after written notice from the Director with respect to any other condition of the Property or Project, including, but not limited to, any environmental hazards, violations of the California Building Code and ADA requirements, landscaping, and building improvements (interior, exterior, superficial, or structural), then the City and Authority, in addition to whatever other remedy they may have at law or in equity, shall have the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City and Authority shall be permitted (but are not required) to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and 0 Declarations of Covenants and Restrictions 1098470.1 landscaped areas on the Property, to assess the Property for the costs of such work, and to attach a lien on the Property. Habitat shall promptly pay to the City and Authority, as applicable, the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and Authority and/or costs of such cure, which amount shall be promptly paid by Habitat to the City and Authority upon demand. Nothing herein shall limit any other rights and remedies the City or Authority may have under the Agreement Documents. As a condition precedent to the close of escrow, Habitat and the prospective purchaser shall execute an assumption of obligations under which the prospective purchaser agrees to assume and be bound by this Section 6. Upon the close of escrow transferring title to a Home from Habitat to a purchaser and execution of an assumption of obligations under this Section 6, the obligations of this Section 6 shall transfer from Habitat to the purchaser. These covenants shall run with the land and shall remain in effect for the Term. Section 7. Sale Provisions. Prior to entering into an agreement to sell a Home, Habitat shall provide notice to the prospective purchaser of this Affordability Covenants and provide a copy hereof. As a condition of any sale of a Home, a prospective buyer shall, to the extent provided herein, agree to be bound this Affordability Covenants, including any rights or remedies available to the City or the Authority hereunder. Section S. Property Maintenance, Compliance with Law and Insurance. Habitat shall at all times maintain property damage insurance covering the Property in an amount of not less than $1.5 million which shall be issued by an insurance company authorized to do business in the State of California with a current A.M. Best's rating of no less than A-, VII. Habitat shall provide the City and Authority with certificates of insurance evidencing that the coverage is in effect. In the event any such insurance lapses or is modified, Habitat shall immediately notify the City and Authority. Failure to maintain insurance as required herein shall constitute a default of this Agreement. Any Qualified Household which buys a Home, shall maintain property insurance in accordance with this Section 8, which covers the replacement value of the Home. Section 9. Indemnity. To the fullest extent permitted by law, Habitat agrees to indemnify, hold harmless and defend the City and Authority and their elected officials, officers, employees, attorneys and agents (collectively, the "Indemnitees"), from and against any and all losses, damages, claims, actions, liabilities, costs and expenses of any and every conceivable nature, kind or character (including, without limitation, reasonable attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnitees, or any of them, may become subject to under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: (a) This Affordability Covenants or the execution or amendment thereof or in connection with the transactions contemplated thereby; -5- Declarations of Covenants and Restrictions 1088470.1 (b) Habitat's ownership or operation of the Project or any act or omission of Habitat or any of its agents, contractors, servants, employees or licensees in connection with the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation, operation or rehabilitation of, the Project or any part thereof which act or omission arose during Habitat's ownership of any Home; (c) Any violation of any environmental law, rule or regulation with respect to, or the release of any toxic substance from, the Project or any part thereof, which release occurred during Habitat's ownership of any Home; except to the extent such violation is caused by the gross negligence or willful misconduct of such Indemnitee. In the event that any action or proceeding is brought against any Indemnitee with respect to which indemnity may be sought thereunder, Habitat, upon written notice from the Indemnitee, shall assume the investigation and defense thereof, including the employment and payment for of counsel selected by the Indemnitee, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same; provided that the Indemnitee shall have the right to review and approve or disapprove any such compromise or settlement. Section 10. Prohibited Activity/Non-Discrimination. Habitat herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that it shall comply with all applicable federal and state laws and regulations prohibiting discrimination by Habitat in the sale or purchase of the Homes on the Property. The foregoing shall not be construed to prohibit the operation of federal and state approved programs focusing on the special needs of the homeless, veterans, victims of domestic violence and other classes of persons at risk, nor shall it be construed to prohibit employment practices not otherwise prohibited by law. The foregoing covenants shall run with the land. Section 11. Compliance with Terms of the DDA. Habitat shall comply with all the terms and provisions of the Agreement Documents, Section 12. Enforcement by City/Authority. If Habitat fails to perfonn any obligation or violates any restriction under this Affordability Covenants, and the default is curable as determined by the City or Authority, and Habitat fails to cure the default within ninety (90) days after City or Authority have notified Habitat in writing of the default, City or Authority shall have the right to proceed with any and all remedies set forth in the Agreement Documents or otherwise available at law or in equity or by statute (and all of the City's and Authority's rights and remedies shall be cumulative), and including, but not limited to the following: (a) Power of Termination. The Parties acknowledge that the Property is being conveyed to Habitat on the condition that it be sold to and occupied by Qualifying Households and if this use is discontinued by either Habitat or a future owner of a Horne, the City or Authority shall have the power to terminate all right, title, and interest in the Property in -6- Declarations of Covenants and Restrictions 1088470.1 the manner provided by law for the exercise of this power of termination; provided that this provision does not preclude the Parties from at some point in the future modifying the use of the Property upon written amendment to this Affordability Covenants. (b) Specific Performance. The City and Authority shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Habitat to perform its obligations and covenants under the Agreement Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Agreement Documents. (c) Right to Cure at Habitat's Expense. The City and Authority shall have the right to cure any monetary default by Habitat under this Affordability Covenants. Habitat agrees to reimburse the City and Authority for any funds advanced by either to cure a monetary default by Habitat upon demand therefore, together with interest thereon at the rate of three percent (3%) per annum or the maximum rate permitted by law, whichever rate is less, from the date of expenditure until the date of reimbursement. (d) Remedies Cumulative. No right, power, or remedy given to the City and Authority by the terms of the Agreement Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City or Authority by the terms of any such instrument, or by any statute or otherwise against Habitat and any other person. Neither the failure nor any delay on the part of the City or Authority to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City or Authority of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. (e) Waiver of Terms and Conditions. No waiver of any default or breach by Habitat hereunder shall be implied from any omission by the City or Authority to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. The consent or approval by the City or Authority to any act by Habitat requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this Affordability Covenants, nor shall it invalidate any act done pursuant to notice of default, or prejudice the City or Authority in the exercise of any right, power, or remedy hereunder or under the Agreement Documents, unless in the exercise of any such right, power, or remedy all obligations of Habitat to City and Authority are paid and discharged in full. If Habitat fails to perform any obligation or violates any restriction under this Affordability Covenants, and the default is not curable as determined by the City or Authority, then the City or Authority shall have the right to immediately proceed with any and all remedies set forth in the Agreement Documents or otherwise available at law or in equity or by statute (and all of the City's and Authority's rights and remedies shall be cumulative). -7- Declarations of Covenants and Restrictions 10884701 Section 13. Attorneys' Fees and Costs. In any action brought to enforce this Affordability Covenants, the prevailing party shall be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute. Section 14. Recordine and Filing. City, Authority and Habitat shall cause this Affordability Covenants, and all amendments and supplements to it, to be recorded in the Official Records of the County of Orange, California. Section 15. Governine Law. This Affordability Covenants shall be governed by the laws of the State of California. Section 16. Waiver of Requirements. Any of the requirements of this Affordability Covenants may be expressly waived by City or Authority in writing, but no such waiver shall, or shall be deemed to, extend to or affect any other provision of this Affordability Covenants. Section 17. Amendments. This Affordability Covenants may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of County of Orange. Section 18. Notices. Any notice requirement set forth herein shall be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows: Habitat: Habitat for Humanity or Orange County 200 Ritchey Street Santa Ana, CA 92705 Attn: President/CEO City and Authority: Tustin Housing Authority 300 Centennial Way Tustin, CA 92780 Attn: Executive Director Such addresses may be changed by notice to the other party given in the same manner as provided above. Declarations of Covenauts and Restrictions 1088470.1 Section 19. Severability. If any provision of this Affordability Covenants shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Affordability Covenants shall not in any way be affected or impaired thereby. Section 20. Multiple Ori inals• Counterparts. This Affordability Covenants may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. IN WITNESS WHEREOF, Habitat, the City and the Authority have executed this Affordability Covenants as of the date first above written. CITY: City of Tustin, a municipal corporation LIM John Nielsen, Mayor ATTEST: Erica Rabe, City Clerk TUSTIN HOUSING AUTHORITY: John Nielsen, Chairman APPROVED AS TO FORM: David Kendig, City Attorney, Housing Authority General Counsel Dated: -9- Declarations of Covenants and Restrictions 1088470,1 HABITAT: Habitat for Humanity of Orange County, Inc., a California non-profit public benefit corporation M. Sharon Ellis, President/CEO Mark Korando, Senior Vice President EXHIBIT "A" Fife No: 21.6591211 EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS; LOT 6 OF BLOCK B OF MRS. A,B, LEWIS'S ADDITION TO TUSTIN, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUiS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; ALSO ACCORDING TO MAP ENTITLED "A PART OF TUSTIN CITY", AS PER MAP THEREOF RECORDED IN BOOK 4, PAGES 218 AND 219 OF MISCELLANEOUS MAPS OF LOS ANGELES COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER: 401-361-03 CLTA Preliminary Report Form - Modified (11-17-06) Page 3 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Declarations of Covenants and Restrictions 1088470.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA } COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Declarations of Covenants and Restrictions 1088474.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person{s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Declarations of Covenants and Restrictions 1088470.1 GRANT DEED ATTACHMENT 4 Project Name: Veterans' Housing Project Address: 140 South A Street, Tustin, California APN: 401-361-03 V LIEN RECORDED MAIL TO: HABITAT FOR HUMANITY 2200 South Ritchey Street Santa Ana, CA 92705 Attn: President Exempt from recording fee per Government Code §§ 6103 and 27383 DOCUMENTARY TRANSFER TAX $ ........Computed on the consideration or value of property conveyed; OR ........Computed on the consideration or value less liens or encumbrances remaining at time of sale Signature of Declarant or Agency determining tax GRANT DEED FOR VALUABLE CONSIDERATION, receipt and sufficiency of which is hereby acknowledged, the CITY OF TUSTIN, a municipal corporation of the State of California ("Grantor"), hereby grants to the HABITAT FOR HUMANITY OF ORANGE COUNTY, a California non-profit public benefit corporation ("Grantee"), all that real property situated in the County of Orange, State of California, described as follows: See Exhibit "A", legal description attached hereto and made a part hereof. Executed this of , 2016. Grantor: City of Tustin By: Name: Jeffrey C. Parker Title: City Manager ATTEST: By: Erica Rabe Title: City Clerk Grant Deed 1088465A CERTIFICATE OF ACCEPTANCE This is to certify that the interest in real property conveyed by the attached Grant Deed dated , 2016, from the City of Tustin is hereby accepted by the undersigned officer on behalf of Habitat for Humanity of Orange County, a California non-profit public benefit corporation ("Grantee") on , 2016 and the undersigned officer is authorized to accept on behalf of Grantee and consents to the recording thereof. Grantee By: Narne: Sharon Ellis Title: President/CEO Grant Deed 1088465.1 EXHIBIT A LEGAL DESCRIPTION EXHIBIT A Grant Deed 1088465.1 Fife No; 216591211 EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS; LOT 6 OF BLOCK B OF MRS, A.B. LEWIS'S ADDITION TO TUSTIN, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGES 618 AND 619 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; ALSO ACCORDI� G TO MAP ENTITLED "A PART OF TUSTIN CITY", AS PER MAP THEREOF RECORDED IN BOOK 4, PAGES 218 AND 219 OF MISCELLANEOUS MAPS OF LOS ANGELES COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER; 401-361-03 CLTA PreliminaryReport Form - Modified (11-17-06) Page 3 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA } } COUNTY OF ORANGE } On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Grant Deed I088465,1 ACKNOWLEDGEMENT A notary public orl other officer completing this certificate verifies only the identity of the individual who sikned the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDERI 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) Grant Deed 1088465.1 CERTIFICATE OF COMPLETION ATTACHMENTS CERTIFICATE OF COMPLETION OF CONSTRUCTION AND DEVELOPMENT This certificate of completion of construction and development (the "Certificate") is made by the City of Tustin, a municipal corporation ("City"), in favor of Habitat for Humanity of Orange County California, Inc., a California non-profit, public benefit corporation (the "Developer"), as of the date set forth below. RECITALS A. The City and the Developer have entered into that certain Disposition and Development Agreement For Affordable Housing (the "DDA") dated , 2016 concerning the redevelopment of certain real property situated in the City of Tustin, California as more fully described in Exhibit "A" attached hereto and made a part hereof. B. As referenced in Section 4.14 of the DDA, the City is required to furnish the Developer with a Certificate upon completion of construction of the Improvements (as defined in the DDA). This Certificate is conclusive determination of satisfactory completion of the construction and development of the Improvements required by the DDA. NOW THEREFORE: 1. As provided in the DDA, the City does hereby certify that the construction of the Improvements has been satisfactorily performed and completed in conformance with the DDA. 2. This Certificate does not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to finance the work of construction of improvements and development of the Site, or any part thereof. This Certificate is not a notice of completion as referred to in Section 3093 of the California Civil Code. IN WITNESS WHEREOF, the City has executed this Certificate as of this day of , 2016. [SIGNATURES ON NEXT PAGE] -- Certificate of Completion of Construction and Development 1104196.1 CITY OF TUSTIN I: Jerry Craig Economic Development and Housing Manager ATTEST: a] Erica Rabe City Clerk, City of Tustin APPROVED BY DEVELOPER Habitat for Humanity of Orange County, California, Inc. IN -z- Certificate of Completion of Construction and Development 1101796.1 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ORANGE On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) EXHIBIT A LEGAL DESCRIPTION OF THE SITE 1104196,1 File No; 216591211 EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT 6 OF BLOCK B OF MRS, A.B. LEWIS'S ADDITION TO TUSTIN, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; ALSO ACCORDING TO MAP ENTITLED "A PART OF TUSTIN CITY", AS PER MAP THEREOF RECORDED IN BOOK 4, PAGES 218 AND 219 OF MISCELLANEOUS MAPS OF LOS ANGELES COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER; 401-361-03 CLTA Preliminary' Report Form - Modified (11-17-06) Page 3 NOTICE OF AFFORDABILITY COVENANTS ATTACHMENT 6 APN No. 401-361-03 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tustin 300 Centennial Way Tustin, California 92780 -3715 Attention: Tustin Housing Authority Executive Director NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY Important notice to owners, purchasers, lenders, brokers, escrow and title companies, and other persons, regarding affordable housing restrictions on the real property described in this Notice: Restrictions have been recorded with respect to the property described below (referred to in this Notice as the "Property") which restrict the price and terms at which the Property may be sold. These restrictions may limit the sales price of the Property to an amount which is less than the fair market value of the Property. These restrictions also limit the income of persons and households who are permitted to purchase the Property. The Affordable Housing Restrictions are contained and recorded in the Declaration of Affordability Covenants and Restrictions ----Document No. , official records of Orange County, recorded on Parties to the Affordable Housing Restrictions: City of Tustin, a municipal corporation ("City"), the Tustin Housing Authority, a local housing authority ("Authority") and Habitat for Humanity of Orange County, a California non-profit benefit corporation ("Owner"). Legal Description of Property: See attached Exhibit "A". Street Address of Property: 140 South "A" Street, Tustin, California. Assessor's Parcel Number of Property: 401-361-03 1 ]notice of Affordability Restrictions 1091859.1 Summary of Affordable Housing Restrictions: • The Affordable Housing Restrictions restrict the homeowner from renting the Property. • The Affordable Housing Restrictions limit the sales price which may be charged for the Property. • The Affordable Housing Restrictions limit the income level of the buyer of the Property to a moderate income level household. • Term of Restrictions: 60 years, commencing on and terminating on , and as may be extended by the City, Authority and Owner. This Notice does not contain a full description of all of the terms and conditions in the Affordable Housing Covenant. You will need to obtain and read the Affordable Housing Covenant to fully understand the restrictions and requirements which apply to the Property. In the event of any conflict between the terms of this Notice and the terms of the Affordable Housing Covenant, the ten -ns of the Affordable Housing Covenant shall control. This Notice is being recorded and filed in compliance with Health and Safety Code Section 33334.30(3) and (4), and shall be indexed against the City and the current Owner of the Property. IN WITNESS WHEREOF, the Authority has caused this Notice of Affordability Restrictions on Transfer of Property (Ownership) to be executed on the recordation date of the documents listed above. DATED: , 2016 TUSTIN HOUSING AUTHORITY fC ATTEST: I: Erica Rabe, City Clerk Notice of Affordability Restrictions 1091859.1 2 Jerry Craig, Economic Development and Housing Manager ACKNOWLEDGEMENT OF NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (OWNERSHIP) To INDICATE ACKNOWLEDGEMENT AND ACCEPTANCE of this Notice of Affordability Restrictions on the Transfer of Property (Ownership), the Unit Homeowner has executed this document on the date written below: Dated: , 2016 HOMEOWNER: Habitat for Humanity of Orange County, a California non-profit public benefit corporation Sharon Ellis President/CEO 3 Notice of Affordability Rcstrictiom 1091859.1 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA } } COUNTY OF ORANGE } On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS lily hand and official seal. Signature (Seal) M Notice of Affordability Restrictions 1091859.1 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA } COUNTY OF ORANGE ) On , 2016, before me, , Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the persons) whose name is subscribed to the within instrument and acknowledged to ane that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 11 Notice of Affordability Restrictions 1091859.1 EXHIBIT A LEGAL DESCRIPTION Attached hereto Notice of Affordability Restrictions 1091859.1 File No: 216591211 EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT 6 OF BLOCK B OF MRS, A.B, LEWIS'S ADDITION TO TUSTIN, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; ALSO ACCORDING TO MAP ENTITLED "A PART OF TUSTIN CITY", AS PER MAP THEREOF RECORDED IN BOOK 4, PAGES 218 AND 219 OF MISCELLANEOUS MAPS OF LOS ANGELES COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER: 401-361-03 CLTA Preliminary Report Form - Modified (11-17-66) Page 3 SCHEDULE OF PERFORMANCE ATTACHMENT ? SCHEDULE OF PERFORMANCE ITEM OF PERFORMANCE 3 TIME FOR PERFORMANCE 1. Developer conducts its inspections of the During the Disposition and Development Agreement negotiations and up to 60 -days after physical and environmental condition of the Site and procures commercial general the Agreement's Effective Date. Insurance liability insurance. shall be obtained prior to entry on the Site. 2. City and Developer enter into a Disposition Effective Date and Development Agreement. 3. Developer raises the necessary funds within 9 months of the Effective Date.V Failure to raise Developer begins fundraising efforts upon the necessary funds within 15 months of DDA execution Effective Date will result in the termination of the DDA, unless extended by mutual agreement of the Parties. 4. Developer submits to City and Agency applications and materials required to obtain all land use and other entitlements; Within 90 days after the Effective Date. i permits, and approvals required for the Project, Site including a map. 5. Developer submits application and fees for Subdivision Maps, Within 90 days after the Effective Date. 6. City and Agency review the Association Within 45 days after submittal. CC&Rs. 7. Developer and Agency open Escrow. Within 10 days after Subdivision Map submittal date. 1172412.1 ITEM OF PERFORMANCE TIME FOR PERFORMANCE g' Developer submits to City and Agency final construction dra��ings and exereses ; , Within 90 days after City's approval of the reasonable diligence to obtain approval. architectural plans for the Project. 9. City and Agency approve (or disapprove) final construction drawings for Project. Within 45 days after complete submittal, ; I 10. ; Developer submits evidence of financial Within 30 days prior to the anticipated I capability to develop the Project. Closing Date. 3 3 3 11. Agency approves (or disapproves) Developer s evidence of financial 1 1 Within 20 days after submittal. capability. 12. Developer submits evidence of insurance. Within 10 days prior to the scheduled Closing Date. 13. Developer executes and deposits into Escrow the Agency Deed of Trust, Agency Note, Affordable Housing Agreement, Memorandum of DDA, and l day prior to the scheduled Closing Date. all additional funds and documents required under this Agreement in order to I close Escrow, including the closing costs I for which Developer is responsible to pay. 14 Agency executes and deposits into Escrow E the Grant Deed, Affordable Housing Agreement, Memorandum of DDA and all I additional funds and documents required 1 day prior to the scheduled Closing Date, under this Agreement in order to close Escrow, including the escrow and closing costs for which Agency is responsible to pay ; 1172412.1 ITEM OF PERFORMANCE i TIME FOR PERFORMANCE 15. After the completion of Items 1-1.4 and the satisfaction or waiver of all Agency Escrow closes and Developer acgrdres fee Conditions to Closing and Developer title to the Site. Conditions to Closing, but in no event later than 50 days after Developer obtains all I necessary land use and other entitlements, permits, and other approvals for the Project. 16. Developer cominenees construction of the Within 30 days after Developer obtains Project. building permits. 17. Developer completes construction of the Within 18 months after commencement of Project, construction. i 18. Agency issues Release of Construction Upon satisfactory completion of construction � Covenants. of the Project, within 10 days of written request of Developer. 19 Developer transfers fee title to the No later than. 120 days after Agency's issuance of the Release of Construction Covenants for Condominiums to Qualified Purchasers. the Project. Times of performance under this Agreement may be extended by mutual written agreement of Agency and Developer. The Executive Director of Agency shall have the authority on behalf of Agency to approve extensions of time, with the exception of any extension that would result in the Outside Closing Date, the date to commence construction of the Project, or the date to complete construction of the Project, being extended by more than one hundred twenty (120) days. 3 1172412,1 AFFORDABLE HOUSING AGREEMENT ATTACHMENT 8 RECORDING REQUESTED BY: First American Title Insurance Company AND WHEN RECORDED MAIL TO: Exempt From Recording Fee Pursuant to Goverment Code § 27383 AFFORDABLE HOUSING AGREEMENT FOR AND City of Tustin, A Street Project [Low Income] [Moderate Income] 140 South "A" Street, Tustin, CA 1135821.1 AFFORDABLE HOUSING AGREEMENT FOR CITY OF TUSTIN/SOUTH "A" STREET 140 South "A" Street, Tustin, CA THIS AFFORDABLE HOUSING AGREEMENT FOR 140 South "A" Street, Tustin, California (the "Agreement") is made this day of , 20_, by and between and ("Participant") and Habitat for Humanity of Orange County, Inc., a California non-profit public benefit corporation ("Habitat"). RECITALS A. Habitat provides housing to selected families on a nonprofit basis and finances all or a portion of the purchase price of these homes at no interest. B. Habitat has constructed a residential development on certain real property ("Site") in the City of Tustin, California ("City") and will sell the dwelling units to Qualified Households as defined below. C. Participant has entered into an agreement (the "Purchase Agreement") to purchase a dwelling unit on the Site located at 140 South "A" Street, Tustin, CA (the "Property"). The Property is more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference. D. Participant acknowledges that the City of Tustin and Tustin Housing Authority (collectively, the "Agency") and Habitat, as developer of the Property, previously entered into that certain Disposition and Development Agreement, dated , (the "DDA") concerning the Agency's sale to the Developer of the Site and the Developer's development on the Site of a number of affordable homes (the "Project"). E. Participant further acknowledges that the Property is subject to affordability restrictions stemming from: (i) the DDA; (ii) the Notice of Affordability Restrictions on Transfer of Property recorded in the Official Records on , 20_, as Instrument No. 20 ; and (iii) that certain Declaration of Covenants and Restrictions for 140 South "A" Street, Tustin, CA, recorded in the Official Records on , 20_, as Instrument No. 20 , (the "Agency CC&Rs"). The Agency CC&Rs are attached hereto as Exhibit "E". F. The Property and Participant are also subject to certain documents that Habitat has required Participant to execute in connection with the loan provided to Participant by Habitat (collectively, the "Habitat Affordable Housing Documents"), including, but not limited to, a promissory note (the "Habitat Note") and a deed of trust (the "Habitat Deed of Trust"). G. Participant is a "Qualified Household" which, for purposes of this Agreement, is a Veteran who served or is serving honorably on active duty in the armed forces of the United States and whose annual income does not exceed the qualifying limits under California law for [lowj [moderate] income households as established by the United States Department of Housing 2056-26292\PJD40311228322.7 1135821.1 and Urban Development, and as published periodically by the State of California, Department of Housing and Community Development. As of the date of this Agreement, the income limits for [low] [moderate.] income households is [eighty percent .(80%)1[one Hundred twenty percent .. ... (120%,)] of the Orange County area median income adjusted for family size. H. Beneficiary. Participant acknowledges that the City of Tustin and the Tustin Housing Authority (hereafter, collectively, 'Beneficiary") are third party beneficiaries to this entire Agreement and Participant agrees that any third party beneficiary may seek to enforce any provision of this Agreement in the event that Participant violates any such provision and/or Habitat fails, for any reason, to demand performance by Participant of any provision of this Agreement and that inclusion of this provision was a material consideration for the City of Tustin and the Tustin Authority in entering into the DDA. No other persons or entities are intended to be third party beneficiaries. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference and made a part hereof, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Effectiveness. The covenants set forth in this Agreement shall remain in effect from the date this Agreement is recorded and continue thereafter for forty-five (45) years following the date of recordation ("Covenant Period"). 2. Representations and Warranties. a. Participant represents and warrants that Participant shall reside in the Property as Participant's principal residence at all times throughout the term of this Agreement. b. Participant is a Qualified Household. 3. VOLUNTARY SUBMISSION TO EXTRAORDINARY PROVISIONS. Participant acknowledges that Participant was selected by Habitat for the purchase of a residence and that (a) Participant had no right to require Habitat to select Participant, and (b) without the assistance of Habitat, Participant would never have acquired the Property. Therefore, Participant agrees that all the terms and conditions of this Agreement are (a) required in order to preserve a stock of housing for Qualified Households, (b) reasonable in light of their purposes, and (c) approved in every respect by Participant. Participant acknowledges that selection by Habitat has given Participant decent and affordable shelter, which is the major benefit Participant is bargaining for and which Participant has obtained. Participant acknowledges that Participant's selection by Habitat is not intended to give to Participant a business opportunity or right, expectation or entitlement to any profits from any sale of the Property. Therefore, Participant agrees not to challenge the provisions of this Agreement or any right of any Beneficiary created hereunder and acknowledges that the same are not an unreasonable restraint on any right to transfer the interest of Participant in the Property. -3- 2056-262921A7D40311228322.7 1135821,1 4. Option Events: Habitat shall be entitled to exercise Habitat's Option to Purchase as described below upon the occurrence of any of the following events ("Option Events"): a. Transfers. Upon a "Transfer" (as defined below) of the Property unless the Transfer is a "Permitted Transfer" (as defined below). (1) A "Transfer" is (i) any sale, assignment, conveyance or transfer of an interest in the Property, whether voluntary or involuntary, including, without limitation, a fee simple interest, tenancy in common, joint tenancy, community property, tenancy by the entireties, life estate, or other limited estate, leasehold interest or any rental of the Property, (ii) the creation of any interest in the Property in a third party by a land contract, (iii) the transfer of the Property upon death by devise or by operation of law, or (iv) the refinancing of the Habitat Note and Habitat Deed of Trust. (2) Transfers to a spouse, to Habitat, or to a Qualified Household (provided Habitat has made the determination that the buyer qualifies as a Qualified Household in accordance with Section 7 below) shall constitute "Permitted Transfers". Any Transfer that does not constitute a Permitted Transfer shall be deemed a "Prohibited Transfer" and is expressly prohibited by this Agreement. Any Prohibited Transfer shall be null and void and shall constitute a default of Participant under this Agreement, entitling Habitat and/or Beneficiary to exercise its right to purchase the Property from the new owner, as described in Section 6 herein, as well as all remedies available at law or equity, including without limitation the enforcement of the liquidated damages as provision in Section 12 of this Agreement. b. Participant's failure to pay delinquent real property taxes, homeowners' association fees, or any other amount owing which results or may result in the creation of lien against the Property within sixty (60) days after Habitat has given written notice to Participant demanding that Participant pay the amounts owing. 5. Notice to Habitat. Participant (or Participant's successors in interest) agrees to notify Habitat in writing not less than thirty (30) days prior to any proposed Transfer of any interest in the Property. 6. Habitat's Option to Purchase; Sale of Property. a. Notice of Intent to Transfer. If Participant desires to sell, quitclaim, exchange, or in any manner dispose of the Property or any part thereof ("Proposed Sale"), Participant shall first notify Habitat of its intent to transfer the Property, by sending to Habitat the notification form attached hereto and incorporated herein as Exhibit "B" ("Participant's Notice of Intent to Transfer"), no later than thirty (30) days prior to the date each time the Property is placed on the market for a Proposed Sale or Participant takes any other action to transfer the Property or any interest therein. b. Exercise of Option. For a period of sixty (60) days commencing on the date Habitat receives Participant's Notice of Intent to Transfer (or, if Participant fails to send such notice, the date Habitat discovers) that (i) an Option Event has occurred or (ii) Participant has placed the Property on the market or has taken any other action to Transfer the Property or -4- 2056-262921RJD40311228322.7 1135821.3" any interest therein or, (iii) in the event of an involuntary transfer of the Property, upon the date Habitat obtains knowledge of such involuntary transfer, Habitat shall have the option ("Habitat's Option to Purchase") to purchase the Property from Participant or Participant's successor in interest at the "Habitat's Option Price" (as defined below). Habitat's exercise of Habitat's Option to Purchase shall be made by delivery of written notice to Participant or Participant's successor in interest. In the event that Habitat determines not to exercise its Option to Purchase before the expiration of the period set forth above then Habitat agrees to give notice to such effect to Participant. C. Escrow. In the event Beneficiary elects to purchase the Property, an escrow shall be established to close within ninety (90) days after delivery of Habitat's notice of exercise, subject to any extensions requested by Habitat for causes outside the control of Habitat. d. Termination of Option. Habitat's Option to Purchase set forth in this Section b shall terminate and be of no fiu-ther force or effect on the date the Covenant Period terminates. 7. Habitat's Election Not to Exercise Option. In the event Habitat fails to exercise Habitat's Option to Purchase and Participant desires to effect a transfer of the Property, the following restrictions shall apply: a. Qualified Household. Participant shall not sell or transfer the Property until such time as Habitat has determined (i) the proposed buyer is a Qualified Household; (ii) the proposed buyer intends to occupy the Property as its principal residence; and (iii) the Proposed Sale is at the "Affordable Sales Price" (as defined below). b. Preliminary Determination. If Participant identifies a buyer whom the Participant believes to be a Qualified Household, Participant shall cooperate with and reasonably -5- 2056-262921K.11740311228322 , 7 1135821.1 assist Habitat with the determination of whether the proposed buyer is a Qualified Household. Within ten (10) days after Participant locates the proposed buyer, Participant shall submit to Habitat (i) information evidencing the proposed buyer's identity and income in order that Habitat may make a preliminary determination regarding the buyer's household income status ("Preliminary Determination"); and (ii) the price at which Participant proposes to sell the Property (less the value of any Participant personal property or equipment included in said price). C. Final Determination. In the event Habitat makes a Preliminary Determination that the buyer qualifies as a Qualified Household, Participant may proceed with opening an escrow for a Proposed Sale; provided, however, that not less than twenty (20) days prior to the date escrow is scheduled to close for the Proposed Sale, Participant (or the proposed buyer) shall submit to Habitat adequate information to enable Habitat to make a final determination regarding whether the buyer qualifies as a Qualified Household and whether the Property is available to such buyer at an Affordable Sales Price ("Final Determination"). Such information shall include (a) a completed request for approval of buyer form in the form attached hereto and incorporated herein as Exhibit "C"; (b) the purchase and sale agreement pursuant to which Participant proposes to sell the Property to the proposed buyer; and (c) information evidencing the income of the proposed buyer including, but not limited to, original or true copies of pay stubs, income tax records or other financial documents. Habitat may request additional information reasonably required to make a Final Determination regarding the proposed buyer's status. d. Inability to Make Determination. If Habitat is unable to make a Final Determination regarding the proposed buyer's income as provided herein prior to the date set for the Proposed Sale, then the proposed buyer's income shall be deemed to exceed the maximum allowable income limit for Qualified Household status and Participant may not conclude the Proposed Sale. e. Affordable Housing Agreement. As a condition precedent to Participant's sale of the Property to the Qualified Household, the Qualified Household shall execute and deliver in recordable form an Affordable Housing Agreement substantially similar to this Agreement, with a term of forty-five (45) years from recordation and in form approved by Habitat, which shall be recorded against the Property upon its conveyance to the buying Qualified Household. f. Additional Terms. In order for a household to qualify economically, that household must meet the definition of a Qualified Household in Recital G above. No proposed Transferee shall be a Qualified Household if he, she or they own any improved real properly at the time he, she or they take possession of the Property. Any proposed Transferee must also represent and warrant that he, she or they intend to personally and continuously occupy the residence as a sole residence for the foreseeable future. Habitat shall have the right to determine in its sole discretion whether any household is a Qualified Household. g. Non -Economic Characteristics. Habitat may consider non -economic characteristics of each household to determine who shall purchase or lease the Property. -6- 2056-262921RJD40311228322.7 13.35829.1 Participant acknowledges that Habitat has the right to select Qualified Households who approve of and support Habitat's purposes and activities. THE FOREGOING CONSTITUTES NOTICE TO ANY BUYER OF THE PROPERTY WHO HAS PURCHASED THE PROPERTY WITHOUT OBTAINING THE PRIOR APPROVAL OF HABITAT. S. Sales Price. a. Habitat's Option Price. In the event that Habitat should exercise Habitat's Option to Purchase, then Habitat's purchase price shall be determined as set forth below ("Habitat's Option Price"). In no event, however, shall Habitat's Option Price exceed the fair market value of the Property. (1) Purchase from Participant. Habitat set the original purchase price of the Property (the "Original Price") at the amount that resulted in a Monthly Housing Cost (as defined below) equal to percent (_%o) of Participant's income ("Participant's Income"). Habitat's Option Price shall therefore be determined based on a formula using an amount of income ("Corresponding Income") that most nearly corresponds to Participant's Income for the year ("Pricing Year") which was used to determine the Original Price. In order to derive the Corresponding Income from generally available data, it is necessary to refer to the percentage ("Participant's Percentage") that Participant's Income bore to the maximum income ("Category Maximum") in Orange County allowable under the State Income Limits (the "State Limits") published by the California Department of Housing and Community Development for the Pricing Year for Participant's income category [low income, moderate income] and Participant's family size in the Pricing Year. The data used to determine the Original Price are set forth on Exhibit D attached hereto. The Corresponding Income shall be the product of Participant's Percentage times the Category Maximum for the year ("Current Category Maximum") in which Habitat's Option is exercised. Habitat's Option Price shall be in an amount that results in an Affordable Housing Cost as set forth below. (2) Purchase from Participant's Successor. In the event that when Habitat exercises Habitat's Option to Purchase the Property is owned by a successor in interest to Participant ("Owning Successor") other than Participant's spouse [or Moderate only] then the Habitat's Option Price shall be determined using the formula set forth above but based, not on the data set forth in Exhibit D, but upon the Owning Successor's income category, family size, annual income and ratio of such income (expressed as a percentage) to the Category Maximum for the Owning Successor's Pricing Year; i.e., the year in which the purchase price paid by the Owning Successor was determined. [NTT erste only Iii the event that when the Habitat exereises, Habitat', aptlan'to Purchase, ;the Property .is owned by Participant's spouse or Heir, then the data set forff in Exhibit D shall lie used to detemm�e Ha mat's Option Pz�ce ] (3) Discontinuation of State Limits. In the event that the State Limits are no longer published, then Habitat shall determine the Corresponding Income using such generally available data as, in its reasonable discretion, most closely approximates the State Limits and the Category Maximum. -7- 2456-262921RJD40311228322.7 1135827.1 (4) Derivation of Price. Habitat's Option Price shall be determined based upon the price that a purchaser could afford to pay with a monthly mortgage payment equal to 1112 of the Affordable Housing Cost based on the following assumptions: (i) A down payment equal to the down payment made by Participant when Participant purchased the Property, as set forth on Exhibit D. (ii) A mortgage with payment terms, interest rate and length equal to those terms in the first mortgage taken out by Participant when Participant purchased the Property, as set forth on Exhibit D. b. Participant's Sales Price. In the event that Habitat elects not to exercise Habitat's Option to Purchase and Participant elects to Transfer the Property, Participant shall contact Habitat to determine the applicable Affordable Sales Price for the proposed Transfer to a Qualified Household. "Affordable Sales Price" shall mean that purchase price which would result in an "Affordable Housing Cost" determined as set forth below. (1) Affordable Housing Cost. The Affordable Housing Cost shall be the annual Housing Cost, as defined below, which [for moderate income, is not less than 28% of the gross income of the household, nor more than the product of 35% times 110% of area median income adjusted for family size appropriate for the unit] [for low income, does not exceed the product of 30% times 70% of the area median income adjusted for family size appropriate for the unit] The Housing Cost shall include the following monthly expenses as reasonably estimated by Habitat and multiplied by a twelve (12) month period: (i) Property taxes and assessments, (ii) fire and casualty insurance covering replacement value of property improvements, (iii) Homeowners association fees and a utility allowance reasonably determined by Habitat, at the time of Habitat's purchase, and (iv) Principal and interest on a mortgage loan. (2) Derivation of Price. The Affordable Sales Price shall be determined based upon the price that a purchaser could afford to pay which resulted in an amount equal to a monthly Housing Cost based on the following assumptions. (i) A down payment equal to the down payment made by Participant when Participant purchased the Property, as set forth on Exhibit D. (ii) A mortgage with a payment terms, interest rate and length equal to those terms in the first mortgage taken out by -8- 2056-262921R7D40311228322.7 1135821.1 Participant when Participant purchased the Property, as set forth on Exhibit D. PARTICIPANT UNDERSTANDS THAT THE DETERMINATION OF HABITAT'S OPTION PRICE AND THE AFFORDABLE SALES PRICE CAN BE MADE ONLY AT THE TIME OF THE PROPOSED SALE, AND THAT HABITAT'S OPTION PRICE AND THE AFFORDABLE SALES PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THE AFFORDABILITY COVENANTS IN THIS AGREEMENT. PARTICIPANT FURTHER ACKNOWLEDGES THAT IN SETTING HABITAT'S OPTION PRICE AND THE AFFORDABLE SALES PRICE, THE PRIMARY OBJECTIVE OF HABITAT AND THIS AGREEMENT IS TO PROVIDE HOUSING TO QUALIFIED HOUSEHOLDS AT AN AFFORDABLE SALES PRICE. PARTICIPANTS' INITIALS: 9. Occupancy Standards. a. The Property shall be used as the principal residence of Participant and for no other purpose. b. Participant shall not enter into an agreement for the rental or lease of the Property, or any portion thereof, or permit the rental of lease of the Property, or any portion thereof. C. The maximum occupancy of the Property shall not exceed the maximum occupancy allowed pursuant to the general requirements of the United States Department of Housing and Urban Development which as of the date of this Agreement is two persons per bedroom, plus one person. d. Participant shall, upon demand by Habitat, submit to Habitat an affidavit of occupancy verifying Participant's compliance with this Section 9. Said affidavit may be required by Habitat on an annual basis. e. Habitat may grant a temporary waiver of the above requirements for good cause, in Habitat's sole and absolute discretion. 10. Income and Asset Information. Participant has submitted an application and additional information verifying income and asset eligibility to Habitat prior to execution of this Agreement. Participant represents, warrants and declares under penalty of perjury to Habitat that all information Participant has provided and will provide in the future to Habitat is and will be true, correct and complete. Participant acknowledges that Habitat is relying upon Participant's representations that Participant is a Qualified Household, and Habitat would not have entered -9- 2056-26292gUD40311228322.7 1135821.1 into this Agreement if Participant did not so qualify. Asset eligibility shall be determined pursuant to regulations adopted by the Habitat, as they may be amended from time to time. 11. Defaults. a. Failure or delay by either party to perform any term or provision of this Agreement which is not cured within thirty (3 0) days after receipt of notice from the other party constitutes a default under this Agreement; provided, however, if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. b. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice (or such longer period as described in the immediately preceding sentence). Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 12. Liquidated Damages for Prohibited Transfer. In the event Habitat seeks monetary damages for a Prohibited Transfer, Participant shall be required, to the extent permitted by law, to pay to Habitat the amount of the proceeds of the Prohibited Transfer that were actually received by Participant in excess of the amount that Participant would have received if the Property had been sold at the Affordable Sales Price permitted pursuant to this Agreement; provided, however, that nothing herein shall be deemed to limit Habitat's remedy for a Prohibited Transfer to seeking monetary damages, and Habitat shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent a Prohibited Transfer. THE PARTIES HERETO AGREE THAT THE AMOUNT SET FORTH IN THIS SECTION 12 (THE "DAMAGE AMOUNT") CONSTITUTES A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT HABITAT WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT SET FORTH IN THIS SECTION 12, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO HABITAT AND ACCOMPLISHMENT OF HABITAT'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO QUALIFIED HOUSEHOLDS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE DAMAGE AMOUNT SET FORTH IN THIS SECTION 12 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 12, BUT NOTHING IN THIS SECTION 12 SHALL BE INTERPRETED TO LIMIT HABITAT'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS INITIALS AT THE PLACES PROVIDED HEREIN BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL TO EXPLAIN THE - t0 - 2056-2629218 D40311228322,7 1135821.1 CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. PARTICIPANT'S INITIALS: HABITAT'S INITIALS: Notwithstanding any of the above, nothing herein is intended to preclude Habitat's recovery of its attorney's fees and costs incurred to enforce this Section 12, as provided in Section 19. 13. Rights and Remedies are 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 its 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. 14. Non -Waiver. Failure to exercise any right Habitat may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. ng to the contrary herein, this Agreement shall automattcally'nnd permanently terminate brmlosure, deed i.n-lieu of foreclosure or assignment to IIUD of any moftgage or deed of r1 the Property that is insured by the" Federal Housmg Administration: 16. Further Assurances. The Participant shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as Habitat shall from time to time find necessary or appropriate to effectuate its purposes. 17. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Orange, State of California. 18. Amendment to Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Participant and Habitat. 19. Notices. Any notices, requests or approvals given under this Agreement from one party to another may be personally delivered by reputable same-day or overnight courier, or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address: To Participant: -11- and , CA 926 2056-262921RJD40311228322.7 1135821.1 To Habitat: Habitat for Humanity, Inc. 2200 South Ritchey Street Santa Ana CA 92705 Attention. Project Officer Either party may change its address for notice by giving written notice thereof to the other party. 20. Attorneys' Fees and Costs. In the event that any action is instituted to enforce payment or performance under this Agreement, the parties agree the non -prevailing party shall be responsible for and shall pay all costs, including expert witness fees, and all attorneys' fees incurred by such prevailing party in enforcing this Agreement. 21. Entire Agreement. This Agreement, together with all attachments hereto, constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between Habitat and the Participant concerning all or any part of the subject matter of this Agreement. 22. Authority. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 23. Time of Essence. Time is of the essence of every portion of this Agreement in which time is a material part. 24. Interpretation; Severability. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party hereto by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. Each provision of this Agreement shall be severable from the whole. If any provision of this Agreement shall be found contrary to law, the remainder of this Agreement shall continue in full force. 25. Integration; Amendment. It is understood that there are no oral agreements between the parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the parties with respect to the subject matter hereof, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 26. Counterparts. This Agreement may be executed in counterparts, each of which, when this Agreement has been signed by each of the parties hereto, shall be deemed to be an original. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. -J2- 2056-2629211Z7D40311228322.7 1135821.1 Date: Date: Date: 1135821.1 "Participant" "Habitat" HABITAT FOR HUMANITY, INC., a California non-profit public benefit corporation By: Name: Title: -13- 2056-262921RID40311228322.7 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature -14- (seal) 2056-262921RJD40311228322.7 1135821.1 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On 5 , before me, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seat) -15- 2056-262921RJD40311228322.7 1135821.1 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, (here insert name and title of The officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature -16- (Seal) 2056-262921RJD40311228322.7 1135821.1 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Exbibit A to Affordable Housing Agreement 2056-262921RJD40311228322.7 1135821.1 File No: 216591211 EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT 6 OF BLOCK B OF MRS. A.B. LEWIS'S ADDITION TO TUSTIN, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; ALSO ACCORDING TO MAP ENTITLED "A PART OF TUSTIN CITY", AS PER MAP THEREOF RECORDED IN BOOK 4, PAGES 21.8 AND 219 OF MISCELLANEOUS MAPS OF LOS ANGELES COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER: 401-361-03 CLIA Preliminary Report Form - Modified (11-17-06) Page 3 EXHIBIT "B" NOTICE OF INTENT TO TRANSFER [See attached] Exhibit B to Affordable Housing Agreement 2055-262921RJD40311228322,7 1135821.1 NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO HABITAT AND CITY PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: ("Owner") To: Habitat: Humanity Housing, Inc. 2200 South Ritchey Street Santa Ana CA 92705 Attention: Project Officer Re: CA (the "Property") (street address) Owner desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer] (circle appropriate words) the Property. Date: Signature of Owner U Daytime Telephone of Owner Date: Signature of Owner L--) Daytime Telephone of Owner B-1 Exhibit B to Affordable Housing Agreement 2056-26292TJD40311228322.7 1135$21.1 EXHIBIT "C" REQUEST FOR APPROVAL OF PROPOSED BUYER [See attached] Exhibit C to Affordable Housing Agreement 2056-262921R7D40311228322.7 1135821,1 REQUEST FOR APPROVAL OF PROPOSED BUYER THIS FORM MUST BE DELIVERED TO HABITAT BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. [Date] Humanity Housing, Inc. 2200 South Ritchey Street Santa Ana CA 92705 Attention: Project Officer Re: Request for Approval of Proposed Buyer To Whom It May Concern: The undersigned ("Owner") is the owner of real property in , California located at (the "Property"), which is covered by an Affordable Housing Agreement. The Owner now desires to transfer the Property and by this letter is requesting Habitat to approve the proposed buyer. 1. The Proposed Buyer is: Name: Current Address: Telephone Number: 2. The terms of the proposed transfer are: (a) Sales price of $ {i) Fair market value; or This sales price is based on: (ii) The maximum price which results in an Affordable Sales Price. (Note: Sales price must be the lesser of (i) or (ii) above.) 3. The proposed buyer represents, warrants and covenants the following: (a) The Property will be the principal residence of the proposed transferee. C-1 Exhibit C to Affordable Housing Agreement 2056-262421RJD40311228322.7 1135821.1 (b) The combined maximum annual income for all household members of the proposed buyer is $ . (This figure must include all sources of income.) 4. The proposed buyer's household consists of the following persons who will reside in the Property: Adults (18 or over) - [name of each]: Minors (under 18) [name of each] : 5. The proposed buyer must submit to the Owner, on a form available from the Owner, an income certification so the Owner may determine if the proposed buyer is a Qualified Household (as that term is defined in the Agreement). 6. A true and correct copy of the proposed buyer's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. A true and correct copy of the purchase and sale or other agreement between the Owner and the proposed buyer is attached hereto. C-2 Exhibit C to Affordable Housing Agreement 2456-262921RJD40311228322.7 1135821.1 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. OWNER: Date signature signature print name print name street address telephone city state zip code PROPOSED BUYER: Date signature print name street address signature print name city state zip code 1135821.1 telephone C-3 Exhibit C to Affordable Housing Agreement 2056-202921RJ[740311228322.7 Owner's Certification Based on the Proposed Buyer's Certificate above, and all documents attached hereto, Owner hereby certifies that: (1) Proposed Buyer is a Qualified Household; and (2) The Purchase Price to be paid by the Proposed Buyer is an Affordable Sales Price. [Capitalized terms used above are defined in the Agreement to which this certificate is attached.] OWNER: Print Name: Date: C-4 Exhibit C to Affordable Housing Agreement 2056-262921R,TD40311228322.7 1135821.1 EXHIBIT D FACTORS USED TO DETERMINE INITIAL PURCHASE PRICE I . Year When Original Price Was Determined ("Pricing Year") 2. Participant's Annual Income during Pricing Year $ .00 3. Participant's Income Category (Low`incoxm, etc.) 4. Category Maximum for Pricing Year 5. Participant's Percentage (Participant's Income as Percentage of Category Maximum) 6. Participant's Family Size 7. Participant's Maximum Monthly Housing Cost for Pricing Year 8. Monthly Housing Expenses Other than Mortgage [Section 8.a.(4)] 9. Participant's Affordable Mortgage Payment 10. Down Payment Expressed as Percentage of Purchase Price 11. Term of First Mortgage in Months 12. Interest Rate on Note Secured by First Mortgage 13. Payment Terms {Usually Equal Rayuments ;of Principal over the -Tenn) Exhibit D to Affordable Housing Agreement 2056-262921R.TD40311228322.7 1135821.1