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HomeMy WebLinkAboutCDC/2003-05 , 1 RESOLUTION NO: CDC/2003-S 2 3 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE MEADOWBROOK SINGLE FAMILY RESIDENTIAL GRANT DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND ANR INDUSTRIES, INC. 4 5 6 7 8 9 WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") is a 10 public body and politic, exercising governmental functions and powers and organized and 11 existing under chapter 2 of the Community Redevelopment Law of the State of California 12 (Health and Safety Code Section 33020, et seq.); and 13 WHEREAS, the Agency desires to assist ANR Industries, Inc., a local housing developer ("Developer") who has the experience, financial strength and background in developing affordable housing in the City of San Bernardino, with the development of twenty- three (23) single family homes in the area bounded by 2ndand Rialto Streets, between Sierra 14 15 16 17 Way and Allen Avenue located within the Inland Valley Development Agency (IVDA") 18 Project Area boundaries, but within the City of San Bernardino City limits ("Meadowbrook 19 Park Single Family Infill Housing Development"); and WHEREAS, the Meadowbrook Park Single Family Infill Housing Development has been determined to be categorically exempt from the California Environment Quality Act 20 21 22 (CEQA) requirements, per Section 15332, Class 32; and 23 24 WHEREAS, under Section 33334.2 of the California Community Redevelopment Law, the Agency is authorized to utilize low and moderate income housing funds (" Housing Fund") 25 26 to provide housing opportunities to families and individuals whose income do not exceed 27 120% of the area median income for San Bernardino County and the Agency desires to provide 28 financial assistance to the Developer in an amount of not too exceed $500,000; and P:\Clerical Services Dcpt\Margaret Parker\Rcsolutions\2003\03-02-03 ANR Meadowbrook Resolution Adoc 1 CDC/2003-5 1 2 3 4 5 WHEREAS, the Developer and Agency desire to develop the Meadowbrook Park Single Family Infill Housing Development in accordance with the provisions of the Grant Development Agreement (the "Agreement"). NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 6 FOLLOWS: 7 Section 1. 8 9 hereby authorized 10 11 12 13 14 15 16 The Executive Director of the Agency ("Director") or hislher designee is and directed to execute on behalf of said Commission the Agreement between the Agency and Developer in order to effectuate the provisions of Agreement and development of the Meadowbrook Park Single Family Infill Housing Development. Section 2. The Director or hislher designee is hereby authorized to reimburse the Developer pursuant to the Agreement the sum of not too exceed Five Hundred Thousand Dollars ($500,000) from the Agency's Housing Fund (2002/2003 EDA Budget). Section 3. The Director or hislher designee is authorized to make changes to the Agreement, provided said changes are not substantive in nature and do not increase the Agency's financial contribution, and as approved by Agency Counsel. Section 4. The Community Development Commission has determined that the Project is "categorically exempt" pursuant to CEQA, Section 15332, Class 32, guidelines. The Resolution shall become effective immediately upon its adoption. 17 18 19 20 Section 5. 21 1/1 22 /II 23 /II 24 /II 25 /II 26 27 /II 28 /II /II P:\Clcrical Services Dcpt\Margarct Parkcr\Rcsolutions\2003\03-02-03 ANR Meadowbrook Resolution Adoc 2 CDC/2003-S 1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE MEADOWBROOK SINGLE FAMILY RESIDENTIAL GRANT DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND ANR INDUSTRIES, INC. 2 3 4 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 7 Community Development Commission of the City of San Bernardino at a j t. reg. meeting 8 thereof, held on the 3rd day of February ,2003, by the following vote to wit: 9 Abstain Commission Members: Ayes Nays X X X X X X X Absent 10 ESTRADA 11 LONGVILLE 12 MCGINNIS 13 DERRY 14 SUAREZ 15 ANDERSON 16 MC CAMMACK 17 18 19 20 21 The foregoing resolution is hereby approved this 671" day of February /) 0a L L~~ Judith Yalles, Chairperson Com;rl~ity Development Commission of tlie City of San Bernardino ( , ,2003. 22 23 24 25 26 Approved a nt: 27 By: 28 P:\Clerical Services Dept\Margaret Parker\Rcsolutions\20 \0] 2-03 ANR Meadowbrook Resolution A.doc 3 CDC/2003-5 MEADOWBROOK SINGLE FAMILY RESIDENTIAL GRANT DEVELOPMENT AGREEMENT By and Between The Redevelopment Agency of the City of San Bernardino (Agency) And ANR Industries, Inc. A California Corporation (Developer) CDC/2003-5 TABLE OF CONTENTS ARTICLE I Page TERMS AND CONDITIONS.............. . . . . . . . . . . . . . . 1 Section 1. 01. Section 1.02. Section 1.03. Section 1.04. Section 1.05. ARTICLE II Integration of All Agreements Relating to the proj ect and Definition of Terms . . . . . . . . 1 Parties to the Agreement ......... .... .....10 Prohibition Against Change in Ownership, Management and Control of Developer and Assignment of Agreement ...... .............10 Benefit to Project Areas ........... .......12 List of Exhibits to Agreement.. . . . . . . . . . . . 12 DISBURSEMENT OF AFFORDABLE HOUSING DEVELOPMENT GRANT AND DISPOSITION OF THE AGENCY LOT........ 12 Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 2.14. Section 2.15. Section 2.16. Section 2.17 . Section 2.18. Section 2.19. Section 2.20. Section 2.21. Section 2.22. Section 2.23. Section 2.24. 03-02-03 ANR-Meadowbrook Development Agreement Affordable Housing Development Grant...... 12 Disposition of Agency Lot. . . . . . . . . . . . . . . . . 16 Developer Agreement to Undertake the Proj ect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Sale of Completed New Homes to Qualified Homebuyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Project Development Cost Pro Forma .... ....24 Developer to Exercise Best Efforts to Obtain Additional Developer Lots .......... 25 RESERVED - NO TEXT..... . . . . . . . . . . . . . . . . . . . 25 Inspection and Review of Agency Lot. ......25 Due Diligence Investigation of the Agency Lot and the proj ect by the Developer...... 26 Due Diligence Approval Certificate........ 27 Books and Records of the Agency Relating to the Agency Lot.... . . . . . . . . . . . . . . . . . . . . . . . . 28 Condition of the Agency Lot; Developer's Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Review and Approval of Condition of Title in the Agency Lot by the Developer.. .........30 RESERVED - NO TEXT....... . . . . . . . . . . . . . . . . . 31 Extension of Due Diligence Period......... 31 Developer's Conditions Precedent.......... 31 The Agency's Conditions Precedent ......... 32 RESERVED - NO TEXT......... . . . . . . . . . . . . . . . 33 Satisfaction of Conditions Precedent . . . . . . 33 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 RESERVED - NO TEXT.......... . . . . . . . . . . . . . . 34 RESERVED - NO TEXT............. . . . . . . . . . . . 34 RESERVED - NO TEXT............. . . . . . . . . . . . 34 Representations and Warranties............ 34 - i - Section 2.25. Section 2.26. CDC/2003-5 Damage, Destruction and Condemnation ...... 37 Developer Market Reports to the Agency 38 ARTICLE III DEVELOPMENT OF THE DEVELOPER LOTS AND THE AGENCY LOT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Section 3.01. Section 3.02. Section 3.03. Section 3.04. Development by Developer.................. 39 Property Taxes and Assessments. . . . . . . . . . . . 46 Prohibition Against Transfer.............. 47 Securi ty Financing; Right of Holders...... 47 ARTICLE IV USE OF THE DEVELOPER LOTS .................. ....49 Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 4.05. Uses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Maintenance of the Developer Lots . . . . . . . . . 50 Obligation to Refrain from Discrimination. 50 Form of Nondiscrimination and Nonsegregation Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Effect and Duration of Covenants Under Section 4.01 and Section 4.04 . . . . . . . . . . . . . 52 ARTICLE V DEFAULTS, REMEDIES AND TERMINATION .... .........52 Section 5.01. Section 5.02. Section 5.03. Section 5.04. Defaults - General......... ...............52 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Rights and Remedies are Cumulative. .......54 Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 ARTICLE VI GENERAL PROVISIONS............................. 54 Section 6.01. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Section 6.06. Section 6.07. Section 6.08. Section 6.09. Section 6.10. Section 6.11. Notices, Demands and Communications Between the Parties............................... 54 Conflict of Interest ........... ...........55 Warranty Against Payment of Consideration for Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Nonliability of Agency Officials and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Enforced Delay: Extension of Time of Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Inspection of Books and Records........... 56 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Real Estate Commissions................... 57 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Attorneys' Fees........................... 58 Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENT ........58 03-02-03 ANR-Meadowbrook Development Agreement Section 7.01. Entire Agreement ....... ... ... .............58 - ii - EXHIBIT "A" EXHIBIT "B" EXHIBIT "C" EXHIBIT "0" EXHIBIT "E" EXHIBIT "F" EXHIBIT "G" EXHIBIT "H" EXHIBIT "I" CDC/2003-S Legal Description of Agency Lot Form of Agency License Agreement (may affect the Agency Lot) Legal Description of Developer Lots Form of Notice of Agreement Project Description/Scope of Development Schedule of Performance Form of Section 33334.3 Covenant Copy of HUD Mortgagee Letter 2001-30 Form of Agency Grant Deed (for Completed New Agency Home) 03402-03 ANR-Meadowbrook Development Agreement - iii - CDC/2003-S MEADOWBROOK SINGLE FAMILY RESIDENTIAL GRANT DEVELOPMENT AGREEMENT THIS MEADOWBROOK SINGLE FAMILY RESIDENTIAL GRANT DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of February 3, 2003, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic (the "Agency") and ANR INDUSTRIES, INC., a California corporation (the "Developer") in light of the facts set forth in the following paragraphs of the Recitals: RECITALS [INSERT TEXT OF RECITAL FACTS AS APPROPRIATE] NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE AGENCY AND THE DEVELOPER HEREBY AGREE AS FOLLOWS: ARTICLE I TERMS AND CONDITIONS Section 1.01. Integration of All Agreements Relating to the Project and Definition of Terms. (a) This Agreement integrates all of the terms and conditions mentioned herein and supercedes all negotiations, discussions and understandings between the parties with respect to the Project and all items of assistance which the Agency may hereafter provide to the Developer. (b) In addition to the words which have defined meanings as set forth in the preceding paragraphs of this Agreement, certain other phrases or terms as used in this Agreement shall have the meaning set forth as follows: Adjusted Family Income. The words "Adjusted Family Income" mean the anticipated total annual income (adjusted for family size) of each individual or family residing or treated as residing in the New Home as calculated in accordance with Treasury Regulation 1.167(k) - 3b) (3) under the Code, as adjusted, based upon family size in accordance with the household income adjustment factors adjusted and amended from time to time, pursuant to Section 8 of the United States Housing Act of 1937, as amended. 03-02-03 ANR-Meadowbrook Development Agreement 1 CDC/2003-5 Affordable Housing Cost. The words "Affordable Housing Cost" shall have the meaning as set forth in Health and Safety Code Section 50052.5, as this section may hereafter be amended from time-to-time by the State of California. A Qualified Homebuyer, and/or the Successor-In-Interest of such Qualified Homebuyer, if any, shall pay no more than an Affordable Housing Cost as its purchase price for the New Home as of the applicable Delivery Date. Affordable Housing Development Grant. The words "Affordable Housing Development Grant" mean and refer to the grant to the Developer of certain low- and moderate- income housing funds of the Agency in the total aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) which the Developer shall use and apply in connection with the redevelopment of nine (9) New Homes on the Developer Lots, plus the New Agency Home, which shall be reserved for sale and occupancy by Qualified Homebuyers. The amount of the Affordable Housing Development Grant as disbursed by the Agency to the Developer shall be subject to final audit and, if applicable, adjustment, by the Agency as provided in Section 2.05 in the event that Final proj ect Costs as incurred by the Developer are less than the estimated Project development costs of $4,162,011 shown in the Project development cost pro forma on file with the Agency. Agency License Agreement. The words "Agency License Agreement" mean and refer to the license agreement by and between the Developer and the Agency affecting the Agency Lot. The Developer may enter the Agency Lot and perform the Work on the Agency Lot pursuant to the terms of the Agency License Agreement and this Agreement. The form of the Agency License Agreement is attached as Exhibit "B". Agency Lot. The words "Agency Lot" mean and refer to the parcel of land located in the City of San Bernardino and more particularly described in Exhibit "A". The Agency acquired the Agency Lot from the United States Secretary of the Department of Housing and Urban Development. Completed New "Completed New to the purchase the Agency for Home (e.g., the Agency Home Purchase Price. The words Agency Home Purchase Price" mean and refer price payable by the Qualified Homebuyer to the purchase of the Completed New Agency Agency Lot as improved with the New Agency 03-02-03 ANR-Meadowbrook Development Agreement 2 CDC/2003-S Home) at the close of the Agency New Home Escrow. The Completed New Agency Home Purchase Price shall be an amount which is no more than the maximum amount of the sales price of the Completed New Agency Home as computed under the applicable provisions of the HUD land purchase program pursuant to which the Agency acquired the Agency Lot, including HUD Mortgagee Letter No. 2001-30. A copy of HUD Mortgagee Letter No. 2001-30, is attached as Exhibit "H". Completed New Agency Home. The words "Completed New Agency Home" mean and refer to the new single family residential unit to be designed, constructed and improved by the Developer on the Agency Lot under the terms and conditions of the Agency License Agreement and made available for sale and occupancy by a Qualified Homebuyer designated by the Developer. Delivery Date. The words "Delivery Date" mean the date of delivery of title and possession of the New Home by the Developer to the Qualified Homebuyer at the close of each New Home Escrow. Developer Lot. The words "Developer Lot" mean and refer to each of the nineteen (19) parcels of land located in the Ci ty of San Bernardino and more particularly described in Exhibit "C". In the event that the Developer may be able to acquire additional parcels of land within the vicinity of the site shown in the diagram attached to Exhibit "e", the Developer, at its option may designate up to three (3) such additional parcels as "Developer Lots" for the purposes of this Agreement as set forth in Section 2.06. Effective Date. The words "Effective Date" mean and refer to the date on which this Agreement has been fully executed by the officers or representatives of the parties following an approving majority vote of the governing board of the Agency authorizing the execution of this Agreement by the Agency. Environmental Laws. The words "Environmental Laws" mean all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or 03-02-03 ANR-Meadowbrook Development Agreement 3 CDC/2003-5 industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Site), occupational or environmental conditions on, under, or about the Site or Sales Office, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes ci ted above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Site, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. Final Project Costs. The words "Final Project Costs" mean and refer to the actual and reasonable costs incurred by the Developer in the acquisition, development and improvement of the Proj ect. Final Proj ect Costs include each of the following: (1) the purchase price payable by the each Developer Lot, including Developer for real estate 03-02-03 ANR-Meadowbrook Development Agreement 4 CDC/2003-5 commissions, escrow fees insurance and the like; and costs, title (2) the cost of preparing each Developer Lot, and the Agency Lot for improvement, including demolition expenses, if any, grading, and all off-site costs incurred in connection with the improvement of each Developer Lot and the Agency Lot, including utility connection charges and adjacent public right-of-way improvements, if any; (3) architectural, engineering, legal, accounting, consulting and other professional service fees paid in connection with the planning, execution and financing of the Project; (4 ) the cost of points and surety and assessments; insurance, lender financing charges, fees, construction loan interest, completion bonds, property taxes, (5) the cost of construction of the New Homes, and the Completed New Agency Home, including all building permits, public school fees, and other regulatory agency charges, landscaping, fencing, on-site construction supervision and management and construction site security patrol expenses; (6) the cost of other extraordinary Proj ect-related construction and/or marketing expenses of the Developer approved by the Executive Director in his reasonable discretion which are based upon unusual or unforeseen conditions associated with the completion of the Project; (7) New Home sales, marketing at the time of sale of percent (6%) of the gross Home; and commissions payable each New Home of six sales price of each New (8) New Home sale escrow closing costs; (9) a Developer overhead fee of the cost items under (2), above; and five percent (5%) (3), (5) and of (6) , 03-02-03 ANR-Meadowbrook Development Agreement 5 CDC/2003-5 (10) a Developer profit allowance of eight percent (8%) of the gross sales price of each New Home. Ai though the estimated Proj ect development costs shown on the pro forma on file with the Agency as of the Effective Date indicate that such cost items (1) through (9), above, of Final Project Costs are anticipated to be $4,162,011, upon the completion of the Project the amount of Final Project Costs may be different from such estimate, and if Final Project Costs are less than the product of $180,987 multiplied by the number of New Homes as completed plus the Completed New Agency Home then the amount of the Affordable Housing Development Grant shall be subject to an adjustment payable by the Developer as provided in Section~,OI. Hazardous Substances. The words "Hazardous Substances" mean and include without limitation: those substances included wi thin the definiteness of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any other environmental law; and those substances listed in Department of Transportation 172.101], or by the EPA, or any hazardous substances [40 CFR Part the United States (DOT) Table [49 CFR successor agency, as 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (1) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, 03-02-03 ANR-Meadowbrook Development Agreement 6 CDCj2003-S (5) a flammable explosive, or (6) a radioactive material. Moderate-Income Household. The words "Moderate-Income Household" mean persons and families whose income does not exceed one hundred and twenty percent (120%) of the area median income of the City adjusted for family size by the State Department of Housing and Community Development in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, as amended, and Health and Safety Code Section 50093, as this section may hereafter be amended from time-to-time by the State of California. Net Development Cost. The words "Net Development Cost" mean and refer to certain of the actual, reasonable and necessary construction and resale costs as incurred by the Developer during the course of construction and improvement of the New Agency Home on the Agency Lot prior to the transfer and sale of the Completed New Agency Home to a Qualified Homebuyer. The Net Development Cost shall be payable by the Agency to the Developer from a portion of the Completed New Agency Home Purchase Price paid by the Qualified Homebuyer to the Agency. The Net Development Cost calculation performed by the Developer at the time of sale of the Completed New Agency Home to a Qualified Homebuyer shall be subject to audit and verification by the Agency in accordance with HUD Mortgagee Letter 2001-30. Net Development Cost Certificate. The words "Net Development Cost Certificate" mean and refer to the written accounting and cost certification prepared by the Developer and submitted to the Agency not later than fifteen (15) days before the date scheduled for the close of the New Agency Home Escrow. The Net Development Cost Certificate shall contain a suitably detailed description of the basis on which the Developer has determined the amount payable to the Developer from the sale of Completed New Agency Home to the Qualified Homebuyer at the close of the Agency New Home Escrow. The portion of the Completed New Agency Home Purchase Price sales price amount payable to the Developer as indicated in the Net Development Cost Certificate shall be no more than as permitted under HUD Mortgagee Letter 2001-30. 03-02-03 ANR-Meadowbrook Development Agreement 7 CDC/2003-S New Agency Home. The words "New Agency Horne" mean and refer to the affordable new single family dwelling unit to be designed, constructed, installed and financed by the Developer on the Agency Lot in accordance with the New Agency Horne Plans; provided however, that the Developer shall have first executed the Agency License Agreement prior to entering the Agency Lot to perform any of the Work on the Agency Lot. New Agency Home Escrow. The words "New Agency Horne Escrow" mean and refer to the escrow transaction through which the Agency shall sell the Agency Lot, as improved by the Developer with the Completed New Agency Horne, to the Qualified Homebuyer designated by the Developer. New Home. The words "New Horne" mean and refer to each of the completed single-family residential dwelling units (including the land and landscape improvements thereon) as shall be constructed and installed by the Developer on each Developer Lot. New Home Escrow. The words "New Horne Escrow" mean and refer to the real estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or later, by and between the Qualified Homebuyer and the Successor-In-Interest) for the conveyance and sale of the New Horne. The transfer of each New Horne from the Developer to a Qualified Homebuyer (or later, by and between the Qualified Homebuyer and the Successor-In-Interest) shall be accomplished upon the close of the New Horne Escrow. Notice of Agency Concurrence. The words "Notice of Agency Concurrence" mean and refer to the acknowledgment executed by the Executive Director of the Agency and delivered to the holder of the New Horne Escrow, in which the Agency confirms that the proposed Qualified Homebuyer, appears to satisfy all of the Adjusted Family Income and other requirements of the Section 33334.3 Covenant for occupancy of the New Horne. Project. The word "Project" means and refers to the redevelopment by the Developer of at least nine (9) New Homes on nine (9) of the Developer Lots, as designated by the Developer, which shall be reserved for occupancy and sale to Qualified Homebuyers and the completion and sale of Completed New Agency Horne to a Qualified Homebuyer as designated by the Developer. The proj ect is more 03-02-03 ANR-Meadowbrook Development Agreement 8 CDC/2003-5 particularly described in the Scope of Development attached as Exhibit "E". The proj ect shall be undertaken by the Developer in accordance with the dates set forth in the Schedule of Performance attached as Exhibit "F". Qualified Homebuyer. The words "Qualified Homebuyer" mean the purchasers of each of the nine (9) New Homes from the Developer (e.g.: all persons identified as having a property ownership interest vested in the New Home as of the close of the New Home Escrow) which the Developer shall reserve for sale and occupancy by Qualified Homebuyers. At the close of the New Home Escrow involving a Qualified Homebuyer, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does not exceed the household income qualification limits of a Moderate-Income Household; and (ii) pay no more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase transaction for the New Home, including all sums payable by the Qualified Homebuyer for its purchase money mortgage financing, insurance, escrow and other fees and costs. In the case of the Completed New Agency Home, the purchaser from the Agency as designated by the Developer upon the completion of the Work on the New Agency Home shall also be a Qualified Homebuyer whose household income does not exceed 115% of County median household income, adjusted for family size. Qualified Residence Period. The words "Qualified Residence Period" mean in the case of each New Home sold to a Qualified Homebuyer, and the Completed New Agency Home, as applicable, the period of time beginning on the Delivery Date and ending on the date which is forty-five (45) years after the Delivery Date. Real Estate Sales and Marketing Work. The words "Real Estate Sales and Marketing Work" refer to the services to be provided by the Developer relating to the marketing of the Completed New Agency Home for sale to a Qualified Homebuyer. The Real Estate Sales and Marketing Work includes without limitation the presentation of the Completed New Agency Home to one or more Qualified Homebuyers for the purpose of causing a Qualified Homebuyer to purchase the Completed New Agency Home from the Agency upon the completion of all of the Work and the satisfaction of all of the applicable other terms and conditions pertaining to such sale of the Completed New Agency Home to the Qualified Homebuyer under the Agreement. 03-02-03 ANR-Meadowbrook Development Agreement 9 CDC/2003-S Section 33334.3 Covenant. The words "Section 33334.3 Covenant" mean the Redevelopment Agency of the City of San Bernardino Community Redevelopment Housing Affordability Covenants and Restrictions by and among the Qualified Homebuyer, the Developer and the Agency pertaining to the New Home, and the Completed New Agency Home, as applicable. Work. The word "Work" refers to all of the acti vi ties of the Developer which may hereafter be undertaken on a Agency Lot subject to the terms and conditions of the Agreement. The Work includes: (i) the preparation of the Agency Lot for the construction of the New Agency Home including the installation of all off-site public improvements and utility connections as required; (ii) the construction of the New Agency Home in accordance with the New Agency Home Plans; and (iii) the Real Estate Sales and Marketing Work. Section 1.02. Parties to the Agreement. (a) The Agency. The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, et ~.) The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The Developer. The Developer ANR Industries, Inc., a California corporation. The principal office and mailing address of the Developer for purposes of this Agreement is: 10702 Hathaway Drive, Unit 1, Santa Fe Springs, California 90670. Section 1.03. Prohibition Against Change in Ownership, Management and Control of Developer and Assignment of Agreement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. Except as set forth in Section 3.03, prior to the completion of the Project the Developer shall not assign all or any part of this Agreement, or any rights hereunder, without the prior written approval of the Agency Executive Director, which approval shall not be unreasonably conditioned, withheld or 03-02-03 ANR-Meadowbrook Development Agreement 1 0 CDC/2003-5 delayed. For the purpose of this Agreement, the words ~completion of the Project" mean and refer to the date by which the Developer has caused both the Completed New Agency Home to be sold to a Qualified Homebuyer and the date on which the Developer has also caused at least nine (9) New Homes to be sold to Qualified Homebuyers; provided however, that both the New Agency Home Escrow and the ninth (9th) New Home Escrow shall each be closed by a date not later than as indicated in the Schedule of Performance. The Developer shall promptly notify the Agency in writing of any material change in the identity of the parties either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such party, of which information the Developer or any of its partners or officers has been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency prior to the completion of the Project if there is any material change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual shareholder or officer) that has not been approved by the Agency prior to the time of such change or the Agency may seek other appropriate relief in the event that at any time following the initial disbursement of the Affordable Housing Development Grant prior to the completion of the Project such a material change occurs in the ownership, or control of the Developer, the Developer's interest under the Agreement or the Developer's ownership interest in the Developer Lots or any portion thereof; provided, however, that (A) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or assert any other such remedy, and (B) the Developer shall have thirty (30) calendar days following its receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory to the Agency, in its reasonable discretion. For the purpose of this Section 1.03 the words ~material change" refer to any total or partial sale, assignment, or conveyance, or any trust power or any transfer in any other mode or form by the Developer of more than a forty- nine percent (49%) interest of the ownership of the Developer, and/or a series of such sales, assignments or conveyances which in the aggregate exceed a disposition or change of more than a 03-02-03 ANR-Meadowbrook Development Agreement 11 CDC/2003-S forty-nine percent (49%) interest of the ownership of the Developer. Section 1.04. Benefit to proj ect Areas. The Agency has determined that the redevelopment of the Developer Lots by the Developer in accordance with this Agreement will eliminate blight and provide needed affordable housing to the Meadowbrook Redevelopment Project Area as well as to areas in proximity thereto, which housing is needed due to the insufficiency of new affordable housing within the City generally. Section 1.05. List of Exhibits to Agreement. following is a listing of the Exhibits attached to Agreement. Each such exhibit is incorporated by this by reference into the text of this Agreement: EXHIBIT "A" EXHIBIT "B" EXHIBIT "C" EXHIBIT " 0" EXHIBIT "E" EXHIBIT " F" EXHIBIT "G" EXHIBIT "H" EXHIBIT "I" The this this Legal Description of Agency Lot Form of Agency License Agreement (affects the Agency Lot) Legal Description of Developer Lots Form of Notice of Agreement Project Description/Scope of Development Schedule of Performance Form of Section 33334.3 Covenant Copy of HUD Mortgagee Letter 2001-30 Form of Agency Grant Deed (for Completed New Agency Home) ARTICLE II DISBURSEMENT OF AFFORDABLE HOUSING DEVELOPMENT GRANT AND DISPOSITION OF AGENCY LOT Section 2.01. Affordable Housing Development Grant. (a) Subject to the terms and conditions set forth in this Agreement, the Agency hereby allocates and reserves the sum of Five Hundred Thousand Dollars ($500,000) to the Developer for 03-02-03 ANR-Meadowbrook Development Agreement 12 CDCj2003-5 disbursement in installments (the Affordable Grant) as provided in this Section 2.01 Project. Housing Development in support of the (b) The Agency shall disburse the Affordable Housing Development Grant to the Developer in installments as follows: (i) Initial disbursement: upon the Developer's acquisition of fee title interest of not less than nineteen (19) Developer Lots, the Agency shall disburse the sum of $75,000 to the Developer as provided in Section 2.01(c); (ii) Second disbursement: provided that the Developer has delivered its Due Diligence Approval Certificate to the Agency as provided in Section 2.03, and further provided that the Agency conditions precedent set forth in Section 2.17 have been satisfied, upon the recordation of a construction loan in favor of the Developer for the financing of the construction of not less than eleven (11) New Homes on eleven (11) Developer Lots designated by the Developer, the Agency shall disburse the sum of $75,000 to the Developer as provided in Section 2.01(e); (iii) Third disbursement: upon the issuance by the City to the Developer of certificates of occupancy for completed New Home Nos. 1 through 11 inclusive, the Agency shall disburse the sum of $125,000 to the Developer as provided in Section 2.01(f); (i v) Fourth disbursement: upon the occurrence of (A) the commencement of the Work by the Developer under the Agency License on the Agency Lot, and the (B) issuance by the City to the Developer of certificates of occupancy for completed New Home No. 12 through 19 inclusive, and (C) the sale by the Developer of a least six (6) New Homes to Qualified Homebuyers, the Agency shall disburse the sum of $125,000 to the Developer as provided in Section 2.01(g); (v) Fifth disbursement: upon the completion of the Project, as defined in Section 1.03 and receipt by the Agency of the Developer's certification of actual Project development costs incurred as 03-02-03 ANR-Meadowbrook Development Agreement 13 CDC/2003-S provided disburse provided in Section 2.05, the sum of $100,000 in Section 2.01(h). the Agency shall to the Developer as (c) The Housing Development within thirty (30) Executive Director documents: initial Grant days from disbursement of shall be payable to following receipt the Developer of the Affordable the Developer by the Agency the following (i) evidence as reasonably satisfactory to the Agency Executive Director that the Developer has obtained a binding commitment from a reputable construction lending institution to provide the Developer with a construction loan in an amount sufficient, when combined with the equity funds of the Developer, to fund the construction and improvement of not less than eleven (11) New Homes on the Developer Lots; and (li) evidence as reasonably satisfactory to the Agency Executive Director that the Developer has acquired fee title interest in not less than nineteen (19) of the Developer Lots. Evidence that the condition of subparagraph (ii), above has been satisfied, may be provided to the Agency Executive Director by a written acknowledgment of a title insurance company which confirms that it has caused the deeds to be recorded whereby the Developer acquires fee title in the Developer Lots concurrently upon the recordation of the Notice of Agreement and the disbursement of the initial installment of the Affordable Housing Development Grant through an escrow of such title insurance company for the account of the Developer. (d) Upon the initial disbursement of the Affordable Housing Development Grant the Developer shall execute and cause to be recorded the Notice of Agreement (See: Exhibit "0") against each of the Developer Lots at no cost to the Agency. The Developer shall provide the Agency with evidence satisfactory to the Executive Director that the Notice of Agreement has been recorded against each of the Developer Lots, subj ect only to permitted financing liens for the proj ect as described in Section 3.04. (e) Provided that the Developer has delivered its Due Diligence Approval Certificate to the Agency and thereafter, the 03-02-03 ANR-Meadowbrook Development Agreement 14 CDC/2003-5 Agency has conducted its public hearing and approved the disposi tion of the Completed New Agency Home as set forth in Section 2.02, and the Developer is not then in default under this Agreement, the second disbursement of the Affordable Housing Development Grant shall be payable to the Developer concurrently upon the recordation of the construction loan as previously approved by the Executive Director of the Agency under Section 2.01(c), which construction loan shall provide for an initial disbursement to the Developer by such lending institution of at least $100,000 for Project development costs, for the improvement of at least eleven (11) New Homes on the Developer Lots. The Developer shall provide the Agency with at least thirty (30) days written notice of the date on which the Developer reasonably believes the recordation of such construction loan shall occur, the Agency shall pay the second installment of the Affordable Housing Development Grant for the account of the Developer through the construction loan disbursement escrow account established by such construction lender and the Developer. (f) Provided the Developer is not then in default under this Agreement, the third disbursement of the Affordable Housing Development Grant shall be payable to the Developer within thirty (30) days following the receipt by the Agency of written certification from the Developer that the City has issued certificates of occupancy for completed New Home Nos. 1 through 11, inclusive. (g) Provided the Developer is not then in default under this Agreement, the fourth disbursement of the Affordable Housing Development Grant shall be payable to the Developer within thirty (30) days following the receipt by the Agency of written certification from the Developer that: (i) the Developer is ready to commence the Work on the Agency Lot pursuant to the Agency License; and (ii) the Developer has caused at least six (6) New Homes to be sold to Qualified Homebuyers; and that (iii) the City has issued certificates of occupancy for completed New Home Nos. 12 through 19, inclusive. (h) Provided the Developer is not then in default under this Agreement, the fifth and final disbursement of the Affordable Housing Grant shall be payable to the Developer within forty five (45) days following the receipt and verification by the Agency of a suitably detailed written accounting prepared by the Developer's accountant in accordance with generally accepted accounting principles of the Final Project Costs. Such written accounting shall be certified as to 03-02-03 ANR-Meadowbrook Development Agreement 15 CDC/2003-S its accuracy by the Developer's accountant and shall include at a minimum a general ledger for the Project, a record of cash receipts for the Project, a record of cash disbursements for the Project, a record of New Home sales and cash realized from such sales, a Final Proj ect Cost summary compared with the proj ect pro forma on file with the Agency as of the Effective Date, and a profit and loss statement for the Project. (i) In the event that the Final Proj ect Cost certification under Section 2.01(h) indicates that the Final Project Costs are less than $180,957 for each Developer Lot fully improved, plus the Completed New Agency Home, then in such event the Affordable Housing Development Grant shall be reduced by a ratio of $1 of Affordable Housing Development Grant for each $8.33 of Final Project Costs less than such figure as set forth in Section 2.05. Section 2.02. Disposition of the Agency Lot. (a) Provided that the Developer has delivered its Due Diligence Approval Certificate to the Agency as provided in Section 2.03, the Agency shall make the Agency Lot available to disposition to a Qualified Homebuyer as designated by the Developer subject to the following conditions: (i) the Developer shall have indicated in its Due Diligence Certificate that it intends to undertake the Work on the Agency Lot subject only to an approving majority vote of the governing board of the Agency in its discretion in accordance with Health and Safety Code Section 33433, authorizing the execution of the Agency License Agreement and the disposition of the Agency Lot, as improved by the Developer with the Completed New Agency Home, to a Qualified Homebuyer as designated by the Developer at a sales price (the Completed New Agency Home Purchase Price) which is not more than the $25,000 land purchase price paid by the Agency for the Agency Lot, plus the Net Development Cost estimate for the Completed New Agency Home, based upon the Developer's written budget for the improvement of the New Agency Home in accordance with the New Agency Home Plans; (ii) the Home Agency Plans, shall the have approved the New Agency amount of the Completed New 03-02-03 ANR-Meadowbrook Development Agreement 16 CDC/2003-S Agency Home Purchase Price and the Net Development Cost estimate as submitted by the Developer, as part of the public hearing for the disposition of the Completed New Agency Home as set forth in subparagraph (i), above; (iii) provided that subparagraphs the Developer Agency License the conditions described in (i) and (ii) have been satisfied, and the Agency have executed the Agreement; (iv) the other conditions set forth in Section 2.17(b) have been satisfied. (b) Provided the Agency has authorized the disposi tion of the Completed New Agency Home to a Qualified Homebuyer, as set forth in Section 2.02(a) (i), the parties shall complete the final form of the Agency License Agreement. The final form of the Agency License Agreement shall set forth the Completed New Agency Home Purchase Price based upon the Net Development Cost estimate and shall include a complete and itemized budget and description of the Work to be undertaken by the Developer on the Agency Lot and a schedule for the completion of such Work. The Agency License Agreement shall also include acknowledgment by the Agency that the Developer may create and the Agency shall cooperate with the recordation of a construction loan security interest in the Agency Lot in favor of the Developer's construction lender to provide the Developer with a portion of the estimated cost of improvement of the New Agency Home in an amount not to exceed eighty percent (80%) of the Developer's estimated Net Development Cost for the Completed New Agency Home. The Developer shall construct and install the New Agency Home on the Agency Lot in a good and workman like manner, as provided in the final form of the Agency License Agreement. (c) Upon the completion of the Work on the Agency Lot by the Developer, the Agency shall transfer and sell all of its right, title and interest in the Agency Lot as improved with the Completed New Agency Home to the Qualified Homebuyer designated by the Developer. The Completed New Agency Home Purchase Price payable by such Qualified Homebuyer to the Agency for the Completed New Agency Home shall be an amount which does not exceed the actual Net Development Cost for the Completed New Agency Home as confirmed by the Net Development Cost Certificate of the Developer, including the cost paid by the Agency for the Agency Lot. 03-02-03 ANR-Meadowbrook Development Agreement 1 7 CDC/2003-5 (d) The disposition of the Completed New Agency Home to the Qualified Homebuyer designated by the Developer shall take place through the New Agency Home Escrow to be administered by the Escrow Holder. The New Agency Home Escrow shall be deemed open ("Opening of New Agency Home Escrow") upon delivery of a fully executed copy of the Agency License Agreement to the Escrow Holder. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to such escrow. The Escrow Holder shall be a title company or escrow service as mutually acceptable to the Agency and the Developer. (e) Provided that the Developer and the Agency have jointly executed the Agency License Agreement, then the Developer may thereafter take possession of the Agency Lot under the Agency License Agreement, and cause the Work on the Agency Lot to be undertaken. The words "Close of Escrow," "Closing Date" and "Closing" in the case of the New Agency Home Escrow shall mean and refer to the date when the last of the following has occurred: (i) the Developer has completed the Work on the Agency Lot; (ii) the Developer has submitted its Net Development Cost Certificate to the Agency; (iii) the Developer has designated a Qualified Homebuyer to purchase the Completed New Agency Home and the Agency has issued its Notice of Agency Concurrence with respect to such Qualified Homebuyer; (i v) the Qualified Homebuyer has executed the escrow instructions as the purchaser thereof; (v) the Qualified Homebuyer and the Developer have mutually satisfied all of the remaining conditions for the close of New Agency Home Escrow; and (vi) the Escrow Holder is in receipt of the Completed New Agency Home Purchase Price, the fully executed form of the Section 33334.3 Covenant and all necessary documents and the Escrow Holder is in a position to comply with the final written instructions of the parties and cause the Agency Grant Deed for the Completed New Agency Home to be recorded and the policy of insurance for the Completed New Agency Home to be delivered to the Qualified Homebuyer. (f) The Developer shall deliver to the Agency the information relating to the Qualified Homebuyer described in Section 2 (e) of the Section 33334.3 Covenant, within five (5) days following the Developer's designation of such Qualified Homebuyer as the prospective purchaser of the Completed New Agency Home. Concurrently upon the Developer's delivery to the Agency of the household income and occupancy information described in Section 2 (e) of the Section 33334.3 Covenant, the Developer shall also request that the Agency issue its Notice of 03-02-03 ANR-Meadowbrook Development Agreement 18 CDCj2003-S Agency Concurrence with respect to the Qualified Homebuyer designated by the Developer. Within ten (10) days following its receipt of such written information and request from the Developer relating to the Qualified Homebuyer, the Agency shall provide the Developer with a preliminary confirmation of the approval or rejection of the income and household occupancy qualifications of the proposed Qualified Homebuyer. In the event that the Agency may request additional information relating to the confirmation of the matters described in the preceding sentence with respect to the Qualified Homebuyer, the Developer shall cause such additional information to be provided to the Agency as promptly as feasible. The Executive Director of the Agency shall issue a preliminary determination of his concurrence of the eligibility of the Qualified Homebuyer within ten (10) days following receipt of such completed income and household occupancy information. Provided that the proposed Qualified Homebuyer also qualifies to obtain purchase money mortgage financing for the purchase of the Completed New Agency Home with terms and costs not in excess of an Affordable Housing Cost for such Qualified Homebuyer, as evidenced by a written mortgage lending contract by and between the Qualified Homebuyer and a financial lending institution which is issued within sixty (60) days following the Executive Director's preliminary concurrence of the eligibility of the Qualified Homebuyer designated by the Developer, the Executive Director of the Agency shall issue a Notice of Agency Concurrence with respect to such Qualified Homebuyer to the Escrow Holder. In the event that the Agency may later discover that the written information provided to it in support of a request for issuance of a Notice of Agency Concurrence is false or incorrect in any material respect, then in such event the Agency may exercise all of its remedies to enforce the provisions of this Agreement and the Section 33334.3 Covenant, if applicable, notwithstanding the fact that a Notice of Agency Concurrence may have been issued in favor of a particular Qualified Homebuyer. (g) The Developer and the Agency mutually covenant and agree to execute all necessary or appropriate written escrow instructions as may be reasonably requested by the Escrow Holder in connection with the New Agency Home Escrow. The Developer shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder in any event of cancellation. (h) On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed for the Completed New Agency Home in 03-02-03 ANR-Meadowbrook Development Agreement 19 CDC/2003-S the form attached hereto as Exhibit "I" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of the right, title and interest of the Agency in the Completed New Agency Home to the Qualified Homebuyer. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of San Bernardino County, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties as set forth herein and can obtain for the Qualified Homebuyer a CLTA owner's extended coverage policy of title insurance ("Title Policy") issued by a title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Completed New Agency Home Purchase Price insuring that the Completed New Agency Home consists of a legal subdivided parcel of land with fee title vested in the Qualified Homebuyer and subject only to: (1) non-delinquent real property taxes; (2) the provisions of the Agency Grant Deed for the Completed New Agency Home; (3) the Section 33334.3 Covenant; (4) the matters described in 2.13; (5) such other title exceptions, if any, resulting from documents being recorded or delivered through the Qualified Homebuyer Escrow (Agency Lot), including without limitation the purchase money mortgage security interest of the lending insti tution providing a purchase money mortgage loan to the Qualified Homebuyer, sec'llred by the Completed New Agency Home. (i) The Agency shall pay the Developer the Net Development Cost for the Completed New Agency Home solely from the proceeds of the Completed New Agency Home Purchase Price paid by the Qualified Homebuyer at the Close of the New Agency Home Escrow. No other source of funds of the Agency is available to the Agency or to the Developer to pay the amount of the Net Development Cost for the construction, improvement and sale of the Completed New Agency Home. Notwi thstanding the special fund limitation on the source of Agency funds to pay the Developer the Net Development Cost, any proceeds of insurance carried or obtained by the Developer to pay for a property casualty loss or destruction to the New Agency Home which may 03-02-03 ANR-Meadowbrook Development Agreement 20 CDC/2003-5 occur prior to the Close of the New Agency Horne Escrow, shall be used and applied following the occurrence of any such loss or destruction of the New Agency Horne as provided in the Agency License Agreement. Section 2.03. Developer Agreement to Undertake the Project. (a) Subject to the satisfaction of the conditions precedent set forth in Section 2.16, the Developer hereby agrees to undertake the Project, including the Work on the Agency Lot. The Project shall be undertaken in accordance with the schedule of improvement set forth in the Schedule of Performance. (b) In the event that the Developer may fail to deliver its Due Diligence Approval Certificate to the Agency for any reason by the date established in the Schedule of Performance, the Developer shall return the first installment of the Affordable Housing Developer Grant (if previously disbursed to the Developer by the Agency) within thirty (30) days of written demand by the Agency. Upon receipt by the Agency of the reimbursement of the first installment of the Affordable Housing Development Grant, the Agency shall deliver to the Developer in recordable form, an acknowledgment of quitclaim and release by the Agency of the Notice of Agreement affecting each of the Developer Lots. Upon the receipt of such sum by the Agency and the delivery by the Agency to the Developer of the quitclaim and release of the Notice of Agreement, the parties shall be mutually released from any further duty, right or liability arising under this Agreement. (c) If following the Agency's receipt of the Developer's Due Diligence Approval Certificate, thereafter the Agency may fail to conduct a public hearing and approve the disposition of the New Agency Horne to a Qualified Homebuyer for any reason by the date established in the Schedule of Performance, the Developer shall return the first installment of the Affordable Housing Development Grant (if previously disbursed to the Developer by the Agency) within thirty (30) days of written demand by the Agency. Upon receipt by the Agency of the reimbursement of the first installment of the Affordable Housing Development Grant, the Agency shall deliver to the Developer in recordable form, an acknowledgment of quitclaim and release by the Agency of the Notice of Agreement affecting each of the Developer Lots. Upon the receipt of such sum by the Agency and the delivery by the Agency to the Developer of the quitclaim and release of the Notice of 03-02-03 ANR-Meadowbrook Development Agreement 21 CDC/2003-5 Agreement, the parties shall be mutually released from any further duty, right or liability arising under this Agreement. Section 2.04. Sale Qualified Homebuyers. of Completed New Homes to (a) The Developer shall designate the nine (9) New Homes which it shall sell to Qualified Homebuyers. Each New Home which the Developer proposes to sell to a Qualified Homebuyer shall be transferred to such Qualified Homebuyer through a New Home Escrow. The Agency shall not be a party to any such New Home Escrow. The Developer shall instruct the holder of the New Home Escrow, that the escrow holder shall comply with the provisions of Section 2.04(d) of this Agreement and at the close of each New Home Escrow, the escrow holder shall provide the Agency with a copy of both the "seller's" and the "buyer's" closing statement, together with a complete copy of the real estate sales agreement between the Developer and the Qualified Homebuyer for the New Home. (b) The Developer shall deliver to the Agency the information relating to the Qualified Homebuyer described in Section 2 (e) of the Section 33334.3 Covenant, within five (5) days following the Developer's designation of such Qualified Homebuyer as the prospective purchaser of the New Home. Concurrently upon the Developer's delivery to the Agency of the household income and occupancy information described in Section 2 (e) of the Section 33334.3 Covenant, the Developer shall also request that the Agency issue its Notice of Agency Concurrence with respect to the Qualified Homebuyer designated by the Developer. Within ten (10) days following its receipt of such written information and request from the Developer relating to the Qualified Homebuyer, the Agency shall provide the Developer with a preliminary confirmation of the approval or rejection of the income and household occupancy qualifications of the proposed Qualified Homebuyer. In the event that the Agency may request additional information relating to the confirmation of the matters described in the preceding sentence with respect to the Qualified Homebuyer, the Developer shall cause such additional information to be provided to the Agency as promptly as feasible. The Executive Director of the Agency shall issue a preliminary determination of his concurrence of the eligibility of the Qualified Homebuyer within ten (10) days following receipt of such completed income and household occupancy information. Provided that the proposed Qualified Homebuyer also qualifies to obtain purchase money mortgage financing for the purchase of the New Home with terms and costs not in excess 03-02-03 ANR-Meadowbrook Development Agreement 22 CDC/2003-5 of an Affordable Housing Cost for such Qualified Homebuyer, as evidenced by a written mortgage lending contract by and between the Qualified Homebuyer and a financial lending institution, which is issued wi thin sixty (60) days following the Executive Director's preliminary concurrence of the eligibility of the Qualified Homebuyer designated by the Developer, the Executive Director of the Agency shall issue a Notice of Agency Concurrence to the Escrow Holder. In the event that the Agency may later discover that the written information provided to it in support of a request for issuance of a Notice of Agency Concurrence is false or incorrect in any material respect, then in such event the Agency may exercise all of its remedies to enforce the provisions of this Agreement and the Section 33334.3 Covenant, if applicable, notwithstanding the fact that a Notice of Agency Concurrence may have been issued in favor of a particular Qualified Homebuyer. (c) The Developer and the Agency mutually covenant and agree to execute all necessary or appropriate written escrow instructions as may be reasonably requested by the escrow holder in connection with the New Home Escrow. (d) Each New Home Escrow shall close upon satisfaction of the applicable escrow conditions by and between the Developer and such Qualified Homebuyer and when the escrow holder confirms that: (i) it is in receipt of the Notice of Agency Concurrence for the Qualified Homebuyer; (ii) the escrow holder shall recorded a fully executed 33334.3 Covenant for the New have recei ved and from of the Section Home; and (iii) the escrow holder shall provide the Agency with evidence in the form of a policy of title insurance in favor of the Agency which insures that the Section 33334.3 Covenant is subject only to the lien for property taxes and the lien in the New Home of the senior purchase money mortgage lender to the Qualified Homebuyer. (e) In the event that the New Home Escrow may fail to close for any reason, the Developer shall cause such New Home Escrow to be cancelled. The Developer shall pay for all of the costs and expenses of such New Home Escrow and shall indemnify, 03-02-03 ANR-Meadowbrook Development Agreement 2 3 CDC/2003-5 defend and hold the Agency harmless from any such costs which may otherwise have been assessed or charged to the Agency. Section 2.05. Project Development Cost Pro Forma. (a) As of the Effective Date of this Agreement, the Developer has presented the Agency with a Project development cost pro forma as on file with the Agency. The Agency has elected to provide the Affordable Housing Development Grant to the Developer based upon the Project development cost estimate presented by the Developer in the Proj ect development cost pro forma. (b) In the event that as of the date of the submission of the certificate of the Developer relating to Final Project Cost umier Section 2.01 (h), may indicate that a refund of the Affordable Housing Development Grant is payable to the Agency, such refund shall consist of the addition of two (2) separate variables as follows: Refund Variable A = the number (if any) of New Homes less than 20 as actually produced and occupied or ready for occupancy as of the date of the Developer's certificate under Section 2.01 (h) multiplied by the sum of $21,739; and Refund Variable B = 12% of the difference, if any, between: (i) the product of $180,957 multiplied by the number of New Homes, plus the Completed New Agency Home, produced and occupied or ready for occupancy and (ii) Final Project Costs divided by the actual number of New Homes, plus the Completed New Agency Home produced and occupied or ready for occupancy as of the date of the Developer's Certificate under Section 2.01(h); (c) The Developer shall maintain accounting books and records of Project development costs incurred in accordance with generally accepted principles of business accounting. The Agency and its accountants and auditors shall have the right to conduct, at its expense, an inspection and review of the 03-02-03 ANR.Meadowbrook Development Agreement 24 CDC/2003-5 accounting books and records of the Developer relating to the proj ect upon the request of the Agency. The Developer shall cooperate with the Agency in the production of its accounting books and records as reasonably required by the Agency and its auditors to conduct an audit of actual Project development costs. (d) In the event that the Agency reasonably determines based upon its review of the Developer's certificate under Section 2.01 (h) or based upon its audit of the Project related business record of the Developer under Section 2.05(c), or both, that any portion of the Affordable Housing Development Grant is refundable by the Developer to the Agency, then the Developer shall remit the such portion of the Affordable Housing Development Grant to the Agency within thirty (30) days of written demand therefore by the Agency. Section 2.06. Developer to Exercise Best Efforts to Obtain Additional Developer Lots. The Developer shall exercise best efforts to obtain at least three (3) additional parcels of land from third parties in the neighborhood in which the Project shall be undertaken. All such additional parcels of land as so acquired by the Developer shall be deemed "Developer Lots" for the purpose of this Agreement, and the Developer shall construct and install New Homes on each such parcel. In the event that the Developer may fail to acquire and improve at least three (3) such additional parcels of land before the date set forth in the Schedule of Performance, the Developer acknowledges that the amount of the Affordable Housing Development Grant shall be subj ect to a reduction or partial refund to the Agency as set forth in Section 2.05. Section 2.07. [RESERVED - NO TEXT] . Section 2.08. Inspection and Review of Agency Lot. Within fifteen (15) days following the Effective Date, the Agency shall deliver true, correct and complete copies or originals of the following documents and items ( collectively, "Due Diligence Items") to the Developer as relate to the Agency Lot: (i) copies of all soils, seismic, geologic, drainage, toxic waste, engineering, environmental and similar type reports and surveys (including, but not limited to, any Environmental Site Assessments of the Agency Lot), if any, in the 03-02-03 ANR-Meadowbrook Development Agreement 2 5 CDCj2003-5 possession or control of the correspondence relating thereto, if the Agency's possession or control; Agency and any, wi thin (ii) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Agency Lot the Agency's possession or control; (iii) disclosure of any legal or condition of the knowledge of the Agency; matters affecting the use Agency Lot within the (iv) a preliminary title insurance report on the Agency Lot issued by the Title Company; (v) a copy of the real estate purchase agreement by and between the Agency and the United States Secretary of the Department of Housing and Urban Development for the Agency's purchase of the Agency Lot from the United States Secretary of the Department of Housing and Urban Development. Section 2.09. Due Diligence Investigation Agency Lot and the Project by the Developer. of the (a) For sixty (60) days from the Effective Date, and subj ect to the extensions of time set forth below in Section 2.15, the Developer shall have the right to examine, inspect and investigate the Developer Lots and the Agency Lot (the "Due Diligence Period") to determine whether their condition, and the undertaking of the Project thereon by the Developer, is acceptable to the Developer in its sole and absolute discretion. (b) During the Due Diligence Period, the Agency shall permi t the Developer, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Agency Lot as the Developer deems prudent with respect to the physical condition of the Agency Lot, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, and for purposes of surveying the potential presence of any hazardous substances, if any. Any such investigation work on the Agency Lot may be conducted by the Developer and/or its agents during any normal business hours upon seventy-two (72) hours prior notice to the Agency, which notice will include a description of any investigation work or 03-02-03 ANR-Meadowbrook Development Agreement 26 CDC/2003-5 tests to be conducted by the Developer on the Agency Lot. the Agency's request, the Developer will provide the Agency copies of any test results. Upon with (c) During the Due Diligence Period, the Developer shall also have the right to investigate all other matters relating to the Project, including the zoning, use and compliance with other applicable laws which relate to the use and development and improvement of the Project, including the Agency Lot. The Agency shall cooperate fully to assist the Developer in completing such inspections and investigations of the condition of the Agency Lot. The Agency shall have the right, but not the obligation, to accompany the Developer during such investigations and/or inspections of the Agency Lot. Section 2.10. Due Diligence Approval Certificate. (a) Within sixty (60) days following the Effective Date, the Developer shall complete its investigation of the Developer Lots, the Agency Lot and the Project (subject to the extensions of time set forth in Section 2.15) and deliver a due diligence approval certificate signed by the Developer (the uDue Diligence Approval Certificate") to the Agency which either: (i) indicates wi th the the Work condition that the Developer is ready to proceed Project, including the performance of on the Agency Lot and accepts the of the Agency Lot or; (ii) indicates that the Developer has elected not to proceed with the Project. (b) In the event that the Developer submits its Due Diligence Approval Certificate to the Agency under subparagraph (i) of Section 2.10(a), the Developer shall include in such submission a set of New Agency Home Plans for the Agency Lot, together with an itemized written budget estimates for the Net Development Cost payable by a Qualified Homebuyer for the Completed New Agency Home. Such New Home Plans and Net Development Cost estimates shall be in a form as reasonably acceptable to the Executive Director of the Agency and such acceptance by the Executive Director shall not be unreasonably withheld, conditioned or delayed by the Executive Director. The Agency shall schedule a public hearing for the consideration of the disposition of the Completed New Agency Home to a Qualified Homebuyer designated by the Developer in accordance with Health 03-02-03 ANR-Meadowbrook Development Agreement 27 CDC/2003-5 and Safety Code Section 33433 within thirty (30) days following its receipt of such a Due Diligence Approval Certificate. (c) In the event that the Agency may in its sole discretion, determine that it shall not approve the disposition of the Agency Lot upon the conclusion of the public hearing described in Section 2.02 (a), the Developer shall pay a refund to the Agency of the first installment of the Affordable Housing Development Grant (if such sum has previously been disbursed to the Developer), and upon the receipt by the Agency of such sum, if applicable, the parties shall be mutually released and discharged with respect to any further right, duty or obligation with respect to the Project. (d) In the event that the Developer may at its sole discretion, indicate in its Due Diligence Approval Certificate its election not to proceed with the Project, or in the event that by a date no later than ninety (90) days following the Effective Date, the Developer may fail to deliver its completed Due Diligence Approval Certificate to the Agency for any reason, then in such event, the parties shall be mutually released from any further obligation or liability under this Agreement. Section 2.11. Books and Records of the Agency Relating to the Agency Lot. As part of the Developer's due diligence investigations during the Due Diligence Period, the Developer shall be afforded full opportunity by the Agency to examine all books and records which relate to the Agency Lot in the possession of the Agency and/or the Agency's agents or employees, including the reasonable right to make copies of such books and records. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Developer with obtaining access to information relating to the Agency Lot which is in the possession or control of Agency. Section 2.12. Condition of the Agency Lot; Developer's Release. The Developer acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Agency Lot during the Due Diligence Period. The Developer shall accept the delivery of possession to the Agency Lot in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Developer shall have conducted and completed (or waived the completion) of all of its independent investigation of the condition of the Agency Lot which the Developer may believe to be indicated. The 03-02-03 ANR-Meadowbrook Development Agreement 2 8 CDC/2003-S Developer hereby acknowledges that it shall rely solely upon its own investigation of the Agency Lot and its own review of such information and documentation as it deems appropriate for the purpose of accepting the condition and possession of the Agency Lot. The Developer is not relying on any statement or representation by the Agency relating to the condition of the Agency Lot unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representation or warranty as to whether the Agency Lot presently comply with Environmental Laws or whether the Agency Lot contain any Hazardous Substance. Furthermore, to the extent that the Agency has provided the Developer with information relating to the condition of the Agency Lot, including information and reports prepared by or on behalf of the City of San Bernardino, the Agency makes no representation or warranty with respect to the accuracy, completeness or methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of itself and its successors and assigns, waives and release the Agency and its successors and assigns from any and all demands, claims, legal or administrative proceedings, losses, liability, damages, penalties, fines, judgments, costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of . the Agency Lot or any law or regulation applicable thereto, including the presence or alleged presence of harmful or hazardous substances in, under or about the Agency Lot including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Developer expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that the general release does not extend to claims which the creditor does not know of suspect to exist in his or her favor at the time the release is agreed to, which, if known to such creditor, would materially affect a settlement. By execution of this Agreement, the Developer acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, 03-02-03 ANR-Meadowbrook Development Agreement 29 CDC/2003-5 described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, 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." The undersigned, expressly waives under any other effect. being aware of any rights it may statutes or common this have law code section, thereunder, as principles of hereby well as similar Initials of Developer:~ The provisions of this Section 2.12 shall survive the Close of the New Agency Home Escrow. Section 2.13. Review and Approval of Condition of Title in the Agency Lot by the Developer. (a) Within fifteen (15) days following the Effective Date, the Agency shall cause to be delivered to the Developer a preliminary title report or title commitment for a CLTA extended coverage policy of title insurance issued by the Title Company, describing the condition of title of the Agency Lot, together with copies of all exceptions specified therein and with all easements plotted but excluding matters disclosed on a survey (the "Preliminary Title Report"). The Developer shall notify the Agency in writing wi thin ten (10) days of its receipt of such preliminary title report ("Developer's Title Objection Notice") of any obj ections the Developer may have to the title exceptions contained in the Preliminary Title Report prior to the expiration of the Due Diligence Period. The Agency shall have a period of five (5) days after receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer ("Agency's Title Notice") of the Agency's election to either: (i) agree to remove the objectionable items prior to the Close of the New Agency Home Escrow, or (ii) decline to remove any such title exceptions and withdraw the Agency Lot from 03-02-03 ANR-Meadowbrook Development Agreement 30 CDC/2003-S availability for disposition under this Agreement; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency 's acti vi ties. I f the Agency notifies the Developer of its election to withdraw the Agency Lot from availability for disposition under this Agreement rather than remove the objectionable items, the parties shall be mutually released from any further obligation with respect to the Agency Lot or the Work. (b) The Agency covenants not to further encumber and not to place any further liens or encumbrances on the Agency Lot, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Developer. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Developer to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period or ten (10) days from receipt of the amendment or supplement). Section 2.14. RESERVED - NO TEXT. Section 2.15. Extension of Due Diligence Period. In the event Agency fails to provide to the Developer the documents and other information required by Sections 2.08 by the date (s) set forth therein, the Due Diligence Period for such information shall be extended by one (1) day for each day of the delay by the Agency to permit the Developer to perform an adequate due diligence review (but not to exceed a total of thirty (30) days.) The Developer will use its best efforts to notify Agency of any documents the Agency has failed to deliver to the Developer within the time periods provided in Sections 2.08 and 2.11. Section 2.16. Developer' s Conditions Precedent. The Developer's obligation to undertake and complete the Project, including taking possession of the Agency Lot, shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the second disbursement of the Affordable Housing Development Grant: 03-02-03 ANR-Meadowbrook Development Agreement 31 CDC/2003-5 (1) The Agency shall not material term of this Agreement Agency hereunder; have defaulted on any to be performed by the (2) the Developer's approval of the contents of all Due Diligence Items, and the other investigations of the Project, the Developer Lots and the Agency Lot made by the Developer, on or before the expiration of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.15. (3) the Developer's approval of any notice of change in representation or warranty given by the Agency pursuant to Section 2.24(a)hereof; (4) if the Developer has indicated in its Due Diligence Approval its readiness to proceed with the Project then the Agency shall have approved the disposition of the Agency Lot as set forth in Section 2.02(a); (5) if the Agency has approved the disposition of the Agency Lot as provided in Section 2.02(a) then the Title Company shall have committed to issue the Title Policy, for the Agency Lot in the form described in Section 2.02(h) and the Developer and the Agency have both executed the Agency License Agreement; (6) the Developer has obtained a construction financing loan commitment to cover all costs of at least eleven (11) of the Developer Lots (when combined with Developer equity), on terms acceptable to the Developer; (7) the Agency shall have deemed satisfied (or waived satisfaction of) each of the conditions precedent set forth in Section 2.17; (8) provided plans for the improvement of the Developer Lots have been submitted to the City of San Bernardino by the Developer wi thin l2.. D days following the Effective Date, the City of San Bernardino shall have completed the plan check for the improvement of the New Homes on the Developer Lots, and if applicable, for the Agency Lot as approved by the City of San Bernardino Planning Commission. Agency's Section 2.17. obligation to The Agency's Conditions Precedent. provide the second through the The final 03-02.Q3 ANR-Meadowbrook Development Agreement 32 CDCj2003-S installment of the Affordable Housing Development Grant and, if applicable, to permit the Developer to enter the Agency Lot to perform the Work pursuant to the Agency License Agreement and thereafter to transfer the Completed New Agency Home to the Qualified Homebuyer designated by the Developer shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the second disbursement of the Affordable Housing Development Grant: (1) the Developer has submitted its Due Diligence Approval Certification to the Agency on or before the date set forth in this Agreement; (2) if the Developer has elected in its Due Diligence Approval Certificate to proceed with the Project then the Agency shall have approved the disposition of the Agency Lot as set forth in Section 2.02(b); (3) the Developer has provided the Agency with satisfactory evidence of the commitment of a lender to provide construction financing to the Developer for the construction and improvement of not less than eleven (11) New Homes on the Developer Lots, including all applicable development fees, with an initial construction loan disbursement amount (when combined with Developer equity) sufficient to construct and improve not less than eleven (11) of the Developer Lots; (4) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct; (5) the Developer shall have satisfied (or shall be deemed to have waived satisfaction of) each of the conditions precedent set forth in Section 2.16. Section 2.18. RESERVED - NO TEXT. Section 2.19. Satisfaction of Conditions Precedent. Where satisfaction of any of the conditions precedent in this Agreement requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where 03-02-03 ANR-Meadowbrook Development Agreement 3 3 CDC/2003-S satisfaction of any condition requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Ei ther party may waive any of the conditions set forth in the Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the other party. Section 2.20. Termination. In addition to the termination of this Agreement pursuant to Section 2.10 (c), in the event of the conditions set forth in Section 2.16, in the case of the Developer, or Section 2.17 in the case of the Agency is not fulfilled within one hundred and twenty (120) days after the Effective Date or waived by the applicable party pursuant to Section 2.19, either party may, at its option, terminate this Agreement upon written notice, and upon the issuance by either party of such notice or termination, the parties shall be mutually released from further obligations hereunder, and all documents delivered by the Developer to the Agency shall be returned to the Developer and all documents delivered by the Agency to the Developer shall be returned to the Agency. Nothing in this Section 2.20 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement. Section 2.21. RESERVED - NO TEXT. Section 2.22. RESERVED - NO TEXT. Section 2.23. RESERVED - NO TEXT. Section 2.24. Representations and Warranties. (a) Warranties and Representations by the Agency. The Agency hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Developer has been made in material reliance by the Developer on such covenants, representations and warranties: (i) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects as of the Effective Date. 03-02-03 ANR-Meadowbrook Development Agreement 34 CDC/2003-S (ii) Due Organization. The Agency is a community redevelopment agency, duly formed and operating under the laws of California. The Agency has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby. (iii) Requisite Action. The Agency has taken all requisi te action and obtained all requisite consents for agreements or matters to which the Agency is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby. (iv) Enforceability of Agreement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewith will, when executed, shall be valid and enforceable against the Agency in accordance with its terms. (v) Use of Agency Low-Mod Funds. The sole source of funds which the Agency used to acquire the Agency Lot and which the Agency shall use to make disbursements to the Developer of each installment of the Affordable Housing Development Grant, shall be derived from the low-and moderate-income housing set aside funds of the Agency (as this term is defined at Health and Safety Code Section 33334.2 and 33334.3 (b)) and from no other source of funds of the Agency or the City of San Bernardino. (b) Warranties and Representations by the Developer. The Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Agency has been made in material reliance by the Agency on such covenants, representations and warranties: (1) The Developer is a duly organized and validly existing California corporation. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons 03-02-03 ANR-Meadowbrook Development Agreement 35 CDC/2003-5 executing this Agreement referenced herein on behalf represent and warrant that power, right and authority to and the instruments of the Developer hereby such persons have the bind the Developer. (2) The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for the Developer's authorization to enter into this Agreement. (3) This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by and are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4) The Project development cost pro forma as prepared by the Developer and submitted to the Agency as of the Effective Date is to the best information and belief of the Developer, a fair and reasonable presentation of the costs and expenses which the Developer expects to incur as of the Effective Date with respect to the development of the Project. (5) The books and accounting records of the Developer with respect to the improvement of the New Agency Home and performance of any of the Work and the final accounting for the Net Development Cost for the Completed New Agency Home, shall conform to the financial accountability standards of Attachment F of Office of Management and Budget Circular A-II0, as evidenced by a notarized statement by the certified public accountant. (6) The books and account records of the Developer with respect to its confirmation and certification as provided in Section 2.05, of actual proj ect development costs as incurred, shall conform to generally acceptable principles of accounting. (7 ) Neither the execution of this the consummation of the transactions hereby shall result in a breach of or Agreement nor contemplated consti tute a 03-02-03 ANR-Meadowbrook Development Agreement 3 6 CDC/2003-5 default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer. (8) The Developer acknowledges that it has been informed of the provisions of Labor Code Section 1720 by its legal counsel and that the Developer is aware of the legal effect of its acceptance of the Agency Affordable Housing Development Grant. The Developer further represents and warrants to the Agency that the Developer shall not accept any other financial assistance from any other public agency in connection with the Project, including the City of San Bernardino, unless the Developer first complies with the applicable provisions of Labor Code Section 1720 in connection with its acceptance of such other assistance. (9) The representations and warranties of the Developer contained in this Section 2.24 (b) shall be based upon the actual knowledge of (~J~ . All representations and warranties contained in this Section 2.24(b) are true and correct on the date hereof and on the Effective Date. (c) Change in Facts. If either party becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by such party under this Agreement, whether as of the Effecti ve Date or any time thereafter and whether or not such representation or warranty was based upon such party's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the other party, but such notice shall not release such party of its liabilities or obligations with respect thereto. Section 2.25. Damage, Destruction and Condemnation. If the Project suffers damages as a result of any casualty prior to then the Developer shall give written notice thereof to the Agency within thirty (30) days after the occurrence of the casualty. The Developer elects in such notice to the Agency to either: (i) repair or replace such casualty loss or (ii) the 03-02-03 ANR-Meadowbrook Development Agreement 37 CDC/2003-S Developer may terminate this Agreement, in which case, the balance of the Affordable Housing Development Grant as disbursed to the Developer shall be promptly refunded to the Agency, and upon the receipt by the Agency of such reimbursement, the parties shall be mutually released from further responsibility under this Agreement. In the event that, prior to the completion of the Project, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Project, the Agency shall give prompt written notice thereof to the Agency, and the Developer shall have the option either: (i) to elect not to complete the Project and to promptly refund the balance of the Affordable Housing Development Grant as disbursed to the Developer and terminate the Agreement; or (ii) the Developer may complete such portion of the proj ect as not affected by such condemnation proceedings, in which case Developer shall be entitled to retain the proceeds of such taking; provided however, that the Developer shall reimburse the Agency a portion of the balance of the Affordable Housing Development Grant as previously disbursed to the Developer in a pro rated amount for each Developer Lot as so acquired by a third party public agency in eminent domain. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice of the initiation of any such condemnation proceedings affecting the Project. Section 2.26. Developer Market Reports to the Agency. (a) From and after the date of the initial disbursement of the Affordable Housing Development Grant by the Agency to the Developer until the completion of the proj ect as provided in Section 1.03, the Developer shall provide the Agency with the following financial reports relating to the Project: (i) within sixty (60) days of the end of each calendar quarter and upon the request of the Agency, a report on the status of the Project, which shall include, at a minimum, the trial balance, general ledger, cash receipt journal, cash disbursements journal, sales journal, job cost summary compared with the Project pro-forma, bank statement, and quarterly profit and loss statement, and schedule of cash flows and a weekly sales report for New Homes, as applicable; and 03-02-03 ANR-Meadowbrook Development Agreement 38 CDC/2003-5 (ii) within one hundred twenty (120) days after the end of each fiscal year of the Developer, an annual unaudited financial statement, prepared by the Developer for the Project, or, if obtained by the Developer, an audited financial for the proj ect. (b) The Agency shall have the right to inspect the business and financial records of the Developer as relate to the Project and the presentation of the information described in subsection (a), above and in Section 2.05 with respect to the verification by the Agency of final Project development costs. The Developer shall provide the Agency (and its auditors or accountants) with reasonable access to such business records upon reasonable prior notice from the Agency. The Agency shall pay for its copying and accounting costs associated with inspection of the business records provided by the Developer to the Agency for inspection. ARTICLE II I DEVELOPMENT OF THE DEVELOPER LOTS AND THE AGENCY LOT Section 3.01. Development by Developer. (a) Scope of Development. It is the intent of the parties that the Developer Lots and, the Agency Lot shall be developed as follows: (i) the construction by the Developer on the Developer Lots of twenty two (22) single family detached residential dwelling units (e.g., each a New Home), containing a minimum interior living area Of~y;gO square feet each, together with all on and off-site improtements such as streets, curbs, sidewalks, storm drains, gutter, utilities, etc, and not less than nine (9) of the New Homes shall be reserved for sale and occupancy by "Qualified Homebuyers" whose Adjusted Family Income at the time of initial occupancy of each New Home (e.g., close of the applicable New Home Escrow) does not exceed the household income qualification limits of a Moderate-Income Household; (ii) the performance of the Work on the Agency Lot by the Developer pursuant to the Agency License Agreement, and the Completed New Agency Home shall be reserved for sale and occupancy by a Qualified Homebuyer whose Adjusted Family Income at the time of close of the New Agency Home Escrow does not exceed 115% of County median household income. 03-02-03 ANR-Meadowbrook Development Agreement 39 CDC/2003-5 (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the New Homes on each Development Lot and the Agency Lot pursuant to this Agreement. The Developer acknowledges that any change in the plans for development of the New Homes on the Developer Lots and/or the Agency Lot as set forth in the Scope of Development shall be subject to the City's zoning ordinance and building requirements; provided however not less than nine (9) of the New Homes shall be reserved for sale and occupancy by Qualified Homebuyers as set forth in Section 3.01 (a) and Section 4.01. No action by the Agency or the City with reference to this Agreement or related documents shall be deemed to constitute a waiver of any lawful City requirements which are applicable to the Developer Lots and the Agency Lot or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Developer Lots and/or the Agency Lot, except by modification or development variance approved by the City consistent with this Agreement. (c) The Scope of Development set forth in Exhibit "E" is hereby approved by the Agency upon its execution of this Agreement. The New Homes shall be constructed and improved on the Developer Lots in conformance with the Scope of Development and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency and the mutual approval of any such change shall not be unreasonably conditioned, withheld or delayed. The Developer shall improve the Agency Lot in accordance with the New Agency Home Plans as referenced in the Agency License Agreement. The approval by the City of any element of the Project except for the New Agency Home, which may be subject to the discretionary or ministerial regulatory review of the City, shall be deemed to be approved by the Agency. (d) The approval of the Scope of Development by the Agency hereunder shall not be binding upon the Common Council of the City or the Planning Commission of the City with respect to any regulatory approvals relating to the improvement of the New Homes and/or the public improvements necessary for the development of the Developer Lots and/or the Agency Lot as may be required by such other bodies. If any material change of the Scope of Development as previously approved by the Agency shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Developer Lots and/or the Agency Lot. The Agency shall not 03-02-03 ANR-Meadowbrook Development Agreement 40 CDC/2003-5 unreasonably withhold or delay approval of such revisions to the Scope of Development. (e) The Developer agrees to accept and comply fully with any and all lawful and reasonable conditions of approval applicable to all permits and other governmental actions affecting the development of the Project. (f) The Developer shall cause landscaping plans in connection with development of the Project to be prepared by a licensed landscape contractor. The Developer shall prepare and submit, preliminary and final landscaping plans for the Project to the City for its approval which are consistent with City Code requirements. These plans shall be prepared, submitted and approved wi thin the times established therefor in the Schedule of Performance. (g) The Developer shall prepare and submit development plans, construction drawings and related documents for the development of the Project consistent with the Scope of Development to the City. The development plans, construction drawings and related documents submitted by the Developer to the City shall be in the form of final drawings, plans and specifications. Such final drawings, plans and specifications are hereby defined as those which contain sufficient detail necessary to obtain a building permit from the City. (h) During the preparation of all drawings and plans in connection with the development of the New Homes and the public improvements necessary for the development of the Project, the Developer shall provide to the Agency regular progress reports to advise the Agency of the status of the preparation by the Developer, and the submission to and review by the City of construction plans and related documents. The Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any such plans and related documents submitted by the Developer to the City are being processed in a timely fashion. (i) The Agency shall have the right to review all plans, drawings and related documents pertinent to the development of the Project in order to ensure that they are consistent with this Agreement and with the Scope of Development. (j) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related 03-02-03 ANR-Meadowbrook Development Agreement 4 1 CDC/2003-5 documents pertinent to the development of the Project, as required by the City. The Agency shall cooperate with and shall assist the Developer in order for the Developer to obtain the approval of any and all development plans, construction drawings and related documents submitted by the Developer to the City consistent with this Agreement as promptly as feasible following the City's receipt of such plans. Any failure by the City to approve any of such plans or to issue necessary permits for the development of the Project within sixty (60) calendar day following submission by the Developer to the City of complete and correct plans shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that period of time beyond a sixty (60) calendar day period in which the City approves said plans; provided, however, that in the event that the City disapproves of any of such plans, the Developer shall wi thin thirty (30) calendar days after receipt of such disapproval revise and resubmit such plans in accordance with the City's requirements and in such form and substance so as to obtain the City's approval thereof. (k) [RESERVED - - NO TEXT] (1) The Agency shall approve any modified or revised plans, drawings and related documents to which reference is made in this Agreement as long as such modified or revised plans, drawings and related documents are generally consistent with the Scope of Development and any other plans which have been approved by the Agency. Upon any disapproval of such modified or revised plans, drawings or related documents, the Agency shall state in writing the reasons for such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved portions of the plans, drawings or related documents in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and related documents to the Agency as soon as possible after its receipt of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or disapprove such revised plans, drawings and related documents in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings and related documents initially submitted to the Agency, and if no specific time for approval if specified then the Agency shall so approve or disapprove the proposed modifications or revisions promptly upon the written request of the Developer. 03-02-03 ANR-Meadowbrook Development Agreement 42 CDC/2003-5 (m) If the Developer desires to make any material change in the final construction drawings, plans and specifications and related documents after their approval by the Agency and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within thirty (30) calendar days after submission to the Agency. This thirty (30) calendar day period may be extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof submitted by the Agency to the Developer, setting forth in detail the reasons therefor, and such rejection shall be made within said thirty (30) calendar day period unless extended as permitted herein. The Agency shall use its best efforts to cause the City to review and approve or disapprove any such change as provided in Section 3.01(j) hereof. (n) The Developer, upon receipt of written notice of disapproval of a proposed change in construction drawings, plans and specifications by the Agency and/or the City, may revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the City for approval in the manner provided in Section 3.01(j) hereof. (0) The Developer shall have the right during the course of construction to make changes in construction concerning the interior design of the New Homes and "minor field changes" with respect to the New Homes, and to make "minor field changes" to the public improvements necessary for the development of the Project without seeking the approval of the Agency; provided, however, that such changes do not affect the type of use to be conducted within all or any portion of a New Home or the ability of the City to accept the completion of the public improvements necessary for the development of the Project; and further provided that the City has approved any such minor field change to either a New Home or the public improvements necessary for the development of the Project in accordance with the standards and practices of the City Building Department and/or City Public Works Department, as applicable. Said "minor field changes" shall be defined as those changes from the approved final construction drawings, plans and specifications which have no substantial effect on the improvements and are made in order to expedite the work of construction in response to field conditions. Nothing contained 03-02-03 ANR-Meadowbrook Development Agreement 43 CDC/2003-S in this subsection shall be deemed to constitute a waiver of or change in the City's Building Code or Public Works Department requirements governing such "minor field changes" or in any and all approvals by the City otherwise required for such "minor field changes." (p) Except as otherwise specified in this Agreement, the cost of constructing the New Homes and, the New Agency Home and all other improvements on the Project shall be paid for by the Developer; provided however, that the Agency shall be obligated to the Developer to pay the Agency Affordable Housing Development Grant in the installments as provided in Section 2.01. (q) Developer shall pay the school capital facility development improvement fees as required and at the time specified by the San Bernardino Unified School District. All other development fees imposed by the City as a condition of issuance of any permit for the development of the Project shall be paid by the Developer to the City at the time of issuance of each such permit or, subject to the approval of the City in its discretion, at the close of each New Home Escrow, pursuant to the terms of the City of San Bernardino's Development Fee Deferral program as may then be in effect. (r) The Developer shall at its expense cause to be prepared, and shall pay any and all fees pertaining to the review and approval thereof by the City, all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development of the Project hereunder including, but not limited to the public improvements necessary for the development of the Project and to the specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and design review documents for the New Homes, and the New Agency Home. (s) The Developer shall pay for any and all costs, including but not limited to the costs of design, construction, relocation and securing of permits for utility improvements and connections, which may be required in developing the proj ect. The Developer shall obtain any and all necessary approvals prior to the commencement of applicable portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and habitability of surrounding properties during said construction. 03-02-03 ANR-Meadowbrook Development Agreement 44 CDC/2003-S (t) The Developer shall begin and complete all construction and development and undertake all obligations and responsibilities of the Developer within the times specified in the Schedule of Performance, or within such reasonable extensions of such times as may be granted by the Agency or as otherwise provided for in this Agreement. The Schedule of Performance shall be subj ect to revision from time to time as mutually agreed upon in writing by and between the Developer and the Agency. Any and all deadlines for performance by the parties shall be extended for any times attributable to delays which are not the fault of the performing party and are caused by the other party, other than periods for review and approval or reasonable disapprovals of plans, drawings and related documents, specifications or applications for permits as provided in this Agreement. (u) Prior to and during the period of construction of the New Homes the Developer shall submit to the Agency written progress reports when and as reasonably requested by the Agency but in no event more frequently than every twelve (12) weeks. The reports shall be in such form and detail as may reasonably be required by the Agency. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (v) Prior to any distribution of the Affordable Housing Development Grant, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability insurance in the amount of Two Million Dollars ($2,000,000.00) combined single limit, naming the Agency, the City and the elected officers, officials, employees, attorneys and agents of both of them, as additional insureds. Said insurance shall cover comprehensive general liability including, but not limited to, contractual liability; acts of subcontractors; premises- operations; explosion, collapse and underground hazards, if applicable; broad form property damage, and personal injury including libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles, combined single limit in the amount of One Million Dollars ($1,000,000.00) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+: XII in Best's Insurance Guide, or in special circumstances, be preapproved by both the Executive Director of the Agency and the Agency General Counsel. All said insurance 03-02-03 ANR-Meadowbrook Development Agreement 45 CDC/2003-5 policies shall provide that they may not be canceled unless the Agency and the City receive written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance policies governing the Site as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by the Agency Counsel consistent with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force until the Agency has issued the final Certificate of Completion in connection with the development of the Site. The provisions of the Agency License Agreement contain requirements relating to insurance coverage amounts by the Developer which is specific to the Agency Lot and the performance of the Work by the Developer on the Agency Lot. (w) The Developer for itself and its successors and assigns agrees that in the construction of the New Homes and the undertaking of the Project, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry. (x) The Developer shall carry out its construction of the improvements of the New Homes and the undertaking of the proj ect in conformity with all applicable laws, including all applicable State labor standards and requirements and with respect to the development of the Project. (y) The Developer shall, at its own expense, secure or shall cause to be secured, any and all permits which may be required for the construction, development or work of the Project by the City or any other governmental agency having jurisdiction thereof. (z) Officers, employees, agents or representatives of the Agency and the City shall have the right of reasonable access to the Developer Lots, during normal business hours during the period of construction for the purposes of monitoring the Developer's performance under this Agreement. Section 3.02. Property Taxes and Assessments. The Developer shall pay prior to the delinquency all real property 03-02-03 ANR-Meadowbrook Development Agreement 4 6 CDC/2003-S taxes and assessments assessed and levied on or against the Developer Lots prior to the close of each New Home Escrow. Nothing herein shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. Section 3.03. Prohibition Against Transfer. (a) Prior to the completed of the Project as set forth in Section 1.03, the Developer shall not, without prior written approval of the Agency or except as permitted by this Agreement, (i) assign or attempt to assign this Agreement or any right herein or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of any Developer Lot or permit to be placed on any Developer Lot any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien. This prohibi tion shall not apply to any of the following: (1) the reasonable grant by the Developer of utility easements or permits to facilitate the development of any Developer Lot; (2) the assignment of all of the Developer's interest in this Agreement to a limited liability company of which the Developer is the managing member (and the assumption of such interest by such limited liability company); (3) any permitted construction financing interest under Section 3.04; and (4) sales by the Developer of individual New Homes. (b) In the absence of specific written agreement or approval by the Agency, no unauthorized sale, transfer, conveyance, lease, leaseback or assignment of a Developer Lot shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. (c) Developer shall not lease or rent any of the New Homes, or any structure thereon for commercial or residential occupancy by any person, pending final sale to a New Homebuyer. Section 3.04. Security Financing; Right of Holders. (a) The words "mortgage" and "deed of trust" as used herein shall be deemed to include all other customary and appropriate modes of financing real estate construction and land development. Notwithstanding any provision of Section 3.03 to the contrary, mortgages, deeds of trust, or any other form of lien required for any reasonable method of financing the construction and improvement of the Project are permitted on any Developer Lot before the completion of the Project. The 03-02-03 ANR-Meadowbrook Development Agreement 4 7 CDC/2003-5 Developer shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of lien for financing of the proj ect which the Developer proposes to be secured by any Developer Lot before the recordation of any such Project-related construction financing security interests. The Developer shall not enter into any such conveyance for construction financing without the prior written approval of the Agency, which approval the Agency shall grant if: Ii) any such conveyance is given to a responsible financial or lending institution including, without limitation, banks, savings and loan institutions, insurance companies, real estate investment trusts, pension programs and the like, or other acceptable persons or entities for the purpose of financing the construction of the New Homes on the Developer Lots, and Iii) such loan contains customary construction lender disbursement controls. Ib) The Developer shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the New Homes whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien. Ic) The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to construct or complete the proj ect or to guarantee such construction or completion; provided however, that each surety under any completion and payment surety bond delivered by the Developer to the City of San Bernardino, if any, under the terms of any off-site improvement permit issued by the City to the Developer, shall not, by the virtue of any term of this Agreement, be deemed to be discharged from its obligation to the City as arises under such surety. Id) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Project or any Developer Lot prior to the completion of the Project and the holder of such security interest has not exercised its option to complete the proj ect, the Agency may cure the default of the Developer with respect to one or more of the Developer Lots, but is under no obligation to do so prior to completion of any foreclosure. In the event that the Agency may cure any such default by the Developer, the Agency shall be entitled to reimbursement from the Developer of 03-02-03 ANR-Meadowbrook Development Agreement 4 8 CDC/2003-5 all costs and expenses incurred by the Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as may arise under this Section 3.04(d) upon the Project (or any Developer Lot) to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to mortgage, deed of trust or other security instrument executed by the Developer encumbering the applicable Developer Lots. ARTICLE IV USE OF THE DEVELOPER LOTS Section 4.01. Uses. (a) The Developer covenants and agrees for itself, its successors, and assigns that at least nine (9) of the New Homes to be developed, constructed and improved on Developer Lots, shall be reserved for sale and occupancy by Qualified Homebuyers whose Adjusted Family Income at the time of initial occupancy of each New Home does not exceed the household income qualification limits of a Moderate-Income Household. The Developer shall cause to be recorded at the time of close of each New Home Escrow for each of the nine (9) New Homes for which the provisions of this Section 4.01(a) are applicable the fully executed form of the Section 33334.3 Covenant. The final form of the Section 33334.3 Covenant shall be delivered to the escrow holder for execution by the Developer and the Qualified Homebuyer at the time of close of each applicable New Home Escrow. The selection of the nine (9) individual New Homes from among the Developer Lots which shall be subject to the provisions of this Section 4.01(a) shall be at the discretion of the Developer. If the Qualified Homebuyer may use Agency MAP funds for the purchase of the New Home from the Developer, the Qualified Homebuyer and the Agency shall execute a separate set of redevelopment affordability covenants in favor of the Agency to evidence the obligation of the Qualified Homebuyer to the Agency which arise by virtue of the Qualified Homebuyer's acceptance of Agency MAP Funds under the Agency MAP program. (b) The Developer further covenants and agrees for itself, its successors and assigns that each of the Developer Lots shall be improved, developed and used in accordance with the Scope of Development. Developer covenants to develop and use the Developer Lots in conformity with all applicable laws. 03-02-03 ANR-Meadowbrook Development Agreement 4 9 CDCj2003-S (c) Developer shall not Developer Lots, or any New Home final sale to a New Homebuyer. lease or constructed rent any thereon, of the pending Section 4.02. Maintenance of the Developer Lots. The Developer covenants and agrees for itself, its successors, and assigns to maintain the each of the Developer Lots in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condi tion the landscaping on each Developer Lot required to be planted in accordance with the Scope of Development. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter any Developer Lot and undertake, such maintenance acti vi ties. In such event, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities. The obligation of the Developer under this Section 4.02 with respect to the Developer Lots shall be discharged for each Developer Lot on the applicable Delivery Date for such Developer Lot, as improved with a New Home. Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to each of the Developer Lots, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, 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 tenants, lessees, subtenants, sublessee or vendees of the Developer Lots. Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Developer Lots, and each of them, or any part thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of each of the Developer Lots and each of the New Homes, on the basis of sex, marital status, race, color, religion, creed, ancestry or 03-02-03 ANR-Meadowbrook Development Agreement 50 CDC/2003-S national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." (c) In contracts: "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, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises 03-02-03 ANR-Meadowbrook Development Agreement 51 CDC/2003-S herein transferred." The foregoing provision binding upon and shall obligate the contracting parties and any subcontracting party or parties, transferees under the instrument. shall be party or or other Section 4.05. Effect and Duration of Covenants Under Section 4.01 and Section 4.04. The covenants established under Section 4.04 against discrimination shall remain in effect in perpetuity. The covenant respecting uses and occupancy of each of the nine (9) New Homes which are designated by the Developer to be initially occupied by a Qualified Homebuyer as set forth in Section 4.01 (a), shall remain in effect for the Qualified Residence Period of each such New Horne, and shall run with the land and shall constitute equitable servitudes thereon, and shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns and the City. The Agency is deemed the beneficiary of the terms an provisions of this Agreement and of the covenants running with the land for and in its own rights and for the purposes of protecting the interests of the community. The Agency shall have the right, if such covenants are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity or such other proper proceedings to enforce the curing of such breaches to which it or any other beneficiary of such covenants may be entitled, including, without limitation, to specific performance, damages and injunctive relief. The Agency shall have the right to assign all of its rights and benefits hereunder to the City. ARTICLE V DEFAULTS, REMEDIES AND TERMINATION Section 5.01. Defaults - General. (a) Subject to the extensions of time set forth in Section 6.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this 03-02-03 ANR-Meadowbrook Development Agreement 52 CDC/2003-S Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. (b) The injured party shall give written notice of default to the party in default, specifying the default complained of by the non-defaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failure 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. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to insti tute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 5.02. Legal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chairman of the Agency, or in such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service on ~",l)u,y.lJ.IJ..cpr such other agent for service of process and at such address~/as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. 03-02-03 ANR-Meadowbrook Development Agreement 53 CDC/2003-S Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 5.04. Damages If either party defaults with regard to any provision of this Agreement following the Effective Date, the non-defaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such defaul t wi thin thirty (30) calendar days after service of the notice of default and promptly complete the cure of such default wi thin a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for any specific default), after the service of written notice of such default, the defaulting party shall be liable to the other party for damages caused by such default. ARTICLE VI GENERAL PROVISIONS Section 6.01. Notices, Between the Parties. Demands and Communications (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable, as designated in Section 1.02(a) and Section 1.02(b) hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail as heretofore provided. 03-02-03 ANR-Meadowbrook Development Agreement 5 4 CDC/2003-5 (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Developer: At-l12. ~<;,.th\"'?l~C., ICl7tJL~ ~'-k... -- .' ~oto to f't;H-"":~ to the Agency: Redevelopment Agency of the City of San Bernardino 201 North UE" Street Suite 301 San Bernardino, CA 92401 FAX: (909) 888-9413 with copy to: ~l"\ "D'J.N"IQ.1AN:1l1 'P,O &N.. JOO~ t-cM.L- p~ . OA "t'716Ll5" I with copy to: Lewis Brisbois Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, CA 92408 FAX: (909) 387-1138 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement, or in the development of the Site, shall participate in any decision relating to this Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. Section 6.04. Nonliability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, 03..()2..()3 ANR-Meadowbrook Development Agreement 55 CDC/2003-5 insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inabili ty to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of the City or Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Project or to satisfy any other condition of this Agreement relating to the redevelopment of the Developer Lots and/or the Agency Lot, if applicable, shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic condi tions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force maj eure event and does not excuse the performance by such party of its obligations under this Agreement. Section 6.06. Inspection of Agency shall have the right at all Agency's cost and expense to inspect Books and Records. The reasonable times at the the books and records of 03-02-03 ANR-Meadowbrook Development Agreement 56 CDC/2003-5 the Developer pertaining to the proj ect, as necessary for the Agency, in its reasonable discretion, to enforce its rights under this Agreement. Matters discovered by the Agency shall not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of the Agency hereunder. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Site and/or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. Approvals. (a) Except as otherwise provided in this Agreement, approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or disapproval shall be given wi thin the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees which may arise or be purported to arise from or related to this Agreement except with respect to the actual and reasonable real estate sales commission payable by the Agency to the real estate broker who represents the Agency as part of Net Development Costs for the Completed New Agency Home. . Section 6.09. Indemnification. The Developer agrees to indemnify and hold the City, the Agency, and the elected officers, officials, employees, attorneys and agents of both of them, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Developer in performing its obligations hereunder. The Agency agrees to indemnify and hold the Developer and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Agency in performing its obligations hereunder. 03-02-03 ANR-Meadowbrook Development Agreement 57 CDC/2003-5 Section 6.10. Attorneys' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by the Escrow Holder or a third party, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include in the case of the Agency to salaries and expenses of the lawyers employed by the Office of City Attorney (allocated on an hourly basis) who may provide legal services to the Agency in connection with the representation of the Agency in any such matter. Section 6.11. Effect. This binding upon and inure to the benefit of their respective heirs, executors, representatives, successors and assigns. Agreement shall be the parties hereto and administrators, legal ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENT Section 7.01. Entire Agreement. (a) This Agreement shall be executed in three originals each of which is deemed to be an original. Agreement includes 59 pages and Exhibits "A" through "I" list of attachments at Section 1.05), which constitute entire understanding and Agreement of the parties. (3) This (see the (b) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate representations of the Agency and the Developer. 03-02-03 ANR-Meadowbrook Development Agreement 5 8 CDC/Z003-5 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Date: <;/?/P? .( / APPROVED AS TO FORM: )..ku. 'S - (I' - ,;A:..O;, Agency Special Counsel DEVELOPER ANR Industries, Inc., a California corporation Date: :3/?> J/J3 I I By: b~ 03-02-03 ANR-Meadowbrook Development Agreement 59 CDC/2003-S EXHIBIT "A" Legal Description of Agency Lot 03-02-03 ANR-Meadowbrook Development Agreement Exh . "A" - 1 CDC/2003-5 LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: Lot 6, Block ~A", Daley Tract, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, records of said county. APN: 0135-292-01-0-00 Exh. ~A" - 2 CDC/2003-S EXHIBIT "B" Form of Agency License Agreement (may affect the Agency Lot) 03-02-03 ANR-Meadowbrook Development Agreement Exh. "B" - 1 CDC/2003-S REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 2003 LICENSE AGREEMENT PERMITTING LIMITED ENTRY FOR AFFORDABLE HOUSING REHABILITATION WORK AND REAL EST ATE SALES AND MARKETING TO QUALIFIED HOMEBUYERS THIS LICENSE AGREEMENT PERMITTING LIMITED ENTRY FOR AFFORDABLE HOUSING REHABILITATION WORK AND REAL ESTATE SALES AND MARKETING TO QUALIFIED HOMEBUYERS (this "License Agreement") is dated as of _, 2003, by and between (the "Participant") and the Redevelopment Agency of the City of San Bernardino (the "Agency"), and is entered into with respect to the facts set forth in the Recitals: RECITALS 1. This License Agreement affects certain improved property owned by the Agency situated at , San Bernardino, California (the "Agency Lot"). A legal description of the land on which the Agency Lot is located is attached hereto as Exhibit "A". 2. The Participant and the Agency have entered into an agreement entitled "Meadowbrook Single Family Residential Grant Development Agreement" dated as of , 2003 (the "Meadowbrook Agreement") and the Participant has delivered its Notice of Intention to Rehabilitate and Resell dated , 2003 to the Agency with respect to the Agency Lot and the Participant and the Meadowbrook Agreement provides for the Participant (referred to as the "Developer" in the Meadowbrook Agreement) to perform the Work as this terms is defined below, on the Agency, subject to the terms of this License Agreement. IN CONSIDERATION OF THE MUTUAL PROMISES OF THE PARTIES SET FORTH IN THIS LICENSE AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE P ARTICIP ANT AND THE AGENCY HEREBY AGREE, AS FOLLOWS: Section 1. Definitions. In addition to the definitions of certain words set forth in the Recitals, the Meadowbrook Agreement or elsewhere in this License Agreement, the following words or phrases shall have the meanings set forth below: . Completed New Agency Home. The term "Completed New Agency Home" refers to the New Home, as designed, constructed and installed by the Participant and ready for occupancy by the Qualified Homebuyer upon the completion of the Work by the Participant on the Agency Lot and the close of the New Agency Home Escrow. . Qualified Homebuyer. The term "Qualified Homebuyer" refers to the person or household who the Participant designates in writing to the Agency to acquire the fee title interest in the Completed New Agency Home upon the close of the New Exh. "B" - 2 CDC/2003-5 Agency Home Escrow. The Qualified Homebuyer shall certify to the Agency that the Qualified Homebuyer satisfies all applicable eligibility requirements to be the purchaser of the Completed New Home as set forth in the Meadowbrook Agreement. . New Agency Home Escrow. The words "New Agency Home Escrow" refers to the real I estate conveyance transaction or escrow by and between the Qualified Homebuyer and the Agency. The conveyance of the fee title interest in the Completed New Agency Home shall be accomplished upon the close of the New Agency Home Escrow when the Participant has completed the Work, and the other conditions for the close of the New Agency Home Escrow as set forth in the Meadowbrook Agreement have been satisfied. . Real Estate Sales and Marketing Work. The term "Real Estate Sales and Marketing Work" refers to the services to be provided by the Participant relating to the marketing of the Completed New Agency Home for sale to a Qualified Homebuyer. The Real Estate Sales and Marketing Work includes without limitation the presentation of the Completed New Agency Home to one or more Qualified Homebuyers for the purpose of causing a Qualified Homebuyer to enter into a contract with the Participant and the Agency for the purchase of the Completed New Home upon the completion of all of the Work and the satisfaction of all of the applicable other terms and conditions pertaining to such sale of the Completed New Home to the Qualified Homebuyer under the Meadowbrook Agreement. . Work. The term "Work" refers to all of the activities of the Participant which may hereafter be undertaken on the Agency Lot subject to the terms and conditions of this License Agreement. Such Work includes: (i) the preparation of the Agency Lot for the construction of the New Agency Home, including the installation of all off-site public improvements and utility connections as required; (ii) the construction and improvement of the New Agency Home in accordance with the New Home Plans; and (iii) the Real Estate Sales and Marketing Work. Section 2. Conditions of Agency Lot At Time of License Agreement. Upon the Effective Date of this License Agreement, the Participant acquires no right of interest in the Agency Lot except as provided in this License Agreement. The termination of this License Agreement by the Agency for any reason shall not give rise to any claim by the Participant for business displacement or other loss under Government Code Section 7260 et seq., and the Participant hereby waives any such claim. Although not effective to imply that the Participant has acquired fee title to the Agency Lot, all notices by the Agency to the Participant, acknowledgements and waivers by the Participant, release of the Agency by the Participant and disclaimers of the Agency relating to the condition of the Agency Lot as set forth in the Meadowbrook Agreement shall be effective as of the Effective Date of this License Agreement and apply to the entry and performance of all Work on the Agency Lot by the Participant under this License Agreement; provided however, nothing in this License Agreement is intended to alter or amend the terms and conditions of the Meadowbrook Agreement as relate to the Project, the improvement of the Developer Lots, the sale and disposition of the New Homes thereunder or the Affordable Housing Development Grant. Exh. "SIf - 3 CDC/2003-5 Section 3. Effective Date of License Agreement. This License Agreement shall take effect (the "Effective Date") on the date of the last of the following to occur: (1) this License Agreement is approved and executed by the Executive Director of the Agency, (2) this License Agreement is executed by the authorized representative of the Participant; and (3) the Participant provides the Agency with written evidence of the execution of the insurance coverages on the Agency Lot and the Work as set forth in Section 10. Section 4. Covenants and Agreements. Oversight by the Agency of the Work or its failure to do so, or through review or approval by the Agency, or its representatives, of any documents or other matters permitted herein or the failure of the Agency to discover or identify non-conforming work or enforce its rights under this License Agreement shall not relieve the Participant of its obligations hereunder. The Agency takes no responsibility for the method, means or procedures employed by the Participant to perform the Work. The Agency makes no representation to the Participant as to the accuracy or completeness of any documents provided to the Participant by the Agency or any other party in connection with the Agency Lot, the Work and the New Agency Home. Section 5. Indemnity. (a) In addition to and cumulative with the agreement of the Participant to indemnify the City and the Agency as set forth in the Meadowbrook Agreement, the Participant hereby agrees to indemnify, protect, hold harmless and defend the Agency, the City and the elected officials, officers, employees, attorneys and agents of both of them, with counsel approved by the Agency, from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, fees, disbursements and costs of attorneys, environmental consultants and experts of any nature whatsoever (collectively, "Losses") that may, at any time, be imposed upon, incurred or suffered by, or asserted or awarded against, the Agency directly or indirectly relating to activities of the Participant occurring at or relating to the Agency Lot during the period from the Effective Date of this License Agreement until the date on which the fee title interest in the Completed New Agency Home is transferred to a Qualified Homebuyer: 1. The failure of the Participant or its agents to perform the Work III accordance with Environmental Laws; 2. The failure of the Participant or its agents to complete, obtain, submit and/or file any and all notices, permits, licenses and authorizations required by Environmental Laws in connection with the Work and/or any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with the violation of any Environmental Laws by the Participant or its agents arising during the course of the Work; 3. The failure of the Participant to implement and enforce any monitoring, notification or other precautionary measures on the Agency Lot that may, during the term of this License Agreement, be required under applicable Environmental Laws to protect against the unlawful release, potential unlawful release or unlawful discharge of Hazardous Substance Waste from the Agency Lot; Exh. "B" - 4 CDC/2003-5 4. Any claim for injury or death to persons or loss or damage to property at or adjacent to the Agency Lot accruing or arising from the activities of Participant or its agents at the Agency Lot during the period that the Participant is performing any Work. (b) All obligations of the Participant under the indemnity given in this Section 5 of this License Agreement are payable immediately upon a determination by the Agency that such obligations are due. Any amount due and payable hereunder to the Agency by Participant that is not paid within thirty (30) days after it is due, will bear interest from the date it is due at the rate of ten percent (10%) per annum. The environmental indemnity given by the Participant in this section of this License Agreement will survive termination of this License Agreement. Section 6. License to Enter Agency Lot and Perform the Work. (a) Subject to the terms and conditions of this License Agreement, as of the Effective Date, the Agency hereby permits, authorizes and licenses the Participant and its agents and subcontractors to enter the Agency Lot and perform the Work. (b) The Agency Executive Director shall have the right to order the suspension of the Work by written notice to the Participant (the "Notice of Suspension") in the event that the Agency Executive Director reasonably determines that the Participant has failed to substantially comply with its material obligations under this License Agreement. The Notice of Suspension shall set forth (i) the specific reason for suspension and (ii) permit the Participant not less than ten (10) business days to cure such failure prior to the effective date of the suspension, (iii) indicate the number of days during which the suspension is to be in effect and (iv) indicate measures (if any) which the Participant shall implement in order to correct or lift the suspension. Nothing in this subsection shall be deemed to limit the right of the Agency to terminate this License Agreement in accordance with its rights under Section 13 below. (c) If, following the Effective Date, the Participant desires to perform any work item not specifically set forth in the scope of the Work, the Participant shall request in writing the Agency Executive Director to approve each additional item of work, prior to the performance of such work on the Agency Lot. If no response is received by the Agency Executive Director within 15 calendar days following receipt of such request, then such request shall be deemed approved. The written approval of the Agency Executive Director shall not be unreasonably withheld. The Agency Executive Director may condition his approval of such additional work upon compliance by the Participant with such special conditions as may then be deemed appropriate by the Agency Executive Director, in his reasonable discretion. (d) The Participant shall perform the Work in an efficient and workmanlike manner in accordance with the New Agency Home Plans as approved by the Agency. Any and all items or materials brought onto the Agency Lot by the Participant pursuant to this License Agreement, including without limitation, any and all equipment, machinery, temporary structures or temporary construction site fencing and the like, shall as between Participant and the Agency, be and remain the personal property of Participant. Section 7. Unpermitted Events. The Participant shall not cause or permit any material or substance of any kind to be released or discharged on, in, under or about the Agency Lot in any manner as to violate any Environmental Laws, regulation, permit or order of any court Exh. "B" - 5 CDC/2003-S or governmental agency or authority or in any manner as to require remediation or removal thereof under any Environmental Laws. If an Unpermitted Event occurs then the Participant shall immediately remedy, repair and remediate any damage or harm caused by such Unpermitted Event, and shall notify the Agency of such Unpermitted Event as soon as possible, but in all cases within seven (7) calendar days of the discovery of such Unpermitted Event. Section 8. Termination. This License Agreement shall terminate upon the earlier to occur of the following: 1. Written notice of termination by the Agency to Participant in accordance with Section 12 below; 2. The date of the close of New Agency Home Escrow; 3. The first (1 st) anniversary following the Effective Date of this License Agreement, unless the Agency may in its reasonable discretion, agree to extend the term of this License Agreement. Section 9. Survival of Provisions. Notwithstanding the expiration of the license granted by this License Agreement, the parties' rights and obligations pursuant to Sections 4, 5, 7, 10 and 11 of this License Agreement shall survive and remain in full force and effect. Section 10. Insurance. (a) Participant shall maintain or cause their contractors to maintain appropriate insurance coverage for all Work conducted pursuant to this License Agreement and will cause the Agency and the City and the elected officials, officers, employees, attorneys and agents of the both of them to be named as an additional named insured under all such policies. Prior to entering onto the Agency Lot and commencement of any of the part of the Work, Participant shall submit and/or cause to be submitted to the Agency reasonably acceptable evidence of the following insurance coverage on behalf of Participant and its contractors and subcontractors: (i) all statutorily required workers compensation coverage, (ii) comprehensive or commercial general liability (bodily injury and property damage) coverage in the amount of not less then $2,000,000 combined single limit, including the following supplementary coverages: (a) contractual liability to cover liability assumed under this License Agreement, (b) product and completed operations liability insurance, (c) pollution liability endorsement (d) broad form property damage liability and (e) builder's risk coverage, including coverage for claims of construction defects, and (iii) automobile bodily injury and property damage liability insurance with limits of liability of such insurance not less than $500,000 per person/$I,OOO,OOO per occurrence for bodily injury and $500,000 per occurrence for property damage, covering owned, non-owned and hired vehicles used in the performance of the Work and naming the Agency as an additional insured. Participant's insurance shall be primary coverage and the Agency's insurance/self-insurance shall not be contributory. Any and all insurance obtained hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+:XII in Best's Insurance Guide, or in special circumstances, be preapproved by both the Executive Director of the Agency and the Agency General Counsel. Exh. "B" - 6 CDC/2003-5 (b) The above insurance shall include a requirement that the insurer provide the Agency with thirty (30) days' written notice prior to the effective date of any cancellation or material change of the insurance. The worker's compensation insurance specified above shall contain a waiver of subrogation against the Agency and an assignment of statutory lien, if applicable. The comprehensive general liability and automobile insurance specified above shall name the Agency, the City and the elected officials, officers, employees, attorneys and agents of both of them as additional insureds with respect to operations performed under this License Agreement. All insurance carried by Participant and each of its contractors and subcontractors relating to the Work shall provide a waiver of subrogation against the Agency. Section 11. Agency to Permit Participant to Record Certain Construction Financing Security Interest on the Agency Lot During Term of License Agreement. [TEXT TO BE FINALIZED DURING DUE DILIGENCE PERIOD AND PRIOR TO PUBLIC HEARING FOR DISPOSITION OF NEW AGENCY HOME AS PROVIDED IN SECTION 2.02(b) OF THE MEADOWBROOK AGREEMENT SUCH THAT THE PARTICIPANT'S CONSTRUCTION LENDER MAY OBTAIN A SECURITY INTEREST IN THE AGENCY LOT (WITHOUT RECOURSE TO ANY OTHER ASSETS OF THE AGENCY TO PROVIDE FOR CONSTRUCTION LOAN FUNDS TO THE PARTICIPANT TO CONSTRUCT AND IMPROVE THE NEW AGENCY HOME - SUCH PERMITTED CONSTRUCTION LOAN SECURITY INTEREST SHALL CONTAIN LOAN DISBURSEMENT CONTROLS SUCH THAT LOAN AMOUNTS SECURED BY THE AGENCY LOT SHALL BE USED AND APPLIED BY THE PARTICIPANT SOLELY FOR THE IMPROVEMENT OF THE NEW AGENCY HOME AND NOT OTHER NEW HOMES IN THE PROJECT]. Section 12. Notice to the Parties. For the purpose of this License Agreement, communications and notices among the parties shall be in writing and shall be deemed to have been given when actually delivered, if given by hand delivery or transmitted by overnight courier service, or if mailed, when deposited in the United States Mail, First Class, postage prepaid, return receipt requested and delivered to or addressed as follows: To the Agency: To Participant: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attention: Executive Director Phone: (909) 663-1044 FAX: (909) 888-9413 Phone: FAX: Section 13. All Costs Associated with the Work Shall be Paid Bv Participant. As between Participant and the Agency, all costs incurred in connection with performance of any item of the Work shall be the sole responsibility of and be paid by Participant. If any claim or lien is recorded or asserted against the Agency Lot for any materials supplied or labor or professional services performed directly or indirectly for Participant relating to the Work, then the Participant shall satisfy and discharge such lien, at the sole cost and expense of Participant, within five calendar days of notice to Participant of the existence or assertion of such claim or Exh. "8" - 7 CDC/2003-S lien. If the Participant disputes the claim or lien and, therefore, elects not to satisfy and discharge the claim or lien, as required in the preceding sentence, then Participant shall, within five calendar days of notice to Participant of the existence or assertion of such claim or lien, either (i) file with the Agency a payment bond issued by a California admitted surety that runs to the benefit of the Agency in the amount of 125% of the aggregate amount of the claim or lien stated by the party asserting such claim or lien, conditioned for the payment of any sum that the claimant or lien or may recover on the claim or lien, together with any costs of suit incurred in enforcing such claim or lien or (ii) post with the Agency cash collateral or other security reasonably acceptable to the Agency for payment of such claim or lien. Section 14. Conflicts/Disputes. If a conflict arises between applicable regulations relating to the Work, the most stringent regulatory requirement shall control. In the event there is a disagreement in connection with the interpretation of the requirements of any regulations, then the Agency and the Participant will promptly endeavor in good faith to resolve such disagreement. If no resolution can be reached within 5 days of such disagreement, then the interpretation of the Agency (exercised in good faith consistent with a reasonable interpretation of industry standards) shall apply. Except for the matters to be addressed as set forth above in the two (2) preceding sentences, if a dispute arises between the parties to this License Agreement, the parties hereto agree to use the following procedure to resolve such dispute, prior to pursuing other legal remedies: 1. A meeting shall be held promptly between the parties that will be attended by individuals with decision-making authority, who will attempt in good faith to negotiate a resolution of the dispute. 2. If the parties are unsuccessful in resolving the dispute under (a), above, they may initiate litigation upon forty five (45) days advanced written notice to the other parties. Section 15. Default. If a party fails to fulfill any material obligation of this License Agreement, the other party may give written notice to that party of such failure, and in the event that party fails to remedy such failure within ten calendar days of receipt of such notice, the notifying party may terminate this License Agreement by a second written notice and/or pursue whatever other legal or equitable remedies are available. Section 16. Governing Law. The parties hereto acknowledge that this License Agreement has been negotiated and entered into in California. The parties hereto expressly agree that this License Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California and if controlling, by the laws of the United States. Further, the parties to this License Agreement hereby agree that any legal actions arising from this License Agreement shall be filed in California Superior Court, in the Court of San Bernardino, Central District or the appropriate federal court in such district. Section 17. Partial Invalidity. If any term or provision or portion of this License Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this License Agreement, or the application of such term or provision or portion thereof to persons or circumstances other than those as to which it is Exh. "Bft - 8 CDC/2003-S held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this License Agreement shall be valid and enforced to the fullest extent permitted by law. Section 18. No Intent to Create Third Party Beneficiaries. The parties intend that the rights and obligations under this License Agreement shall benefit and burden only the parties hereto, and do not intend to create any rights in, or right of action to or for the use or benefit of any third party, including any governmental agency, who is not one of the parties to this License Agreement. Section 19. Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of the time for performance of any obligation or act to be performed herein shall be deemed to be an extension of the time for performance of any other obligation or act to be performed under this License Agreement. Section 20. Professional Fees. If any action or suit by a party hereto is brought against another party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other party arising out of this License Agreement, the prevailing party shall be entitled to have and recover of and from the other party all costs and expenses of the action or suit, any appeals therefrom, and enforcement of any judgment in connection therewith, including reasonable attorneys' fees, accounting and engineering fees, and any other professional fees resulting therefrom. The words "reasonably attorneys' fees and costs" in the case of the Agency mean and include the salaries and benefits payable to the attorneys employed by the Office of City Attorney, allocated on an hourly basis, who provide legal services to the Agency in connection with any such action. Section 21. Meadowbrook Agreement and Performance of the Work Under the License Agreement. This License Agreement (including all Exhibits attached hereto) is the final expression of, and contains the entire agreement between, the parties with respect to the performance of the Work by the Developer on the Agency Lot. However, nothing in this License Agreement shall be deemed to supercede the provisions of the Meadowbrook Agreement which pertain to the development and improvement of the Project, as defined therein, on the Developer Lots or the provisions of the Meadowbrook Agreement as relate to the Affordable Housing Development Grant. The parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the parties hereto. Section 22. Construction. Headings at the beginning of each paragraph and subparagraph are solely for the convenience of the parties and are not a part of this License Agreement. Whenever required by the context of this License Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This License Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all parties had prepared the same. Unless otherwise indicated, all references to sections are to this License Agreement. All exhibits referred to in this License Agreement are attached hereto and incorporated herein by this reference. If the date on which any action is required to be performed under the terms of this License Agreement is not a business day, the action shall be taken on the next succeeding business day. Exh. "8" - 9 CDC/2003-5 Section 23. Counterparts. This License Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall constitute a single instrument. This License Agreement may be executed by facsimile signatures, and each facsimile counterpart, when taken together, shall be deemed an original. Exh. "B" - 10 CDC/2003-S IN WITNESS WHEREOF, the Participant and the Agency hereby execute this License Agreement as evidenced by the signatures of their authorized representatives: PARTICIPANT Date: By: Name: Title: AGENCY Redevelopment Agency of the City of San Bernardino By: Date: Gary Van Osdel Executive Director Exh. "B" - 11 CDC/2003-5 EXHIBIT "A" Legal Description of the Agency Lot Exh. "A" - 1 CDC/2003-S LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: Lot 6, Block "A", Daley Tract, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, records of said county. APN: 0135-292-01-0-00 Exh. "A" - 2 CDC/2003-5 EXHIBIT "elf Legal Description of Developer Lots 03-02-03 ANR-Meadowbrook Development Agreement Exh. "e" - 1 MAR 05 2003 11:06 AM FR BURROW ESCROW CDC/Z003-5 SA-97266 As Qf3/'V2003 12:19:~8 h-d ~ I Burro"'" !:sorow Services, 1m:. - - BURROW 15~I NO~.lTUstin^vcnue Suite 500 S.nlllAl1a 0.92705 ESCKOW Pho/le: 1'14)5~S-9712 PRX: (714) 547-2516 bscrow Officrr: Dcl.il1c M Mnrkc 745475427 TO 15627777808 P.01. ..~ I ~'Il" I J 11111111111 SA-97266-DM J\lIye!'~ .~_al ~_~ttlement !~tlIlt':n~.!1t__.. Clo~( Dllle: 2/28/2003 Buyer: 156 EAST RTALTO SAN DERNNWINO, CA ANR lNDUSTJUES, INC. 1I:$cro' ~ Numher: SA_!1"I266-0M prvpel"ty ; Dtlhi~ Credits PurchQse price Pllrchase Pricc DepOlIits nerosit 01 Earnest Maney Dcpooit or b~~t Money prorlltiQUS Cot1nly TnKee (Pal.d) 2/78/2003 IV 7/112003 Esero"" <:Illkrges Escrow Fee disC('IUJlt R eenrdlIlle Flle~ RecQrding Grant Deed Prneeells ur Bala/lce Due Cath l'romfTn ROItOWel BAbn~.e Due $16,;00.00 $1,00000 $16,154.36 $,4.36 $475.00 $12j.OO 39.00 $361.00 $0.00 $17,'79.36 S17.379.36 T(tI1IS: r Savo this St~t~mHnt rOt InGom , Tllx purposes. 06-NOV-02 10,05 FROM,BURROW ESCROW 10,+++ PAGE 6/1 CDC/2003-5 Order Number: 0623-674980 (02) Page Number: 4 LEGAL DESCRIP 1l0N Real property in the City of San Bernardino, coun1:\ of San Bernardino, state of California, described as follows: LOT 30, BLOCK "A", DALEY TRACr, IN THE em CF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CAUFORNIA, ~ PER PU:r RECORDED IN BOOK 6 OF MAPS, PAGE 34, RECORDS OF SAID COUNlY. ""---,'-~ (.PAPN: 0135-292- -,-" _ \ S'v {Z:\o-.\ ~ . First America11 . 7tle CDC/2003-S Recorded In OUlclal Record'i_~ftOty 01 San Bernardino RECORDING REQUESTED BY First American Title Company LARRY WALKER Auditor/Controller - Recorder 11101/2002 8:00 AM LMJ 701 First American - CF AND WHEN RECORDED MAIL TO: ANR Industries Inc. 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA 90670 (J~JD ..C vr A.P.N.: 0135-291-36 / Doc#: 2002 - 0589284 1111111111111111111111111 Titles: 1 Pages: 3 Fees 22.00 Taxes 16.50 Other 0.00 PAID $3B.50 Space Above This Une for Recorder's Use Only File No.: LSD--586210 (LOL) The Undersigned Grantor(s) Deciare(s): DOCUMENTARY TRANSFER TAX $16.50 SURVEY MONUMENT FEE $10.0 [ X ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area; [X] City of San Bernardino. and GRANT DEED / ./ I FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Cecilia L. Aguilar hereby GRANTS to ANR Industries Inc., a California the following described property in the City of San Bernardino, County of San Bernardino, State of California; Legal Description as per Exhibit "A" attached hereto and made apart hereof. Property referred to by ANR as 108 King Street, San Bernardino, California Dated: AUQust 2,2002 I I / Mail Tax Statements To: SAME AS ABOVE or Address Shown Below A.P.N.:' 0135-291-36 CDC/2003-5 Grant Deed - continued File No.: LSD--586210 (LOL) Date: 08/02/2002 STATE OF California } } 55. COUNlY OF San Bernardino } On ~CZ= . )7 I Zoo ""'-- before me) O~ b-l t.- C\1A\ \G"-t:I\~ personally appeared ~ L. A&\JI LA L , personally known to me (or~ to me on the basIs of satisfactory evidence) to be the personlsT whose name~ is/_ subscribed to the within instrument and acknowledged to me that he/~they executed the same in his/bcd.their authorized capacity(~ and that his/tlsr/their signature~ on the instrument the person(&t or the entity upon behalf of which the person~ acted, executed the instrument. ~/ This area for official notarial seal ^'-.It..A..^-^-{ _AA-^^^^^" } ~' JOHN C. CRAIK OJ CD . '. COMM. #1235934 ~ I- . NOTARVPUBUC-CALIFO~ en o AN BEJ;N~DINO COIl !XI M~ Comm. Expi,es Sept. 30, 2003 (. )' ...,,,,__'W',," ..". ,.. - .....,"'----- / 1/ CDC/2003-S Order N. ~r: LSD--586210 (01) Page Number: 4 LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: The West 50 feet of Lots 1, 2 and 3, Block B, of the Daley Tract, a subdivision of Block 6, Rancho San Bernardino, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in book 6 of maps, page(s) 34, records of said county, particularly described as: Commencing at the Southwest corner of Lot 1, running thence North, 135 feet to the North line of Lot 3; thence East along the North line of Lot 3, 50 feet; thence South to the South line of Lot 1; thence West 50 feet to the place of beginning. APN: 0135-291-36 ....... First American Title CDC/2003-5 Recorded In Olllclal Rr" "Is, County 01 San Bernardino RECOR~JlNGREQUESTED BY First American Title Company LJd4RY WALKER Auditor/Controller - Recorder 8/09/2002 8:00 AM L12 701 First American - CF AND WHEN RECORDED MAIL TO: ANR Industries, Inc. c/o Jeff Whyld, 10702 Hathaway Drive, Unit 1 Santa Fe Springs, CA 90670 DocH: 2002 - 0418132 111111111111111 Titles: 1 Pages: 2 - Fees 9.00 Taxes 16.50 Other 0.00 PAID $25.50 0-1D'b1a~C~ A.P.N.: I "b[y 8(11 ... \ b The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $16.50 /' SURVEY MONUMENT FEE ~ [ :( ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area; [ ] City of San Bernardino, and Space Above This Une for Recorder's Use Only File No.: LSD--540872 (LOL) GRANT DEED / / t' e FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,Isabelle; Chavez. Isabelle Chavez Trust under Trust Agreement dated December 8, 1993 I ,/,/ hereby GRANTS to ANR Industries, Inc., a California Corporation r I;' ;' r Trustee of the the following described property in the City of San Bernardino, County of San Bernardino, State of California; Legal Description as per Exhibit "A" attached hereto and made apart hereof. Dated: Co-1-D'L ~.l~ p<fLL Isabella Chavez ',rt.\5-1-ce.. Y STATE OF COUNTY OF '(' <lA I. ~Orl\l'l'{L )SS ..sAN ~l"i'JAlUj ~ /\l() ) I On 10 - 7 - 0 ;;2.. , before me, *' ~e~ h tll'l;( A"N \?x....*rn" ( ~ersonally appeared ~ ~ personally known to me (or proved to me on the basis of satis actory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(les) and that his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. , j This area for offidal notarial seal I 1------------ @ STEPHANIE ANN BESEMER J _ Commission 1# 129~73 . Noby Public . CalIror1ia I Rlvelslde Co\Inty - MvCanm.. &pies Mar'" ZXl5 Mail Tax Statements To: SAME AS ABOVE or Address Shown Below CDC/2003-S Order. oer: LSD--540872 Page Number: 4 LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: Lot 18, Block "B", Daley Tract, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, records of said County. APN: 0135-291-15-0-00 First American Title CDC/2003-5 , First America,? Title Company 140 East Via Verde, Suite #240 . San Dimas, CA 91773 Buyer's Settlement Statement Property: Vacant Land APN 0135-292-38, 0 Sierra Way, San Bernardino, CA File No: LSD--555304 Officer: Lupe Landeros/LOL New Loan No: Settlement Date: Disbursement Date: Print Date: 11/20/2002 11/20/2002 11/25/2002, 6:26 PM Buyer: Address: Seller: Address: ANR Industries, Inc. o Sierra way, San Bernardino, CA Manuel C. Ol1itv((ros H/:Quye!'Credjt . ---.-._-_._:~~~~:,~:r~~::~~~~~~=~::=~:~~==-=~:. Consideration: Total Considefliti~n-u--"u,,------------------uo---u------------ DelJosits in Escrow: Rec~fpiNo.208 on 06/05i2002--'--'---------uou------------------.--uoou----.-ou.ouuo-.u-....~.....ou.-----ou.---(i500:0.0uo '. R';;;eiptN~~"f 438 onTI1T9!2002---------------------ou------..-.---..---.uo__uo -ou..--uo-ou..ou-----ou-ouou.-"...--ou......-..uoou.uoou-8:743:9Tu Prorations: C~uni};-;fiixll/207i5i-~ouof 10 liOf@$304.48/yr OU_______._OU_______OU_______uUuo_u___ -------_.._-------...-._--------------------------------...-...---...............-----..---------------- 34.68 Title/Escrow Charges to: R~-;;rd GranfDe;xfi;Fii~tA;:nen;;;m Titf.;-c~mpany--------------- u___u________uu__uo 9.00 u"Wlr~F;;:;;.t~.Fiid.Amefi;;anUTitfe..c~mpWiy...u-.u..h.....u.....h.h-...........................U.hU.hU.......u...... 15.00 ..E;;;r~~uF~~.t~UFlrnt-Am~rl;;iin.Tltle.CompiiIi.yu...........u..u......u.............. -----.--,......"350:60 i Disbursements Paid: Zone Disclosure Report to Baldwin Real Estate Services 49.95 Cash ( From) (X To) Borrower 285.28 9,743.91 9,743.91 CDC/2003-S RECORDING REQUESTED BY First American Title Company LARRY WALKER Auditor/Controller - Recorder 10/2312002 8:00 AM SR2 Recorded In OIftclill Records, Counly 01 San Bernardino AND WHEN RECORDED MAIL TO: ANR Industries, Inc. 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA 90670 701 First American - CF Doc#: 2002 - 0564882 111111111111111111111 Titles: 1 Pages: 4 Fees 25.00 Taxes 57.20 Other 0.00 PAID $B2.20 Space Above This Line for Recorder's Use Only A.P.N.: 0135-291-05 & 0135-292- 36 I I t6-aq~2>1 ~ W i'O'2J~1>Ll The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $57.20 / SURVEY MONUMENT FEE $ [ x ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area; [x] City of San Bernardino. and File No.: LSD--581199 (LOL) GRANT DEED .J I .I FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Richard D. Andrews and Elizabeth S. Andrews as to Parcels 1 and 2; Robert H. Andrews and Raymond S. Andrews both single men as to Parcel 3; Lisa C.l. Andrews, a single woman as to Parcel 4 and Richard K. Andrews as to Parcel 5 hereby GRANTS to ANR Industries, Inc., a California the following described property in the City of San Bernardino, County of San Bernardino, State of California; As per Legal Description attached hereto and made apart hereof. Dated: Auaust 05.2002 '~'7J.~ Eli~S.~S~ ~ Richard D. Andrews / .I / ~ ,/ r Robert H. Andrews Raymond S. Andrews Lisa C.J. Andrews Richard K. Andrews ~ -mi.s:~ I? OVl-c... O+-f,'\Jf-. ~ S~ ~ C~.c:ur-r , " Mail Tax Statements To: SAME AS ABOVE or Address Shown Below A.P.N.: 0135-291-05 & 0135-292-36 CDC/2003-S Grant Deed - continued File No.: LSD--581199 (LOL) Date: 08/05/2002 STATE OF California } } ss. COUNTI OF San Bernardino } on~tfi ~ 'R:&tfh J;% me,li!fJ/?..OilllE! L<;KI1A)j)t:R.... personally appeared F.f. - . A rJ D " r.' D.4 ~oni!1lY kM"'n ta me ~d to me on the basis of satisfactory evidence) to be the person(s) whose name(s) i41..are subscribed to the within instrument and acknowledged to me that~s~/they executed the same in ~~r/their authorized capacity(ies) and that ~~r/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and o~ Signatu/);1eu.d, CutJ~L My Commission Expires: /::j 3 - r900y // This area for official notarial seal / }~~.~./'... ~'.,..~.t'~ '.~k" I \ : W.I:lJi. 'E l~i,AI'JDI]~ 1\ \ Conllnl" 1011 # 1253770 ~ ..~ ,NolClry Public Cnllfomkl s: } 1 z- i1 BLrnu,di'1o County, f ~ '-..-.-" ""~'CCiI1m.r:' _3tvint3.2004f ~. "","~"""'/~ CDC/2003-S Order Number: LSo.-581199 (07) Page Number: 6 LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: Parcell: Lot 8, Block "B" of the Daley Tract In the County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, Records of said County. Parcel 2: Lot 1, Block "A" of the Daley Tract in the County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, Records of said County. Excepting therefrom the easterlv 50 feet thereof. Parcel 3: Lot 2, Block "A" of the Daley Tract in the County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, Records of said County. Excepting therefrom the easterly 50 feet thereof. Parcel 4: The east 50 feet of Lots 1, 2 and 3, Block "An of the Daley Tract in the County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34 Records of said County. ParcelS: Lot 36, Block "A" of the Daley Tract in the County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, Records of said County. APN: 0135-291-05 and 0135-292-31 and 0135-292-32 and 0135-292-33 and 0135-292-34 and 0135-292-36 , First Ameria3n 77t/e CDC/2003-5 Recorded In Official Records, Col! ; San Bernardino Rt:CORDING REQUESTED B~ First American Title Company LARRY WALKER Auditor/Controller - Recorder 10/23/2002 8:00 AM SR2 701 First American - CF AND WHEN RECORDED MAIL TO: ANR Industries, Inc. 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA 90670 Doc#: 2002 - 0564883 '""111111111 Titles: 1 Pages: 4 Fees 15.00 Taxes 0.00 Other 0.00 PAID $15.00 Space Above This LIne for Recorder's Use Only A.P.N.: 0135-291-05 & 0135-292- 36 I "o~n5t'l~-91~~~"D:3'~4 The Undersigned Grantor(s) Declare(s): DOCUMENTARY lRANSFER TAX $ f::tt...-1)e..tt:l I () f 0 SURVEY MONUMENT FEE $ [ x ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area; [x] City of San Bernardino. and File No.: LSD--581199 (LOL) GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Richard D. Andrews and Elizabeth S. Andrews as to Parcels 1 and 2; Robert H. Andrews and Raymond S. Andrews both single men as to Parcel 3; Lisa C.l. Andrews, a single woman as to Parcel 4 and Richard K. Andrews as to Parcel 5 hereby GRANTS to ANR Industries, Inc., a California the following described property in the City of San Bernardino, County of San Bernardino, State of California; As per Legal Description attached hereto and made apart hereof. Dated: Auoust 05.2002 Richard D. Andrews Elizabeth S. Andrews awH.~ 1-s--02.. Robert H. Andrews Raymond S. Andrews Lisa C.J. Andrews Richard K. Andrews ~-tn;~~ )~ two of-t-(Vf- ~ S\~ ~ C15lt-nWp.:cr1- Mail Tax Statements To: SAME AS ABOVE or Address Shown Below ~ORDING REQUESTED BY ~st American Title Company CDC/2003-S Recorded In Olflclal Records, Coun... 1m Bernardino LARRY WALKER Auditor/Controller - Recorder 10/23/2002 8:00 AM SR2 701 First American - CF AND WHEN RECORDED MAIL TO: ANR Industries, Inc. 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA90670 DocR: 2002 - 0564884 111111111111111111111111 Titles: 1 Pages: 4 Fees 15.00 Taxes 0.00 Other 0.00 PAID $15.00 Space Above This Line for Recorder's Use Only A.P.N.: 0135-291-05 & 0135-292- 36 I I-oS-a-'iQ-211 ~:3a 1~.p~t>Lf. File No.: LSD--581199 (LOL) The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $ see. De.ed \ of S SURVEY MONUMENT FEE $ [ x ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens andlor encumbrances remaining at time of sale, [ ] unincorporated area; [x] City of San Bernardino. and GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Richard D. Andrews and Elizabeth S. Andrews as to Parcels 1 and 2; Robert H. Andrews and Raymond S. Andrews both single men as to Parcel 3; Lisa C.l. Andrews, a single woman as to Parcel 4 and Richard K. Andrews as to Parcel 5 hereby GRANTS to ANR Industries, Inc., a California the following described property in the City of San Bernardino, County of San Bernardino, State of California; As per Legal Description attached hereto and made apart hereof. Dated: AUQust 05. 2002 Richard D. Andrews Elizabeth S. Andrews Jkr~ - CL~ Ray nd. drews 1 ((}f i< Robert H. Andrews Lisa C.J. Andrews Richard K. Andrews ~ -1YI\ ~:DLwl i S--}h'l-LL o-f -f1 V-e. bu1t~ ::,\.~ Ln C-OU-n-kf po-r+- Mail Tax Statements To: SAME AS ABOVE or Address Shown Below CDC/2003-5 Recorded In Official Records, Co! il San Bernardino RECORDING REQUESTED BY First American Title Company LARRY WALKER Auditor/Controller - Recorder 10/2312002 8:00 AM SR2 701 First American - CF AND WHEN RECORDED MAIL TO: ANR Industries, Inc. 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA 90670 DocH: 2002 - 0564885 11111111111111 Titles: 1 Pages: 4 Fees 15.00 Taxes 0.00 Other 0.00 PAlO $15.00 Space Above This Une for Recorder's Use Only A.P.N.: 0135-291-05 &. 0135-292- 36 I J~s-aAa.<?>1 ~3;). ~1>3~ '3y The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $ ';:7ee. Peect \ D.r s SURVEY MONUMENT FEE $ [ x ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area;' [x] City of San Bernardino. and File No.: LSD--581199 (LOL) GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Richard D. Andrews and Elizabeth S. Andrews as to Parcels 1 and 2; Robert H. Andrews and Raymond S. Andrews both single men as to Parcel 3; Lisa C.l, Andrews, a single woman as to Parcel 4 and Richard K. Andrews as to Parcel 5 hereby GRANTS to ANR Industries, Inc., a California the following described property in the City of San Bernardino, County of San Bernardino, State of California; As per Legal Description attached hereto and made apart hereof. Dated: Auoust 05. 2002 Richard D. Andrews Elizabeth S. Andrews Robert H. Andrews X~ C.l1.~ Lisa C.J. An~ews Raymond S. Andrews Richard K. Andrews ~'--ti1\'-::>JXed.15.fouro~-A\/t'.-bei.nj Sl~ecl U, ~~+- Mail Tax Statements To: SAME AS ABOVE or Address Shown Below ~ECOtl.DING REQUESTED BY First American Title Company CDC/2003-S Recorded In Official Records, Cou' "San Bernardino LARRY WALKER Aud itor/Conlroller - Recorder 10/23/2002 8:00 AM SR2 701 First American - CF AND WHEN RECORDED MAIL TO: ANR Industries, Inc. 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA 90670 Doc#: 2002 - 0564886 1111111111111111 Tilles: Pages: 3 Fees Taxes Other PAID 12.00 0.00 0.00 $12.00 Space Above This Line for Recorder's Use Only A.P.N.: 0135-291-05 &. 0135-292- 36 I 1'?Jf)- .J.qa~81 ~ 2a ~ 3b ~ 84 The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $ se-c-;1).eec{ lotS SURVEY MONUMENT FEE $ [ x ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area;' [x] City of San Bernardino. and File No.: LSD--581199 (LOL) GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Richard D. Andrews and Elizabeth S. Andrews as to Parcels 1 and 2; Robert H. Andrews and Raymond S. Andrews both single men as to Parcel 3; Lisa C.J. Andrews, a single woman as to Parcel 4 and Richard K. Andrews as to ParcelS hereby GRANTS to ANR Industries, Inc., a California the following described property in the City of San Bernardino, County of San Bernardino, State of California; As per Legal Description attached hereto and made apart hereof. Dated: Auaust 05.2002 Richard D. Andrews Elizabeth S. Andrews Robert H. Andrews Lisa C.J. Andrews Raymond S. Andrews f;~ k./f-~ItUd- Richard K. Andrews '-RI~ 1(. fln:;ln.w~ /' ~ ' . 1f:-rhi=>De.e& i~..f,\/(. bf-hVG bLtxt~ Sl~d en COLLn-+u-par+- Mail Tax Statements To: SAME AS ABOVE or Address Shown Below RECORDING REQUESTED BY First American Title Company CDC/2003-5 Recorded In Otllclal Records, Co...oj 01 San Bernardino 10/23/2002 LARRY WALKER 8:00 AM t SR2 Auditor/Controller - Recorder 701 First American - CF DocH: 2002 - 0564881 Titles: 1 Pages: 3 11111II11I1 III 1111~1111 Fees 12.00 Taxes 92.40 Other 0.00 PAID $104.40 AND WHEN RECORDED MAIL TO: ANR Industries Inc. or Assignee 10702 Hathaway Drive, Unit 1 Santa Fe Springs, CA 90670 " u-cJ Space Above This Une for Recorder's Use Only A.P.N.: \ 5S- c;tOll_ 31 ~ 13"'7"- J. q 1 -;2~ . File No.: LSD--571426 (LOL) The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $92.40 / [ X ] computed on the consideration or full value of property conveyed, OR [ ] computed on the cons~d"ration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area; rjJ City of San Bernardino. and GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged; 137 Inc., a California Corporation hereby GRANTS to ANR Industries Inc. or Assignee, a California Corporation the following described property in the City of San Bernardino, County of San Bernardino, State of California; Dated: June 17. 2002 ~~t<~~ ~~ a.~' 13~ R~chard D. Andrews ::y(:-erDl~i- ~ Elizabe . Andrews I 6e&-r.~ .fey '0 1 ~" &. CIA t ,-fo-rn I'u. <1:,yr:::~~f1M ~ ll).,-7 -r ~ I' r~, . 137 Inc., a California Corporation v I ..rr IL- .,ClQo.,\'-rlTl f\lCv COy~~ Mail Tax Statements To: SAME AS ABOVE or Address Shown Below CDC/2003-S s~ ,~ 4y AMERl o <1 ~ STA1E OF CALIFORNIA COUNTY OF .5AV\ <-Beelllt^-((LIIL~ } }ss. } On Sepffh1Ju(~ . personally appeared _____ , personally knowR to II Ie proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s)~are subscribed to the within instrument and acknowledged to me that~/~e/they executed the same in t1Lt#/their authorized capacity(ies), and that by I)&I~/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument./ WITNESS my hand and official seal. I - .. .' /,,/'''''f''J:'..''''"':'..J:.~") ~-~ W:rillll<lE ISlv\NDEP. ~ /Ill /' I. I A //" /i /! "., r' ~ J~;nt~~~~~g;;~~a [ Signature { f lLuta/"'~ /}:5fAUlIl.t:f!u } \ SOIl n6111"..11'1o Co~nIY..J ~-'f' "~~~~~:~r,:t~j3,7"'" ISK II tf/ j)t:f~ t1Md (this area for official notarial seal) Title of Document Date of Document Other signatures not acknowledged No. of Pages 3006 (1/94) (General; First American Title Insurance Company CDC/2003-S I Order 1'.. Jer: LSD--S71426 (07) Page Number: 5 LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: Parcel No.1: Lot 31, Block B, Daley Tract, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in book 6 of Maps, page 34, records of said county. Parcel No.2: Lots 9, 10, 11, 32, 33 and 34, Block B, Daley Tract, in the City of San Bernar:dino, County of San Bernardino, State of California, as per plat recorded in book 6, of maps, page 34, in the Office of the County Recorder of said County. First American Title CDC/2003-S RECO~PING REQUESTED BY First American Title Company LARRY WALKER Auditor/Controller - Recorder 7/05/2002 3:00 PM U2 Recorded In Olllclal Records, County ul San Bernardino AND WHEN RECORDED MAIL TO: ANR Industries Attn Rochelle Willaims, Escrow Coor, 10702 Hathaway Drive Unit 1 Sante Fe Springs, CA 90670 701 First American - CF <j?fl>1:? -c ~ Doc#: 2002-0348149 1111111111111111111 IIII Titles: 1 Pages: 3 Fees 42.00 Taxes 55.00 Other 0.00 PAID $97.00 Space Above This Une for Recorder's Use Onlv A.P.N.: 0135-291-02 I O~ .bY File No.: 529843 (LOL) The Undersigned Grantor(s) Declare(s): DOCUMENTARY 1RANSFER TAX $55.00 SURVEY MONUMENT FEE $ ( x ] computed on the consideration or full value of property conveyed, OR/ [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at ti~ of sale, (I r. / 7 r--'~'" [ ] unincorporated area; [X] City of San Bernardino. and ~ J - .J ") GRANT DEED ',-~. I I --'-'./....-'" .- FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,Jimmy Summers and Dottijlf B. Summers, husband and wife as joint tenants ".'.:""'" hereby GRANTS to ANR Industries, A California Corporation the following described property in the City of San Bernardino, County of San Bernardino, State of California; Legal Description as per Exhibit "A" attached hereto and made apart hereof. A.P.N.# 0135-291-02, A.P,N.#0135-291-03, and A,P.N,#0135-291-04 Dated : March 15. 2002 littL'. d.lvn~J.u-/ Dotti~ B. Summers ... / --' )55 ) This area ~!!!...ffJ'!.:~'!!!!.."!~'....se.!L~'~1 ~... TEHI L NAPIER 00 ~ COMM. #1231.317 ~ II: '. NOT/\RY PUBLIC - CALlFORNfA ~1 11: . RIVtJi~JIDF COUNTY My Camm. [y,)ires Aunust 6, 200,j Mail Tax Statements To: SAME AS ABOVE or Address Shown e 0) A.P.N.: 0135-291-02 CDC/2003-S Grant Deed - continued File No.: 529843 (LOL) Date: 03/27/2002 CDC/2003-5 Ord, .mber: 0623-530073 Page Number: 4 LEGAL DESCRIPTION Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: Parcel no. 1: The East 100 feet of Lots 4, 5, and 6, Block "B" Daley Tract, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in book 6 of maps, page(s) 34, records of Said County. Parcel No.2: Lot 7,Block "B" Daley Tract, City of San Bernardino, in the County of San Bernardino, State of California, as per plat recorded in book 6 of maps, page(s) 34, records of said County. APN: 0135-291-02-0-00 and 0135-291-03-0-00 First American Title CDC/2003-5 EXHIBIT "Off Form of Notice of Agreement 03-02-03 ANR-Meadowbrook Development Agreement Exh. "0" - 1 CDC/2003-S RECORDING REQUESTED BY WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attn: Executive Director (SPACE ABOVE LINE FOR USE BY RECORDER) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO NOTICE OF AGREEMENT RELATING TO REAL PROPERTY TO ALL INTERESTED PERSONS: PLEASE TAKE NOTICE that as of the date of recordation of this Notice of Agreement Relating to Real Property, ANR Industries, Inc., a California corporation (the "Developer") and the Redevelopment Agency of the City of San Bernardino, a body corporate and politic (the "Agency") have entered into an agreement entitled: "Meadowbrook Single Family Residential Grant Development Agreement". This Notice of Agreement Relating to Real Property affects the property descried as follows: [INSERT TEXT OF LEGAL DESCRIPTION FOR EACH DEVELOPER LOT] Interested persons Executive Director) by regular business hours the Meadowbrook Single Agreement. may contact the Agency (Attention telephone at (909) 663-1044, during for additional information relating to Family Residential Grant Development 03-02-03 ANR-Meadowbrook Development Agreement Exh. "D" - 2 CDC/2003-5 This Notice of Agreement Relating to Real Property has been executed by the parties as set forth below. DEVELOPER Date: 3/~j~3 . / ANR Industries, Inc., :yca~"(j;i~ BY'~ AGENCY Date: y,? /// .-? / - the APPROVED AS TO FORM: (~ . hJJ... '1, - I. - ltJu) Agency Special Counsel [NOTARY JURATS ATTACHED] 03-02-03 Al'm-Meadowbrook Development Agreement Exh. "0" - 3 CDC/2003-S STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) On March 6. 2003 before me, Wasana Chantha. Notary Public, personally appeared Gary Van Osdel ,personally known to me (or proved to me on the b:Jsis of s:Jtisf::lctory evidence) to be the personfsj whose namefsj islafe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacityfiesj, and that by his/her/their signaturefsj on the instrument the personfsj, or the entity upon behalf of which the personfsj acted, executed the instrument. WITNESS my h! nd and official seal. Signatu ~.....__...._...._...._--- WASANA CHANTHA ~ Commission # 1380487 ~ ~ ' Notary Public - California ~ San Bernardino County - My Comm. Expires Oct18. 2006 (Seal) CDC/2003-5 CALIFORNIA ALL.PURPOSE ACKNOWLEDGMENT ~ ~JcX'JcX'JcX'''X''X~<X'''0<'JcX'JcX'j;xXj(XX'JcX'JcX'JcX'"X>Q(X;(,/~A':XRX,Q('j(X>'X:.e<; :OX' State of California }" County of Lo So A-rs -.D. {l 5. ~ I OncYY>..i\. ~ ~ 0."0 '3: before me, ~ S00 0o~ ~~ personally ap;::r~d \-\~~s.~ to . C2.0~Titl~.OffiCer(e~&t~~~ J Name~SigJ t'fPersonally known to me ::J proved to me on the basis of satisfactory evidence ~ ~ ~ I----:s~~--~ _@ Q!f.., I .~~J'I~ i I -_.~; , &GI Angeles CcMtly - _ _ _ ~~~~~3X)4r to be the person(s) whose name(s) 1s/are subscribed to the within instrument and acknowledged to me that hefshe/they executed the same in htsfrrer/their authorized capacity(ies), and that by msttrer/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed he instrument. Place Notary Seal Above OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document ~, Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: ~ ~ I ~ i Capacity(ies) Claimed by Signer Signer's Name: o Individual o Corporate Officer - Title(s): LJ Partner - [j Limited 0 General C Attorney in Fact U Trustee U Guardian or Conservator o Other: Top of thumb here RIGHT THUMBPRINT OF SIGNER Signer Is Representing: I ~'G<.-~~~XX;'CZ,'C(..'C(..~'9(;(.X.'C(..'C(..'C(..'C(..'CV'C(..'C<;;(.X.'C(..'C(..'C(..'CV'CV'C<;;(X;;C<,;(.X.~X;;(.X.~~'C<..'CV'GV~~~'C<..'CV'CV'C<..'<:x;(.x.'CY~ @ 1997 National Notary Association. 9350 De Soto Ave" PO. Box 2402. Chatsworth, CA 91313-2402 Prod. No 5907 Reorder: Call Toll-Free 1-800-876-6827 CDC/2003-S EXHIBIT "Elf Project Description/Scope of Development 03-02-03 ANR-Meadowbrook Development Agreement Exh. "E" - 1 CDC/2003-S MEADOWBROOK PARK INFILL HOUSING PROPOSAL BackQround The City of San Bernardino has identified a Project Area for downtown redevelopment bounded by Baseline to the north; Mill Street to the south; the 215 freeway to the west; and E Street to the east. Nearly 45 percent of the Project Area consists of vacant or underutilized land. The Project Area's housing stock is predominantly renter-occupied with only 22 percent owner occupants as of the year 2000.1 At the same time, this area has significant commercial and entertainment development, including: . The Carousel mall . A Radisson Hotel . Municipal Baseball Park . 20-screen movie theater Additionally, just east of the Project Area is the center of government employment for the city. This area includes: . The Chamber of Commerce building . City Hall . The County Administration Building . The County Courthouse . Caltrans Building . County Health Department . County Jail . Feldheym Central Library Up until now, San Bernardino's downtown area has had a very small population of owner-occupant high wage employees living in or around the center of the city. This is a result primarily from the distressed conditions of this area and the unavailability of new and attractive housing stock. Within the immediate downtown area, nearly 70 percent of residential buildings were built prior to 1960. Much more detailed information regarding the need for quality downtown housing can be found in the Market Analvsis San Bernardino Garden City Plan completed by Kosmont Partners. Meadowbrook Park Within the boundaries of the defined Project Area there is no significant park space. The closest public park to the downtown area is Meadowbrook Park, which occupies an almost four square block area less than two blocks east of most of the downtown public buildings. The park includes the Rudy C. 1 Market Analvsis San Bernardino Garden City Plan (Draft), Kosmont Partners, July 16, 2002, p.8. CDC/2003-5 Hernandez Community Center, public swimming pool, picnic tables and large grassy area. The park offers many family educational and recreational opportunities, and would be the ideal setting for attractive homes, particularly for families with downtown employment. Instead, the residential area just south of the park is typified by vacant lots and buildings; boarded up structures, and highly distressed homes and apartments. ANR Industries, Inc. has successfully negotiated control over twenty-three (23) vacant lots and teardown properties in the two block area bounded by 2nd Street; Rialto Street; Sierra Way; and Allen Street. This represents 74% of the vacant parcels in this two block area. Additionally, this includes seven contiguous lots along 2nd Street directly across the street from the community pool at Meadowbrook Park. This is the area where ANR proposes to initiate the City's efforts at downtown residential revitalization. Meadowbrook Homes. Phase 1 ANR proposes to construct twenty-three (23) new single family detached homes in the described two block area where we have assembled lots. Our plans provide for three different f100rplans as follows: . Single-story, 3 bedrooms, 2 baths, 1400sf . Single-story, 3 bedrooms, 2 baths wi bonus room, 1550sf . Two-story, 4 bedrooms, 3 baths, 1700sf The f100rplans would be offered in contemporary interpretations of Victorian and Craftsman style homes, integrating natural element accents such as stone and brick. We believe these elevations will integrate our homes within the existing fabric of the neighborhood, while at the same time distinguishing them as fresh and welcoming for families. The following design elements have been incorporated into all of the homes: . Open f100rplans with great rooms and open kitchens for flexible living . Designated front porches to encourage neighborhood unity . Oversized two-car garages that will be finished for increased flexibility . Large, open kitchens with standard European-style cabinetry and tile countertops . Large master suites with private, dual-vanity baths and walk-in closets; sitting area in 2-story plan . Interior laundry area . Central heating and air conditioning . Upgradable options, including flooring, appliances, window coverings, alarm system and rear yard landscaping with automatic sprinklers Our preliminary proposed site plan provides for alternating the one-story f100rplans along 2nd Street and building the two-story f100rplans behind them CDC/2003-5 along King Street. ThE;l purpose of this selection is two-fold. First, we have sought to maximize the availability of views of Meadowbrook Park from as many homes as possible. By backing the one-story plans with two-story plans behind them, both homes will have views of the park. Secondly, backing the one-story homes with two-story homes behind them will increase the visual depth of the redevelopment in the area by providing a more pleasing view from Second Street that passes all the way through to King. We are receptive to feedback from city officials regarding this strategy of site selection. We have alternated f100rplans in the clusters of the more scattered lots that we are including in this plan along Sierra Way south of King Street and along the northwest corner of Rialto and Allen Streets to achieve variety in the appearance of the area. We have also attempted where possible to provide for detached garages on corner lots with single-story plans in order to achieve greater visual differentiation and minimize the appearance of the garages along street frontage. This proposal represents the first phase of redevelopment in the Meadowbrook Park area. In order to complete the success of this transformation, we encourage the city to offer exterior fayade improvement grants to homeowners in the area and to initiate a landscape maintenance district, in order to provide for enhanced uniform exteriors for the existing homes in the neighborhood. With the city's support, ANR intends to work diligently in this area to acquire distressed properties for rehabilitation or teardown and new construction. Additionally, we are acquiring vacant lots and distressed properties in the larger area extending to 3rd Street to the north and Waterman to the east for future infill projects. CDC/2003-5 EXHIBIT "F" Schedule of Performance 03-02-03 ANR-Meadowbrook Development Agreement Exh. "F" -1 CDC/2003-5 SCHEDULE OF PERFORMANCE Meadowbrook Single Family Residential Grant Development Agreement Agency governing board approves Agreement (As of February 3,2003) Within 10 days following Agency governing board approval of Agreement As soon as practicable following Effective Date Within 30 days following Developer submission of information under preceding paragraph Within 90 day Due Diligence Period Forms of all exhibits attached to Agreement, Developer delivers evidence of insurance to the Agency and parties fully execute Agreement (Effective Date of Agreement) Developer submits evidence of ownership of at least 19 Developer Lots and evidence of construction lender commitment to the Agency (Section 2.01(c)) Agency remits first installment of Affordable Housing Development Grant ($75,000) to Developer and parties record Notice of Agreement against each Developer Lot Developer conducts its investigations of the Project Meadowbrook Schedule of Performance Exh F Exh. "F"-2 Within 90 day Due Diligence Period Within 90 day Due Diligence Period Within 30 days following receipt of Developer Due Diligence Approval Certificate and New Agency Home Plans and Net Development Cost CDC/2003-5 Developer delivers its Due Diligence approval certificate to the Agency Developer delivers its: (1) Net Development Cost estimates to the Agency (2) New Agency Home Plans Agency schedules date for conduct of public hearing authorizing disposition of Completed New Agency Home (Published notice of public hearing 2 times with first publication 14 days prior to date of public hearing) By June 23, 2003, assuming preceding Agency conducts public hearing for disposition of conditions have been satisfied Completed New Agency Home Meadowbrook Schedule of Performance Exh F Exh . " F" - 3 Within 30 days following public hearing for approval of disposition of Completed New Agency Home Within 30 days following public hearing for approval of disposition of Completed New Agency Home Within 10 days following Executive Director of construction loan financing receipt by the evidence of CDC/2003-5 Parties complete final form of Agency License Agreement including provisions relating to Developer Construction lender financing interest in Agency Lot Developer provides the Executive Director of the Agency with satisfactory evidence of construction loan financing for at least 11 New Homes The Executive Director issues written acceptance or rejection of the evidence of construction loan financing Within 30 days following public hearing or Developer submits New Home design plans to approval of disposition of Completed New City for review and approval Agency Home Meadowbrook Schedule ofPenormance Exh F Exh. "F"-4 Within 30 days following the acquisition of the Developer Lots Within 60 days following the acquisition of the Developer Lots but by a date no later than June 30, 2003 As promptly as feasible following the Agency's approval, following a public hearing, of the disposition of the New Agency Home CDC/2003-S Developer applies for and obtains demolition permits for each existing structure on Developer Lots Developer completes demolition of all existing structures on Developer Lots Developer causes construction loan for improvement of at least 11 New Homes to be in a condition to record and be funded Provided construction loan for 11 New Agency disburses second installment of Homes is recorded concurrently on each Affordable Housing Development Grant Developer Lot Meadowbrook Schedule of Performance Exh F Exh. "F" - 5 CDC/2003-S Within 60 days following submission to the City approves design plans for New Homes City by the Developer Within 60 days following submission to the City by the Developer, of building improvement plans and specifications [Developer to add course of improvement milestones and Affordable Housing Development Grant disbursement dates] Within 180 days following issuance of building permits for homes 1-11 Within 180 days following the City's issuance of certificate of occupancy for homes 1-11 and subject to lender additional requirements City issues builder permits for the improvement of at least 11 New Homes plus the New Agency Home City issues certificate of occupancy for homes I- II City issues certificate of occupancy for homes 1- 23 Meadowbrook Schedule of Performance Exh F Exh. "F" - 6 CDC/2003-S Developer has satisfied all conditions for 5th By a date not later than 12/31/04 disbursement of Affordable Housing Development Grant Agency completes audit of final Developer Within 45 days of Agency receipt of the improvement cost certificate and makes Developer's written Project development cost disbursement of 5th and final installment of certificate under Section 2.01(h) of the Agreement Affordable Housing Development Grant (or requests refund of a portion of the Affordable Housing Development Grant) Meadowbrook. Schedule of Performance Exh F Exh. "F"-7 CDC/2003-S EXHIBIT "G" Form of Section 33334.3 Covenant 03-02-03 ANR.Meadowbrook Development Agreement Exh. "G" - 1 CDC/2003-5 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Attn: Executive Director (Space Above Line Reserved For Use By Recorder) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS , 200 Dated as of Meadowbrook Single Family Residential Grant Development Agreement 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 2 CDC/2003-5 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS (Meadowbrook Single Family Grant Development Agreement) THIS REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS (the "Section 33334.3 Covenant") is made and entered into as of 200 , by and among ANR Industries, Inc., a California corporation (the Developer"), the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a body corporate and politic (the "Agency"), and (the "Qualified Homebuyer"), and this Section 33334.3 Covenant relates to the following facts set forth in Recitals. R E C I TAL S A. The Qualified Homebuyer proposes to acquire a single family residence (the "New Home"), located within the City of San Bernardino (the "City"), from the Developer, to be owned and occupied by the Qualified Homebuyer as their principal residence. The legal description of the New Home is attached hereto as Exhibit "A" and incorporated herein by this reference. B. The Agency has used and applied certain affordable housing development funds from the Low-and Moderate-Income Housing Funds of several different redevelopment project areas, to make the New Home available for acquisition by the Qualified Homebuyer from the Developer subject to the terms and conditions of the Community Redevelopment Law found at Health and Safety Code Section 33000, et seq. (the "Act") and this Section 33334.3 Covenant; and C. The Act mandates that the acquisition, use and occupancy of the New Home shall be regulated in certain respects for the term as provided herein (the "Qualified Residence Period") in order to ensure that the New Home will be used and occupied in accordance with the Act and the affordable single family residential dwelling unit development goals and objectives of the Agency. 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 3 CDC/2003-S NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE QUALIFIED HOMEBUYER, THE DEVELOPER AND THE AGENCY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS: Section 1. Definitions of Certain Terms. As used in this Section 33334.3 Covenant, the following words and terms shall have the meaning as provided in the Recitals or in this Section 1 unless the specific context of usage of a particular word or term may otherwise require: Adjusted Family Income. The words "Adjusted Family Income" mean the anticipated total annual income (adjusted for family size) of each individual or family residing or treated as residing in the New Home as calculated in accordance with Treasury Regulation 1.167(k) - 3b) (3) under the Code, as adjusted, based upon family size in accordance with the household income adjustment factors adjusted and amended from time to time, pursuant to Section 8 of the United States Housing Act of 1937, as amended. Affordable Housing Cost. The words "Affordable Housing Cost" shall have the meaning as set forth in Health and Safety Code Section 50052.5, as this section may hereafter be amended from time-to-time by the State of California. A Qualified Homebuyer and/or the Successor-In-Interest of such Qualified Homebuyer, if any, shall pay no more than an Affordable Housing Cost for the New Home as of the applicable Delivery Date. Agency Investment Reimbursement. The words "Agency Investment Reimbursement" mean and refer to the sum of money which may be payable to the Agency by the Qualified Homebuyer if, during the Qualified Residence Period, the Qualified Homebuyer sells, assigns, transfer or otherwise hypothecates the New Home to any person who does not satisfy the requirement of a permitted successor-in- interest (in other words the Successor-In-Interest designated by the Qualified Homebuyer is a person or household whose Adj usted Family Income exceeds the income level for a Moderate Income Household). The Agency Investment Reimbursement, and the method or formula for determining the amount, if any, as may be payable by the Qualified Homebuyer to the Agency upon the resale of the New Home, is more particularly described in Section 5 of 03~2-O3 ANR-Meadowbrook Development Agreement Exh. "G" - 4 CDC/2003-S this Section 33334.3 Covenant. As of the Delivery Date, the Agency has provided the Developer with the sum of $50,000 as an affordable housing development assistance contribution for the improvement of the New Home, and the provisions of Section 5 of this Section 33334.3 Covenant are included in satisfaction of the requirements of Health and Safety Code Section 33334.3 (f) (B) . Code. The word "Code" means the Internal Revenue Code of 1986, as amended, and any regulation, rulings or procedures with respect thereto. Delivery Date. The words "Delivery Date" mean the date of delivery of title and possession of the New Home from the Developer to the Qualified Homebuyer at the close of the New Home Escrow. In the case of a Successor-In-Interest, the words "Delivery Date" refers to the date on which such Successor-In-Interest acquires the New Home from the Qualified Homebuyer; provided however, that for the purpose of establishing the termination date of the Qualified Residence Period, the Delivery Date shall refer to the date on which this Section 33334.3 Covenant is recorded. Moderate-Income Household. The words "Moderate-Income Household" mean persons and families whose income does not exceed one hundred and twenty percent (120%) of the area median income of the City adjusted for family size by the State Department of Housing and Community Development in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, as amended, and Health and Safety Code Section 50093, as this section may hereafter be amended from time-to-time by the State of California. New Home. The words "New Home" mean and refer to the completed affordable single-family residential dwelling unit (including the land and landscape improvements thereon) as constructed and installed by the Developer and sold to the Qualified Homebuyer. New Home Escrow. The words "New Home Escrow" mean and refer to the real estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or later, by and between the Qualified Homebuyer and the Successor-In-Interest) . The transfer of the New Home from the Developer to the Qualified Homebuyer (or later, by and 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 5 CDC/2003-S between the Qualified Homebuyer and the Successor-In- Interest) shall be accomplished upon the close of the New Home Escrow. Notice of Agency Concurrence. The words "Notice of Agency Concurrence" mean and refer to the acknowledgment in recordable form in which the Agency confirms that the proposed Successor-In-Interest of the Qualified Homebuyer satisfies all of the Adjusted Family Income and other requirements of this Section 33334.3 Covenant for occupancy of the New Home by the Successor-In-Interest at any time during the Qualified Residence Period. Qualified Homebuyer. The words "Qualified Homebuyer" mean the purchaser of the New Home from the Developer (e. g. : all persons identified as having a property ownership interest vested in the New Home as of the close of the New Home Escrow). At the close of the New Home Escrow, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does not exceed the household income qualification limits of a Moderate-Income Household: (ii) shall be a first-time homebuyer, as this term is defined in Health and Safety Code Section 50068.5 as this section may hereafter be amended from time-to-time by the State of California; and (iii)pay no more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase transaction for the New Home, including all sums payable by the Qualified Homebuyer for its purchase money mortgage financing, insurance, escrow and other fees and costs. Qualified Residence Period. The words "Qualified Residence Period" mean the period of time beginning on the Delivery Date and ending on the date which is forty-five (45) years after the Delivery Date. Section 33334.3 Covenant. The words "Section 33334.3 Covenant" mean these Redevelopment Agency of the City of San Bernardino Community Redevelopment Housing Affordability Covenants and Restrictions by and among the Qualified Homebuyer, the Developer and the Agency pertaining to the New Home. Successor-In-Interest. The words "Successor- In - Interest" mean and refer to the person, family or household which may acquire the New Home from the Qualified Homebuyer at any time during the Qualified Residence Period by purchase, assignment, transfer or otherwise and whose payments for 03-02-03 ANR.Meadowbrook Development Agreement Exh. "G" - 6 CDC/2003-S the acquisition of the New Home from the Qualified Homebuyer do not exceed an amount which is an Affordable Housing Cost for such Successor-In-Interest household. The Successor-In-Interest does not need to be a "First-Time Homebuyer" but, such Successor-In-Interest shall have an income level for the twelve (12) months prior to the date on which the Successor-In-Interest acquires the New Home which does not exceed the maximum Adj usted Family Income level for a Moderate-Income Household. Upon acquisition of the New Home the Successor-In-Interest shall be bound by each of the covenants, conditions and restrictions of this Section 33334.3 Covenant. The titles and headings of the sections of this Section 33334.3 Covenant have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the meaning any of the terms or provisions hereof. Section 2. Acknowledgments and Representations Qualified Homebuyer. The Qualified Homebuyer acknowledges and represents to the Agency that, as Delivery Date: of the hereby of the (a) the total household income for the Qualified Homebuyer does not exceed the maximum amount permitted as Adjusted Family Income for a Moderate-Income Household, adjusted for family size; (b) the Qualified Homebuyer intends to promptly occupy the New Home after the Delivery Date as the principal place of residence for a term of at least two (2) years following the Delivery Date and the Qualified Homebuyer has not entered into any arrangement and has no present intention to rent, sell, transfer or assign the New Home to any third party during the Qualified Residence Period so as to frustrate the purpose of this Section 33334.3 Covenant; (c) the Qualified Homebuyer has no present intention to lease or rent any room or sublet or rent a portion of the New Home to any relative of the Qualified Homebuyer or to any third person at any time during the Qualified Residence Period; (d) following interest, the sum payable each month by the Qualified Homebuyer the close of the New Home Escrow as principal and property taxes and, property casualty insurance for 03-02...03 ANR.Meadowbrook Development Agreement Exh. "G" - 7 CDC/2003-S the acquisition of the New Home does not exceed the Affordable Housing Cost for the household; (e) the Qualified Homebuyer agrees to provide the Agency with the following items of information for inspection by the Agency promptly upon written request of the Agency: (i) State and federal income tax returns filed by all persons who reside in the New Home for the most three (3) recent tax years preceding the close of the New Home Escrow for inspection of such State and federal income tax returns; (ii) current wage, income all person residing close of the New Home and salary statements in the New Home at Escrow; for the (f) The Qualified Homebuyer has been informed by the Developer that this Section 33334.3 Covenant imposes certain restrictions on the use and occupancy of the New Home during the term of this Section 33334.3 Covenant and that this Section 33334.3 Covenant imposes certain restrictions on the resale of the New Home during the Qualified Residence Period. The Qualified Homebuyer acknowledges and understands that these restrictions shall be applicable to the New Home and to any resale of the New Home from the Delivery Date to the end of the forty-five (45) year Qualified Residence Period which is , 204 . (g) Each of the foregoing acknowledgements and representations of the Qualified Homebuyer are true and correct. Dated: Initials of Qualified Homebuyer Section 3. Covenant of the Qualified Homebuyer to Maintain Affordabili ty of the New Home During the Qualified Residence Period and Covenant Relating to Sale or Transfer of the New Home During the Qualified Residence Period to a Successor-In- Interest. (a) The Qualified Homebuyer for itself, its heirs, successors and assigns, hereby covenants and agrees that during the term of the Qualified Residence Period the New Home shall be used and, occupied by the Qualified Homebuyer as its principal residence, and that the New Home shall be reserved for sale, use 03-02-03 ANR-Meadowbrook. Development Agreement Exh. "G" - 8 CDC/2003-5 and occupancy by the Qualified Homebuyer and/or for another Moderate-Income Household as a Successor-In-Interest at an Affordable Housing Cost. The Qualified Homebuyer, for itself, its heirs, successors and assigns, further covenants and agrees that, during the Qualified Residence Period, the Agency shall have the right and duty as provided in this Section 3 to verify that each proposed Successor-In-Interest of the Qualified Homebuyer in the New Home satisfies the income requirements and Affordable Housing Cost limitations of a Moderate-Income Household (based upon the Adjusted Family Income of each household), and that the completion of any resale or transfer of the New Home to a Successor-In-Interest shall be subject to the recordation of the "Notice of Agency Concurrence" as provided in Section 3 (d) . (b) The Qualified Homebuyer, for itself, its successors and assigns, hereby covenants and agrees that during the term of the Qualified Residence Period the Qualified Homebuyer shall not sell, transfer or otherwise dispose of the New Home (or any interest therein) to a Successor-In-Interest without first giving written notice to the Agency and without first obtaining the written concurrence of the Agency as provided herein. At least forty-five (45) days prior to the date on which the Qualified Homebuyer proposes to transfer title in the New Home to a Successor-In-Interest, the Qualified Homebuyer shall send a written notice to the Agency as provided in Section 17 of the intention of the Qualified Homebuyer to sell the New Home to a Successor-In-Interest which includes the following true and correct information: (i) name of the proposed Successor-In-Interest (including the identity of all persons in the household of the Successor-In-Interest, proposing to reside in the New Home); (ii) copies of State and federal income tax returns for the Successor-In-Interest for the calendar year preceding the year in which the notice of intention to sell the New Home is given to the Agency; (iii) resale price of the New Home payable by the Successor-In-Interest, including the terms of all purchase money mortgage financing to be assumed, provided or obtained by the Successor-In- Interest, escrow costs and charges, realtor broker fees and all other resale costs or charges 03-02-03 ANR.Meadowbrook Development Agreement Exh. "G" - 9 CDC/2003-S payable by either the Qualified Homebuyer or the Successor-In-Interest; (iv) name address, and telephone number of the escrow company which shall coordinate the transfer of the New Home from the Qualified Homebuyer to the Successor-In-Interest; (v) appropriate mortgage credit references for the Successor-In-Interest together with a written authorization signed by the Successor-In-Interest authorizing the Agency to contact each such reference (for the purposes of this subparagraph (v), appropriate mortgage credit reference may include a true and correct and complete copy of the mortgage loan application submitted by the Successor-In-Interest to its proposed purchase money mortgage lender); and (vi) such other relevant information as the Agency may reasonably request, as provided in Section 3(c). (c) Within twenty (20) days following receipt of the notice of intention and accompanying written information described in Section 3(b), the Agency shall provide the Qualified Homebuyer with either a preliminary confirmation of approval or a preliminary rejection of approval in writing of the income and household occupancy qualifications of the Successor-In-Interest. The Agency shall not unreasonably withhold, condition or delay approval or rejection of the qualifications of the proposed Successor-In-Interest in connection with any proposed sale of the New Home. In the event that the Agency may request additional information relating to the confirmation of the matters described in Section 3(b) with respect to a proposed Successor-In-Interest, the Qualified Homebuyer shall provide such information to the Agency as promptly as feasible. (d) Upon its final confirmation of approval of the Adjusted Family Income and Affordable Housing Cost eligibility of the Successor-In-Interest to acquire the New Home, the Agency shall deliver a written acknowledgment and approval of the resale of the New Home to the Successor-In-Interest (e. g., the Notice of Agency Concurrence) in recordable form to the escrow holder referenced in Section 3(b) (iv) above, and thereafter the Successor-In-Interest may acquire the New Home subject to the satisfaction of the following conditions: 03-02-03 ANR-Meadowbrook Developmenl Agreement Exh. "G" - 10 CDC/2003-S (i) the income and household occupancy information provided to the Agency shall be true and correct, and the Notice of Agency Concurrence executed by the Successor-In-Interest and the Agency shall be recorded at the close of the resale escrow; (ii) the escrow holder shall have provided the Agency with a copy of the customary form of the final escrow closing statement of the Qualified Homebuyer and the final escrow closing statement for the Successor-In-Interest; and (iii) the other conditions of the resale escrow established by the Qualified Homebuyer Successor-In-Interest shall have satisfied. as and been (e) The Qualified Homebuyer for itself, its successors and assigns hereby covenants and agrees that during the Qualified Residence Period the New Home shall not be leased, subleased, or rented to any third person, except for a temporary period (not to exceed 12 months) in the event of an emergency or other unforeseen circumstance as may be expressly approved in writing by the Agency subject to compliance during the temporary rental period with the reasonable temporary rental occupancy conditions required by the Agency. The Qualified Homebuyer shall submit a written request to the Agency prior to the commencement of the temporary occupancy, as practicable, but in any event within not more than (60) days following the commencement of a temporary rental occupancy of the New Home by a third party, which notice to the Agency shall set forth the grounds on which the Qualified Homebuyer believes an emergency or other unforeseen circumstance has occurred and that a temporary rental occupancy in necessary. Section 4. Maintenance Condition Qualified Homebuyer, for itself, its hereby covenants and agrees that: of the New Home. The successors and assigns, (a) The exterior areas of the New Home which are subject to public view (e.g.: all improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the term of the Qualified Residence Period, there is an occurrence of an adverse condition on any area of the New Home which is 03..()2-O3 ANR-Meadowbrook Development Agreement Exh. "G" - 11 CDC/2003-S subject to public view in contravention of the general maintenance standard described above, (a "Maintenance Deficiency") then the Agency shall notify the Qualified Homebuyer in writing of the Maintenance Deficiency and give the Qualified Homebuyer thirty (30) days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words "Maintenance Deficiency" include without limitation the following inadequate or non-confirming property maintenance conditions and/or breaches of single family dwelling residential property use restrictions: failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling unit in a clean and presentable manner; failure to keep the front and side yard areas of the property free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the property; failure to regularly mow lawn areas or permit grasses planted in lawn areas to exceed six inches (6") in height, or failure to otherwise maintain the landscaping in a reasonable condition free of weeds and debris; parking of any commercial motor vehicle in excess of 7,000 pounds gross weight anywhere on the property, or the parking of motor vehicles, boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of the property which are not covered by a paved and impermeable surface; the use of the garage area of the dwelling unit for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of persons residing in the New Home. In the event the Qualified Homebuyer fails to cure or commence and to diligently proceed to complete the cure of the Maintenance Deficiency within thirty (30) days from the date of notice to cure, the Agency may thereafter conduct a public hearing following transmittal of written notice thereof to the Qualified Homebuyer ten (10) days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Qualified Homebuyer has failed 03-O2..()3 ANR-Meadowbrook Development Agreement Exh. "G" - 12 CDC/2003-5 to comply with the provlslon of this Section 4(a). If, upon the conclusion of a public hearing, the Agency makes a written finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, and that the Qualified Homebuyer has failed to cure such Maintenance Deficiency, then in such event the Agency shall have the right (in addition to any other rights or powers then available to the Agency or the City of San Bernardino) to enter the New Home (exterior areas only) upon ten (10) days written notice to the Qualified Homebuyer and perform all acts necessary to cure the Maintenance Deficiency, or the Agency may take other action at law or equity the Agency may then deem appropriate to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency as authorized by this Section 4(a) shall become a lien on the New Home. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce the lien in the manner as provided in Section 4(c). (b) Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the New Home shall be removed by the Qualified Homebuyer from any exterior surface of a structure or improvement on the New Home by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the New Home (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application; then in such event and without notice to the Qualified Homebuyer, the Agency shall have the right to enter the New Home and remove the graffiti. Notwi thstanding any provision of Section 4(a) to the contrary, any sum expended by the Agency for the removal of graffiti from the New Home as authorized by this Section 4(b) shall become a lien on the New Home. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce its lien in the manner as provided in Section 4(c). (c) The parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 4 expressly include the power to establish and enforce a lien or other encumbrance against the New Home in the manner 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 13 CDC/2003-5 provided under Civil Code Sections 2924, 2924b and 2924c in the amount as reasonably necessary to restore the New Home to the maintenance standard required under Section 4(a) or Section 4 (b), including the reasonable attorneys fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of the Agency in connection with such action. In any legal proceeding for enforcing such a lien against the New Home, the prevailing party shall be entitled to recover its attorneys' fees and costs of suit. For the purposes of this Section 4, the words "reasonable attorneys' fees and costs of the Agency" mean and include the salaries and benefits payable to lawyers employed by the Office of the City Attorney, allocated on an hourly basis, who provide legal services to the Agency in connection with the enforcement of this Section. The provisions of this Section 4, shall be a covenant running with the land for the Qualified Residence Period and shall be enforceable by the Agency in its discretion, cumulative with any other rights or powers granted by the Agency under applicable law. Nothing in the foregoing provisions of this Section 4 shall be deemed to preclude the Qualified Homebuyer from making any alterations, additions, or other changes to any structure or improvement or landscaping on the New Home, provided that such changes comply with the zoning and development regulations of the City and other applicable law. Section 5 . Protection of Agency Derived From the Low-and Moderate-Income Home - Agency Investment Re~ursement. Investment of Moneys Housing Fund in the New (a) For the purpose of this Section 5, the following terms shall have the meaning as provided below: "Purchase Money Mortgage" means the original balance on the Delivery Date of the New Home mortgage provided to the Qualified Homebuyer by the conventional mortgage lender, plus the original outstanding balance of the Agency MAP Loan, if any. "Qualified Homebuyer Equity" means the downpayment amount in cash paid by the Qualified Homebuyer for the New Home on the Delivery Date (e.g.: the equity or "basis" as defined under the Code, net of the Purchase Money Mortgage of the Qualified Homebuyer in the New Home), plus the reduction, if any, of the outstanding principal balance of the Purchase Money Mortgage secured by the New Home through the date of the resale of the New Home. 03-02...Q3 ANR~Meadowbrook Development Agreement Exh. "G" - 14 CDC/2003-5 "Resa1e Price" means the total consideration paid by the Successor-In-Interest, including real estate broker fees and commissions for the purchase of the New Home, but excluding escrow fees and mortgage financing costs payable or otherwise allocated to the Successor-In-Interest in connection with the transfer of the New Home from the Qualified Homebuyer to the Successor-In-Interest. "Resa1e Profit" means the balance of the following calculation: (Resale Homebuyer Profit. Price)-(Purchase Equity + Resale Money Mortgage)-(Qualified Cost Adjustment Factor)=Resale A portion of the Resale Profit shall be payable to the Agency by the Qualified Homebuyer in accordance with Section 5(b). "Resa1e Cost Adjustment Factor" means one of the following sums determined by reference to the number of years which have elapsed between the Delivery Date and the date on which the resale and transfer of the New Home to the Successor-In-Interest occurs: Date of Resa1e of New Home after the De1ivery Date: From the Delivery Date to the 5th anniversary after Delivery Date From and including the 5th anniversary to the 10th anniversary after Delivery Date From and including anniversary to anniversary after Date the 10th the 30th Delivery From and including the anniversary to the end of Qualified Residence Period 30th the Resa1e Factor: Adjustment Cost $0 $5,000.00 $10,000.00 $15,000.00 (b) The Agency has used and applied certain moneys from the Low-and Moderate-Income Housing Funds of the Agency to 03-02-03 ANR-Meadowbrook Development Ag=ment Exh. "G" - 15 CDC/2003-5 assist with the development of the New Home. In the event that the New Home may be sold, assigned, conveyed or otherwise transferred by the Qualified Homebuyer during the term of the Qualified Residence Period to a person or household whose Adjusted Family Income exceeds the income level for a Moderate- Income Household, a portion of the Resale Price of the New Home in excess of an adjusted sale price amount which the Qualified Homebuyer paid on such resale date (e. g.: the "Resale Profit" amount) shall be payable to the Agency as the Agency Investment Reimbursement in accordance with Health and Safety Code Section 33334.3 (f), and as provided herein. In the event that, at any time during the Qualified Residence Period, the Qualified Homebuyer (or any Successor-In-Interest) may sell, assign, conveyor otherwise transfer the New Home to a person or household whose Adjusted Family Income exceeds the income level for a Moderate-Income Household, a portion of the Resale Profit realized by the Qualified Homebuyer shall be payable to the Agency as the "Agency Investment Reimbursement" in the amounts as follows: Date of Resale of New Home After Deli very Date From the Delivery 2~ anniversary Delivery Date Date to the after the From the 2nd anniversary to the loth anniversary after the Delivery Date From the loth anniversary to end the 20th anniversary after the Delivery Date From the 20th anniversary to the 30th anniversary after the Delivery Date From the 30th anniversary after the Delivery Date to the end of the Qualified Residence Period 03-02-03 ANR-Meadowbrook Development Agreement Portion of Resale Profit Payable to Agency from Resale of New Home 100% of Resale Profit is payable to Agency as Agency Investment Reimbursement 75% of Resale Profit is payable to Agency as Agency Investment Reimbursement 50% of Resale Profit is payable to Agency as Agency Investment Reimbursement Resale Profit is the Agency as Investment 25% of the payable to Agency Reimbursement Resale Profit is the Agency as Investment 10% of the payable to Agency Reimbursement Exh. "G" - 16 CDC/2003-5 (c) Three (3) examples of the application of the formula described above as "Resale Profit" to determine the amount of the Agency Investment Reimbursement payable on the date of a hypothetical resale of the New Horne are presented as follows: EXAMPLE A: Resale to a purchaser whose Adjusted Family Income exceeds the income level of a Moderate Income Household: Assume that on the Delivery Date the sales price of the New Horne payable by the Qualified Homebuyer was $156,000 and that the resale occurs on the 7th anniversary following the Delivery Date; Assume the Resale Price of the New Horne is $185,000; and Assume that Qualified Homebuyer Equity as of the date of the resale is $24,000: EXAMPLE A CALCULATION OF RESALE PROFIT: $185,0001-$137,0002- ($19,0003+$5,0004)=$24,0005:Resale Profit (SEE ALSO FOOTNOTES, BELOW) . The payable example Agency Investment Reimbursement amount under Example A at close of the resale escrow in this hypothetical is $18,000 (e.g., 75% of $24,000). EXAMPLE B: Resale to a purchaser whose Adj usted Family Income exceeds the income level of a Moderate Income Household: Assume same facts as in Example A EXCEPT that the Resale Price of the New Horne is $220,000. 1 The Resale Price of the New Home to the Successor-In-Interest in Example A. 2 The Purchase Money Mortgage amount ($130,000 conventional mortgage plus $7,000 Agency MAP) of the New Home as of the Delivery Date. 3 The Qualified Homebuyer Equity in the New Home ($19,000 cash down payment plus a $5,000 reduction of outstanding principal balance on the Purchase Money Mortgage loans through the time of resale). 4 The Resale Cost Adjustment Factor in the 7th year. 5 The Resale Profit of $24,000 is subject to a 75% allocation to pay the Agency Investment Reimbursement, or $18,000 payable to the Agency (as provided in Section 5 (b) ) . The seller of this New Home could retain $6,000 of the "Resale Profit" in this example. 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 17 CDC/2003-S EXAMPLE B CALCULATION OF RESALE PROFIT: $215,0006 - $137,000 - ($19,0007 + $5,0008) = $54,0009: Resale Profit (SEE FOOTNOTES 6- 10, BELOW). The Agency Investment Reimbursement under Example B payable at close of the resale escrow in this hypothetical example is $40,500. The seller of this New Home could retain $13,500 of the "Resale Profit" in this example. EXAMPLE C: Resale to a purchaser whose Adj usted Family Income DOES NOT exceed the income level of a Moderate Income Household: Assume same facts as in Example A and that the Successor- In-Interest also pays no more than an Affordable Housing Cost for the New Home at a resale price of $185,000 on the 7th anniversary date following the Delivery Date; EXHIBIT C CALCULATION OF RESALE PROFIT: No Agency Reimbursement is payable to Agency as the Successor- In-Interest is a Moderate Income Household in this hypothetical sale and pays to the Qualified Homebuyer no more than Affordable Housing Cost for its purchase of the New Home. In this example, the seller of the New Home could retail the full amount of the Resale Profit or $24,000. Such Successor-In-Interest's "Qualified Homebuyer Equity" will be adjusted to reflect that buyer's new mortgage and equity basis in the New Home for purposes of determining whether an Agency Reimbursement amount may be payable by such Successor-In-Interest in any future resale transaction during the remaining term of the Qualified Residence Period. (d) The sole source of funds of the Qualified Homebuyer to pay the Agency the Agency Reimbursement Agreement, shall be from the Resale Profit amount realized at the time of resale to a purchaser whose Adjusted Family Income exceeds the income level of a Moderate Income Household. In the event that the applicable amount of the Agency Investment Reimbursement is paid to the Agency at the time of resale of the New Home to a person or household which does not qualify as a Successor-In-Interest, 6 Resale Price of New Home in Example B. 7 Purchase Money Mortgage amount is the same as in Example A. 8 The Qualified Homebuyer Equity is the same as in Example A. 9 The Resale Cost Adjustment Factor is the same as in Example A. 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 18 CDC/2003-S the Agency shall cause resale of the New Home the following provisions to be to such of this recorded concurrently with the person, a notice of release of Section 33334.3 Covenant: Section 2, Section 3, Section 5 Section 7 Section 6. Acknow1edgment of Subordination of the Provisions of Section 3, Section 5 and Section 7 (b) of this Section 33334.3 Covenant to the Mortgage Security Interest of the First Mortgage Lender. Concurrently upon the execution and recordation of this Section 33334.3 Covenant the Qualified Homebuyer shall obtain certain purchase money mortgage financing for the acquisition of the New Home from (the ~First Mortgage Lender"). As of the Delivery Date, the Qualified Homebuyer has provided the Agency with a true and correct copy of the loan agreement by and between the First Mortgage Lender and the Qualified Homebuyer. As a condition to providing its mortgage loan to the Qualified Homebuyer, the First Mortgage Lender requires the Agency to agree that the provisions of Section 3, Section 5 and Section 7 (b) of this Section 33334.3 Covenant shall be junior and subordinate to the security interest of the First Mortgage Lender of even date herewith, in the New Home. The Agency hereby acknowledges and agrees that the provisions of Section 3, Section 5 and Section 7 (b) of this Section 33334.3 Covenant are subordinate and junior to the security interest of the First Mortgage Lender of even date herewith in the New Home. No breach or default by the Qualified Homebuyer of any provision of Section 3 and/or Section 7 (b) of this Section 33334.3 Covenant, nor the exercise by the Agency of any remedy it may have against the Qualified Homebuyer in the event of such a breach or default shall affect or render invalid the lien of the First Mortgage Lender in the New Home. In the event that the First Mortgage Lender (or its assignee) may foreclose the lien of the First Mortgage Lender in the New Home through trustee sale, judicial foreclosure or by acceptance of deed in lieu of foreclosure, the First Mortgage Lender, and its good faith purchasers for value, shall receive title in the New Home free and clear of the provisions of Section 3, Section 5 and Section 7(b) of this Section 33334.3 Covenant. Section 7. Forec1osure of Purchase Money Mortgage Loan and Agency Right of First Refusa1. 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 19 CDC/2003-S (a) During the Qualified Residence Period the Agency shall have the right (but not the obligation) to bid on the purchase of any mortgage loan lien secured by the New Home at the time of any trustee foreclosure sale or any judicial foreclosure sale. (b) During the Qualified Residence Period the Agency shall have the right of first refusal to purchase the New Home from the Qualified Homebuyer on the same terms which the Qualified Homebuyer may propose to sell the New Home to a third party who does not qualify as a Successor-In-Interest. The Agency must exercise such a right of first refusal wi thin thirty (30) days following written notification of the intention of the Qualified Homebuyer to resell the New Home to such a third party, and such notice shall be accompanied with a true and complete copy of the written sale agreement between the Qualified Homebuyer and such third party. If the Agency accepts the offer in writing within such time period the Agency shall be bound to complete the purchase of the New Home in accordance with the written sale agreement of such third party. Thereafter the Agency shall pay the "resale price" to the Qualified Homebuyer and close an escrow for the transfer of the New Home to the Agency within sixty (60) days following written notification of the intention of the Qualified Homebuyer to resell the New House. Section 8. Covenants to Run With the Land. The Developer, the Agency and the Qualified Homebuyer hereby declare their specific intent that the covenants, reservations and restrictions set forth herein are part of a common plan for the development of affordable single family housing improvements in the Northwest Redevelopment Project and that each shall be deemed covenants running with the land and shall pass to and be binding upon the New Home and each Successor-In-Interest of the Qualified Homebuyer in the New Home for the term provided in Section 10. The Qualified Homebuyer hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in this Section 33334.3 Covenant. Each and every contract, deed or other instrument hereafter executed covering or conveying the New Home or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument. Section 9. Burden and Benefit. The Developer, the Agency and the Qualified Homebuyer hereby declare their understanding and intent that the burden of the covenants set forth herein 03-02-03 ANR-Meadowbrook Development Agreement Exh." G" - 2 0 CDC/2003-5 touch and concern the land in that the Qualified Homebuyer' s legal interest in the New Home is affected by the affordable single family dwelling use and occupancy covenants hereunder. The Agency and the Qualified Homebuyer hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the New Home by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the public purposes for which moneys from the Low-and Moderate Income Housing Fund of the Northwest Redevelopment proj ect were used and applied by the Agency in order to make the New Home available for acquisition and occupancy by the Qualified Homebuyer. Section 10. Term. This Section 33334.3 Covenant shall apply to the New Home and the Qualified Homebuyer and to each Successor-In-Interest as of the Delivery Date for the Qualified Residence Period -- e. g.: this Section 33334.3 Covenant shall remain in full force and effect for forty five (45) years after the Delivery Date, except as to certain sections hereof as provided in Section 5(d). Any provision or section hereof, may be terminated after the Delivery Date upon agreement by the Agency and the Qualified Homebuyer (or the Successor-In-Interest in the New Home), if there shall have been provided to the Agency an opinion of special legal counsel that such a termination under the terms and conditions approved by the Agency in its reasonable discretion will not adversely affect the Agency or the investment of Low-and Moderate-Income Housing Funds of the Agency in the New Home. Section 11. Breach and Default and Enforcement. (a) Failure or delay by the Qualified Homebuyer to honor or perform any material term or provision of this Section 33334.3 Covenant shall constitute a breach under this Agreement; provided however, that if the Qualified Homebuyer commences to cure, correct or remedy the alleged breach within thirty (30) calendar days after the date of written notice specifying such breach and shall diligently complete such cure, correction or remedy, the Qualified Homebuyer shall not be deemed to be in default hereunder. The Agency shall give the Qualified Homebuyer written notice of breach specifying the alleged breach which if uncured by the Qualified Homebuyer within thirty (30) calendar days, shall be deemed to be an event of default. Delay in giving such notice shall not constitute a waiver of any breach or event of default nor shall it change the time of breach or event of 03-02-03 ANR-Meadowbrook Development Agreement Exh." G" - 21 CDC/2003-S default; provided, however, the Agency shall not exercise any remedy for an event of default hereunder without first delivering the written notice of breach as specified in this Section 11. Except with respect to rights and remedies expressly declared to be exclusive in this Section 33334.3 Covenant, the rights and remedies of the Agency are cumulative with any other right or power of the Agency or the City or other applicable law, and the exercise of one or more of such rights or remedies shall not preclude the exercise by the Agency at the same or different times, of any other right or remedy for the same breach or event of default. In the event that a breach of the Qualified Homebuyer may remain incurred for more than thirty (30) calendar days following written notice, as provided above, an event of default shall be deemed to have occurred. In addition to the remedial provisions of Section 4 as related to a Maintenance Deficiency at the New Home, upon the occurrence of any event of default the Agency shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i) by mandamus or other suit, action or proceeding at law or in equity, to require the Qualified Homebuyer to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the Agency; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the Qualified Homebuyer to the Agency. (b) No third party shall have any right or enforce any provision of this Section 33334.3 Covenant of the Agency or to compel the Agency to enforce any of this Section 33334.3 Covenant against the Qualified on the New Home. power to on behalf provision Homebuyer Section 12. Governing Law. This Section 33334.3 Covenant shall be governed by the laws of the State of California. Section 13. Amendment. This Section 33334.3 Covenant may be amended after the Delivery Date only by a written instrument executed by the Qualified Homebuyer (or the Successor-In- Interest, as applicable) and by the Agency. The Developer shall 03-02-03 ANR-Meadowbrook Development Agreement Exh . "G" - 2 2 CDC/2003-S have not any right or this Section 33334.3 Developer of any such not be required. power to Covenant, amendment approve any such amendment to and the execution by the after the delivery date shall Section 14. Attorney's Fees. In the event that the Agency brings an action to enforce any condition or covenant, representation or warranty in this Section 33334.3 Covenant or otherwise arising out of this Section 33334.3 Covenant, the prevailing party in such action shall be entitled to recover from the other party its reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit. For the purposes of this Section, the words "reasonable attorneys' fees" in the case of the Agency shall mean and include the salaries and benefits payable to lawyers employed by the Office of City Attorney, allocated on an hourly basis, who provide legal services to the Agency in connection with the enforcement of this Agreement. Section 15. Severability. If any provision of this Section 33334.3 Covenant shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of this Section 33334.3 Covenant which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable. Section 16. Time of this Section 33334.3 of time within which satisfied, time shall be is of the Essence. For each provision Covenant which states a specific amount the requirements thereof are to be deemed to be of the essence. Section 17. Notice. Any notice required to be given under this Section 33334.3 Covenant shall be given by the Agency or by the Qualified Homebuyer, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the parties hereto: If to the Agency: Executive Director Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Ste 301 San Bernardino, CA 92401 Phone: (909) 384-5081 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 23 CDC/2003-S If to the Qualified Homebuyer: Attn: Phone: Notice shall be deemed given five (5) calendar date of mailing to the party, or, if personally received by the Executive Director of the Qualified Homebuyer, as applicable. 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 24 days after the delivered, when Agency or the CDC/2003-S IN WITNESS WHEREOF, the Developer, the Qualified Homebuyer and the Agency have caused this Section 33334.3 Covenant to be signed, acknowledged and attested on their behalf by duly authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document. The recordation of this Section 33334.3 Covenant is authorized under Health and Safety Code Section 33334.3(g) . QUALIFIED HOMEBUYER Dated: By: By: DEVELOPER ANR Industries, Inc., a California corporation By: Dated: AGENCY Redevelopment Agency of the City of San Bernardino Dated: By: Executive Director [ALL SIGNATURES MUST BE NOTARIZED] Approved as to Form: By: Agency Special Counsel 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 25 CDC/2003-S EXHIBIT "A" Legal Description of the New Home 03-02-03 ANR-Meadowbrook Development Agreement Exh. "G" - 26 CDC/2003-S EXHIBIT "H" Copy of HUD Mortgagee Letter 2001-30 03-02-03 ANR-Meadowbrook Development Agreement Exh. "H" - 1 CDC/2003-S U. S. Department of Housing and Urban Development WashingtOn. D.C. 20410-8000 DEC 31 200 I J OFFICE OF THE ASSISTANT SECRETARY FOR HOUSIN .FEDERAL HOUSING COMMISSIONER MORTGAGEE LETTER 2001-30 TO: AU.. APPROVED MORTGAGEES . AU.. APPROVED NONPROFIT ORGANIZATIONS ALL P ARTICIP A TING GOVERNMENT ENTITIES SUBJECT: Nonprofit Organization ~d Government Entity Participation in Single Famil FHA Activities: Clarification of Net Developmen.tCost Calculation; Expansion of the Use of the Net Development Cost Calculation and Land Use Restriction Addendum to Properties Sold at a Discount of 10 percent or more; Program Definitions; .and List of Relevant Documents This Mortgagee Letter clarifies the calculation of Net Development Cost and expands the use of the Net Development Cost calculation to HUDproperties sold at a discount of 10 percent or more. Itapplies to government entities and qualified nonprofit orgariizations that have been pre-approved by HUD to purchase HUD Homes (also referred to as Real Estate Owned, or REO properties in other Mortgagee Letters). Nonprofit organizations aild government.entities must pass on the discount received from HUD to increase homeownership opportunities for low- and moderate-income families and individuals. Appendix A to this Mortgagee Letter provides a detailed list of the costs allowed in the Net Development Cost calculation. This Mortgagee Letter also expands the use of the Land uSe Restrictiori Addendum to all HUD. homes sold to nonprofit organizations and government entities at a discount of 10 percent. or greater, effective for all sale contracts executed on or after one month from the date of this Mortgagee Letter. The addendum, to be attached to all Sales Contracts for these discounted properties, stipulates that the property be utilized to expand affordable housing opportunities as stated in 24 CPR 291.301(3). The Land Use Restriction Addendum is set forth in Appendix B to this Mortgagee Letter. Discounted homes purchased through the Dollar Homes, Asset ContrQl Area (ACA), and Officer/Teacher Next Door programs continue to be exempt from these restrictions. Appendix C to this Mortgagee Letter is a list of definitions for terms comm~mly used b lenders, nonprofit organizations. and government entities in FHA Single Family Housing Exh. "H" - 2 CDC/2003-S 2 programs and Appendix D to this Mortgagee Letter is a sumniaryreference guide of HUn Handbooks, Mortgagee Letters, and Housing Notices that apply to. nonprofit participation hi Single Family Housing activities. Questions regarding this ~ortgagee Letter should be directed to the FHA . Horneownership Centers in Atlanta (1-888-696-4687), Denver (1-800-543-9378), Philadelphia (1-800-440-8647) or Santa Ana (1-888-827-5605)... . Sincerely, John C. Weicher Assistlint Secretary for Housing- Federitl Housing Commissioner . Attachments Exh. "H" - 3 CDC/2003-5 Appendix A Net Development Cost The Net Development Cost is composed of the allowable property acquisition costs plus allowable rehabilitation, holding, and selling costs nonprofit organizations or government entities incur when purchasing HUD Homes at discounted prices; redeveloping the properties f()r .resale, and selling those properties. The Net Development Cost calculation applies to all MUD.Homes so Id to nonprofit organizations and. government entities at a 10 percent or greater discount regardless of the fmancing instrument (FHA, conventional mortgage, or cash), except for HUD - Homes purchased through the Dollar Homes, ACA, and Officerffeacher Next Door prograuis. The purpose of these disCounts and the limits on development costs is to make housing affordable to low-ta-moderate income families. The Department limits the costs that are eligible : to be included in the Net Development Cost calculation and prohibits the nonprofit organization or government entity from reselling the repaired or improved properties at prices in excess of 110 percent of the net development cost calculation. If the nonprofit organization's or . government entity's re-sale price of the HUD Home exceeds 110 percent of the net development- cost, or if non-allowable items that are included in net development cost result in an excessive . sales price, the HUD-approved nonprofit organization or government entity must use the excess profit to pay down the existing mortgage associated with that particular re-sale. - Costs Allowed in Calculating the Net Development Cost Only the costs specifically included in the following list, within the prescribed limitations and/or conditions, may be included in calculating the Net Development Cost. 1. Discounted purchase price paid to HUD 2. Upon the purchase of the property from HUD, financing and closing costs actuall incurred, which must be reasonable and customary for the area in which the property is lOCated, limited to the following: a. . The actuall<?an origination fee, not to exceed 1 percent . b. Supplemental loan origination fee (203(k) mortgages only) .c. Credit report fee d. Net tax and insurance escrow deposit e. . Settlement fee (buyer's portion) f. Discount points g. Hazard insurance premiums . h. Lender's title insurance policy premium i. Owner's title insurance poli~y premium j. Notary fees k. Recording fees L Appraisal fee m. Courier fees Exh. "H" - 4 CDC/2003-5 n. Document preparation fees - o. Attorney fees for services performed in connection with the loan closing, such as review of abstract or preparation of closing documents p. Flood plan certification and fee for determination of flood zone 3. . For the time period the nonprofit organi:zation or government entity holds title, the following costs, limited to amounts that are reasonable and customary for the area in which the property is located: . a. Fees paid to an approved Z03(k) 'consultant for work write-ups, cost estimates, and inspections only. See Mortgagee Letter 95-40 for allowable fees~ _ b. Property management, but only if related to periodic inspection and/or minor maintenance of ~he property. c. Architectural fees, but only if the services are provided by a licensed . architectural firm or individual architect, - d. Rehabilitation costs, which are the total verifiable contractor and vendor expenditures incurred in the actu~ re.;.construction, repair, restoration and physical improvement of the property. Rehabilitation costs are limited to the actual price paid to the contractor for completing each repair or improvement, and may also include expenditures for mechanical systems inspections, sewer and well inspections, repair inspections, foundation certifications for manufactured homes obtained from a licensed engineer, and roof inspections from a licensed contractor.HUD may require canceled checks and corresponding receipts as proof of rehabilitation costs. When calculating the Net Development Cost, nonprofit organizations or government entities using grant .funds for the rehabilitation of HUD Homes acquired at a discoun~ can not include the cost of the rehabilitation that is paid for by those grant funds. - e. Cost of public and municipal serVices and/or utilities and real property taxes for the subject premises, except for deli~quent interest or penalty charges . incurred as a result of failure of purchaser to pay these expenses in a timel manner. f. Cost of termite inspection and extermination services. g. Homeowners Association fees or Condo Association fees. . h. Permits and other fees-paid to units of state and local governments that are required by nile, law, regulation or other legally binding mandate that must be paid before initiating or completing the rehabilitation or propert improvement. i. Survey costs. j. Hazard and liability insurance premiums. k. Principal and Interest portion of mortgage payments (P&O limited to a maximum of six months (P&I) mortgage payments, less any and all rents received. If the property is resold in less than 180 days, the mortgage payment credit must be prorated on the-basis of the actual payments made. 2 Exh. "H" - 5 . CDC/2003-5 4. Upon the.resale of the property to a new purchaser, only the following seller closing costs that are actually incurred, limited to amounts that are reasonable and customary for the area in which the property is located: a. 1/2 of closing agent-fee (sellers portion) b. Electronic wiring fees c. . Courier and mailing fees (seller's documents only) d. Title insurance premium (owners policy only) e. State, county, or city tax stamps, if local law requires the sellerto pay these costs f. Homeowners warranty premium g. Environmental haz3nh:ertification h.. Document preparation fee (seDer's documents only) i. Recording (deed only) and reconveyance fees j. Sales commissions for real estate broker/agent services Ie. Condominium transfer fee Costs N~t Allowed in Calculating the Net Development Cost Costs oot'listed above are ineligible and cannot be included in the Net Development Cost calculation. Ineligible costs include, but are not limited.to: 1. General administration costof the nonprofit organization's or government entity's Affordable Housing Program andhomeownership programs, including overhead and staffing costs. 2. Housing developer fees and/or real estate consultant fees. 3. Sales bonuses and sales incentives (other than sales commissions) for selling or listing real estate brokers/agents. 4. Gifts to the eventual purchasers for down payment, financing or closing costs, and any other purchaser-related expenses associated with their purchase of the property. .5. Development, maintenance and management costs related to other properties in the nonprofit organization's or government entity's inventory. . : 6. Delinquent property tax penalties and intere$t. i 7. Mortgage payment late feeS, pre-payment penalties, pa -off quote fees and fax charges. 8. Any development costs that are paid from local, state, or Federal grant funds (such as, but not limited to HOME orCDBG funds) that would otherwise be allowable in Ule NDC ' calculation. '3 Exh. "H" - 6 CDC/2003-S AppendixC Definitions This list of definitions applies to terminology only as applied to FHA's Single Famil Housing Nonprofit Programs. 203(b) - An FHA mortgage insured under Section 203(b) of the National Housing Act for the acqllisition of a 1-4 unit property by an owner occupant buyer, a qualified nonprofit organization that has been pre-approved to participate by BUD, or a participating government entity. 203(k) - An FHA mortgage insured under Section 203(k) of the National Housing Act. This . mortgage is for the acquisition and rehabilitation of a 1-4 unit prope~ by an owner occupant buyer, a qualified nonprofit organization that has been pre-approved to participate by BUD, or a participating government entity. 203(k) Consultant - A technical expert, selected by the mortgagee from FHA's roster of qualified 203(k) consultaDtS to assist mortgagors for a fee with the preparation of the rehabilitation plan for a property being financed with HUD's 203(k) Rehabilitation Insured Mortgage. A 203(k) Consultant may also perform draw illspections. The mortgagor, and not HUD or the mortgagee, is responsible for paying the fees charged by the 203(k) consultant. See M~rtgagee Letter 94-11 for a description of the 203(k) Consultant's role. See Mortgagee Letter 95-40 for the maximum allowa~le fees that a 203(k) Consultant can charge. See Mortgagee _ Letter 00-25 for a description of how individuals can apply for placement on FHA's roster of qualified 203tk) consultants. . Affordable Housing Progra - A program. as described in a written proposal submitted to HUD, operated by a nonprofit in specific geographical areas in which the nonprofit provides affordable homeownership opportunities for low-to-moderate income buyers by purchasing, rehabilitating, and reselling HUD Homes to these buyers. The program can incluqe other homeownership activities, such as counseling. See Mortgagee Letter 2002-01, Attachment 2, for a description of the items that a nonprofit should address in the written proposal that describes its program. Allowable Net Development Cost - Costs that are permitted to be included in the Net Development Cost calculation. Conflict of Interest - An inappropriate relationship that compromises the private interests and official responsibilities of a person in a position of trust It is a conflict of interest for a nonprofit to employ staff who also work for ~d receive financial benefits from a for-profit entity that is providing the nonprofit with services related to the nonprofit's affordable housing plan. Board members must serve on a voluntary basis, and may not be paid nor receive any compensation for any services they provide in the implementation of the nonprofit's affordable housing program. Exh. "H"-- 7 CDC/2003-5 FHA will collect information on the job responsibilities of all Board members to ensure that their occupational. activities and obligations do not conflict with the work of the nonprofit. HUD strictly prohibits the sale or lease of properties with FHA fmancing and/or discounted HUD Homes to any of the nonprofit's officers, directors, elected or appointed officials, employees, or business associates, either during their tenure or for one year thereafter, or to any individual who is related by blood, marriage, or law to any of the above. Consultant - A real estate, financiiU or management professional who assists a nonprofit organization with housing development activities. Consultant fees, except for certain fees b 203(k) Consultants, are not allowable net development costs. Direct Sales Progra - A program under which qualified nonprofit organizations that have been pre-approved to participate by HUD, and government entities can purchase properties at a discount. The participation of a BUD registered real estate broker is not required. . Gift Funds - A monetary gift "to a homebuyer that does not require repayment and is given for downpayment or closing costs. The following individuals and groups are acceptable sources of gift funds: a relative of the home~yer, the homebuyer's employer or labor union, a charitable organization, a government agency or public entity that has a program to provide homeownership assistance to low- and moderate- income persons or first time homebuyers, or a close friend with a clearly defined- interest in the homebuyer. Gifts to a homebuyer are not Allowable Net Development Costs. See paragraph 2-IO.C, Handbook 4155.1, REV-4, CHG-l, "Mortgage Credit Analysis for Mortgage Insurance on One to Four Family Properties", and Mortgagee Letter 97-5. Homeownership Center (HOC) - Anyone of the four HOCS; which are located in Atlanta, GA; Denver, CO; Philadelphia, PA; and Santa Ana, CA. The jurisdiction of each HOC can be found online at: http://www .hud.~ov/officesJhsglsfli/hoc!hsghocs.cfm. Housing Developer - An individual or entity that performs activities such as propert acquisition, inspection, construction, rehabilitation, financing, marketing or sales. Housing Developer fees are not allowable Net Development Costs. - Income Verification - The act of obtaining documentation that establishes that the resale buyers' income was at or below the defined percent of the area median income when adjusted for famil . size. Such d~umentation may include a copy of the buyer's IRS W-2 form, pay stubs, employer verification, mortgage credit analysis worksheet, loan application, or tax returns. See Mortgag~e Letter 2002-01, Attachment 4, for the requirement to retain income verification. .2 Exh. "H" ~ 8 CDC/2003-5 Land Use Restriction Addendu - A legally binding contractual agreement between the Department of Housing and Urban Development and the nonprofit organization or government entity imposing restrictions on the resale of a HUD home that the nonprofit organization or government entity purchased at a discount of 10 percent or greater. See Appendix B. (.ow to Moderate Income Buyer ~ A purchaser whose. income does not exceed the defined percent of the median income, when adjusted for family size, for the area in which the property is located. Non-AUowable Net Development Costs - Those costs that are not permitted to be included in the Net Development Cost calculation. . Property Manager - Maintains a property that is in the inventory of a nonprofit organization or government entity. TyPical activities of a property manager are lawn c~, trash removal, buildin security, and repairs of minor damage caused by vandalism or the weather. Propert management fees related to the periodic inspection and/or minor maintenance of a property are allowable Net Development Costs to the extent that they are reasonable and customary for the area in which the property is located. See Mortgagee Letter 97-5 and Appendix A. Reasonable and Customary Fees.- Those fees that are consistent with recent historical f~s for the area in which the real estate transaction occurs. Fees included in the Net Development Cost calculation must be reasonable and customary. and HUD will disallow excessive fees. Revitalization Area - An area deSignated by HUD that meets the criteria stated in Housing . Notice H 00-16. Secondary Financing. Program - Financing in the form of seco.nd mortgages that may be . forgivable, run for a specific term, with or without monthly mortgage payments. Subject to certain conditions, this financing may be used for a borrower's downpayment, closing costs, prepaid expenses, or any combination of these. S~e paragraph 1-13, Handboc>k 4155.1, Rev-4, CHG-l, "Mortgage Credit Analysis for Mortgage Insurance on One-ta-Four Family Properties" and Mortgagee Letters 94-2 and 00-08. . 3 . Exh~ "H" - 9 CDC/2003-5 Appendix D . Ust of Reference Documents The following list of documents applies to qualified nonprofit organizations that have been pre-approved to participate in HlJD's Single Family Housing Programs. Nonprofit organizations must have knowledge of, and comply with, the instructions contained in Ihese documents, any amendments to these documents, and any future documents issued. HUD periodically publishes new documents relating to the activities of IlQll-profit organizations and government entities. Non-profit organizations and government entities can register for automatic e-mail notification of new HUD handbooks, mortgagee letters and housing notices on the internet at: http://www.hud.gov/officesJhsglstblref/hsgrcont.cfm. All of the documents listed herein may be accessed online at: http://www.hudclips.orglcgilindex.cgi HUD Regulations 24 CPR Part 291, governs the sales of HUD homes " 24 CPR Part 2m, governs HUO's Single Family Mortgage Insurance programs HUD Mortgagee Letters ML# 92-33 Clarifications nd Modifications to the 203(k) Program ML# 94-02 Secondary financing for Nonprofit Agencies ML# 94-11 Revisions to the 203(k) Progra ML# 95-40 Revisions to.the"203(k) Mortgage Progra . ML# 96-21 203(k) wlParticipation by State & Local Housing Agencies and Non-Profit Organizations ML# 96-52 Non Profit Agencies as Mortgagors ML# 96-59 Moratorium on Investor Loans in Conjunction with the 203(k) ML# 97 -05 Revised Escrow Commitment Procedure ML# 98-02 Combining EEM and.203(k) ML# 98-11 Concerns about 203(k) Underwriting, Loan Processing ML# 00-08 Nonprofit Agency Participation in Single Family FHA Activities ML# 00-25 203(k) Mortgage Progra. - Single Family. Loan Production ML 2002-01 Nonprofit Participation in FHA Single Family Activities - New Requirements and Restrictions HUD Handbooks HUD Handbook4155.1 Chapter I: Underwriting the mortgage, Section -5 Non profit organizations and state and local government agencies HUD Handbook 4240.4 REV -2: 203(k} Rehabilitation Home Mortgage Insurance HUD Notices HUD Property Disposition Notice 94-74 HUD Property Disposition Notic~ 00-16 HOC National Reference Guide Secondary financing by non profit agencies Chapter 2 page 2-5 Exh. "Hu - 10 CDC/Z003-S U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 January 9, 2002 OFFlCEOFmE ASSISTANT SECRETARY FOR HOUSIN -FEDERAL HOUSING COMMISSIONER MORTGAGEE LEITER 2002-01 )'0: AIL APPROVED MORTGAGEES ALL APPROVED NONPROFIT AGENCIES SUBJEcr: Nonprofit Participation in Single Family FHA Activities - New Requirements and Restrictions . This Mortgagee Letter clarifies the requirements that new nonprofit applicants must meet . to participate in FHA's SingleFamily activities, including purchasing discounted HUD Homes, . serving as mortgagors, and offering secondary financing assistance. Nonprofits that are seeking FHA approval, and FHA-approved nonprofits currently listed on the nonprofit roster seeking re- approval at the expiration of their current certification, must meet the requirements of this Mortgagee Letter and Mortgagee Letter 00.:.08. Mortgagees must asSure that nonprofit mortgage loan applicants meet the eligibility criteria and comply with the required disclosures. The' . 'changes described in this Mortgagee Letter and attachments are effective'30 days from the date. ~~k~' . NEW POLICY DIRECTIVES: RESPONSmll.lTIES OF THE MORTGAGEE AND TIlE NONPROFIT AGENCIES Currently, mortgagees may not approve an application for FHA mmgage insurance from a nonprofit agency without verifying its approval status, applicable geographical restrictions, ~d specific restrictions on property inventories. This Mortgagee Letter supplements and clarifies FHA's current requirements for nonprofit participation in FHA programs and review requirements for mortgagees, as stated below. General Clarification Because this Mortgagee Letter is intended to clarify a number of application requirements for nonprofits interested in participating in FHA's programs, an updated application checklist is attached (Attachment I). This new application guide supercedes the checklist provided to nonprofits in Mortgagee Letter 00-08. In addition, the Affordab'le Housing Program Format Exh . \\ H" - 11 CDC/2003-5 (Attachment 2) has been revised slightly, to clarify FfIA's requirements. This new version also supercedes the version attached to Mortgagee Letter 00-0&. Conflict of Interest Issues The Department has a responsibility to ensure that no conflict of interest exists between nonprofit agencies, .their boardS of directors, their principal staff or any other entities that ma . participate in operating their affordable housing programs. Therefore, FHA will require that members of the board of directors (Chief Executive Officer, Pre~ident, Vice President, Secretary, aDd Treasurer - excluding non-voting members) and salaried or voluntary principal staff (Executive DirectorlPresiftent or Vice President, ProjectlProgram Director, or similar position) provide their social security numbers (SSN) to FHA. FHA will keep the SSNs confidential. The SSNs will be used only' to assure the Department that no conflict of inte~st relationship exists and the board and staff have no outstanding unpaid government loans, sanctions, foreclosures, , . inappropriate transfers of real property, business relationships, etc. It is a conflict of interest for a nonprofit to employ staff who also work for and receive financial be~efits from a for-profit entity that is providing the nonprofit with services related to the nonprofit's affordable housing plan. Board members must serve on a voluntary basis, and may not be paid nor receive any {;ompensation for any services,they provide in the , implementation onhe nonprofit's affordable housing program. FHA will collect information on the job responsibilities of all Board members to ensure that their occupational activities and obligations do not conflict with the work of the nonprofit. HUD strictly prohibits the sale or lease of properties with FHA financing and/or discounted HUD Homes to any of the nonprofit's officers, directors, elected or appointed officials: employees, or business associates, either during , their tenure or for one year thereafter, or to any individual who is related by blood, marriage, or law to any of the above. Ineligible Participants To be approved and to maintain approval, neither the nonprofit, nor any officer, partner, director, principal or employee shall: . Be suspended, debarred, or otherwise restricted under the Department's regulations in 24 or 25 CFR, or similar procedures of any other Federal agency. . ae indicted for, or convicted of, an offense which reflects upon ,the responsibility, integrity, or ability of the nonprofit to participate in FHA activities. . Be subject to unresolved findings as a result of HUD or other government audits or investigations. . Be engaged in activities that do not conform to generally accepted practices of prudent non profits or that demonstra~e irresponsibility. ' 2 Exh. "H" - 12 CDC/2003-5 These requirements are applicable at the time that the nonprofit applies for approval and at all times while it is an approved nonprofit. Consultant Services Nonprofit agencies must have the administrative capacity to develop and carry out their FHA approved homeownership plans in a timely and successful manner. Nonprofits that obtain consultant services to help implement their homeownetship programs are not relieved from this requirement. The nonprofit's operations must be independent of the influence, control, or direction of the consultant or any other ootside party, particularly those seeking to derive profit or gain from a proposed project (such as, but not limited to, landowners, real estate brokers, bankers, contractors, builders, or consultants). Therefore, to assure that the consultant services are provided on an 'arms length' basis, the "nonprofit must disclo~ any written and/or side agreements with parties that may derive financial gain through the homeownership program. Disclosure should identify the name of the busin~s entity, and the individuals from the compan who will be working with the nonprofit, the .terms of the relationship and how the party will be compensated. Failure to adequately disclose may result in a conflic~of-interest determination. In addition, consultant services - administrative; management, financial, or otherwise - provided under an independent contractor relationship (as opposed to employer-employee relationship) shall not constitute more than half of the nonprofit's activities. This measurement will be calculated b evaluating: the ratio of nonprofit staff to contracted or cOlisultant staff; the" ratio of hours devoted to the implementation of the Affordaple Housing Plan by nonprofit staff" " Versus contracted or consultant staff; and the funds devoted to paying nonprofit staff compared to those paying contracted or consultant staff. In other words, the nonprofit must have the in-hous~ resources and capacity to run its own programs, and contract for services on a temporary " and supplementary basis. _ Financial Capacity Nonprofit agenCies must have the financial capacity to operate their homeownership " programs. Nonprofits will be required, if applicable, to submit the following with their . .' . application or recertification package so that FHA may assess each organization's financial stability in terms of cash balances, assets and liabilities, annual expenses, and cash flow from operations: . Consistent with the requirements of the Single Audit Act Amendments of 1996 (31 U.S.C. ~~7501-07), nonprofit applicants that expended $300,000 or more in Federal awards in the most recent fiscal year are required to submit for such fiscal year a financial audit by the applicant's Independent Public Accountant certifying that the applicant maintains internal controls over Federal !lwards; complies with 3 Exh. "H" - 13 CDC/2003-S applicable laws, regulations, and contract or grant provisions; and prepares appropriate financial statements. 'Federal awards' include discounts associated with the.purchase of HUD Homes and FHA-insured financing, as defined in OMB Circular A-133, "Audits of States, Local Governments, and Nonprofit Organizations," with which the audit must be in conformance. Additionally, applicants are required to submit their most recent quarterly financial statement along with certification from a CPA or other fmancial professional attesting that this information accurately represents the financial condition of the nonprofit agency. . Applicants that expended less than $300,000 in Federal awards in the most recent fiscal year must submit a complete, un-audited year-end financial statement for such fiscal year, prepared in accordance with generally accepted accounting principles and reporting practices and must include an auditor's review report, a treasurer's report and an supplemental schedules. Additionally, applicants are required to submit their most recent quarterly statement, along with certification from a CPA or other financial professional attesting that this information accurately represents the financial condition of the . nonprofit agency. Based on an analysis of submissions, FHA may limit the number of properties a nonprofit may purchase at a discount and/or purchase with FHA-insured financing. . . . Nonprofit Status . Eligible nonprofits must have two years 501 (c)(3) IRS tax-exempt status. Nonprofits must submit to FHA their IRS letter of determination to prove their 50 I (c)(3) tax-exempt status. In a~dition, nonprofits must certify compliance with IRS regulations that require nonprofits to notify the IRS of any substantial and material changes in the nonprofit's character, purpose, or methods of operation [IRS Reg. L50 I (a)-l (a)(2)60 L20 I (h)(3)(ii)). Finally, nonprofits may not assume the name and employer identification number (EIN) of another dormant or defunct nonprofit. . Clarification of Experience Criteria Nonprofit agenCies must meet strict housing development experienCe requirements. The nonprofit must have a minimum of two consecutive years, within the last five years, of housing development experience. Housing development experience is defined as acquisition, rehabilitation, and sale to low-ta-moderate income persons. Hiring of experienced personnel does not relieve the nonprofit of the experience requirement. Organizations that do not meet this experience requirement may be able to obtain limited approval if they have at least one 4 Exh. "W' - 14 CDC/2003-S year of housing development experience and one year of other related housing provider experience. To be considere"d, the organization's "other related housing experience" must demonstrate that the organization has the financial and administrative capacity to purchase, rehabilitate and resell homes to low to moderate-income families. Adequate Facilities To ensure that all approved nonprofits have adequate space for employees and records, .FHA will now require the submission of photographs and floor plans for the agency's facilities. This new requirement is identical to the requirement for lenders seeking FHA approval. Additionally, nonprofits must have office(s) located within a 200 mile radius of the geographical areas in which they plan to do business, as identified in the nonprofit's Affordable Housing Plan. For each office, nonprofi~ are required to have adequate office space, equipment and clerical assistarrce," so that employees may perform their duties in a responsible manner. This includes, but is not limited to; a desk, telephone, and photocopying equipm~nt. A nonprofit's main office must be its designated facilit to which the Department directs ail communications about the management affairs of the nonprofit, arid from which the public obtains information on the activities of the nonprofit." The nonprofit's facilities m~st be located in a space that is separate and apart from an other entity. A nonprofit may share general reception-type entrances or lobbies with another business entity or nonprofit. However, the facilities must be clearly defined to the public, so that visitors will know, at all times, exactly with which entity they are doing business. This includes a sign and other common means of identification used by nonprofits and business entities. Evidence of Perfonnance Nonprofits applying to continue participating as Mortgagors must submit to HUD information on the performance of all of their FHA-insured loans, as described in Attachment I, #15. HUD will examine property purchase prices and dates, resale prices and dates, default rates, " and evidence of rehabilitation completion (in the case of 203(k) loans) to assess the nonprofit's capabilities and compliance with FHA requirements. Quality Control Plan As a condition of approval to participate in FHA activities, nonprofits must sqbmit a written Quality Control Plan that explains the organization's internal and external audit and monitoring procedures. The Quality Control Plan must include 5 Exh. "H" 15 CDC/2003-5 periodic reports tbat identify for senior management areas of deficiency, including fraud or violations of FHA regulations and its own policies and procedures, errors and omissions, and unacceptable patterns or trends. The Quality Control Plan must describe in detail the nonprofit's review procedures and outline the corrective actions to be initiated immediately when .discrepancies are found. Reporting Requirements With the issuance of this Mortgagee Letter, nonprofits will be required .to include in their annual reports information on all REO properties purchased at a discount - "10% or higher. These reports are due each February to the Homeownership Center Director and provide information about the nonprofit's program accomplishments over the past calendar year (See Mortgagee Letter 00-08, Attachment 3). Previously, only nonproflts that purchased REO properties at a 30% discount were required to submit this annual report. Properties purchased under an Asset Control Area (ACA) agreement must be included in the report, but listed separately from other purchases. In addition, nonprofits must submit a list of all business partners participating in the rehabilitation and resale of the property; The list should include the name of the company, the . name of the principals, the name and title of all staff with whom the nonprofit is working, a description of the services provided by thecompaIiy, and an account of the costs and fees associated willi those services. This information must be reported for all real estate agents, lenders. and contractors involved in the reh~bilitation and sale of REO property_ Record-Keeping Requirements In order to accommodate on-site reviews, the non-profit. agency should maintain records .' in a specific format. Attachment 4 lists the required items to be included in each property file. F'lles should be maintained individually for each property purchased. sold. or leased. In addition to the individual property files, other documents should be maintained for review and are listed .' in Attachment 4. Accounting records should be maintained in a property specific format so that cost calculations can be made for all expenses related to each specific property. Files should be maintained for a minimum of three years after the property is sold by the nonprofit. . '. Mortgagee ResponsibilitieS As established in Mortgagee Letter 00-08, mortgagees may not process any loan application on behalf of a nonprofit.agency without an approval letter, dated within the past two years, verifying that the nonprofit is a participating agency and identifying any conditions or . limitations placed on the nonprofit's activities. In addition, the mortgagee 6 Exh. "H" - 16 CDC/2003-5 is respc)nsible for assessing the financial and management capacity of the nonprofit to carry ou its affordable housing program. The Credit Evaluation responsibilities of the mortgagee are detailed in Mortgagee Letter 00-08, Attachment 6. HUD will also use a Financial Capacit Worksheet (Attachment 3) to evaluate the nonprofit's financial capacit when certifying nonprofits for participation in FHA programs. This worksheet may also be used by the . mortgagee's underwriters to assist in assessing the nonprofit's financial condition. lilfonnation Collection Requirements The information collection requirements referred to in this Mortgagee Letter have been approved by the Office of Management and Budget (OMB) under the Papef\Vork Reduction Act of 1995 (44 V.S.C. Chapter 35). The OMB number issued for this requirement is OMB 2502- 0540. Questions regarding this Mortgagee Letter should be directed to the FHA Homeownership Centers in Atlanta (1-888-6964(87), Denver (1-8QO-543-9378), Philadelphia (l-800-440-8647)and Santa Ana (1-888-827-5605). Sincerely, John C; Weicher Assistant Secretary for Housing- Federal Housing Commissioner 7 Exh. "H" - 17 CDC/2003-5 Attachment] NONPROFIT APPROVAL CHECKLIST Please place a check mark next to the activity for which your organization is seeking approval. Use this fonn as a checklist for your application and include it in your application submission. Transitional Housing is not acceptable under Single Family Programs. a The BUD Homes Program (Applicants seeking approval to purchase HUD Homes must sub~t the items requested in numbers I - 21 below, with the exception of numbers 15 and 18.) a Nonprofit Agencies as M~rtgagors (AlSplieants Seeking approval to serve as mortgagors must submit the items requested in numbers 1-17, as well as 20 and 21.) o Secondary Financing (Applicants seeking approval to provide secondary financing must submit the items requested in numbers 1 - 18 below, with the exception of numbers 2,13,14, IS, and 17~ Items not required areindi~ with an asterisk (*). Applicants must also respond to number 20. An affordable housing program narrative is not required.) Required Nonprofit Agency Information Name of Organization Address City Zip Code State Contact Person . Telephone Number Fax Number E-mail Address To apply for participation in FHA programs, a nonprofit agency must submit the following documentation to the HOC that has jurisdiction over their primary location (see . mailing instructions at the end of this checklist): o .1. An IRS "Letter of Detennination" which verifies approval under Section SO I (c)(3) . as exempt from taxation under Section 50 Ita) of the Internal Revenue Code of 1986, as amended. The organization must have an effective date of exemption, as defined by 1 Exh. "H" - 18 'CDC/2003-5 the IRS, under ~tion 501(c)(3) at least two (2) years prior to the HOD nonprofit application date. In addition to the Letter of Determination, a certification signed by an . authorized repr~ntative of the organization certifying that: the organization's approval for tax exemption has not been modified or revoked by the IRS; that the p~ activities fQr which the organization ~ks HUD approval to participate in are consistent . with the activities and purposes for which the IRS granted tax-exempt status; and that the nonprofit has notified the IRS of any substantial and material changes in its character, purpose, ot methods of. operation. Q .2. A conformed copy of the articles of oig;mi'nltion and by-laws, if applicable, of the nonprofit agency. Articles of organization means articles of incorporation, charter, articles of association, constitution, trust instrument, or any other written instrument by which an organization is created. A conformed copy is a copy that agrees with the original and all amendments to it These documents must be signed and dated by the appropriate persons under applicable State law. The co.nformed copy of each document.must be accompanied by a written declaration signed by an authorized representative of the organization certifying that the copy is a complete and accurate copy of the document With respeCt to an association's articles, the certification.must also indicate that two or more individuals, whoseoames are identified in the articles, have signed. As an alteri1atlve to the foregoing declaration, an organization may submit a conformed . copy of its articles approved and dated by the appropriate state authority. [J. 3. Certification signed by an authorized representative of the nonprofit agency in the . f(>llowing fonnat certifying that the nonprofit agency has a voluntary Board of Directors. Required Wording of Certification. (Name of Nonprofit agency) certifies that the members ofits Board ofDiiectors serve in a voluntary capacity and receive no compensation, other than reimbursement for. expenses, for their services and the nonprofit agency oPerates in ainanner so that n9 part of its net earnings is passed on to any individual, . corporation, 'or other entity. Print authorized representative's name Signature Date Title 2 Exh. "H" - 19 CDC/2003-5 WARNING: HUD will prosecute false claims and statements. Conviction may result in criminal andlorcivil penalties. (18 US.C. 1001, 1010, 1012; 31 U.S.c. 3729, 3802). o 4. A list of all Board members' names, board positions, length ofte~ on board, and each member's term expiration. In addition. information on the Board member's employment must be provided. Submit the name of the organization where employed, position andtitIe of employee, and nature of the organization's business. o 5. A list of all principal staff, and resumes for principal management staff of the nonprofit agency. ResUmes must demonstrate experience iIi developing and 9dministering housing programs. STAFF EXPERIENCE DOES NOT RELIEVE THE NONPROFIT ENTITY OF THE REQUIRED TWO YEARS OF ORGANIZATIONAL EXPERIENCE AS DESCRIBED IN ITEM 16. o 6. Provide yoUr organization's FedCra1 Employer IdentifiCation Number (EIN), any subsidiary organization's EIN, as well as the Social Security number for each voting . Board member and salaried and voluntary principal staff. o 7.. Organizational resolutions delegating signature authority to sign loan applications and/or sales contracts on behalf of the organization. These resolutions must be signed . and dated by the appropriate persons under applicable state law and the organi'7lltion's articles and other governing documents. o 8. Evidence of the administrative capability of the applicant to deVelop and carry out the proposed homeownersbipprogram in a reaso~ble timeframe ~d a successfu~ manner; Include the past experience of the applicant; if any, in acquisition. rehabilitation, counseling, and/or administration ofahomeownersmp program or other affordable housing programs. 'Also, include a copy of the nonprofit's Quality Control Plan for monitoring program activities and compliance with FHA. . . requirements. Based on the level of administrative capacity, HUD may limit the number of properties purchased at a discount and/or mortgages insured by FHA. o 9. Evidence of financial capacity of applicant to cany out proposed homeownership program, including current, year-end audited financial statements, profit and loss statements, and balance sheets. Based on the level of financial capacity, HOD may limit the number of properties purchased at a discount and/or the number of mortgages insured by FHA. 3- Exh. "H" ;... 20 CDC/2003-S o 10. Identification of other business partners, such as Real estate agents,. lenders, . rehabilitation contractors and consultants providing atlmini!:trative, financial. and/or management services. Identify the company by name and list staffwith whom you will work. Explain the nature and cost of the services, and how the nonprofit exercises control over the consultants. l:J II. Certification signed by an authorized representative of the organi7;ltion certifying to HUD that the nonprofit is acting on its own behalf and is not under the influence, control, or direction of any party Seeking t9 derive a profit or gain from the proposed project, such as, but not limited to, a landowner, real-cstate broker, banker, contractor, builder, len4~ or ~~tant. TIm NONPROFIT MUST OVERSEE AND MAINTAIN CONTROL OF TImIR OPERATIONS AND MAKE ALL DECISIONS. ~ Wording of Certification . I certify that (Name ofN9nprofit agency) is acting on its own behalf and is not. under the influence, control, or direction of any party seeking to derive a profit or a gain from the proposed project, sUch as, but not limited to, a landowner. real- estate broker, banker, contractor, builder, lender, or consultant. Print authorized representative's name Signature Title. Date WARNING: HOD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S:C. 3729.3802). l:J 12. Copy ofnonproflt agency's most recent approval letter issued by a HUD Office, if available. . . l:J "'13. Descriptio~ of the Affordable Housing Program for each local area in which the n~)Qprofit agency intends to be active (see Attachment 2 for narrative format). The Program plan must be resubmitted for approval every two years (with evidence of performance hi promoting homeownership). 4 Exh. "H" - 21 CDC/2003-S o .14. Board resolution adopting the completed Affordable Housing Program (see Attachment 2). This resolution must be signed and dated by the appropriate persons . under applicable state law and the organization's articles and other governing documents. . o !tIS; For participation as a mortgagor, the nonprofit agency must provide evidence of past and current performance of FHA insured loans, inclUding addresses and FHA . case numbers. certification of completion for each 203(k) property, date sold, sales price. and full name and teleph()ne number of buyer. o 16. Evidence that the nonprofit agency has a Dunimum 'oftwo consecutive years, Within the lastS years, of housing development experience. Hiring of experienced staff does not relIeve the nonprofit agency of the experience requirements. o .17. Name, adchess and contact of any lending institution or bank that has provided financing to the nonprofit o 18. Copies of the mortgage and note used by, or proposed to be used by, the nonprofit agency to secur:e financing (only required for those nonp~fit agencies ~eeking a~proval as providers of secondary financing).'. NOTE: Once HUD approval is granted. nonprofit ~gencies are still required to obtain credit qualification from the lender for each mortgage originated. o .19. For nonprofits seeking approval to purthase BUD Homes, completed IRS form W-9, Request for Employer Identification Number (EIN) and Certification, and HUD's form SAMS - 1111, Payee Name and Address. These forms are needed to provide the nonprofit with a Name Identification Number (NAill) that is required to bid on REO properties. o 20. Photographs of facilities and floor plans. o .21. In the event that a nonprofit is approved to operate a lease-purchase program, copies of the lease with option to buy form used by, or propoSed to be Used by, the nonprofit in establishing the parameters of these aiTangements. . 5 Exh. "H" - 22 CDC/2003-S NOTE: To be approved for this activity, nonprofits must adequately. explain and document the conditions justifying the need for a lease-purchase arrangement, as . opposed to an immediate sales program.. On a separate sheet of paper, please include the following: I certify that the . information submitted in response to the "Application .and/or Recertification Package" is accurate. . Name of Authorized Nonprofit Agency Representative Signature Date W ARNJNG: HUD will prosecute false claims and statements. Conviction may result in . criminal andlorcivil penalties. (18 U.S.c. 1001, 10to, 1012; 31. U.S.C. ~n9, 3802). REMINDER: Alldocuments provided should be either original documents or noted as true and certified copies of originals. I RecertifiCation Requirements If the nonprofit agency is seeking recertification of a previous approval they must provide, in addition to Items 1-21 above, a detailed description of the activities undertaken during their period of approval. Utilize the format established in . Attachment (5). . I Mailing Instructions and Information Requests I . Once the application package has been completed, nonprofits must submit all application materials. including the affordable housing program (except non profits applying for approval to provide secondary financing), to the HOC listed below that has jurisdiction over their primary location: . . Atlanta HOC jurisdiction: Department of Housing and Urban Development Atlanta: Homeownership Center .Five Points Plaza 40 Marietta Street Atlanta, Georgia 30303 \ 6 Exh. "H" - 23 CDC/2003-S -.... . . ATfN: Program Support Division; Nonprofit Approvals For Bdditional information from the Atlanta HOC regarding the completion of the application or to check the status of an application approval, please call (4o.t) 331-5001, . ext. 2055, or toll free 1-888-696-4687 ext. 2055 Mailing Instructions and Information Requests (Continued) Denver HOC jurisdiction: Department of Housing and Urban Development Denver Homeownership Center, Wells Fargo Tower North 633 17* Street Denver, CO 80202-:-3607 ATIN: Program Support Divisio~ Nonprofit Approvals For additional information from the Denver HOC regarding the completion of~e application or to check the status of an application approval, please call (303) 672-5216, or toll-free 1-800-543-9378. Philadelphia HOC jurisdiction: Department of Housing and Urban Development Philadelphia Homeownership Center . 100 Penn Square East Philadelpbia,PA 19107 . . ATTN: Program Support Division, Nonprofit Approvals . For additional information from the Philadelphia HOC regarding the completion of the application or to check the status of an application approval, please call (215) 656.0516, or toU-free 1-800-440-8647. Santa Ana HOC jurisdiction: Department of Housing and Urban Development 160 N. Stone Avenue Tucson, AZ 85701 Attention: Nonprofit Team For additional information from the Santa Ana HOC regarding the completion of the application orto check the status of an application approval, please call (520) 670-6237, or toll-free 1-888-827-5605. 7 Exh. "H". - 24 CDC/2003-S Appendix B I LAND USE RESTRICl10N ADDENDUM This addendum is incorporated into, and made part ot; the FHA Sales Contract for the property located at . . executed this same day of .20-J between (Purchaser) and the SecretaIy of the United States Department of Housing and Urban Development (SeDer). I.Unless.&n exception is granted in writing by the Seller in an FHA approved Affordable Housing Plan, the Purchaser shall utilize the property to expand affordable housing opportunities by: A. Completing needed repairs to bring die property in compliance with.locaI housiDg code followed by n:sa1e,'Iease, or lease purchase only to a per:son who intends to occupy ~ property as his or her . principal residence and whose income Is 'at or below liS percent of the median iDcome in the area, . when adjusted for family s~ or State, government entity, tribe, or agency thereot: B. If sold, the Purchaser shaD resell the property for aD amount nOl in excess of 110 pcn:ent of the Net . DeyelopmCnl Cost. Net Development Cost is the total HUD-allowable costs to purcbase, rehabilitate. and resell the property. C. The property may BOt be occupied by or resold to any of the Purchaser's officers, dim:tors, e1ected or appoinlcd officials, employees, or business associates, either during their tenure Oc for one year thereafter, or to any individual who is related by blood, maniage, or law to anyoCthe above. D. There may be no conflict of interest with individuals or firms that may provide acquisition or rehabilitation funding; management, sales or rehabilitation serVices; or other services associated with the property. U. Purchaser musfprovide periodic reports, in the fonnat and frequency specified by HUD regarding the disposition of the property subject to this Addendum. . m. This Addendum survives the expiration, if any, by operittion ofIaw or otherwise, ofthi: FHA Sales Contract. and shall tenninate five years from thci date contained herein. .Purchaser Witness Secretary of Housing and Urban Development . Witness By: (Type Name and Sign) Exh. "H" - 25 CDC/2003-5 EXHIBIT "I" Form of Agency Grant Deed (for Completed New Agency Home) (TO BE PROVIDED BY AGENCY UPON BUYER BEING IDENTIFIED) 03-02-03 ANR-Meadowbrook Development Agreement Exh. " I" - 1