Loading...
1998-359995 ~~U~. . . 1756 DOC # 19C)Q-tO~ J;CH:;g j:~ . . U 'i-JU l. .-...J !a:CORDING REQUESTED BY "UNITED TITlE COMPANY' MAY AND WHEN RECORDED MAIL '1'0: JUN 15, 1998 8:00 AM 4 1998 OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE GREGORY J. SMITH, COUNTY RECORDER FEES: 16,00 o t T( DF alGI t+1 TA5 COMMUi-H,"I DGNe:t-OfM~NT /X"5f. ~05. s. r ,,':.) \-LAp 1-'" tz 1?/,ICif...bl,ASI CA QZDz-4 1IIIIIIIIIIIIIIIIIIIIIIIIIIIIUIIIIIIIIIIIIIII~11I111 11111111 GREEME'Nt'r "'e"UIUer s use UIUY NOTICE: TIllS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJEeT TO. AND-OF LOWER PRIORITY THAN THE LIEN- or- SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this Twenty second day of April, 1998, by North Coast Housing, Inc., a California Nonprofit Corporation owner of the land hereinafter described and hereinafter referred to as "Owner," and The City of Encinitas, a municipal Corporation present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as "Beneficiary"; WITNESSETH THAT WHEREAS, Owner has executed a deed of trust, dated 4/23/98 , to United Title Company, as trustee, covering: Lots 19 and 20 in Block 35 of Cardiff "A", in the City of Encinitas, County of San Diego, State of California, according to Map thereof No. 1334, filed in the Office of the County Recorder of San Diego County on May 12, 19tt. to secure a note in the sum of $ 51,039.00, dated 4/23/98 , in favor of Beneficiary, which deed of trust was recorded May 7; - U98" , as Instrument No. 98-265359 , Official records of said county and WHEREAS, Owner has executed, or is about to execute, a deed of trust and note in the sum of $ 197 , 000 . 00 / ,dated Jnne 2, 1998 , in favor of Los Padres Savings Bank , hereinafter referred to as "Lender" I, payable with interest and upon the terms and conditions described therein, which deed of trust is to be recorded concurrently herewith; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute alien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust above mentioned. SUBORDINATION AGREEMENT CONTINUED ON NEXT PAGE . . CONTINUATION OF SUBORDINATION AGREEMENT liS? NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: (1) That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust first above mentioned. (2) That Lender would not make its loan above described without this subordination agreement. (3) That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deed of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and (d) An endorsement has been placed upon the note secured by deed of trust first above mentioned that said deed of trust has by this instrument been subordinated to the lien or charge of the deed of trust in favor of Lender above referred to. NOTICE: TillS SUBORDINATION AGREEMENT CONTAINS A PROVISION WIllCR ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OR WIllCR MAYBE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. The City of Encinitas, N00/\4ng~C BY: t N a municipal Corporation ~(~~ (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. (CLTA SUBORDINATION FORM "A") . 1758 STATE OF CALIFORNIA ) ) SS COUNTY OF SAN DIEGO ) On April 30, 1998, before me, Leona V. Kauflin, Notary Public, appeared Lauren M. Wasserman, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ~..~...t-t....... ..............., f 0 ..:... . Leona V. Kauflin ~'. 'Comm. # 1044127 ~ ::3< . ~a NOTARY PUBllC.cAI..lFORNIA t 1 .< ".. SAN DIEGO COUNTY i '" " My Comm. Exp Nov. 3. 1998 t................................... . ~~~/v~~ eona V. Kauflin, Notary Pub . ~ G:\PL-95\ACK-W ASS ,.. .. CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT 1759 Signature ~ CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the document. [ ] INDIVIDUAL [ ] CORPORATE OFFICER(S) [ ] PARTNER(S) - [ ] LIMITED [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] GUARDIAN/CONSERVATOR [ ] OTHER SIGNER IS REPRESENTING: TITLE(S) ] GENERAL Name of Person or Entity Name of Person or Entity ~ Though the date requested here is not required by law, it could prevent fraudulent reattachment of this form. TillS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE '" '\.~. PROMISSORY NOTE NOTICE TO BORROWER TIllS DOCUMENT CONTAINS PROVISIONS RESTRICTING ASSUMPTIONS AND IS SECURED BY A DEED OF TRUST $51,039 .E "ta C l'~ . April 23 nCffil s, a IJ.orma , 1998 FOR VALUE RECEIVED, the undersigned, North Coast Housing, a California Nonprofit Public Benefit Corporation with its principal office at 3355 Mission Ave.. Ste. 221. Oceanside. CA 92054, ("Borrower"), hereby promises to pay to the order of the City of Encinitas, a municipal corporation ("City" or "Holder"), at 505 S. Vulcan Ave., Encinitas, CA 92024, the sum of Fifty-One Thousand Thirty-Nine Dollars ($51.039), or so much thereof as may be advanced by Holder to Borrower pursuant to a loan provided to Borrower under the Community Development Block Grant ("CDBG") Program, which is secured by a Deed of Trust and Assignment of Rents, and a Regulatory Agreement, dated as of this date (collectively the "Loan Documents") between Borrower and City. Borrower also promises to pay to the order of Holder in the amount, form and at the times hereinafter provided. The terms and conditions of the Loan Documents are incorporated by reference herein. 1. Borrower's Obligation. This Note evidences the obligation of Borrower to Holder hereof for the repayment of funds loaned to Borrower by City to partially refinance loans on certain real property, appurtenances, improvements and fixtures thereon, described in the Loan Documents. 2. Prohibition Against Transfer of Interest. Borrower shall not make any sale, assignment or conveyance or transfer in any other form, nor any further pledge, encumbrance or mortgaging of the Property or any part thereof or any of its interests therein, other than in accordance with the terms of the Loan Documents. 3. Payment of Indebtedness. a. The principal amount of the Loan, which shall bear no interest except as provided in paragraph 8 hereof, will be due and payable, April. 2053 ("Maturity Date"). This Note may be prepaid in whole or in part at any time, and from time to time, without notice or penalty . b. Each full year, from the original execution date, in compliance with the Loan Documents, the Note amount shall be reduced by an amount equal to 1/55 (1.8%) of its original principal amount. It is anticipated that at Maturity Date the balance of the Note should be zero, and that all conditions agreed upon should be met. At that time, the Note will be forgiven and all restrictions against the Property will be reconveyed. City of Encinitas-Promissory Note Page 1 to. 4. Place and Manner of Payment. All amounts due and payable under this Note and the Loan Documents are payable at the principal office of City set forth below, or at such other place or places as Holder may designate to Borrower in writing from time to time, in any coin or currency of the United States of America, which on the respective dates of payment thereof shall be legal tender for the payment of public and private debts, and shall be immediately available funds (cashier's or certified check). 5. Late Charge. Borrower agrees that it would be impracticable or extremely difficult to fix the actual damage to Holder in the event Borrower shall be late in the making of any payment due hereunder, and that therefore in the event Borrower shall fail to make any such payment within fifteen (15) days after the due date thereof, the holder, at its option and in addition to any other remedy hereunder, may impose on Borrower, and Borrower shall pay, a "late charge" of five percent (5%) of the amount of such delinquent payment. 6. Borrower's Waiver. To the extent permitted by law, Borrower and every guarantor of this Note, or of the obligation represented by. this Note, hereby waives (a) notice of default or delinquency, (b) notice of acceleration, (c) notice of nonpayment, (d) notice of costs, expense and losses and interest therein, (e) notice of interest on interest and late charges, (t) diligence in taking any action to collect any sums owing under the Note, (g) presentment for payment, demand, protest, and notices of dishonor and/or protest; (h) the benefits of all waivable exemptions; and (i) all defenses and pleas on the grounds of any extension or extensions of the time of paym~nt or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. 7. Attorneys' Fees. Borrower hereby agrees to pay all costs and expenses, including reasonable attorneys' fees, including any such fees paid to the City Attorney of City which may be incurred by Holder in the enforcement of this Note, the Loan Documents or any term or provision of any thereof. This provision shall be construed in accordance with California Civil Code Section 1717. 8. Default under other Loan Documents and Acceleration. All covenants, conditions, and agreements contained in the Loan Documents are hereby made a part of this Note. Borrower agrees that the unpaid balance of the principal amount of this Note, shall, at the option of Holder, if so provided in the Loan Documents executed by Borrower, become immediately due and payable, and thereafter until paid bear interest at the rate of ten percent (10%) per annum, upon: (i) the failure of the Borrower to make any payment hereunder as and when due; (ii) upon the failure of Borrower to perform or observe any other term or provision of this Note; or (iii) or upon the occurrence of any event (whether termed default, event of default or similar term) which under the terms of the Loan Documents shall entitle Holder to exercise rights or remedies thereunder. 9. Nonrecourse Obligation. Neither Borrower nor any partner, officer, director, or stockholder of Borrower shall have any direct or indirect personal liability for payment of the principal of, or interest on, this Note. The sole recourse of Holder with respect to the principal of, or interest on, this Note shall be to the property, real and/or personal, securing City of Encinitas-Promissory Note Page 2 .. the indebtedness evidenced by the Note. No judgment, or execution thereon, entered in any action, legal or equitable, on this Note or the Deed of Trust securing this Note shall be enforced personally against Borrower, or any partner, officer, director or stockholder of the Borrower, but shall be enforced only against the property described in the Loan Documents and such other or further security as, from time to time, may be hypothecated for this Note; provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for this Note of all the rights and remedies of Holder hereof, or (b) be deemed in any way to impair the right of Holder to assert the unpaid principal amount of this Note as a demand for money within the meaning and intent of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of and Dayment of interest on this Note: nothing contained herein is intended to relieve the Borrower or any successors thereto of liability for (a) fraud or willful misrepresentation; (b) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the Loan Documents that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (c) the retention of any rental income or other income arising with respect to the Development collected by Borrower after Holder has given any notice that Borrower is in default to the full extent of the rental income or other income retained and collected by Borrower after the giving' of any such notice; (d) the fair market value as of the time of the giving of any notice referred to in subparagraph (c) above of any personal property removed or disposed of by Borrower other than in accordance with the Loan Documents after tl}e giving of any notice referred to in subparagraph (c) above; and (e) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction of any portion to the Development. 10. Governing Law. This Note shall be construed in accordance with and be governed by laws of the State of California. 11. Time. Time is of the essence in this Note. 12. No Waiver by Holder. No waiver of any breach, default or failure of conditions under the terms of the Note or the Loan Documents or the obligations secured thereby shall be implied from any failure of Holder to take, or any delay by Holder in taking, action with respect to such breach, default, or failure from any previous waiver of any similar or unrelated breach, default or failure; and a waiver of any term of the Note or the Loan Documents or any of the obligations secured thereby must be made in writing, executed by Holder, and shall be limited to the express written terms of such waiver. 13. Notices. Except as may be otherwise specifically provided herein, any approval, notice, direction, consent, request or other action by Holder or Borrower shall be in writing and may be communicated to the addressee designated herein, or at such other place or places as Borrower or Holder shall designate in writing. Notices required or permitted under the terms of this Note shall be given: City of Encinitas-Promissory Note Page 3 " To Borrower: To City: North Coast Housing 3355 Mission Ave.. Ste. 221 Oceanside. CA 92054 City of Encinitas Community Development Dept. 505 S. Vulcan Ave. Encinitas, Ca. 92024 Executed at Encinitas, California By:0J4~, I~ Borrower DATE: l/ /13/1998 ~- B~~4T;~( / Holder DATE: f /;1%/1998 ----- -----. City of Encinitas-Promissory Note Page 4 CnBG AFFORDABLE HOUSING AGREEMENT THIS AGREEMENT, made and entered into this ~day of April, 1998, in the State of California, by and between the City of Encinitas ("City") and North Coast Housing ("Contractor"). The provisions on the following pages constitute a part of this agreement. WITNESS WHEREOF, this agreement has been executed by the parties hereto, upon the date fIrst above written. CITY OF ENCINITAS CONTRACTOR City of Encinitas North Coast Housing ture) 2?~ By (Authorized signature) /( \ P-vt- Pr' ed name and title of person signing rinted name nd title of person signing f-... ~....A- S, 1~ ~1,5"Cr~ Lauren M. Wasserman City Manager Address Address 505 S. Vulcan Ave., Encinitas, CA 92024 3355 Mission Ave., Ste.221, Oceanside, CA 92054 A. Contractor is responsible for all of its obligations imposed by law or this Agreement, including but not limited to supervising and managing the acquisition of the Property and development of the Housing Project in accordance with the Scope of Development set forth in Exhibit B, and operating and maintaining the Housing Project in accordance with the Regulatory Agreement, all of which are attached hereto and made a part hereof, and also in accordance with the other contract documents and specifications for the Housing Project. B. Contractor agrees to perform all activities and complete all tasks on or before the dates delineated with each task or activity . as outlined in Attachment B " Scope of Development" . C. All permits, plans, approvals, contracts, reviews, agreements, financing as well as all other necessary documentation must be completed within 21 months of the signing of this Agreement by the City. If the City determines, at any time, in its sole discretion that the Project is no longer feasible, the City will require that all funds reserved, City of Encinitas-CDBG Affordable Housing Agreement Page 2 committed, or awarded to the Contractor be returned within thirty (30) days. The City shall notify Contractor of its decision concerning the continued feasibility of the Project within ten (10) working days after the review is completed. Contractor shall have the right to appeal this decision to the City Council. D. The total amount of this Agreement shall not exceed $51,039 and shall be expended in the manner prescribed, as set forth in Exhibit B, Scope of Development and Exhibit C, Development Budget, both of which are attached hereto and incorporated herein. E. As an inducement to the City to provide the fInancial assistance made available through this Agreement, Contractor has agreed to operate and maintain the Housing Project for 55 years, starting from the date herein, and pursuant to the rules and regulations imposed by applicable statutes and regulations. F. The Contractor's contribution to the Housing Project assisted under this Agreement has already been contributed, as the project is a refInance. The fIrst mortgager is Los Padres Savings Bank. G. The Contractor agrees to comply with all income targeting and affordability requirements as follows: Four (4) units shall be made affordable at and rented to low income households, at or below' 60% of the median income, as determined by the U.S. Department of Housing & Urban Development (HUD). H. In accordance with the Community Development Block Grant Program Rule, 24 CFR Part 570, the Contractor certifIes that: 1. Before committing any funds to a project, it will evaluate the project in accordance with the guidelines that it adopts for this purpose and will not invest any more CDBG funds in combination with other Federal assistance than is necessary to provide affordable housing; 2. It will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended; 3. It will use CDBG funds pursuant to the Consolidated Plan approved by HUD and all requirements of 24 CFR Part 570; 4. It does and will continue to provide a drug-free workplace by: a. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the City of Encinitas-CDBG Affordable Housing Agreement Page 3 actions that will be taken against employees for violation of such prohibition; b. Establishing an ongoing drug-free awareness program to inform employees about the dangers of drug abuse in the workplace; the participating jurisdiction's policy of maintaining a drug-free workplace; any available drug counseling, rehabilitation, and employee assistance programs; and the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph "a. "; notifying the employee in the statement required by paragraph "a." that, as a condition of employment under the grant, the employee will abide by the terms of the statement and notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction. Notifying the agency in writing, within ten calendar days after receiving notice under paragraph 4(b) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant. Taking one of the following actions, within 30 calendar days of receiving notice with respect to any employee who is so convicted: (a) Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or (b) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency. Making a good faith effort to continue to maintain a drug-free workplace through implementation of this paragraph; 5. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress in connection with the awarding of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; 6. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this City of Encinitas-CDBG Affordable Housing Agreement Page 4 Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and 7 . It will require that the language of paragraph (4) of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. I. Contractor agrees to comply with the applicable portions of: Title 24, Part 570 of the Code of Federal Regulations; the Housing and Community Development Act of 1974 as amended; Title 24, Subtitle A, Part 58 of the code of Federal Regulations; Title VI of the Civil Rights Act of 1964; Title VIII of the Civil Rights Act of 1968; Section 109 of the Housing and Community Development Act of 1974; Section 3 of the Housing and Urban Development Act of 1968; Executive Orders 11246, 11063 and 11593; the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; Title 24, Part 42. of the code of Federal Regulations; OMB Circular A-122 and Attachments A, B, C, F, H, N and 0; the Archeological and Historical Preservation Act of 1974; the Architectural Barriers Act of 1968; the Hatch Act (Chapter 15 of Title 5, U.S.C.); the Flood Disaster Protection Act of 1974; the Clean Air Act (42 U.S.C. Section 1857 et seq.) and the Federal Water Pollution Control Act, as amended (33 U.S.C. Section 1251 et seq.); and the Drug-Free Workplace Act of 1988. In accordance with the foregoing, the City and Contractor agree to undertake the activities provided for in this Agreement and that the following paragraphs 1 through 23 are incorporated as part of this Agreement. 1. Contractor agrees that, at all times its acts regarding the development of the Housing Project and the use of funds provided herein, including the contributions prescribed by Paragraph H above, shall be in conformity with all provisions of the City, including the statutes, rules and regulations, and the policies and procedures of the City which are applicable thereto. 2. Contractor shall ensure that development of the Housing Project shall comply with all requirements of the City and the Contract Documents and that it shall employ staff and purchase, rent, and use materials and services as needed in the performance of this Agreement in a manner consistent with all requirements of the City and the Contract Documents. 3. In the event that the Contractor purchases materials or services in the performance of this Agreement, it shall do so in that manner required by the Contract Documents. In the event that the Contract Documents do not adequately establish standards for these activities, Contractor shall comply with all State and Federal requirements. City of Encinitas-CDBG Affordable Housing Agreement Page 5 4. Contractor shall maintain such records and accounts, including property, personnel and fmancial records, as are deemed necessary by the City and the Contract Documents, to insure a proper accounting of all City funds and other contributions, and shall retain the same for at least five years after the fmal payment under this Agreement. The City shall have access to and the right to examine and audit all reports, records, books, papers, and other documents related to the Contractor's performance under this Agreement. 5. If property costing less than $300.00 per item is properly acquired with City funds and is expected at the time of acquisition to be used indefInitely for the purpose for which it was purchased, title to such property shall vest in the Contractor at the time of acquisition. If property acquired with City funds has a cost of $300.00 or more per item, or is not expected at the time of acquisition to be used indefInitely for the purpose for which it was acquired, title to such property shall vest in Contractor with a first lien appropriately recorded in the name of the City of Encinitas until receipt of construction and permanent fmancing. If property or improvements purchased under this Agreement is diverted to uses inconsistent with this Agreement, Contractor shall be liable to the City for the replacement value of such property or improvements. 6. All real and personal property and improvements shall be maintained and protected in accordance with City standards. 7. Contractor shall carry out its responsibilities under this Agreement in accordance with the civil rights provisions of the Contract Documents and the State's Nondiscrimination Clause, as follows: a. During the performance of this contract, Contractor and its subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, physical handicap, medical condition, marital status, age (over 40) or sex. Contractors and subcontractors shall insure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. Contractors and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12900, et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0, et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code Section 12990, set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this contract by reference and made a part hereof as if set forth in full. Contractor and its subcontractors shall give written notice of their obligation under this clause to labor organizations with which they have a collective bargaining or other agreement; and b. This Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the contract. City of Encinitas-CDBG Affordable Housing Agreement Page 6 8. Contractor shall include a provision in all subcontracts of $10,000 or more of City funds, that indicates that the contracting parties and all project related records will be subject to the examination of the City for a period of three years after the fmal payment under the contract. 9. Contractor shall provide the City with written progress reports at the times and in the format required by the City. 10. The City may, at its option, terminate this Agreement at any time upon giving 30 days advance notice in writing to Contractor in the manner provided by law. In such event, Contractor agrees. to use all reasonable efforts to mitigate expenses and obligations hereunder. In such event, the City shall pay Contractor for all satisfactory services rendered prior to such notice of termination; for all expenses incurred by Contractor prior to said termination which are not included in charges for services rendered prior to termination and which could not by reasonable efforts of Contractor have been avoided, but not in excess of contract maximum payable. In the event of termination pursuant to this paragraph, if Contractor has acquired real property or improvements thereto with City funds, the City may require Contractor to reimburse costs related to those expenditures to the extent necessary to ensure that the City's interests are fulfIlled. . 11. In the -event of any breach of this Agreement, the City may, without any prejudice to any of its other legal remedies, terminate this Agreement upon five days written notice to the Contractor. In such event, the City shall pay Contractor only the reasonable value of the services rendered as the same may be agreed upon by the parties or determined by a court of competent jurisdiction. In the event of termination pursuant to this paragraph, if Contractor has acquired real property or improvements thereto with City funds, the City may require Contractor to reimburse costs related to those expenditures to the extent necessary to ensure that the City's interests are fulfilled. 12. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. All remedies afforded in this Agreement shall be taken and construed as cumulative, that is, in addition to every other remedy provided therein or by law. The failure of the City to enforce at any time the provisions of this Agreement, or to require at any time performance by Contractor of any of the provisions, shall in no way be construed to be a waiver of such provision nor to affect the validity of this Agreement or the right of the City to enforce such provisions. 13. Contractor shall submit any subcontracts over $5,000 which are proposed to be entered into to the City for its prior written approval before entering into same if those subcontracts are wholly or partially fmanced by City funds or contributions subject to this Agreement. Every such subcontract shall include or incorporate by reference all the relevant terms and conditions of this Agreement and its attachments in addition to other relevant terms and conditions. City of Encinitas-CDBG Affordable Housing Agreement Page 7 14. The Contractor shall procure all permits and licenses necessary to accomplish the work contemplated in this Agreement, and give all notices necessary and incident to the lawful prosecution of the work. The Contractor shall keep informed of, observe, comply with, and cause all of its agents and employees to observe and comply with all prevailing Federal, State, and local laws, and rules and regulations made pursuant to said Federal, State, and local laws, if any, which affect the conduct of the work of this Agreement. If any conflict arises between provisions of the plans and specifications and any such law referenced above, then the Contractor shall immediately notify the City in writing. 15. The City, promptly after receiving notice thereof, shall notify the Contractor in writing of the commencement of any claim, suit, or action against the City, its agents, officers or employees for which the Contractor must provide indemnification under this Agreement. To the extent permitted by law, the City shall authorize the Contractor or its insurer to defend such claims, suits, or actions, and shall provide it or its insurer, at the Contractor's expense, information and assistance both necessary and available for such defense. The failure, of the City to give such notice, information, authorization, or assistance, shall not relieve the Contractor of its indemnification obligation. The Contractor shall immediately notify the City of any claim or action against it which affects or may affect this Agreement, the terms and conditions hereunder, or the City, and shall take such action with respect to said claim or action which is consistent with the terms of this Agreement and the interests of the City. 16. This Agreement may be amended in writing upon the mutual written agreement of both parties hereto; however, such amendment shall not take effect until approval by the City and shall not have retroactive effect. 17. Contractor may not transfer by assignment, subcontract, or novation the performance of this Agreement or any part thereof except with the prior written approval of the City as to each such assignment, subcontract, or novation. 18. Neither the City nor the Contractor shall be deemed to be in default in the performance of the terms of this Agreement if either party is prevented from performing the terms of this Agreement by causes beyond its control, including without being limited to: acts of God or the public enemy; interference, rulings or decisions by Municipal, Federal, State, or other governmental agencies, boards or commissions; any laws and/or regulations of such Municipal, State, Federal, or other governmental bodies; or any catastrophe resulting from flood, fire, explosion, or other causes beyond the control of the defaulting party. If any of the stated contingencies occur, the delayed party shall immediately give the other parties written notice of the cause of delay. The delayed party shall use reasonable diligence to correct the cause of the delay, the party delayed shall immediately give the other parties written notice thereof and shall resume operations under this Agreement. City of Encinitas-CDBG Affordable Housing Agreement Page 8 19. If any provision of this Agreement is held invalid by a court of competent jurisdiction, such invalidity shall not affect any other provision of this Agreement and the remainder of this Agreement shall remain in full force and effect unless, at the City's sole discretion, the invalid portion of the Agreement has a material effect on the interests of the City and the City, at its sole discretion, determines that the entire Agreement is therefore invalid. 20. Except as otherwise provided in this Agreement, any dispute arising under or relating to the performance of this Agreement, which is not disposed of by Agreement shall be decided by the Community Development Director, who shall reduce decisions to writing in regard to the dispute and shall transmit a copy thereof to the Contractor. The decision of the Community Development Director shall be fmal and conclusive unless within thirty (30) days from the date of receipt of such copy, the Contractor transmits to the City a written appeal. Pending the fmal decision of the City Attorney, the Contractor shall proceed diligently with the performance of this Agreement and in accordance with the written decision of the Community Development Director which is the subject of the Contractor's appeal. 21. With regard to the development of the Housing Project, Contractor agrees to undertake and complete all responsibilities in the Contract Documents and Regulatory Agreeme~t or any other documents which are prescribed as duties of "the City" if, and to the extent, they are delegated to Contractor by the City. 22. In connection with the purchase of real property described in Exhibit A, the parties hereto acknowledge that said property will be owned by North Coast Housing, and that after the development of said Housing Project, Contractor shall operate and maintain said Housing Project as prescribed in the Regulatory Agreement. 23. As additional consideration for receipt of City funds, the Contractor agrees to hold harmless and defend the City and its agents, officers and employees from and against any and all claims, actions, liabilities, loss, damage or injury, including any of the foregoing by way of indemnification or contribution, arising directly or indirectly out of Contractor's activity, performance, operation, acts, or omissions relating to the Contractor's duties, responsibilities and rights under the terms and conditions of this Agreement, whether or not such claims, actions, loss, damage or injuries result directly or indirectly from the sole, contributory, comparative, active, passive, primary or secondary negligence of the Contractor, and the Contractor shall defend, at its expense, including attorney fees, the City, its agents, officers and employees in any legal action b:}sed upon such claim actions, liabilities, loss, damage or injury. The provisions of this paragraph shall be subject to, and limited by, any applicable provision of State law and shall be in addition to the provisions of paragraph 23(i). City of Encinitas-CDBG Affordable Housing Agreement Page 9 EXHmIT A LEGAL DESCRIPTION Land referred to herein is situated in the State of California, County of San Diego and is described as follows: Lots 19 and 20 in block 35 of Cardiff "A" in the City ofEncinitas, County of San Diego, State of California, according to map there of number 1334, filed in the office of the County Recorder of San Diego County, May 12, 1911. City of Encinitas-CDBG Affordable Housing Agreement Page 10 EXHIBIT B SCOPE OF DEVELOPMENT I. GENERAL DESCRIPTION The Site is a four unit affordable housing complex located at 2074 Manchester Ave., Encinitas, California. II. DEVELOPMENT Developer shall refinance existing first mortgage and payoff 2nd Trust Deed currently recorded against this property. III. DEVELOPMENT STANDARDS No improvements are proposed at this time. City of Encinitas-CDBG Affordable Housing Agreement Page 11