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HomeMy WebLinkAbout2014-555 Housing - EmPOWERment, Inc. for HOME Investment Partnership Program - Development Agreement $110,131 hDu Si NORTH CAROLINA DEVELOPMENT AGREEMENT ORANGE COUNTY This is an AGREEMENT between ORANGE COUNTY, a body politic and corporate, a political subdivision of the State of North Carolina, (hereinafter referred to as the "County"), EmPOWERment, Inc., a North Carolina non-profit corporation (hereinafter referred to as "Owner"). The effective date of this agreement is 10/21/14 WITNESSTH WHEREAS, the Orange County HOME Consortium has designated approximately $110,131 in FY 2013 HOME funds to assist in the acquisition of a single family dwelling in Chapel Hill,NC; and WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so designated in an agreement dated July 1, 2011 and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d) et. seq.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, the Owner intends to acquire property located at 505 Edwards Drive in Chapel Hill, NC (hereinafter referred to as "the Project") as rental housing for low-income families earning up to 50% of the Area Median Income that will remain affordable for low income families throughout the term of the 99 year period of affordability. The Project dwelling units are located on the property more particularly described in EXHIBIT A attached hereto and made a part of this Agreement(hereinafter referred to as "the Property"); and WHEREAS, the Owner agrees to utilize HOME funds provided for the purpose of acquiring the Property as described in its HOME Program application dated February 28, 2013 which is hereby incorporated into and made part of this Agreement; and WHEREAS, notwithstanding any provision of this Agreement, the County and the Owner hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. h NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: I. USE OF HOME FUNDS/SUBSIDY TYPE 1. The Owner shall perform the projects or tasks related to its allocation of HOME funds as provided in Exhibit B and within the proposed budget outlined in Exhibit C. Exhibits B and C are hereby made a part of this Agreement and are incorporated by reference, as it now reads or as it may be modified by the parties. 2. The Owner may not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs. The amount of each request must be limited to eligible costs as determined by Orange County staff. 3. Said funds shall be disbursed by check payable to the Owner. 4. HOME funds will be a fixed subsidy provided in the form of a deferred loan. II. AMOUNT OF HOME FUNDS/GRANT TERMS The County shall make available to the Owner up to One Hundred Ten Thousand One Hundred Thirty-One Dollars ($110,131) at an interest rate of zero percent(0%)pursuant to this Agreement. The funding provided by the County will be provided as a fixed subsidy in the form of a deferred loan. The investment will be secured by a forty (40) year Deed of Trust and Promissory Note, forgivable at the end of 40 years. This Deed of Trust, recorded in the Orange County Registry, and Promissory Note shall constitute a lien on the Property, Said funds shall be disbursed by the County to the Owner for performance of the services described in Exhibit B. III. LIEN POSITION Orange County hereby acknowledges that the terms and conditions of its (i) HOME Program Development Agreement, (ii) Promissory Note, (iii) Deed of Trust and Security Agreement and (iv) Declaration of Restrictive Covenants (collectively referred to as "Orange County Loan Documents"), for EmPOWERment, Inc. shall not be subordinate to any other documents. The Declaration of Restrictive Covenants (EXHIBIT D) described in Paragraph VI. of this Agreement should be recorded prior to the Deed of Trust. IV. TIMELINESS Owner shall complete the Project within six (6) months from the date of this Agreement. However, in the event of any alterations or additions or circumstances beyond the control of the Owner, which in the opinion of the Director of the County's Department of Housing, Human Relations and Community Development will require additional time for completion of the t, Project, then in that case, the time of completion shall be extended by the County Manager in writing for a period of time not to exceed six (6) months. Any further extensions will require the approval of the Orange County Board of County Commissioners. V. DURATION OF THE AGREEMENT This Agreement will remain in effect for the Period of Affordability established below. VI. AFFORDABILITY REQUIREMENTS Owner agrees to lease the Project dwelling unit to a low income family earning less than 50% of the area median income throughout the term of the 99 year period of affordability. Area Median Income by family size is determined by the U.S. Department of Housing and Urban Development and amended from time to time. Residential leases will not exceed one year in term. The Project dwelling units must remain affordable for a period of ninety-nine years. The Owner retains full responsibility for compliance with the affordability requirement for each of the Project dwelling units, unless affordability restrictions are terminated due to the sale of the Property to a non-qualified buyer in which event the Resale Provisions of this Agreement pertain. The Owner shall assure compliance with affordability of each of the Project dwelling units as provided in the Declaration on the Property. The Declaration shall constitute and remain a lien on the Property during the period of affordability. Owner agrees to the Affordability Requirements as provided in Section 3b and Resale Provisions as provided in Section 4B of the attached Declaration of Restrictive Covenants in Exhibit D. VII. OWNER PERFORMANCE UNDER THIS AGREEMENT Owner agrees and authorizes the County to conduct on-site reviews, examine client and contractor records, client applications and to conduct any other procedures or practices to assure compliance with these provisions. Owner agrees to not violate any State or Federal laws, rules or regulations regarding a direct or indirect illegal interest on the part of any employee or elected official of the Owner in the Project or payments made pursuant to this Agreement. Owner agrees that to the best of its knowledge, neither the Project nor the funds provided therefore, and the personnel employed in the administration of the program shall be in any way or to any extent engaged in the conduct of political activities in contravention of Chapter 15 of Title 5, United States Code, referred to as the Hatch Act. Owner shall adopt the audit requirements of the Office of Management and Budget qhereinafter "OMB") Circular A-110, "Grants and Agreements with Institutions of Higher Education, • 11 Hospitals, and Other Nonprofit Organizations," and Circular A-122, "Cost Principles for Nonprofit Organizations," and OMB Circular A-133, "Audits of Institutions of Higher Education and Other Non-Profit Institutions." Owner shall submit to the County copy of said audit report. Owner shall permit the authorized representatives of the County, HUD and the Comptroller General of the United States to inspect and audit all data and reports of the Owner relating to its performance under the Agreement. County shall provide, upon request, copies of all laws, regulations and orders cited in this Agreement. Owner and County shall at all times observe and comply with Title 24 CFR Part 92 and all applicable laws, ordinances or regulations of the Federal, State, County, and local government, which may in any manner affect the performance of this Agreement, and Owner shall perform all acts with responsibility to the County in the same manner as the County is required to perform all acts with responsibility to the Federal government. Owner hereby assures and certifies that it will comply with the regulations, policies, guidelines and requirements with respect to the acceptance and use of HOME funds in accordance with the policies of the County. Also, Owner certifies with respect to the Project that: The Project will be conducted and administered in compliance with: Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352, 42 U.S.C. Sec 2000d et seq.) and implementing regulations issued at 24 CFR Part I; Title VIII of the Civil Rights Act of 1968 (Pub. L. 90-208, 42 U.S.C. Sec 2000d at seq.), as amended; and that the Owner will administer all programs and activities related to housing and community development in a manner to affirmatively further fair housing; Section 109 of the Housing and Community Development Act of 1974, as amended; and the regulations issued pursuant hereto; Section 3 of the Housing and Urban Development Act of 1968, as amended; Executive Order 11246-Equal Opportunity, as amended by Executive Orders 11375 and 12086, and implementing regulations issued at 41 CFR Chapter 60; Executive Order 11063-Equal Opportunity in Housing, as amended by Executive Order 12259, and implementing regulations at 24 CFR Part 107; Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and implementing regulations when published in effect; The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations when published for effect; The Fair Housing Act(42 U.S.C. 3601-20); VIII. ADMINISTRATION AND REPORTING REQUIREMENTS Owner shall submit to the County a quarterly Progress Report no later than the fifth day of the months of January, April; July and October until the activity has been reported completed. Miscellaneous Provisions a. Uniform Administrative Requirements. The Owner must comply with the applicable uniform administrative requirements of 24 CFR §92.505. b. Other Program Requirements. The Owner must carry out each activity in compliance with all Federal laws and regulations described in 24 CFR, Part 92, subpart H except that the subrecipient does not assume the responsibilities for environmental review or intergovernmental review. C. Affirmative Marketing. If HOME funds will be used for housing containing five (5) or more assisted units, The Owner must prepare and submit an Affirmative Marketing Plan to the County. d. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for all Project dwelling units. It is the County's intention that the full public benefit of the Project shall be completed under the auspices of the Owner for the assisted units as follows: In the event that the Owner is unable to proceed with any aspect of the Project in a timely manner, and County and the Owner determine that reasonable extension(s) for completion will not remedy the situation, then The Owner will retain responsibility for requirements for any dwelling units assisted and County will make no further payments to the Owner. In the event that the Owner, prior to the contract completion date, is unable to continue to function due to, but, not limited to, dissolution or insolvency of the organization, its filing a petition for bankruptcy or similar proceedings, or is adjudged bankrupt or fails to comply or perform with provisions of this agreement, then the Owner shall, upon the County's request, convey to the County the Property assisted with HOME funds. Conveyance shall be at the sole discretion of County and on a Project dwelling unit by Project dwelling unit basis. Conveyance shall be on the terms set forth herein: Conveyance shall occur within thirty (30) days of County and the Owner's agreement of the Owner's inability to continue as a viable organization. The Owner shall convey the Property to the County by general warranty deed, free and clear of all liens and encumbrances of record except those which create a beneficial interest in County (Declaration of Restrictive Covenants and Deed of Trust). e. Default, Remedies. This Agreement may be terminated by a non-defaulting party upon an event of default hereunder, after written notice thereof and thirty (30) days grace period in which the defaulting party may act to cure. As used herein, the term "an event of default" shall mean and refer to a failure or act of omission by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement. With respect to any event of default, the non-defaulting party may exercise any right available to it at law or in equity with respect to such default. f. Books and Records. The Owner shall maintain records of its grant requirements under this contract for a period of not less than five (5) full fiscal years following the contract completion date. i. The Owner shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, The Owner shall submit a copy of its annual audit to the County. ii. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of The Owner records that relate to this contract. If any audit by County discloses that payments to The Owner were in excess of the amount to which The Owner was entitled under this contract, The Owner shall promptly pay to County the amount of such excess. If the excess is greater than 1% of the contract amount, The Owner shall also reimburse County its reasonable costs incurred in performing the audit. iii. The Owner shall maintain files of all tenants, regardless of length of occupancy, residing in assisted units. Documentation shall verify eligibility for federal assisted housing at the point of initial tenancy and every subsequent year thereafter for the period of affordability. Information maintained shall include: tenant income level; name of family members; ethnic data; family type—e.g. female head of household; disability status; and monthly rent. iv. The Owner shall maintain records verifying the affordability of the dwelling units. g. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner here in above described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided,be as follows: i. To the County: Orange County c/o Housing, Human Rights and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Owner: EmPOWERment, Inc 109 N. Graham Street Chapel Hill,NC 27516 ATTN: Chair, Board of Directors Neither the County nor Owner may change the person or address to which any future Notice shall be given as herein provided. h. No Assignment. No transfer or assignment of the interest of the Owner in this Agreement shall occur without the prior written consent of the County; neither may The Owner assign this Agreement without the prior written consent of County. i. Conflict of Interest. The Owner agrees to abide by the provisions of 24 CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no financial interest and shall acquire any financial interest, direct or indirect, that would conflict in any manner or degree with the performance of services required under this Agreement. The Owner further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by the Owner hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of the County, or any designated public agencies or subrecipients that are receiving funds under the County HOME Investment Partnership Program. j. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. k. Indemnification. To the extent legally possible, The Owner shall indemnify and hold County, its officers, agents, and employees, harmless from and against any and all claims, actions, liabilities, costs, including attorney fees and other costs of defense, arising out of or in any way related to any act or failure to act by The Owner, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, the Owner shall, upon County's tender, defend the same at the Owner's sole cost and expense, promptly satisfy any judgment adverse to County or to County and the Owner jointly, and reimburse the County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by the County. 1. Subcontracting. The Owner shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. The Owner shall require any approved subcontractor to agree, as to the portion subcontracted, to comply with all applicable federal, state, and local laws, rules, ordinances, and regulations at all times and in the performance of the work and to comply with all applicable obligations of The Owner specified in this contract. Notwithstanding County's approval of a subcontractor, The Owner shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor. The Owner shall indemnify, defend, and hold County harmless from all claims of its contractors. m. No Joint Venture or Agency. The County, the Owner each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County, the Owner under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. n. Effect of Waiver or Forbearance. No failure by the County to insist upon the strict performance of any term or condition of this Agreement, or to exercise any right or remedy upon the breach by the Owner of any of its obligations, agreements, or covenants hereunder, shall be a waiver of such affected term or condition or of such breach; nor shall any forbearance by the County to seek a remedy for any breach by the Owner be a waiver by the County of its rights and remedies with respect to that or any other breach. o. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of North Carolina. Any litigation arising out of this Agreement shall be brought in courts sitting in North Carolina, with venue in Orange County. p. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by the fact that for any reason any other provision may be invalid or unenforceable in whole or in part. If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County, The Owner agree to substitute for such provision of this Agreement or the application thereof determined to be invalid or unenforceable, such other provision as most closely approximates, in a lawful manner, such invalid, illegal or unenforceable provision. If the County, the Owner cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as the court deems reasonable and judicially valid, legal and enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. q. Equal Opportunity. The Owner shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, handicap, or familial status in the implementation of the Project. r. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. S. Gender: Singular and Plural. As used herein, the neuter gender includes the feminine and masculine. The masculine includes the feminine and neuter, and the feminine includes the masculine and neuter and each includes a corporation, partnership or other legal entity when the context so requires. The singular number includes the plural and vice versa, whenever the context so requires. t. Recording. The parties hereto agree that upon notice to the other and at its own cost and expense, a party may record this Agreement in the Office of Register of Deeds for Orange County. U. Compliance with Laws. To the extent applicable, each party hereto agrees to comply with all laws, ordinances and regulations affecting the Property from and after the date hereof. Without limiting the generality of the foregoing, the Owner shall comply with all federal, state and local laws, regulations and ordinances applicable to the expenditure of funds provided by the County, to purchase and develop the Property. V. Publicity: Signage. The Owner agrees to provide such publicity with respect to the County's participation in the development of the Property as the County shall reasonably require. Any signage at the Property shall acknowledge the County's role and contribution. W. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute on and the same instrument. X. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or the Owner shall be deemed or construed by the parties or any third party to create any relationship of third party beneficiary, including third party principal or agent, or to create any right, claim or cause of action against the County, the Owner or any of their respective officers, agents or employees by any third party. Y- Performance of Government Functions. Notwithstanding anything in this Agreement which may be to the contrary, nothing contained in this Agreement shall in any way stop, limit or impair the County from exercising or performing any regulatory, policing or governmental powers or functions with respect to the Property including, without limitation, inspection of the Property in the performance of such functions. Z. Duration of Agreement. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. [Signature Page to Followl IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the ,!:!ear,first above written. g } ' ORANGE COUNTY,NORTH CAROLINA r nni er le Manager o N e B. Hamm s y, C ger ro CaTC° ATTEST: Donna Baker Clerk to the Board of Commissioners We'tte form and l egality , Staff A orney This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Act. 6(4%4-1W ..�J, � � , Clarence Grier, EmPOWERment, Inc. President ATTEST EXHIBIT A Property Description ALL those certain lots situated, lying and being on the West side of Edwards Alley, BEGINNING at a stake in the West property line of Edwards Alley,the Northeast corner of Lot 128; running thence with the line of the said lot South 75 degrees 15' 150 feet to a stake; running thence North 16 degrees 30' West 50 feet to a stake in the West property line of Lot 125 North 75 degrees 15'East 151 feet to a stake in the West property line of Edwards Alley;running thence along the West property line of Edwards Alley South 15 degrees 15' East 50 feet to the BEGINNING,being Lots 126 and 127 of the Subdivision known as Lincoln Park. EXHIBIT B Scope of Services Acquisition of 505 Edwards Drive, Chapel Hill, NC for a Contract Sales Price of$108,600.00 with closing costs of$1531.00 for a total of$110,131.00. The property will be rehabilitated using funding from the Town of Chapel Hill CDBG Program to meet Section 8 Housing Quality Standards (HQS)prior to leasing. EXHIBIT C Project Budget Acquisition $108,600 Appraisal 450 Closing Costs 650 Inspection Fee 175 Title& Insurance 230 Recording Fees 26 TOTAL $110,131 Source of Funds Orange County HOME Funds $110,131 Owner may not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs. The amount of each request must be limited to eligible costs as determined by the County's Housing and Community Development Department("OCHCD"). Funds may be shifted between line items of the Project without prior approval of the County only to the extent of"Minor Adjustments," defined as actions which do not result in a change in the Project and so long as such Minor Adjustments do not exceed ten percent (10%) of the line item total from which the funds are being removed or to which the funds are being added, there is no increase to the Total Renovation Cost specified in the above budget, and there are only minor changes to the Plans and Specifications. EXHIBIT D Prepared by: Annette Moore,Esquire, Orange County Staff Attorney,P.O. Box 8181,Hillsborough,NC 27278 After recording return to: Annette Moore,Esquire,Orange County Staff Attorney,P.O. Box 8181, Hillsborough,NC 27278 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated 10/21/14 , by EmPOWERment, Inc. for itself and its successors and assigns (Owner), is given as a condition precedent to the award of Orange County HOME Investment Partnership funds. RECITALS: WHEREAS, the Orange County HOME Consortium has designated approximately $110,131 in FY 2013 HOME funds to assist in the acquisition of a single family dwelling in Chapel Hill, NC; and WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so designated in an agreement dated July 1, 2011 and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d) et. seq.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, the Owner intends to acquire property located at 505 Edwards Drive in Chapel Hill, NC (hereinafter referred to as "the Project") as rental housing for low-income families earning up to 50% of the Area Median Income that will remain affordable for low income families throughout the term of the 99 year period of affordability. The Project dwelling units are located on the property more particularly described in EXHIBIT A attached hereto and made a part of this Agreement(hereinafter referred to as "the Property"); and WHEREAS, the Owner agrees to utilize HOME funds provided for the purpose of acquiring the Property as described in its HOME Program application dated February 28, 2013 which is hereby incorporated into and made part of this Agreement; and WHEREAS, notwithstanding any provision of this Agreement, the County and the Owner hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. WHEREAS, EmPOWERment, Inc. has signed this Declaration agreeing to the terms of this Declaration, its obligations pursuant to this Declaration and agreeing to the terms of the DEVELOPMENT AGREEMENT which is attached as Exhibit B hereto and made part of this Agreement between the County and EmPOWERment, Inc.; NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth herein governing the use, occupancy, and transfer of the Property shall be and are covenants pertaining to the Property and running with the land for the term stated herein and are binding upon all subsequent owners of the Property and for such term, except as specifically provided herein, and are not merely personal covenants of Owner. SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER Owner hereby represents, covenants and warrants as follows: a. It is contemplated that the Property and the Project will be used, during the ninety-nine years after Project Completion (defined as the last of the following events: the Property is acquired, rehabilitated, if necessary, and the Project dwelling unit occupied by a low- income family), for rental housing to families earning up to 50% of HUD area median income. In the event Owner sells, transfers or exchanges the Property or any portion of the Property,the following shall pertain: 1. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit B hereto), the Orange County HOME Investment Partnership Program and this Declaration, Owner may sell, transfer, or exchange the Property to a non-profit fund, foundation, or corporation of like purpose which is organized and operated Declaration of Restrictive Covenants Page 2 exclusively for charitable and educational purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain the written agreement, in form satisfactory to Orange County, of any buyer or successor or other person acquiring the Property or any interest therein, that such acquisition is subject to the requirements of this Declaration and to the requirements of the DEVELOPMENT AGREEMENT and the Orange County HOME Investment Partnership Program. Owner agrees that Orange County may void any sale,transfer, or exchange of the Property or any portion of the Property if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT and the Orange County HOME Investment Partnership Program. 2. Any assignment, sale, transfer, conveyance or other disposition of the Property or any part of the Property other than as described in subparagraph 1 above, whether voluntary or involuntary or by operation of law shall be subject to the provisions of SECTION 4 of this Declaration. b. Owner will, at the time of execution, delivery and recording of this Declaration, have good and marketable title to the Property, free and clear of any lien or encumbrance (except encumbrances created pursuant to this Declaration or other permitted encumbrances). C. Owner warrants that it has not and will not execute any other declaration with provisions contradictory to, or in opposition to, the provisions hereof, and that in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith. SECTION 2 TERM OF DECLARATION a. This Declaration, and the Terms of Affordability specified herein, apply to the Property immediately upon recordation, and Owner shall comply with all restrictive covenants herein. This declaration shall terminate ninety-nine years after Project Completion, unless Orange County HOME Investment Partnership Program affordability restrictions are terminated due to the sale of the Property to a non-qualified buyer as provided herein. SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND a. Upon execution of this Declaration by Owner, Owner shall cause this declaration and all amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County. b. Owner intends, declares and covenants, on behalf of itself and all future Owners of the Project during the term of this Declaration, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer Declaration of Restrictive Covenants Page 3 of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this declaration, binding upon Owner's successors in title and all subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3) shall bind Owner(and the benefits shall inure to Orange County and any past, present or prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. Owner hereby agrees that any and all requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the Property. For the term of this Declaration, each and every contract, deed or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contracts, deed, or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. It is further the responsibility of Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 4713-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section that the 99 year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, EmPOWERment, INC , and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41-29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Any future owner, EmPOWERment, Inc., and Orange County agree to do what each must do to accomplish the 99-year duration of this Declaration of Restrictive Covenants. SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. Rights of Refusal a. Grant and Effect. EmPOWERment is granted a right of first refusal to purchase the Property as described in this Section. Any assignment, sale, transfer, conveyance, or other disposition of the Property or any part thereof whether voluntarily or involuntarily or by operation of law ("Transfer") shall not be effective unless and until the below-described procedure is followed. b. Right of First Refusal. If Owner contemplates a Transfer to other than an agency with similar interest in affordable housing serving families with incomes not exceeding 80% of the area median household income by family size, as determined by the Declaration of Restrictive Covenants Page 4 U.S. Department of Housing and Urban Development at the time of the transfer, the non- profit fund, foundation, or corporation of like purposes must have established its tax- exempt status under Section 501 (c)(3) of the Internal Revenue Code. Owner shall send to Orange County, at the address noted in the Notice section of this Declaration, not less than 90 days prior to the contemplated closing date of the Transfer, a "Notice of Intent to Sell." This Notice of Intent to Sell shall be accompanied by a copy of a completed, fully executed bona fide offer to purchase the Property on the then current North Carolina Bar Association "Offer to Purchase and Contract" form. If EmPOWERment, Inc. elects to exercise its said right of refusal, it shall notify the Owner of its election to purchase within 30 days of its receipt of the Notice and shall purchase the Property or portion thereof within 90 days of the receipt of the"Notice of Intent to Sell." C. Sales After Failure to Exercise Rights of Refusal If EmPOWERment, Inc. does not advise Owner in a timely fashion of an intent to purchase the Property, then Owner shall notify Orange County who may assume the position of EmPOWERment, Inc.. If Orange County does not advise the Owner in a timely fashion of an intent to purchase the Property, then the Owner shall be free to transfer the property in accordance with this Section. d. Assignability. EmPOWERment, Inc. may not assign its right of first refusal except to Orange County without Owner's consent. B. Resale Provisions a. If the Owner no longer uses the Property as affordable rental property, then Owner must sell, transfer, or otherwise dispose of its interest in the Property only to an agency with similar interest in affordable housing and to serve families with incomes not exceeding 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer. The non-profit fund, foundation, or corporation of like purposes must have established its tax- exempt status under Section 501 (c)(3) of the Internal Revenue Code. b. However, if the property is not sold, transferred, or otherwise disposed of to an agency with similar interest in affordable housing during the term of affordability, the net sales proceeds (sales price less: (1) selling cost, and (2) the unpaid principal amount of the initial Orange County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or "equity" will be divided 50150 by the seller of the Property and Orange County. C. The resale provisions shall remain in effect for the full affordability period — 99 years. C. Owner covenants that it will not knowingly take or permit any action that would result in a violation of the affordability requirements of Orange County or of the Orange County HOME Investment Partnership Program. Orange County, together with Owner, may execute and record Declaration of Restrictive Covenants Page 5 e any amendment or modification of this Declaration and such amendment or modification shall be binding on third parties granted rights under this Declaration. D. Owner acknowledges that the primary purpose for requiring compliance by Owner with restrictions provided in this Declaration is to assure compliance with the affordability requirements of Orange County and the Orange County Home Investment Partnership Program, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING ORANGE COUNTY HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS FOR THE PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. E. This Declaration may be enforced by Orange County or its designee in the event Owner fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant. If legal costs are incurred by Orange County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the Owner. SECTION 6 MISCELLANEOUS a. Severability. The invalidity of any clause,part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. b. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner hereinabove described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided,be as follows: i. To Orange County: Orange County c/o Housing/Human Rights and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director it. To : EmPOWERment, Inc.: EmPOWERment, Inc., Inc 109 N. Graham Street Chapel Hill,NC 27516 Declaration of Restrictive Covenants Page 6 C. Governing Law. This Declaration shall be governed by the laws of the State of North Carolina and, where applicable, the laws of the United States of America. IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly authorized representative, on the day and year first above written. EmPOWERment, Inc. Nora Esthimer,President ATTEST: / Secretary NORTH CAROLINA ORANGE,CQUNTY Notary Public in and for the above named County and State, do hereby certify that on 6s day personally appeared before me 0�fj,,,&- , with whom I am personally acquainted, who, being by me duly sworn, says at he is Secretary and that J A-' is President of EmPOWERment, Inc., a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President and attested to by its Secretary. Witness my hand and notarial seal, this the Z / day of OC 2014. My commission expires: L A�m 0 � (q�, �P///PllglMPtIEI„ EXHIBIT A Property Description ALL those certain lots situated, lying and being on the West side of Edwards Alley, BEGINNING at a stake in the West property line of Edwards Alley,the Northeast corner of Lot 128; running thence with the line of the said lot South 75 degrees 15' 150 feet to a stake; running thence North 16 degrees 30'West 50 feet to a stake in the West property line of Lot 125 North 75 degrees 15'East 151 feet to a stake in the West property line of Edwards Alley;running thence along the West property line of Edwards Alley South 15 degrees 15'East 50 feet to the BEGINNING,being Lots 126 and 127 of the Subdivision known as Lincoln Park. EXHIBIT B Development Agreement