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HomeMy WebLinkAbout2018-725-E Housing - Community Home Trust development agreement Lexes Trail 1 NORTH CAROLINA ORANGE COUNTY DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, NORTH CAROLINA, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the “County”) and COMMUNITY HOME TRUST INC., a North Carolina non-profit corporation (hereinafter referred to as “CHT”). The effective date of this agreement is November 5, 2018. WITNESSETH WHEREAS, on June 19, 2018, the Orange County Board of County Commissioners approved an award of funds from the County’s Capital Investment Plan Land Banking Fund in an amount not to exceed $46,529.40 to, to be awarded on a per project basis as a grant to CHT for the purpose of acquiring units and providing homebuyer assistance; and WHEREAS, CHT has proposed to utilize $18,000 of the aforementioned funding to support the resale of the property the organization owns located at 234 Lexes Trl in Chapel Hill, NC, hereinafter referred to as the “Property,” and more specifically defined in EXHIBIT A; and WHEREAS, CHT plans to assist in the sale of the Property to a homebuyer earning less than 80% of the HUD area median income as defined in their Request for Orange County Local Funds for 234 Lexes Trl, Chapel Hill, NC 27516, dated October 30, 2018, which request is incorporated by reference into this Agreement, and hereinafter referred to as the Project. Their October 30, 2018 request is on file in the office of the Orange County Department of Housing and Community Development; and WHEREAS, the Property would be held in a Community Land Trust (CLT), ensuring affordability of the home for at least 99 years; and NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: 1. CHT agrees to convey the housing unit to a homebuyer with income of 80% or less 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 sale. A housing unit will consist of a 99-year ground lease (renewable for an additional 99 years) to the housing unit and a warranty deed to any improvements on the leased premises. 2. The period of affordability will be at least 99 years and will be secured by a CHT Ground Lease of the housing unit with restrictions to ensure compliance. Further security shall be in the form of a Declaration of Restrictive Covenants (Exhibit B) that will make the County a third party beneficiary of and successor to the long term DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 2 affordability remedies in the Ground Lease in the event of a failure of or inability of CHT to enforce the long term affordability remedies in the Ground Lease. 3. CHT is responsible for soliciting CHT Ground Lease tenants for the housing unit. CHT and/or the Ground Lease tenants shall be responsible for securing permanent mortgage financing for the housing unit. 4. CHT is responsible for verifying the income of the Ground Lease tenants, explaining the land trust program and the CHT Ground Lease to potential tenants and certifying by written documentation signed by the tenants that the program requirements have been fully explained. CHT shall maintain purchaser files as part of its Books and Records as required and for the period of time required by Section 11.C. of this Agreement. 5. At the time of resale of the housing unit, CHT will convey the housing unit to a qualified homebuyer. The housing unit will consist of a 99 year Ground Lease (renewable for an additional 99 years) to the project dwelling unit. The Ground Lease, the form of which is Exhibit C hereto, provides for the long term affordability (at least 99 years) of the housing unit and provides remedies to insure the long term affordability of the housing unit. All Exhibits, attachments and addendums annexed hereto or referred to herein are hereby incorporated into and made a part of this Agreement as if set forth herein, as it now reads or as it may be modified by the Parties. CHT hereby declares and covenants, on behalf of itself and all future owners of the Property, that, during the term of the Declaration of Restrictive Covenants, the County is a third party beneficiary of and successor to each and every remedy intended to insure the long term affordability of the housing unit that is provided for in the Ground Lease and may, in the event of the failure or default of the Lessor in the Ground Lease to insure the long term affordability of the housing unit as provided for in the Ground Lease, exercise all rights and remedies available to the Lessor in the Ground Lease for that purpose. 6. The housing unit must have a value that does not exceed 95% of the area median purchase price for that type of housing. Value must be established by one of the following methods: i. An appraisal by a qualified appraiser. ii. Tax assessments may be used to establish value, but only if they are current and can be computed at 100% of market value. 7. AMOUNT AND USE OF FUNDS. The County shall make available to CHT up to Eighteen Thousand Dollars and 00/100 ($18,000) pursuant to this Agreement. Said funds shall be disbursed by a check payable to CHT for performance of the services described in this Agreement. Any unused grant funds shall revert to the County. CHT may not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs as determined by Orange County staff. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 3 8. TIMELINESS CHT shall complete the Project by December 31, 2018. CHT will be responsible for providing status reports to the County quarterly detailing the project activities until project completion. In addition, CHT agrees to furnish to the County a copy of its annual audit performed by a certified public accountant within 90 days of the end of each fiscal year until the Project is complete. The Project completion date is the closing date of the Ground Lease by a qualified buyer of the Property. In the event that CHT is unable to proceed with any aspect of the project in a timely manner, and County and CHT determine that reasonable extension(s) for completion will not remedy the situation, then the Termination of Agreement provisions of this Agreement (Section 11.A.) shall pertain. CHT may, at its option, submit a written request for a delay of completion for County approval. The County may, at its option, approve any delay in the completion date or declare CHT in default. CHT shall monitor the housing unit for affordability for the period of affordability – ninety-nine (99) years and, if renewed, an additional ninety-nine years. Final contract completion date shall be the end date of the last affordability period. 9. AFFORDABILITY REQUIREMENT. The housing unit must remain affordable for a period of ninety-nine years. CHT retains full responsibility for compliance with the affordability requirement for the housing unit unless affordability restrictions are terminated due to sale of the Property to a non-qualified buyer in which event the Resale Provisions of Section 10 of this Agreement pertain. CHT shall assure compliance with affordability of the housing unit by having recorded, no later than the time it leases the housing unit, a "Declaration of Restrictive Covenants" (Exhibit B) on the Property. To further assure compliance with the affordability requirements the Ground Lease shall be made an attachment to the Declaration of Restrictive Covenants and recorded therewith. All other security documents should be recorded thereafter. This Declaration shall constitute and remain a first lien on the Property during the period of affordability, unless otherwise provided by law or unless otherwise agreed by County. It is further the responsibility of CHT to rerecord the Declaration of Restrictive Covenants no later than one day before the expiration of 30 years of the date of its lease of each of the housing units in the event the homeowner leasing the housing unit from CHT is still the owner of the housing unit at the time of the rerecording. County retains the right to periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants 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 of this Agreement that the 99 year affordability requirement contained herein be accomplished and that CHT and the County will do what is necessary to ensure that the same is not extinguished by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 4 property. CHT and the County agree to do what each must do to accomplish the 99 year affordability requirement. 10. RESALE PROVISIONS. CHT shall assure compliance with long term affordability of assisted housing units as provided for in the Ground Lease, which Ground Lease shall, as to resale provisions, remain in substantially the form of the current version of the Ground Lease, a copy of which is an exhibit to the Declaration of Restrictive Covenants, for at least 99 years. 11. MISCELLANEOUS PROVISIONS A. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for the Property assisted with funds designed to provide affordable units to low-income families. It is the County's intention that the full public benefit of the Project shall be completed under the auspices of CHT for the housing unit as follows: 1. In the event that CHT is unable to proceed with any aspect of the Project in a timely manner, and County and CHT determine that reasonable extension(s) for completion will not remedy the situation, then CHT will retain responsibility for requirements for any dwelling units assisted and County will make no further payments to the CHT. 2. In the event that CHT, 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 CHT 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: a. Conveyance shall occur within thirty (30) days of County and CHT's agreement of CHT’s inability to continue as a viable organization. b. CHT 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). B. 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. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 5 C. Books and Records. CHT 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. 1. CHT shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, CHT shall submit a copy of its annual audit to the County. 2. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of CHT' records that relate to this contract. If any audit by County discloses that payments to CHT were in excess of the amount to which CHT was entitled under this contract, CHT shall promptly pay to County the amount of such excess. If the excess is greater than 1% of the contract amount, CHT shall also reimburse County its reasonable costs incurred in performing the audit. 3. CHT shall maintain files of all purchasers residing in the housing units. Documentation shall verify eligibility for the housing at the initial closing on the unit, and every subsequent buyer 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 and disability status; and Property and Improvement purchase price. 4. CHT shall maintain records verifying the affordability of the housing unit. D. 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 and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To CHT: Community Home Trust 109 Conner Drive, Suite 1000 Chapel Hill, NC 27514 ATTN: Executive Director DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 6 Either the County or CHT may change the person or address to which any future Notice shall be given as herein provided. E. No Assignment. No transfer or assignment of the interest of CHT on this Agreement shall occur without the prior written consent of the County; neither may CHT assign this Agreement without the prior written consent of County. F. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. G. Indemnification. To the extent legally possible, CHT 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 CHT, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, CHT shall, upon County's tender, defend the same at CHT’s sole cost and expense, promptly satisfy any judgment adverse to County or to County and CHT jointly, and reimburse the County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by the County. H. Subcontracting. CHT shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. CHT 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 CHT specified in this contract. Notwithstanding County's approval of a subcontractor, CHT shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor. CHT shall indemnify, defend, and hold County harmless from all claims of its contractors. I. No Joint Venture or Agency. The County and CHT each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County and CHT under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. J. 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 CHT 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 CHT be a waiver by the County of its rights and remedies with respect to that or any other breach. K. 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. CHT certifies by executing this Agreement that they have not been identified, and have not DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 7 utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147-86.58. By executing this Agreement CHT certifies that they have not been identified, and have not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147- 86.81. By executing this Agreement CHT affirms they are and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. L. 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 and CHT 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 and CHT 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. M. Equal Opportunity. CHT 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. N. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. O. 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. P. 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. Q. 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, CHT 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. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 8 R. Publicity; Signage. CHT 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. S. 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. T. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or CHT 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, CHT or any of their respective officers, agents or employees by any third party. U. 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. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. [SIGNATURES ON FOLLOWING PAGE] DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 9 COMMUNITY HOME TRUST, INC. _________________________________ _________________________, President ORANGE COUNTY, NORTH CAROLINA ________________________________ Bonnie Hammersley, County Manager This document has been pre-audited in accordance with the N.C. Local Government and Fiscal Control Act. Gary Donaldson, Finance Director ___________________________ Approved as to form and legality ____________________________ Anne Marie Tosco, Staff Attorney DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 10 EXHIBIT A Legal Description Being all of Lot 26 in Ballentine, Phase 1, as shown on the Plat recorded in Plat Book 108, Pages 150-151, Orange County Registry, which plat reference is hereby made for a more particular description of same. PIN: 9860-82-8523 DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 11 Exhibit B Prepared by and return to: Anne Marie Tosco, Orange County Attorney’s Office P.O. Box 8181; Hillsborough, NC 27278 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated ________________, by Community Home Trust, Inc. of Orange County, NC, Inc. for itself and its successors and assigns (“Owner”), is given as a condition precedent to the award of Orange County HOME Investment Partnership Program funds. RECITALS: WHEREAS, on June 19, 2018, the Orange County Board of County Commissioners approved an award of funds from the County’s Capital Investment Plan Land Banking Fund in an amount not to exceed $46,529.40 to, to be awarded on a per project basis as a grant to CHT for the purpose of acquiring units and providing homebuyer assistance; and WHEREAS, CHT has proposed to utilize $18,000 of the aforementioned funding to support the resale of the property the organization owns located at 234 Lexes Trl in Chapel Hill, NC, hereinafter referred to as the “Property,” and more specifically defined in ATTACHMENT A; and WHEREAS, CHT plans to assist in the sale of the Property to a homebuyer earning less than 80% of the HUD area median income as defined in their Request for Orange County Local Funds for 234 Lexes Trl, Chapel Hill, NC 27516, dated October 30, 2018, which request is incorporated by reference into this Agreement, and hereinafter referred to as the Project. Their October 30, 2018 request is on file in the office of the Orange County Department of Housing and Community Development; and WHEREAS, as particularly described herein, the Property will be held by CHT, ensuring affordability of the project dwelling unit for at least 99 years; and WHEREAS, CHT 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 between the County and CHT of even date; and DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 12 NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER CHT hereby represents, covenants and warrants as follows: a. Subject to the requirements of the GRANT AGREEMENT, an unsigned copy of which is ATTACHMENT B hereto, and this Declaration, CHT may sell, transfer, or exchange the Property to a non-profit fund, foundation, or corporation of like purpose which is organized and operated 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 the County, but Owner shall notify in writing and obtain the agreement 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 GRANT AGREEMENT and the Federal HOME Investment Partnership Program. CHT agrees that 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 GRANT AGREEMENT. b. Contemporaneously with the execution, delivery and recording of this Declaration, CHT will acquire good and marketable title to the Property, free and cl ear of any lien or encumbrance (except encumbrances created pursuant to this Declaration or other encumbrances permitted by Orange County). c. CHT warrants that it will not accept title to the Property subject to 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) applies to the Property immediately upon the recordation of this Declaration. CHT and all subsequent owners of the Property shall comply with all covenants herein. This Declaration shall terminate ninety-nine years after the Project completion date as specified in the GRANT AGREEMENT. SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND a. CHT shall cause this declaration and all amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County upon its execution. CHT shall pay all fees and charges incurred in connection therewith. b. CHT intends, declares and covenants, on behalf of itself and all future owners of the DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 13 Property 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 of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this Declaration, binding upon all present and future owners of the Property; (2) are not personal covenants of Declarant; and (3) shall bind all present and future owners (and the benefits shall inure to the County and any prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. For the term of this Declaration, each and every contract, lease, 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 contract, lease, 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 CHT to rerecord this Declaration 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. The County retains the right to, periodically and every 30 years after the first recording of the Ground Lease created in ATTACHMENT C hereof, 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 § 47B-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 3 of this Declaration that the 99 year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, CHT 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 of the Property, CHT and Orange County will 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. At the time of resale of the project dwelling unit, CHT will convey a housing unit to qualified homebuyer. Each housing unit will consist of a 99 year Ground Lease (renewable for an additional 99 years) to the project dwelling unit. The Ground Lease, the form of which is ATTACHMENT C hereto, provides for the long term affordability (at least 99 years) of the housing unit and provides remedies to insure the long term affordability of the housing unit. CHT hereby declares and covenants, on behalf of itself and all future owners of the Property, that, during the term of this Declaration, the County is a third party beneficiary of and successor to each and every remedy intended to insure the long term affordability of the housing unit that is provided for in the Ground Lease and may, in the event of the failure or default of the Lessor in the Ground Lease to insure the long term affordability of the housing unit as provided for in the Ground Lease, exercise all rights and remedies available to the Lessor in the Ground Lease for that purpose. b. CHT covenants that it will not knowingly take or permit any action that would result in a violation of the affordability requirements of the GRANT AGREEMENT. Orange County, DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 14 together with any future owner of the Property may execute and record any amendment or modification of this Declaration necessary to insure the successful completion of the Project and the long term affordability (at least 99 years) of the housing units on the Property and such amendment or modification shall, to the extent permitted by law, either relate back to the date of recording of this Declaration or not as necessary to carry out the intent of this Declaration, and be binding on third parties granted rights under this Declaration. CHT expressly covenants and agrees to rerecord this Declaration periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the Lessor’s option to purchase and right of first refusal, that are contained in the ATTACHMENT C Ground Lease, in the Property or portion thereof including any leasehold interest in the Property or portion thereof. c. CHT acknowledges that the primary purpose for requiring compliance by CHT with restrictions provided in this Declaration is to assure compliance with the long term affordability requirements of the HOME INVESTMENT PARTNERSHIP PROGRAM, AND BY REASON THEREOF, CHT, IN CONSIDERATION FOR RECEIVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS FOR THE PROPERTY, HEREBY AGREES AND CONSENTS THAT THE 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 CHT’S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. CHT hereby further specifically acknowledges that the beneficiaries of CHT’s obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. If legal costs are incurred by the County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the CHT. SECTION 5 MISCELLANEOUS a. Severability. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 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 herein 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 and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Declarant: To CHT: Community Home Trust 109 Conner Drive, Suite 1000 Chapel Hill, NC 27514 ATTN: Executive Director 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, CHT has caused this Declaration to be signed by its duly authorized representative, on the day and year first above written. [SIGNATURES APPEAR ON FOLLOWING PAGE] DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Community Home Trust, Inc. By:____________________________________ _______________________________, President NORTH CAROLINA ORANGE COUNTY I, _________________________, Notary Public in and for the above named County and State, do hereby certify that on this day personally appeared before me _____________ with whom I am personally acquainted, who, being by me duly sworn, says that he is ____________ of Community Home Trust, Inc., a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed by him on behalf of the corporation. Witness my hand and notarial seal, this the _________day of _______________, 20___. _________________________________ Notary Public My commission expires: ___________________ DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F ATTACHMENT A Property Description DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F ATTACHMENT B Grant Agreement DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F ATTACHMENT C Ground Lease Agreement DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F EXHIBIT C Ground Lease Agreement DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Community Home Trust GROUND LEASE (Revised 4-11-12) (New PEP 9/14/16) (Revised 1-27-16) THIS LEASE (“this Lease” or “the Lease”) made and entered into this _______ day of _____________________, 20____, by and between the COMMUNITY HOME TRUST (“CHT” or “Lessor”) and __________________________________________ (“Lessee””). WHEREAS, CHT is organized for the purpose of developing and preserving decent, affordable housing opportunities for low and moderate income people who might otherwise not be able to afford to own a home; and WHEREAS, CHT uses long term land leases as a tool to provide and preserve affordable housing; and WHEREAS, the Lessee enters into this Lease to obtain those benefits to which the Lessee is entitled under the Lease and to further the charitable purposes of the Lessor; and WHEREAS, Lessor and Lessee recognize the special nature of the terms and conditions of this Lease, and each of them, with the independent and informed advice of legal counsel, freely accepts these terms and conditions, including those terms and conditions that may affect the marketing and resale price of the Leasehold Estate; NOW THEREFORE, in consideration of the foregoing recitals, of mutual promises of Lessor and Lessee, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as follows: ARTICLE 1: Letters of Stipulation and Acknowledgment 1.1 LETTERS: In order to assure that Lessee fully understands and accepts the unique nature of this Lease, Lessor requires that Lessee and Lessee’s Counsel review and sign the Lessee’s Letter of Stipulation and Lessee’s Attorney’s Letter of Acknowledgement in the forms attached to this lease as Exhibits A and B. ARTICLE 2: Demise of Leased Premises 2.1 LEASED PREMISES: Lessor leases to Lessee and Lessee hires from Lessor, the Land and any improvements thereon (referred to in this Lease as the “Leased Premises”) described in the attached Exhibit C: LEASED PREMISES. Lessee takes the Leased Premises “as is” as of the date of this Lease. EXHIBITC DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F ARTICLE 3: Duration of Lease 3.1 TERM: The term of this Lease will be 99 years, commencing on ________________, 20__, and terminating on ______________, 2____, unless terminated sooner or extended as provided below. 3.2 LESSEE’S OPTION TO EXTEND: Lessee may extend the term of this Lease for one (1) additional period of 99 years upon the following conditions: a. This Lease must be in effect at the time notice of exercise is given and on the last day of the term. b. Lessee must not be in default on any term of this Lease or on any term of a Permitted Mortgage (as hereinafter defined). c. Not more than 365 nor less than 180 days before the last day of the current term, Lessor will give Lessee written notice, stating the date of expiration of the Lease, describing any changes that Lessor intends to make to the terms of the Lease as permitted above, and reiterating the conditions for renewal (“the Expiration Notice”). d. The parties will execute a memorandum of lease in recordable form, acknowledging the fact that the option has been exercised and otherwise complying with the requirements of law for an effective memorandum of lease. 3.3 CHANGE OF LESSOR; LESSEE’S RIGHT TO PURCHASE: Subject to the requirements of any restrictions or rights to purchase Lessor may have granted any governmental entity which will take priority over the provisions of this subsection, this Lease will continue in effect regardless of any change in the ownership of the Leased Premises. However, if Lessor attempts to convey the Leased Premises to any person or entity other than a nonprofit corporation, charitable trust, governmental agency or other similar entity sharing the goals described in the Recitals above (or as security for a mortgage loan), the Lessee will have a right of first refusal to purchase the Leased Premises. This right will be as specified in the attached Exhibit D: FIRST REFUSAL. Any sale or other transfer contrary to this section 3.3 will be null and void. ARTICLE 4: Use of Leased Premises 4.1 RESIDENTIAL USE ONLY: Lessee and any person occupying the Leased Premises will use the Leased Premises only for residential purposes and the accessory uses permitted under the applicable zoning regulations and will abide by any applicable declaration of restrictions described in the attached Exhibit E: SPECIAL USE RESTRICTIONS. 4.2 RESPONSIBLE USE AND COMPLIANCE WITH LAW AND COVENANTS: Lessee will maintain the Leased Premises in good, safe, and habitable condition in all respects, except for normal wear and tear, in full compliance with all applicable laws and regulations and homeowners regulations applicable to the Leased Premises. 4.3 RESPONSIBLE FOR OTHERS: Lessee will be responsible for the use of the Leased Premises by all residents and their families, friends and visitors and anyone else using the Leased Premises with their consent and will make all such people aware of the spirit, intent and appropriate terms of this Lease. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 4.4 OCCUPANCY: Lessee will physically occupy the Leased Premises full time unless precluded from doing so by doctor certified medical needs or otherwise agreed by Lessor. 4.5 INSPECTION: Lessor may conduct routine inspections of the Leased Premises from time to time to confirm that Lessee is in compliance with Section 4.2. of this lease. Lessor will give Lessee notice of its intention to conduct a routine inspection at least 72 hours in advance of the inspection and will conduct routine inspections only at reasonable times and in a reasonable manner. Lessor may inspect any portion of the Leased Premises at any time without notice to Lessee in the event of an emergency. 4.6 LESSEE’S RIGHT TO PEACEFUL ENJOYMENT: So long as Lessee fulfills his/her obligations under this Lease, he/she will have the peaceful and undisturbed enjoyment of the Leased Premises. ARTICLE 5: Ground Lease Fee 5.1 GROUND LEASE FEE: In consideration of the continued use and occupancy of the Leased Premises, Lessee shall pay to Lessor a monthly ground lease fee (the Ground Lease Fee), established at the commencement of this lease to be _____________________________________ dollars ($ ), which is equal to: (a) A Use Fee established at the commencement of this lease to be ____________________ Dollars ($ ); plus (b) A Stewardship Fee, established at the commencement of this lease to be __________________ Dollars ($ ). Stewardship Fee: Lessor will collect a Stewardship Fee as part of the Ground Lease Fee which it will hold in a common reserve fund along with Stewardship Fees paid by other ground lease tenants to fund capital replacement/repair projects to the Leased Premises as set in Exhibit F. The existence of the reserve fund does not alter Lessee’s repair and maintenance obligations under this Lease. 5.2 PAYMENT OF GROUND LEASE FEE: The Ground Lease Fee will be due and payable on the first day of each month. If the Lease commences on a day other than the first of the month, a pro-rata portion of the Ground Lease Fee will be paid for the balance of the month at the time the Lease is executed. If there are any unpaid Ground Lease Fees at the time this Lease is terminated or assigned, the Lessee will pay Lessor the unpaid balance, plus all applicable late fees and penalties, out of Lessee’s proceeds, if any, from the sale of the Leasehold Estate. Lessee agrees that the Ground Lease Fee will be collected by Lessor through automatic drafting of the Lessee’s bank account. If Lessee fails to establish automatic drafting for the fee, or discontinues automatic drafting at any time, Lessor will add a Processing Fee of twenty dollars to the Ground Lease Fee for each month that automatic drafting is not in place. This Processing DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Fee may be increased yearly to take into account inflation. The maximum increase that may be imposed in any single year is 5%. 5.3 REDUCTION, DELAY OR WAIVER OF GROUND LEASE FEE: Lessor may reduce, delay, or waive entirely the Ground Lease Fee from time to time for the purpose of ensuring affordable monthly housing costs for the Lessee. Any reduction, delay, or waiver must be in writing and signed by Lessor. 5.4 ADJUSTMENT OF GROUND LEASE FEE: If the provisions of Article 10 or Article 11 regarding transfers of the Lessee’s interest in the Leased Premises or Section 4.4 regarding occupancy are suspended or invalidated for any period of time, then during that time the Ground Lease Fee will be increased to the fair rental value of the Leased Premises as determined by independent appraisal for use not restricted by the provisions of the suspended portions of the Lease. The Ground Lease Fee will be recalculated yearly to take into account inflation and other factors as Lessor may reasonably choose. The maximum increase that may be imposed in any single year is 5%. ARTICLE 6: Taxes and Assessments 6.1 TAXES AND ASSESSMENTS: Lessee will be responsible for payment of all taxes, utility charges, homeowner’s association assessments, and governmental assessments that relate to the Leased Premises even if the bills are issued in the name of Lessor. LESSEE AGREES TO have all homeowner’s association assessments and/or dues paid by automatic draft, if available at no additional cost to the homeowner. 6.2 LESSEE’S RIGHT TO CONTEST: Lessee may contest the amount or validity of any taxes related to the Leased Premises. Lessor will, upon written request by Lessee, join in the proceedings if Lessor determines it is necessary for Lessee to raise a valid objection to the tax in question. Lessee will bear all costs of the tax contest proceeding. 6.3 PAYMENTS IN EVENT OF DELINQUENCY: If Lessee fails to pay the taxes or other charges specified in section 6.1 above when due, Lessor may but is not obligated to pay taxes or charges and increase the Ground Lease Fee by the amount of the taxes or charges paid. 6.4 PROOF OF COMPLIANCE: If requested by the other party, the party paying any tax, assessment or charge required or permitted under this lease will provide the other with copies of receipts documenting payment. ARTICLE 7: Ownership Rights 7.1 EXCLUSIVE RIGHTS TO LEASED PREMISES: Lessee will have the “Ownership Interest” in the Leased Premises, defined as the exclusive right during the term of this Lease to occupy and possess the land, buildings, structures, and other improvements, and fixtures attached to any improvements located on the Leased Premises, at the time of the execution of this Lease or constructed by Lessee during the term of this lease. Lessee will not sever or remove the Improvements from the Leased Premises. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 7.2 CONSTRUCTION AND ALTERATION: Lessee may make new improvements or alter existing improvements on the Leased Premises upon the following conditions: (a) Lessee will bear all costs of construction; (b) All construction will be performed in a worker like manner and in compliance with all applicable laws and regulations; (c) All construction will be consistent with the permitted uses set forth in Article 4; (d) Lessee will furnish to Lessor a copy of any plans and all building permits for the construction prior to commencing construction. (e) Lessee may not change the exterior building envelope of the Improvements without the prior written consent of Lessor. Lessee acknowledges that he/she will not recover any increase in the market value of the Property resulting from any improvements he/she might make on resale of the Property. 7.3 PROHIBITION OF LIENS: Lessee will procure the record discharge of any claim of lien including but not limited to mechanic’s or materialman’s claim of lien which might be filed against the Leased Premises within sixty (60) days of its filing. If Lessee fails to procure the record discharge of a claim of lien within the time allowed, Lessor may, but is not obligated to, discharge the same by paying the amount in question. Lessee may contest the validity of any lien asserted so long as Lessee furnishes a bond in an amount sufficient to release the Leased Premises from the lien. Any amounts paid by Lessor hereunder in respect of the liens will be deemed an additional Ground Lease Fee payable by Lessee upon demand. 7.4 MAINTENANCE AND SERVICES: Lessee will, at Lessee’s sole expense, maintain the Leased Premises as required by section 4.2 above. Lessor will not be required to furnish any services or facilities, including but not limited to heat, electricity, air conditioning, or water, or to make any repairs to the Leased Premises, and Lessee hereby assumes the sole responsibility for furnishing all services or facilities. 7.5 DISPOSITION OF LEASED PREMISES UPON EXPIRATION OF LEASE TERM: Upon the expiration of the term of this Lease as such term may be extended or terminated in accordance with this Lease, Lessee will surrender the Leased Premises to the Lessor. The exclusive right to possess the Leased Premises will thereupon revert to Lessor, provided, however, that Lessor will promptly pay to Lessee as consideration for the Leased Premises an amount equal to Lessor’s Resale Formula Price calculated in accordance with Article 10 below, as of the time of reversion of ownership, less the total amount of any unpaid Ground Lease Fee including any charges that may have been added to the Ground Lease Fee in accordance with this Lease. ARTICLE 8: Financing 8.1 PERMITTED MORTGAGE: Lessee may mortgage his or her interest in the Leased Premises with the written consent of Lessor. Lessor will be required to consent to a proposed mortgage only if: (a) All mortgage documents, which must be submitted to Lessor ten (10) days in advance of closing, are in a form acceptable to Lessor; (b) Lessee is not in default on any obligation under this Lease; DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F (c) The proposed loan documents comply with the requirements for a Permitted Mortgage set out in the attached Exhibit G: PERMITTED MORTGAGES, the terms, and conditions of which are incorporated herein by reference. Lessor, Lessee, each Permitted Mortgagee and their respective successors in interest may rely upon and shall be bound by the provisions of the “Permitted Mortgages” exhibit and any Permitted Mortgage approved by Lessor. Lessee will pay to Lessor at Lessor’s option, as additional Ground Lease Fee, all fees, costs, and expenses, including, without limitation, reasonable attorneys’ fees, incurred by Lessor in connection with any Permitted Mortgage. 8.2 REMOVAL OF CERTAIN PROVISIONS PURSUANT TO FORECLOSURE: In the event of foreclosure sale by a Permitted Mortgagee or the delivery of a conveyance to a Permitted Mortgagee in lieu of foreclosure in accordance with the provisions of the Lease, at the election of the Permitted Mortgagee the provisions of Article 10, sections 10.1 through 10.13 will be deleted and thereupon will be of no further force or effect as to only so much of the Security so foreclosed upon or transferred. 8.3 LESSOR’S RIGHT TO PROCEEDS IN EXCESS OF RESALE FORMULA PRICE: Lessee acknowledges that it would defeat Lessor’s goal of providing affordable housing for the long term if Lessee could realize more than the Resale Formula Price established in Article 10 as the result of the foreclosure of a Permitted Mortgage. Accordingly, Lessee irrevocably assigns to Lessor any and all rights Lessee might have in the proceeds of a foreclosure sale of the Leasehold Interest in excess of the Resale Formula Price after satisfaction of the lien of any Permitted Mortgagee. Lessee instructs the Permitted Mortgagee or any party conducting any sale to pay the amount of said excess proceeds directly to Lessor, but the Permitted Mortgagee and its trustee will have no liability to Lessor or Lessee for the failure to distribute excess proceeds to Lessor. If, for any reason, the excess proceeds are paid to Lessee, Lessee agrees to pay the amount of the excess proceeds to Lessor promptly. ARTICLE 9: Liability, Insurance, Damage and Destruction, Eminent Domain 9.1 LESSEE’S LIABILITY: Lessee assumes sole responsibility and liability to all persons and authorities related to the possession, occupancy, and use of the Leased Premises and will defend, indemnify, and hold Lessor harmless against all liability and claims of liability for injury or damage to person or property from any cause on or about the Leased Premises. Lessee waives all claims against Lessor for injury or damage arising from the Leased Premises except for claims arising out of Lessor’s gross negligence or intentional wrongdoing. 9.2 PAYMENT BY LESSOR: If Lessor is required to pay any sum that is the Lessee’s responsibility or liability, the Lessee will reimburse the Lessor for the payment and for reasonable expenses caused thereby. 9.3 INSURANCE: Lessee will keep all Improvements continuously insured against loss or damage by fire and other hazards for the full replacement value of the Improvements and will maintain premises liability insurance covering the Land and Improvements insuring Lessee against all liability assumed under this Lease, as well as all liability imposed by law. The hazard and liability insurance policies will name both Lessee and Lessor as “named insured’s” so as to DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F create the same liability on the part of insurer as though separate policies had been written for Lessee and Lessor. Lessee will provide Lessor with copies of all policies and renewals of policies. All policies will also contain endorsements providing that they will not be cancelled, reduced in amount or coverage, or otherwise modified by the insurance carrier without at least thirty (30) days’ prior written notice to Lessor. Lessor will be entitled to participate in the settlement or adjustment of any losses covered by the policies of insurance. 9.4 DAMAGE OR DESTRUCTION: Subject to the insurance provisions of any declaration of covenants or unit ownership which will control over this lease, if the Improvements are damaged or destroyed by fire or other casualty, Lessee will promptly restore the Improvements to their condition preceding the damage and continue to pay the Ground Lease Fee unless a. The full repair or restoration is not reasonably practicable or b. The available insurance proceeds of the insurance policies maintained in accordance with Section 9.3 are less than eighty percent (80%) of the cost of the repair or restoration. In either event, Lessee may terminate this lease after giving Lessor written notice within sixty (60) days of the loss and allowing Lessor sixty (60) days from the receipt of the notice to either a. Seek an adjustment from the insurer to increase the amount of insurance proceeds to cover at least eighty percent (80%) of the cost of the repairs or restoration, or b. Make arrangements to use the available proceeds to restore or replace the damaged Improvements with Improvements of reasonably equivalent quality with a floor area of at least eighty percent (80%) of the damaged Improvements. If Lessor fails, within sixty days of receipt of Lessee’s notice, to give Lessee notice that it has made arrangements to increase the insurance proceeds or restore or replace the Improvements as specified above, this Lease will terminate and the proceeds of the insurance maintained by Lessee will be paid in the following priority: a. To the payment of the expenses of collection of the proceeds; b. As may be permitted in any Permitted Mortgage then encumbering the Lessee’s leasehold estate; c. To the Lessee up to the then applicable Resale Formula Price as of immediately prior to the casualty calculated pursuant to Article 10. d. The balance of the proceeds, if any, to Lessor. 9.5 EMINENT DOMAIN AND PUBLIC DEDICATION: If the entire Leased Premises are taken by eminent domain, this lease will terminate as of the date the Lessee is required to surrender possession of the Leased Premises, and the condemnation award will be allocated in the same manner as a casualty loss as set out in Section 9.4. If less than the entire Leased Premises are taken, Lessor will in its discretion allocate some or all of the proceeds to enable Lessee to repair and restore that which may remain thereof while retaining the balance of the award. If the Lessor determines that the Leased Premises cannot be restored to a residential use consistent with this Ground Lease, the award will be distributed in accordance with Section 9.4. The prosecution or defense of any proceedings in DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F which a party to this lease seeks damages for a taking will be at the expense of the party asserting the claim or defense. The parties agree to be named as a party to these proceedings if necessary for the other to assert a claim or defense so long as the party asserting the claim or defense agrees to reimburse the other for any costs it might incur as a first charge against any award. 9.6 RELOCATION OF LESSEE: If this Lease is terminated as the result of damage, casualty or taking, Lessor will take reasonable steps to grant Lessee a leasehold interest in other tracts it might own, if any, and Lessee agrees to contribute any proceeds or award received by Lessee to purchase or develop the other property and enter a Lease substantially similar to this one. In no event will Lessor be required to terminate the tenancy of any other lessee or withhold any property from development or rental in order to accommodate lessee and Lessor’s failure to supply similar leasehold premises or any premises whatsoever will not give rise to any cause of action by Lessee against Lessor for damages, specific performance or other remedy. ARTICLE 10: Transfer, Sale, or Disposition of Leasehold Interest 10.1 INTENT: Lessee acknowledges that the terms of this Lease, and in particular of this Article 10, are intended to preserve the affordability of the Leasehold for lower and moderate income households. 10.2 TRANSFERS TO QUALIFIED BUYERS: While living, Lessee may transfer his/her interest in the Leased Premises only to a. Lessor or b. a Qualified Buyer as defined below or c. a Permitted Mortgage Holder in lieu of foreclosure. All such transfers will be subject to Lessor’s review and purchase option rights set forth in this Article 10. Any attempted transfer not authorized under this Article 10 will be null and void. “Qualified Buyer” will mean a person or group of persons who meet the resident selection requirements of CHT described in the attached Exhibit H: CHT RESIDENT SELECTION REQUIREMENTS and/or those of any governmental entity providing funding for CHT, and whose household income does not exceed ___________ percent (_____%) of the median household income for the Standard Metropolitan Statistical Area that encompasses Orange County, North Carolina, as calculated and adjusted for household size from time to time by the U.S. Department of Housing and Urban Development (HUD) or any successor. 10.3 TRANSFER TO LESSEE’S HEIRS/DEVISEES: So long as the recipient is willing to assume the Lessee’s obligations under this lease and sign a Letter of Stipulation and a Letter of Acknowledgment of legal counsel (similar to those described in Article 1 of this Lease), Lessee may leave his or her interest in the Leasehold Estate by will or allow it to pass by intestate succession to the following: a. The spouse of the Lessee; or b. The child or children of the Lessee; or DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F c. Member(s) of the Lessee’s household, including a domestic partner, who resided upon the Leased Premises for at least one year prior to the Lessee’s death. Any other successor to Lessee’s leasehold estate must qualify as a Qualified Buyer. If the successor does NOT qualify as a Qualified Buyer, he/she will not be entitled to possession of the Leased Premises and t must transfer his/her interest in the Leased Premises in accordance with the provisions hereof. 10.4 LESSEE’S NOTICE OF INTENT TO SELL: Lessee will notify Lessor in writing of his/her desire to sell his/her interest in the Leased Premises. Upon receiving Lessee’s Intent to Sell Notice, Lessor will have 5 business days in which to make available to Lessee a list of approved home inspectors who may perform the Professional Inspection required by section 10.5 of this lease. 10.5 PROFESSIONAL INSPECTION: Lessee will commission an inspection of the Leased Premises (the Professional Inspection) by a home inspector acceptable to Lessor. Lessor will pay for the Professional Inspection. 10.6 REPAIR REQUIREMENTS: Within 5 business days after Lessor receives the report from the Professional Inspection, Lessor will contact Lessee to schedule a Lessor’s inspection of the Leased Premises (Lessor’s Inspection). Within 5 business days of Lessor’s Inspection, Lessor will make available to Lessee a list of repair requirements which must be met by Lessee (the Repair Requirements). Lessee will be expected to bear 100% of the costs of the Repair Requirements. In preparing this list, Lessor will reference the standards described in Exhibit I: REPAIR REQUIREMENTS. 10.7 APPRAISAL: At its discretion, Lessor may also commission an appraisal (the Appraisal) of the Property within 5 business days after receiving the report from the Professional Inspection. Lessor will pay for the Appraisal. The Appraisal will be performed by a licensed appraiser acceptable to Lessor and Lessee. The Appraisal will state the market value of the Property, rather than the leasehold value. Copies of the Appraisal are to be provided to both Lessor and Lessee 10.8 REPAIR INSPECTION: After Lessee has completed the Repair Requirements, he or she will contact Lessor to schedule an inspection of the completed upfits and repairs. Lessor will certify when the Repair Requirements have been completed to Lessor’s satisfaction. 10.9 LESSOR’S PURCHASE OPTION: a. Voluntary Sale: Within (five) 5 business days of certifying Lessee’s completion of the Repair Requirements, Lessor will prepare its standard “Resale Agreement” document and notify Lessee that it is available to sign. When Lessee signs and returns the Resale Agreement, Lessor will have the option to purchase Lessee’s interest in the Leased Premises (“the Purchase Option”) at the Resale Formula Price calculated as set forth below. The Purchase Option is designed to further the purpose of preserving the affordability of the Leasehold Estate for succeeding Qualified Buyers while taking fair account of the investment by the Lessee. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Lessor may exercise the Purchase Option upon giving Lessee written notice of the election (“the Notice of Exercise of Option”) within forty-five (45) days of the receipt of the Resale Agreement signed by Lessee. Lessor, or any Qualified Buyer to whom Lessor may assign the Purchase Option, will have sixty days from the exercise of the Purchase Option in which to close the purchase of Lessee’s interest in the Leased Premises. Unless Lessor and Lessee agree to extend either deadline, Lessee will be free to sell his/her interest in the Leased Premises in accordance with Section 10.10 if Lessor or its assignee fails to exercise the option or close the purchase within the time allowed. b. Foreclosure. At any time after the commencement of foreclosure proceedings under a Permitted Mortgage, Lessor may purchase the Lessee’s Leasehold Interest for the balance due under the Permitted Mortgage. 10.10 IF PURCHASE OPTION EXPIRES: If the Purchase Option expires and Lessor fails to complete the purchase within the period allowed by section 10.9 above, Lessee may sell his or her interest in the Leased Premises through Lessor to any Qualified Buyer, for not more than the then applicable Resale Formula Price. 10.11 PURCHASE OPTION PRICE: The Purchase Option Price shall be the lesser of (a) the value of the Property as determined by the Appraisal, should one have been commissioned and conducted as provided in 10.7 above, or (b) the price calculated in accordance with the formula described below (the Resale Formula Price). 10.12 CALCULATION OF THE RESALE FORMULA PRICE: The Resale Formula Price will be equal to the Lessee’s Purchase Price, as stated below, plus the calculated appreciation of the Lessee’s Investment Basis (as defined below). The appreciation amount will be the percentage change in the Median Family Income (MFI), as published by the US Department of Housing and Urban Development (HUD), for the metropolitan statistical area (MSA) that includes Orange County, from the date of purchase to the date of the resale subject to a minimum annual appreciation rate of 0.00% and a maximum annual appreciation rate of 1.00%. Appreciation for partial years will be prorated to the date of the calculation. The published MFI published by HUD as of the date of purchase is $___________________. Lessee's Purchase Price: The parties agree that the Lessee’s Purchase Price for the leased premises as of the commencement of the term of this Lease is $____________. Lessee's Investment Basis: The Lessee’s Investment Basis is calculated in Exhibit J: INVESTMENT BASIS. The parties agree that the Lessee’s Investment Basis in the leased premises as of the commencement of the term of this Lease is $____________. 10.13 RIGHT TO PURCHASE IN LIEU OF OPTION: If the provisions of the purchase option set forth in this Article 10 become unenforceable for any reason, Lessor will nevertheless have a right to purchase the interest in the Leased Premises at the highest documented bona fide purchase price offer made to Lessee as specified in the exhibit D: RIGHT TO PURCHASE IN DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F LIEU OF OPTION. Any sale or transfer contrary to this section, when applicable, will be null and void. ARTICLE 11: Assignment and Sublease 11.1. Except as otherwise provided in Article 8 (including Exhibit G) and Article 10, Lessee may not sublease, sell, or otherwise convey any of Lessee’s rights under this Lease without the prior written consent of the Lessor which the Lessor may withhold in its own discretion. ARTICLE 12: Default 12.1 DEFAULT BY LESSEE: It will be an event of default if Lessee fails to abide by any material term or condition in this Lease, or if Lessee fails to pay the Ground Lease Fee or other charges required by the terms of this Lease, a permitted mortgage, or any relevant owner’s association declaration and the failure is not cured by Lessee or a Permitted Mortgagee within thirty (30) days after notice of the failure is given by Lessor to Lessee and Permitted Mortgagee. Lessee will be assessed a late fee for any payment, including ground lease fees, that Lessor does not receive within thirty days of its due date. The late fee will be 10% of any past due payment. For each additional 30 days that the payment remains delinquent, Lessor will charge an additional late fee which will be 10% of the original past due amount. 12.2 TERMINATION, FORFEITURE AND MODIFICATION OF LEASE: There will be no termination, forfeiture, or modification of the Lease without the prior written consent of any Permitted Mortgagee or until Permitted Mortgagee has failed to object to the intended action for more than thirty days after Lessor has sent Permitted Mortgagee written notice of its intended action. In the case of any of the events of default described above and with the written consent of any Permitted Mortgagee, and following the giving of any required notice of default and the failure of Lessee to cure the default within the applicable cure period, Lessor may give notice of the termination of this Lease to Lessee and initiate summary ejectment proceedings allowing Lessor to enter and retake possession of the entire Leased Premises. If this Lease is terminated by Lessor, or if Lessor reenters the Leased Premises after an Event of Default, the Lessee agrees to pay and be liable for any unpaid Ground Lease Fee, damages which may be due or sustained prior to or in connection with the termination or reentry, and all reasonable costs, fees and expenses (including, without limitation, reasonable attorneys’ fees) incurred by Lessor in pursuit of its remedies under this Lease. If Lessor elects to terminate the Lease and a Permitted Mortgage remains outstanding, a new Lease will automatically be created between the Lessor and the Permitted Mortgagee, which Lease will be for the remainder of the term of the Lease, with the same priority thereto 12.3 DEFAULT BY LESSOR: Lessor will in no event be in default in the performance of any of its obligations under the Lease unless and until Lessor has failed to perform the DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F obligations within thirty (30) days, or the additional time as is reasonably required to correct any default, after notice by Lessee to Lessor properly specifying Lessor’s failure to perform any the obligation. ARTICLE 13: Arbitration 13.1 ARBITRATION PROCESS: Should any grievance or dispute other than a default on a monetary term arise between Lessor and Lessee concerning the terms of this Lease that cannot be resolved by normal interaction, the following arbitration procedure will be used. Lessor or Lessee will give written notice to the other of its selection of a disinterested arbitrator. Within fifteen (15) days of the receipt of this written notice, the other party may give written notice to the first party appointing a disinterested arbitrator of its own choice. These two arbitrators will select a third arbitrator. If the other party fails to name an arbitrator within 15 days of receiving the notice from the first party, the arbitrator selected by the first party will be the sole arbitrator. The arbitrator or arbitrators will hold a hearing within thirty (30) days after the initial written notice by the initiator of the arbitration process. At the hearing Lessor and Lessee will have an opportunity to present evidence and question witnesses in the presence of each other. As soon as reasonably possible, and in no event later than fifteen (15) days after the hearing, the arbitration panel will make a written report to the Lessor and Lessee of its findings and decisions, including a personal statement by each arbitrator of his/her decision and the reasons for it. The arbitrators will decide the dispute or claim in accordance with the substantive law of North Carolina and what is just and equitable under the circumstances. The decision and award of the majority of the arbitration panel will be binding and final. Lessor and Lessee will share the costs of arbitration equally. ARTICLE 14: General Provisions 14.1 LESSEE’S MEMBERSHIP IN CHT: The Lessee under this Lease will automatically be a regular voting member of the CHT. 14.2 NOTICES: Whenever this Lease requires either party to give notice to the other, the notice will be given in writing and delivered in person or mailed, by certified or registered mail, return receipt requested, to the party at the address set forth below, or the other address designated by like written notice: If to Lessor: Community Home Trust, President PO Box 307 Carrboro, NC 27510 With copies to: David M. Rooks, III PO Box 2208 Chapel Hill, NC 27515-2208 DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F If to Lessee: __________________________ __________________________ __________________________ All notices, demands, and requests will be effective upon being deposited in the United States Mail or, in the case of personal delivery, upon actual receipt. 14.3 NO BROKERAGE: Lessee warrants that it has not dealt with any broker other than __________________ in connection with the consummation of this Lease, and in the event any claim is made against Lessor relative to dealings with brokers other than _________________, Lessee will defend the claim against Lessor with counsel of Lessor’s selection and save harmless and indemnify Lessor on account of loss, cost or damage which may arise by reason of any the claim. 14.4 SEVERABILITY AND DURATION: If any part of this Lease is declared unenforceable or invalid, the material will be read out of this Lease and will not affect the validity of any other part of this Lease or give rise to any cause of action of Lessee or Lessor against the other, and the remainder of this Lease will be valid and enforced to the fullest extent permitted by law. It is the intention of the parties that their respective options to purchase and all other rights under this Lease will continue in effect for the full term of this Lease and any renewal thereof, and the options and other rights will be considered to be coupled with an interest. In the event any the option or right will be construed to be subject to any rule of law limiting the duration of the option or right, the time period for the exercising of the option or right will be construed to expire ninety (90) years from the creation of the option or right in question. 14.5 WAIVER: The waiver by Lessor at any given time of any term or condition of this Lease, or the failure of Lessor to take action with respect to any breach of any the term or condition, will not be deemed to be a waiver of the term or condition with regard to any subsequent breach of the term or condition, or of any other term or condition of the Lease. Lessor may grant waivers in the terms of this Lease, but the waivers must be in writing and signed by Lessor before being effective. The subsequent acceptance of Ground Lease Fee payments by Lessor will not be deemed to be a waiver of any preceding breach by Lessee of any term or condition of this Lease, other than the failure of the Lessee to pay the particular Ground Lease Fee so accepted, regardless of Lessor’s knowledge of the preceding breach at the time of acceptance of the Ground Lease Fee payment. 14.6 LESSOR’S RIGHT TO PROSECUTE OR DEFEND: Lessor will have the right, but will be under no obligation, to prosecute or defend, in its own or the Lessee’s name, any actions or proceedings appropriate to the protection of its title to, and Lessee’s interest in, the Leased Premises. Whenever requested by Lessor, Lessee will give Lessor all reasonable aid in any the action or proceeding. 14.7 CONSTRUCTION: Whenever in this Lease a pronoun is used it will be construed to represent either the singular or the plural, masculine or feminine, as the case will demand. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 14.8 CAPTIONS AND TABLE OF CONTENTS: The captions and table of contents appearing in this Lease are for convenience only, and are not a part of this Lease and do not in any way limit or amplify the terms or conditions of this Lease. 14.9 PARTIES BOUND: This Lease sets forth the entire agreement between Lessor and Lessee with respect to the leasing of the Leased Premises. It is binding upon and inures to the benefit of these parties and, in accordance with the provisions of this Lease, their respective successors in interest, each of whom will be a third party beneficiary of the Lease entitled to rely upon and enforce its provisions. This Lease may be altered or amended only by written notice executed by Lessor and Lessee or their legal representatives or, in accordance with the provisions of this Lease, their successors in interest. However, as long as the Lessee’s interest in the Leased Premises is encumbered by a Permitted Mortgage: (a) There will be no modification of this Lease without the written approval of the Permitted Mortgagee, which approval will not be unreasonably withheld or delayed. The passage of thirty days after submittal to a Permitted Mortgagee of a proposed Lease amendment without approval or disapproval by the Permitted Mortgagee will be deemed approval thereof. (b) Unless (i) the Lessee is in default under the terms of this Lease, (ii) the Lessor has notified the Lessee and the Permitted Mortgagee of the default as required in this Lease, and (iii) the default has not been cured within the applicable cure period, there will be no termination, surrender or forfeiture of this Lease or the Leased Premises without the written approval of the Permitted Mortgagee. The passage of thirty days after submittal to a Permitted Mortgagee of notice of intention to terminate the Lease without approval or disapproval by the Permitted Mortgagee will be deemed approval thereof. 14.10 GOVERNING LAW: This Lease will be interpreted in accordance with and governed by the laws of North Carolina. The language in all parts of this Lease will be, in all cases, construed according to its fair meaning and not strictly for or against Lessor or Lessee. 14.11 RECORDING: The parties agree to execute a Memorandum of Lease. The Memorandum of Lease will not set forth the rent or other charges payable by Lessee under this Lease and will the expressly state that it is executed pursuant to the provisions contained in this Lease, and is not intended to vary the terms and conditions of this Lease. 14.12 DISCLOSURE OF INFORMATION: Lessor and its successors in interest may disclose information concerning Lessee and this Lease to any Permitted Mortgagee, to any prospective Permitted Mortgagee, to their respective successors in interest, and to their respective agents and employees. Any Permitted Mortgagee and its successors in interest may disclose information concerning Lessee, this Lease, and any Permitted Mortgage to Lessor, to Lessor’s successors in interest, and to their respective agents and employees. IN WITNESS WHEREOF, the parties have executed this lease at Chapel Hill, NC, on the day and year first above written. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F COMMUNITY HOME TRUST By: _____________________________ President NORTH CAROLINA _________________ COUNTY I, _______________________, Notary Public for said County and State, certify that ________________________, personally came before me this day and acknowledged that he/ she is _________________________ of Community Home Trust, a corporation, and that he/she signed this instrument by authority duly given and as the act of the corporation. Witness my hand and official stamp\seal, this the ______ day of _______________, 20___. Notary Public ________________________My Commission Expires: ____________ Lessee: ______________________________________ Lessee: ______________________________________ NORTH CAROLINA DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F _________________ COUNTY I, _______________________, Notary Public for said County and State, certify that ___________________________________, personally came before me this day and acknowledged the due execution of the foregoing instrument. Witness my hand and official stamp\seal, this the ______ day of _______________, 20___. Notary Public_________________________ My Commission Expires: ____________ NORTH CAROLINA _________________ COUNTY I, _______________________, Notary Public for said County and State, certify that ___________________________________, personally came before me this day and acknowledged the due execution of the foregoing instrument. Witness my hand and official stamp\seal, this the ______ day of _______________, 20___. Notary Public_________________________ My Commission Expires: ____________ DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit A: FORM: LETTER OF STIPULATION Letter of Stipulation To: COMMUNITY HOME TRUST (“the CHT”) Date: ____________ This letter is given to CHT to become an exhibit to a Lease between the CHT and me. I will be leasing a parcel of land and the home located on that parcel of land from CHT for the term of the lease, which will give me an “ownership interest” in the property. I will therefore become what is described here as a “CHT homeowner.” My legal counsel, ___________________________________, has explained to me the terms and conditions of the Lease and other legal documents that are part of this transaction. I understand the way these terms and conditions will affect my rights as a CHT homeowner, now and in the future. In particular I understand and agree with the following points. One of the goals of the CHT is to keep CHT homes affordable for lower-income households from one CHT homeowner to the next. I support this goal as a CHT homeowner and as a member of the CHT. The terms and conditions of my Lease will keep my home affordable for future “Qualified Buyers” (as defined in the lease). If and when I want to sell my home, the lease requires that I sell it either to the CHT or to another Qualified Buyer. The terms and conditions of the lease also limit the price for which I can sell the home, in order to keep it affordable for the Qualified Buyers. It is also a goal of the CHT to promote resident ownership of CHT homes. For this reason, my Lease requires that if I and my family move out of our home permanently, we must sell it. We cannot continue to own it as absentee owners. I understand that I can leave my home to my child or children or other members of my household and that, after my death, they can own the home for as long as they want to live in it and abide by the terms of the Lease, or they can sell it on the terms permitted by the Lease. As a CHT homeowner and a member of the CHT, it is my desire to see the terms of the Lease and related documents honored. I consider these terms fair to me and others. Sincerely, DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit B: FORM: LETTER OF ACKNOWLEDGEMENT Letter of Acknowledgment I, ___________________________, have been independently employed by __________________________ (hereinafter “the Client”) who intends to enter into a long term ground lease with Community Home Trust for the land and home located at ________________________ _________________________. In connection with the contemplated transaction I reviewed with the Client the following documents relating to the transaction: This Letter of Acknowledgment and a Letter of Stipulation from the Client A proposed Ground Lease conveying the “Leased Premises” to the Client Other written materials provided by the CHT. The Client has received full and complete information and advice regarding this conveyance and the foregoing documents. My advice and review has been given to reasonably inform the Client of the present and foreseeable risks and legal consequences of the contemplated transaction. The Client is entering the aforesaid transaction in reliance on her own judgment and upon her investigation of the facts. The full and complete advice and information provided by me was an integral element of the investigation. Name _________________________________ Date _______________ Title _____________________________________ Firm/Address _____________________________ DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit C: LEASED PREMISES Insert legal description of area of Leased Premises and appurtenant title rights and obligations. Reference all easements, rights, utilities access etc. associated with the Leased Premises DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit D: RIGHT TO PURCHASE IN LIEU OF OPTION Whenever any party under the Ground Lease will have a right to purchase as to certain property, the following procedures will apply. If the owner of the property offering it for sale (“Offering Party”) will within the term of the Ground Lease receive a bona fide, third-party offer to purchase the property that the Offering Party is willing to accept, the holder of the right of first refusal (the “Holder”) will have the following rights: a. Offering Party will give written notice of the offer (“the Notice of Offer”) to Holder setting forth (a) the name and address of the prospective purchaser of the property, (b) the purchase price offered by the prospective purchaser and (c) all other terms and conditions of the sale. Holder will have a period of forty-five (45) days after the receipt of the Notice of Offer (“the Election Period”) within which to exercise the right of first refusal by giving notice of intent to purchase the property (“the Notice of Intent to Purchase”) for the same price and on the same terms and conditions set forth in the Notice of Offer. The Notice of Intent to Purchase will be given in writing to the Offering Party within the Election Period. b. If Holder exercises the right to purchase the property, the purchase will be completed within sixty (60) days after the Notice of Intent to Purchase is given by Holder (or if the Notice of Offer will specify a later date for closing, the date) by performance of the terms and conditions of the Notice of Offer, including payment of the purchase price provided therein. c. Should Holder fail to exercise the right of first refusal within the Election Period, then the Offering Party will have the right (subject to any other applicable restrictions in the Ground Lease) to go forward with the sale which the Offering Party desires to accept, and to sell the property within one (1) year following the expiration of the Election Period on terms and conditions which are not materially more favorable to the purchaser than those set forth in the Notice. If the sale is not consummated within the one-year period, the Offering Party’s right so to sell will end and all the foregoing provisions of this section will be applied again to any future offer, all as aforesaid. If a sale is consummated within the one-year period, the purchaser will purchase subject to a renewed right to purchase in said property. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit E: SPECIAL USE RESTRICTIONS To be attached when necessary to stipulate use restrictions not included under Zoning DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit F: STEWARDSHIP FEE Reserves collected through the Lessee’s monthly Stewardship Fee are explicitly the property of Lessor, but may only be used for the capital replacement needs of the Property. Lessor must reserve the full amount of the funds for this purpose. The Stewardship Fee Reserves will be administered by Lessor, and Lessor will decide which capital replacement costs are eligible for the use of the reserves. Lessee may request release of funds, and Lessor shall release funds at its sole discretion, if the requested use is found to be necessary and in accordance with the Reserve’s intended use. Specifically, the Stewardship Fee reserves will be used for the replacement of the following capital systems: ALL HOMES: The HVAC System The Water Heater Interior Floor Finishes Covered UNLESS already covered by HOA: The Roof The Exterior Siding and Trim Services Also Included in Stewardship Fee Routine Termite Inspection and Continuous Termite Warranty Pressure Washing (only if required by HOA) In communities with homeowner or condominium owner associations, a portion of the above capital costs may be covered by the owner association dues. In this case, capital items that are specifically the responsibility of the owner association are explicitly excluded from coverage under the Stewardship Fee reserves and are not included in establishing your fee calculation. Lessee’s monthly Stewardship Fee will be adjusted to reflect coverage of these items under the owner association dues. Lessor will manage the above capital systems replacement needs in consultation with Lessee. System components will be replaced with products of comparable quality and features. At Lessor’s discretion, during a system replacement Lessee may opt to replace components with higher rather than comparable quality products. In this case, Lessee will pay the cost difference between the comparable quality and the higher quality product. It is incumbent upon the Lessee to notify Lessor immediately of any deficiencies in the above capital systems. Damages resulting from failure to make prompt notice of deficiencies are the responsibility of Lessee. The Stewardship Fee Reserves are explicitly the property of Lessor, but may only be used for the capital replacement needs of the Property as specified in this Exhibit F. Lessee acknowledges that the Stewardship Fee Reserves are intended for the benefit of Lessee and all other CHT lessees and will not be returned to Lessee upon the sale or transfer of the Leasehold Estate. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Lessee may expect that up to the full amount of reserves will be available for capital replacement needs but Lessee will bear capital replacement costs in excess of available Stewardship Fee Reserves. No later than September 30th of each year, Lessor will make available upon Lessee’s request a detailed report of Stewardship Fee Reserves transactions for the prior fiscal year. Lessee agrees to attend a home maintenance class offered by Lessor after purchasing the Leasehold Estate. Because regular home maintenance reduces long term repair costs, Lessor will reduce the amount of Lessee’s monthly Stewardship Fee by five dollars after Lessee has completed the home maintenance class. Lessee may attend additional home maintenance classes, but will not receive additional fee reductions. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit G: PERMITTED MORTGAGES The provisions set forth in this Exhibit are understood to be provisions of Article 8 of the Lease to which the Exhibit is attached and in which the Exhibit is referenced. All terminology used in this Exhibit will have the meaning assigned to it in the Lease. 1. A “Permitted Mortgage” as the term is used in Section 8.1 is a mortgage which is approved in advance by Lessor and: a. Runs in favor of either (1) an institutional lender such as, but not limited to, a federal, state, or local housing finance agency, bank, savings and loan association, insured credit union, an insurance company, a pension and/or profit-sharing fund or trust, or any combination of the foregoing, the policies and procedures of which institutional lender are subject to direct governmental supervision, or (2) a “community development financial institution”, or similar nonprofit lender to housing projects for low and moderate income persons (as defined by reference to the membership criteria for the National Association of Community Development Loan Funds, a nonprofit corporation with its principal office located in Philadelphia, Pennsylvania); and b. Is a first lien on Lessee’s Leasehold Estate (Lessor may, but is not obligated to, approve a second lien on the Leasehold Estate); and c. Provides that prior to accelerating the note secured by the mortgage and commencing foreclosure proceedings, the Permitted Mortgage holder will give Lessor notice of a default in any of the mortgagor’s obligations and the right but not the obligation to cure the default within 120 days after its receipt of the notice, provided that current payments due to the holder are made during this period. d. Provides that if after the cure period the holder intends to accelerate the note secured by the Permitted Mortgage and/or initiate foreclosure proceedings under the Permitted Mortgage, the holder will first notify Lessor of its intention to do so and Lessor will have the right, but not the obligation, to pay off or purchase the indebtedness secured by the Permitted Mortgage and acquire the security interest within 30 days of the receipt of the notice; and e. Provides that in the event of foreclosure sale by a Permitted Mortgagee or the delivery of a deed to a Permitted Mortgagee in lieu of foreclosure, upon acquisition of the Lessee’s interest in the Leased Premises by the Permitted Mortgagee, the Permitted Mortgagee will give the Lessor written notice of such acquisition and the Lessor will have an option to purchase the Lessee’s interest in the Leased Premises from the Permitted Mortgagee for the full amount owing to the Permitted Mortgagee under the Permitted Mortgage; provided, however, that the Lessor gives written notice to the Permitted Mortgagee of the Lessor’s intent to purchase the Lessee’s interest in the Leased Premises within thirty (30) days following the Lessor’s receipt of the Permitted Mortgagee’s notice of such acquisition of the Lessee’s interest; further provided that Lessor will complete the purchase of the Lessee’s interest in the Leased Premises within sixty (60) days of having given written notice of its intent to purchase; and provided that, if the Lessor does not complete the purchase within such period, the Permitted Mortgagee will be free to sell the Lessee’s interest in the Leased Premises to another person; 2. LESSOR’S CONSENT TO PERMITTED MORTGAGE: Lessee must obtain Lessor’s consent to a mortgage in advance and will give Lessor copies of all proposed loan documents at DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F least 10 days prior to Lessee’s intended closing date. If the proposed mortgage fully complies with the requirements of Section 8.1, Lessor must consent to the mortgage if: a. Lessee is not in default on this Lease or to any creditor; b. The Permitted Mortgage and related documentation contain no terms other than provisions generally contained in mortgages used for similar transactions in the Orange County, North Carolina area by institutional mortgagees; c. The Permitted Mortgage and related documentation do not contain any provisions which could be construed as rendering Lessor or any subsequent holder of the Lessor’s interest in the Leased Premises liable for the payment of the debt evidenced by the note and Permitted Mortgage or expose Lessor or Lessor’s interest in the Leased Premises to and deficiency judgment; d. The Permitted Mortgage provides that the holder’s rights to Lessee’s share of any condemnation award will attach only to that share of the award allocated to the Lessee in accordance with Section 9.6 of this Lease; e. Nothing in the Permitted Mortgage or related documentation obligates Lessor to execute an assignment of the Ground Lease Fee or other rent payable by Lessee under the terms of this Lease. 3. RIGHTS OF PERMITTED MORTGAGEE: Any Permitted Mortgagee will without the requirement of consent by the Lessor have the right, but not the obligation, to: a. Cure any default under this Lease, and perform any obligation required hereunder, the cure or performance by a Permitted Mortgagee being effective as if the same had been undertaken and performed by Lessee. In the event that Lessor sends a notice of default under the Lease to Lessee, Lessor shall also send a notice of Lessee’s default to Permitted Mortgagee. b. Acquire and convey, assign, transfer and exercise any right, remedy or privilege granted to Lessee by this Lease or otherwise by law, subject to the provisions, if any, in said Permitted Mortgage, which may limit any exercise of any the right, remedy or privilege; and c. Rely upon and enforce any provisions of this Lease to the extent that the provisions are for the benefit of a Permitted Mortgagee. Permitted Mortgagee will not, as a condition to the exercise of its rights, be required to assume liability for the performance of the obligations of the Lessee under this lease. Any payment or performance or other act by Permitted Mortgagee hereunder will not be construed as an agreement by Permitted Mortgagee to assume liability except to the extent Permitted Mortgagee actually takes possession of the Security and the Leased Premises or collects fees or rentals from occupants. If Permitted Mortgagee does take possession of the Security and thereupon transfers the Security, a transferee will be required to enter into a written agreement assuming liability under this Lease and upon any the assumption the Permitted Mortgagee will automatically be released from liability hereunder. So long as Permitted Mortgagee has a security interest in the ground leasehold or the Improvements, there will be no merger of the leasehold and fee estates even if both are owned by the same person or entity unless Permitted Mortgagee consents to the merger. If the estate of Lessor is owned at any time by Lessee (regardless of a merger), or by any person in which Lessee has a direct or indirect interest, Permitted Mortgagee will not be obligated to cure any default of Lessee hereunder as condition to the forbearance by Lessor in the exercise of Lessor’s remedies as herein provided. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F 4. APPROVAL OF AMENDMENTS: Any amendments to this Lease will be subject to the written approval of Permitted Mortgagee, which approval will not be unreasonably withheld or delayed. The passage of thirty (30) days after submittal to Permitted Mortgagee of a proposed amendment without approval or disapproval by Permitted Mortgagee will be deemed approval thereof. 5. NEW LEASE TO PERMITTED MORTGAGEE: Upon written request of the Permitted Mortgagee made within sixty (60) days of the termination of this Lease or upon its rejection or disaffirmance under bankruptcy law or other law affecting creditors’ rights, Lessor will enter into a new lease of the Leased Premises with the Permitted Mortgagee (or with any party designated by the Permitted Mortgagee, subject to Lessor’s approval, which approval will not be unreasonably withheld). The lease term will be for the remainder of the term of the Lease, effective as of the date of the termination, rejection, or disaffirmance, and upon all the terms and provisions contained in the Lease. The written request will be accompanied by a copy of the new lease, duly executed and acknowledged by the Permitted Mortgagee or the party designated by the Permitted Mortgagee to be the Lessee and the Permitted Mortgagee will have cured all defaults under the Lease which can be cured by the payment of money. Any new lease made pursuant to this Section will have the same priority with respect to other interests in the Leased Premises as this Lease. The provisions of this Section will survive the termination, rejection, or disaffirmance of the Lease and will continue in full effect thereafter to the same extent as if this Section were an independent contract made by Lessor, Lessee and the Permitted Mortgagee. 6. NO TERMINATION DURING FORECLOSURE: The Lessor will have no right to terminate this Lease once Permitted Mortgagee commences foreclosure in accordance with the provisions hereof and is diligently pursuing the same. 7. PROVISIONS SUBJECT TO FORECLOSURE: In the event of foreclosure sale by a Permitted Mortgagee or the delivery of a deed to a Permitted Mortgagee in lieu of foreclosure in accordance with the provisions hereof, at the election of the Permitted Mortgagee, the provisions of Sections 10.1 through 10.13 will be deleted and thereupon will be of no further force or effect as to only so much of the Security so foreclosed upon or transferred. 8. NOTICE: Whenever in this Article notice is to be given to Permitted Mortgagee, the notice will be given in the manner set forth in Section 14.2 at the address which has been given by the Permitted Mortgagee to Lessor. 9. COSTS OF PERMITTED MORTGAGE: Lessee will pay to Lessor at Lessor’s option, as additional rent hereunder, all fees, costs and expenses, including, without limitation, reasonable attorneys’ fees, incurred by Lessor in connection with any Permitted Mortgage. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit H: CHT PROGRAM ELIGIBILITY POLICY Program Eligibility Policy Approved 9/14/16 The following criteria will be used to evaluate eligibility for specific homeownership opportunities through Community Home Trust. Based on the following criteria, applicants may qualify for the program, but must also meet affordability, subsidy, and lending requirements in order to purchase a specific home. Income Guidelines The Home Trust is limited to selling most of its homes to buyers making less than 80% of the area median income published by HUD each year. The Home Trust can sell certain properties to buyers making up to 115% of the area median income. Buyers over 80% AMI, are generally not eligible for new subsidy funds. However, buyers above 80% may be eligible to purchase homes already subsidized. Please see the “Subsidy Qualification Requirements” for more information. In order to qualify to purchase a specific property, the buyer's income must be sufficient to meet the affordability guidelines outlined below: The buyer's total monthly housing costs (excluding utilities), must not exceed 30% of the buyer's gross monthly income. Although program eligibility does not allow a buyer's housing ratio to exceed 30%, the Home Trust targets a maximum housing ratio of 28% (less, 1% for each dependent), whenever possible. Income Inclusions: The Home Trust will use the income inclusions required by HUD's HOME program to determine eligibility, even if HOME funds are not being used. In certain circumstances, the Home Trust reserves the right to exclude income when determining affordability to purchase a home (see "Eligibility vs. Affordability Guidelines"). Student and Work Status Student Status A student is defined as someone who is working less than 32 hours per week and is enrolled in an undergraduate, graduate, or community college program. Students (both single and married) are considered to have "temporarily reduced" income and therefore may only purchase a Home Trust home if certain criteria are met: New homes under construction: Student households will be eligible to purchase any remaining units after C/O has been issued Existing homes: Student households may purchase a home after the home has been marketed a minimum of 30 days. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Applicants who have been out of school for ten or more years, and have returned for career development, are not considered students. Work Status Each homebuying household should contain at least one individual who works a minimum of 32 hours per week. Exceptions will be made in the following instances:: An individual that is disabled, yet has sufficient income to meet other affordability guidelines An individual is aged 65 or older An independent contractor or self-employed individual that has intermittent or seasonal work, that otherwise meets program guidelines An individual who is the primary caretaker of either (1) a child under the age of 12, or (2) a person who requires care throughout the day. Additional exceptions may be granted for understandable reasons that can be adequately documented. Real Estate Ownership Only qualified applicants without any other residential real estate holdings or mortgage obligations will be permitted to establish contract and purchase a Home Trust home. An exception may be granted if someone holds partial ownership in a property as a result of an estate and it has not been their primary residence. An exception may also be granted in certain situations that involve real estate ownership in foreign nations. The property will be considered an asset and any income derived from the property will be calculated towards qualifying income. First Time Homebuyer A first time homebuyer is defined using the HUD definition, which is someone who has not owned a home in the past three years, or who meet the "special circumstances" criteria as outlined by HUD. For the purposes of qualifying for the homeownership program, buyers do not need to be a first time homebuyer. To purchase a home subsidized by new CDBG funds, buyers must meet first time homebuyer requirements. After the home has been marketed for 30 days, this requirement is waived. To purchase a home subsidized by new HOME or Bond Funds, buyers must meet first time homebuyer requirements. After the home has been marketed for 90 days, this requirement is waived. Buyers who are not first time homebuyers, may purchase a home with HOME or CDBG funds already invested in them, as long as the affordability period has expired. The appropriate jurisdiction must be notified. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Residency Requirements Applicants must be U.S. Citizens, Permanent Residents, or Registered Aliens to qualify for the program. This does not guarantee an applicant's ability to purchase, as each lender and subsidy source has their own guidelines that must be met. Priority will be given to applicants who currently live or work in Orange County, however, it is not a requirement to qualify for our program. Orange County requires buyers to live or work in Orange County at least 1 year prior to purchasing a home subsidized by HOME funds. This requirement shall be waived after 90 days of marketing. The Town of Chapel Hill requires buyers to live or work in Orange County at least 6 months prior to purchasing a home subsidized by CDBG funds. This requirement shall be waived after 30 days. Appropriate Unit Size We will attempt to match household size to unit size, allowing for larger units to be sold to larger households. For example, a 2 person household is eligible to purchase a 1-2 bedroom home. See the "Exceptions Policy" for eligible exceptions. Assets All assets are assumed to be income generating, even if they are not. HUD's published imputed interest rate is used on all non-income generating assets and this income is included when determining income for eligibility. The value of assets (after a downpayment and closing costs) is considered when awarding subsidy. Applicants with assets that are not invested in qualified retirement accounts will be subject to the following eligibility review: A. All households with non-retirement assets of less than $20,000 are considered eligible for the program and all subsidy sources, provided they meet all other eligibility requirements to purchase a home. B. Households with non-retirement assets greater than $20,000, but less than $100,000, can purchase a Home Trust home, but are not eligible for additional subsidy. C. Households with greater than $100,000 in non-retirement assets are not eligible for the program, except in the following circumstances: Over 65 years of age Permanently disabled, with evidence of disability payments Note: Applicants can receive a one-time gift to help them purchase a home up to a maximum of $10,000. See the "Gift Policy" for more details, including possible exceptions. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Miscellaneous Over 65 years of age Applicants over the age of 65 at the time of purchase must comply with all program requirements with the exception of: Do not need to work a minimum of 32 hours per week May have more than $100,000 in non-retirement assets Do not need to be a first time homebuyer - 30 day waiting period waived If purchasing a condo in the Town of Chapel Hill they do not need to meet residency requirement - 30 day waiting period waived Applicants over 65 years of age must still fulfill all educational requirements, regardless of loan financing or first time homebuyer status. Exceptions: Allowed exceptions to this policy are outlined in the attached "Exceptions Policy." Exceptions are granted based on desirability of certain properties, days on market, buyer circumstances, and property deficiencies. Subsidy: Each subsidy source requires different qualifications. See the "Subsidy Qualification Requirements" for HOME, CDBG, AHDR, Bond, and CPLP qualification requirements. 1st Mortgages: Except in rare circumstances, buyers must qualify for a 1st mortgage to purchase a CHT home. See the "Lending Qualification Requirements" for the lending qualifications of our current loan products. Applicant Recourse to Appeal Provisions of this Policy: If an applicant wishes to appeal for a waiver or modification of any of the above requirements, he/she may appeal to the Community Home Trust Board of Directors. The Board of Directors will only consider waivers for policies unrelated to subsidy requirements or the basic program guidelines. An applicant's appeal should include a written, brief description of the situation and the reason for the waiver request and can be sent directly to the Executive Director to discuss with the Board. The decision of the Board of Directors is final and not subject to further appeal. Statement of Expectations of Full Disclosure: It is expected that every applicant provide all relevant information that impacts his/her eligibility for the Community Home Trust homeownership program. An applicant should fully and honestly disclose all information used to determine program eligibility and subsidy allocation, including, but not limited to, total household size, income, and assets. Withholding or misrepresenting information regarding any criteria used to determine program eligibility or subsidy allocations constitutes fraud and will result in immediate disqualification from the program, as well as possible legal action. Community Home Trust is an equal housing opportunity provider and does not discriminate because of race, color, religion, sex, disability, familial status, or national origin. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F EXHIBIT H-1: APPEAL PROCESS Community Home Trust Policy Regarding the Resolution of Disagreement about Applicant Eligibility Process by which an Applicant may request a Board Review Community Home Trust provides a review process for any applicant who disagrees with a decision made by senior staff regarding the applicant’s eligibility to purchase. This review is limited to decisions regarding: - Live/work eligibility requirements - Meeting qualification for first time homebuyer status - Income eligibility requirements - Compelling or Special Circumstances - Asset limits The applicant should make the request directly to the Board President or by asking the Executive Director to convey the request. This request should be made in writing and will include a brief written summary that explains why the applicant disagrees with the staff decision or is requesting a waiver. The Home Trust staff will also provide a brief summary of its decision and the reasons for making the decision. The Board President will, in a timely manner, convene a committee of at least 3 Board Members to review the decision. The Executive Director may not serve on this Committee. The Committee will first review the written summaries from the applicant and from the staff. The Committee may, at its sole discretion, proceed with one of the following options: Render a decision based upon the written information supplied by both parties, Schedule a meeting with both parties to gather further information. If a meeting is scheduled, then it will include the committee members, a member of the Home Trust staff who is knowledgeable about the original decision, and the applicant. The Committee will ask those questions it deems necessary to make an informed decision. The Committee will render a decision within 10 business days of the review, or request additional information. Once all information is received, the committee will provide a written response to the applicant and the staff. Any decision made by the Committee is final and not subject to further review. Approved by the Community Home Trust Board: January 11, 2011 DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit I: REPAIR REQUIREMENTS Upon Resale, Lessor expects Lessee to sell the Leased Premises in substantially the same condition as when he or she purchased it. Specifically, Lessor expects that: Mechanical and electrical systems will be in good working order; Plumbing will be in good working order and free of stoppages or leaks; Floor, wall, ceiling, and countertop finishes will be clean, in good condition and free of gouges, holes and noxious odors; Original appliances and fixtures will be present, clean and in good working order, or replaced with an appliance of comparable quality, in good working order; There will be no evidence of pest or vermin infestations; Gutters and storm water management systems will be free of debris or blockage and in good working order: Landscaping, grading and drainage will be in good condition; HVAC system will have been satisfactorily serviced within 60 days prior to resale; A home inspection performed by a licensed home inspector will reveal no other damages. Upon receiving a Notice of Intent to Sell from Lessee, Lessor and a professional home inspector will inspect the Leased Premises and require that Lessee makes upfits or repairs as needed so that the Leased Premises meets the standards described above before resale. Lessor may specify, at its discretion, contractors and suppliers who are eligible to provide materials and labor for required upfits and repairs. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F Exhibit J: INVESTMENT BASIS The Investment Basis represents the amount of equity that the Lessee has invested in the leasehold estate. It is calculated subtracting the total amount of the Lessee’s subsidies and grants from the sales price. Lessee’s Investment Basis Amount Purpose / Source List Price _________________ Sales Price of Home Minus _________________ Amount of NCHFA Loan Minus _________________ Amount of FHLB Loan Minus _________________ Amount of CHT Funding Provided Minus _________________ other subsidy or grant to Lessee Equals _________________ Lessee’s Investment Basis Lessee’s signature: _______________________________ Date: _______________ Lessee’s signature: _______________________________ Date: _______________ Home Trust Representative: ________________________ Date: _______________ Please note: If homeowner has owned the home more than 30 years at the time of sale, the amount of NCHFA funds provided to the homeowner for purchase should be ADDED BACK to the investment basis prior to calculating earned appreciation. This step is consistent with the conversion of the NCHFA funds to a monthly note payable after 30 years of homeownership according to current NCHFA guidelines. DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F DATE (MM/DD/YYYY)CERTIFICATE OF LIABILITY INSURANCE THISCERTIFICATEISISSUEDASAMATTEROFINFORMATIONONLYANDCONFERSNORIGHTSUPONTHECERTIFICATEHOLDER.THIS CERTIFICATEDOESNOTAFFIRMATIVELYORNEGATIVELYAMEND,EXTENDORALTERTHECOVERAGEAFFORDEDBYTHEPOLICIES BELOW.THISCERTIFICATEOFINSURANCEDOESNOTCONSTITUTEACONTRACTBETWEENTHEISSUINGINSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT:IfthecertificateholderisanADDITIONALINSURED,thepolicy(ies)mustbeendorsed.IfSUBROGATIONISWAIVED,subjectto thetermsandconditionsofthepolicy,certainpoliciesmayrequireanendorsement.Astatementonthiscertificatedoesnotconferrightstothe certificate holder in lieu of such endorsement(s). CONTACTPRODUCERNAME: FAXPHONE (A/C, No):(A/C, No, Ext): E-MAIL ADDRESS: PRODUCER CUSTOMER ID #: INSURER(S) AFFORDING COVERAGENAIC # INSURED INSURER A : INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : COVERAGESCERTIFICATE NUMBER:REVISION NUMBER: THISISTOCERTIFYTHATTHEPOLICIESOFINSURANCELISTEDBELOWHAVEBEENISSUEDTOTHEINSUREDNAMEDABOVEFORTHEPOLICYPERIOD INDICATED.NOTWITHSTANDINGANYREQUIREMENT,TERMORCONDITIONOFANYCONTRACTOROTHERDOCUMENTWITHRESPECTTOWHICHTHIS CERTIFICATEMAYBEISSUEDORMAYPERTAIN,THEINSURANCEAFFORDEDBYTHEPOLICIESDESCRIBEDHEREINISSUBJECTTOALLTHETERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ADDLSUBRINSR POLICY EFFPOLICY EXPTYPE OF INSURANCE LIMITSPOLICY NUMBERLTR (MM/DD/YYYY)(MM/DD/YYYY)INSRWVD GENERAL LIABILITY EACH OCCURRENCE$ DAMAGE TO RENTED COMMERCIAL GENERAL LIABILITY $PREMISES (Ea occurrence) CLAIMS-MADEOCCUR MED EXP (Any one person)$ PERSONAL & ADV INJURY$ GENERAL AGGREGATE$ GEN'L AGGREGATE LIMIT APPLIES PER:PRODUCTS - COMP/OP AGG$ PRO-$POLICYLOCJECT COMBINED SINGLE LIMITAUTOMOBILE LIABILITY $(Ea accident) ANY AUTO BODILY INJURY (Per person)$ ALL OWNED AUTOS BODILY INJURY (Per accident)$ SCHEDULED AUTOS PROPERTY DAMAGE $(PER ACCIDENT)HIRED AUTOS $NON-OWNED AUTOS $ UMBRELLA LIAB EACH OCCURRENCE$OCCUR EXCESS LIAB CLAIMS-MADE AGGREGATE$ $DEDUCTIBLE $RETENTION$ WC STATU-OTH-WORKERS COMPENSATION TORY LIMITSERAND EMPLOYERS' LIABILITY Y / N ANY PROPRIETOR/PARTNER/EXECUTIVE E.L. EACH ACCIDENT$N / AOFFICER/MEMBER EXCLUDED? (Mandatory in NH)E.L. DISEASE - EA EMPLOYEE$ If yes, describe under E.L. DISEASE - POLICY LIMIT$DESCRIPTION OF OPERATIONS below DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD 101, Additional Remarks Schedule, if more space is required) CERTIFICATE HOLDERCANCELLATION SHOULDANYOFTHEABOVEDESCRIBEDPOLICIESBECANCELLEDBEFORE THEEXPIRATIONDATETHEREOF,NOTICEWILLBEDELIVEREDIN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE © 1988-2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORDACORD 25 (2009/09) OP ID: CR 10/01/2018 Jeff Rubish, CIC High & Rubish Insurance Agency P.O. Box 3040 6015 Farrington Rd. Ste 101 Chapel Hill, NC 27517 Jeffrey A. Rubish 919-913-1144913-913-1155 jeff@highandrubish.com COMMU-6 Community Home Trust PO Box 2315 Chapel Hill, NC 27515 Owners Insurance Company32700 Hartford Fire Insurance Co 1,000,000 AXX 911163810011/27/201711/27/2018 100,000 X 5,000 1,000,000 2,000,000 2,000,000 X 1,000,000 AX 911163810011/27/201711/27/2018 AX X A 3501759201/02/201801/02/2019 1,000,000 3501759201/02/201701/02/2018 1,000,000 1,000,000 B Dishonesty Bond22BPEAM806509/11/201809/11/2019 500,000 Additional Insured: Orange County ORANGEC Orange County Government P.O. Box 8181 Hillsborough, NC 27278 DocuSign Envelope ID: 1C608BEC-B713-4BE4-9E53-CD92D598627F