612 Jefferson - Grant of Option to Repurchase and Resale Restriction Agreement Unit 603

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completion of the proposed transfer (c) Owner shall present substantiating documentation showing the original cost of materials and the original cost of labor for the improvement, and the date of its installation as well as proof of payment; and (d) A Qualifying Improvement must add value to the home in the context of affordable housing, such as the addition of living space. Upgrades to cabinetry, flooring, countertops, fixtures and landscaping are not considered capital improvements in this context. 6.6 Distribution of Sales Proceeds. In the event of a resale, closing and title insurance costs will be paid pursuant to the custom and practice in San Mateo County, California at the time of the closing of escrow. The Owner shall bear the expense of providing a current written report of an inspection by a licensed structural pest control operator. All work recommended in said report to repair damage caused by infestation or infection of wood -destroying pests or organisms found and all work to correct conditions that caused such infestation or infection shall be done at the expense of the Owner. Upon the close of escrow, Owner shall receive the sale proceeds minus any closing costs that are the responsibility of the seller, any Transfer Fees due to Habitat, if applicable, and the amount necessary to remove any liens on the Home, including any outstanding mortgage balances secured by the Home. The Owner shall not be entitled to receive any compensation for the value of Owner's "sweat equity" contribution toward the construction of the Home. The Owner shall be entitled to receive the return of Owner's down payment and the cost of Qualifying Improvements. 6.7 Sale of Home by Owner if Neither Habitat nor the City Exercise Option. In the event that neither Habitat nor City elects to purchase the Home pursuant to the Option, Owner may sell the Property directly to an Eligible Household at an Affordable Sales Price as determined in accordance with the Regulatory Agreement and the HOME Regulatory Agreement, taking into account any deferred financing that may be assumable by the Eligible Household purchasing the Home. Excess Sales Proceeds received by the Owner from the sale of the Home shall be paid to Habitat at close of escrow and distributed by Habitat in accordance with Section 5.5 above. The purchaser of the Home shall, as a condition of acquisition of the Home be obligated to enter into a Grant of Option to Repurchase and Resale Restriction Agreement on terms substantially similar to the terms of this Agreement with a term of fifty-five (55) years, a Homebuyer Deed of Trust for the benefit of City, a new HOME Homebuyer Note for the benefit of the City, and a new HOME Homebuyer Deed of Trust for the benefit of the City. 7. DEFAULT AND REMEDIES. 7.1 Events of Default. Failure or delay by Owner to honor or perform any material term or provision of this Agreement, the Habitat Deed of Trust, or the Habitat Note, or Owner's default under any Approved Junior Lien, including without limitation, the Homebuyer Deed of Trust executed for the benefit of City, the HOME Homebuyer Note for the benefit of the City, or the HOME Homebuyer Deed of Trust for the benefit of the City shall constitute an "Event of Default' under this Agreement; provided however, that if Owner commences to cure, correct or remedy the alleged breach within thirty (30) calendar days after the date of written notice specifying such breach and shall diligently complete such cure, correction or remedy, Owner shall not be deemed to be in default hereunder. 7.2 Notice of Breach. Habitat shall provide Owner written notice of breach specifying the alleged breach, which if uncured by Owner within thirty (30) calendar days, shall be deemed to be an Event of Default. Delay in giving such notice shall not constitute a waiver of any breach or Event of Default nor shall it change the time of breach or Event of Default; provided, however, Habitat shall not exercise any remedy for an Event of Default hereunder without first delivering to Owner the written notice of breach as specified in this Section. 7.3 Notice of Breach to Approved Junior Lender. Habitat shall also provide City and the Approved Junior Lenders, a duplicate copy of all notices of default that Habitat may give to Owner pursuant to the terms provided in Section 7.2 above. Habitat shall deliver such notice to City and the Approved Junior Lenders in the manner provided for in Section 10.4. REV: 08-10-22 SK ATTY/AGR.2022.247/Habitat 612 Jefferson 603 (03_HOME - Resale Restriction Agreement 603) (Page 9 of 17)