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WHEREAS, Kainos has agreed to pursue acquisition of the Property for the <br /> purpose of renting bedrooms ( "Affordable Bedrooms ") within the single family dwelling <br /> ( "Dwelling ") located thereon at an affordable rent to extremely low income persons with <br /> developmental disabilities in the City of Redwood City; and <br /> WHEREAS, as a condition of receiving the funds under this Agreement, Kainos <br /> has agreed to execute and deliver to the City, the City Note, Deed of Trust and <br /> Declaration of Affordability Covenants, defined in Paragraph 1 below. <br /> NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES HERETO AS <br /> FOLLOWS: <br /> 1. GENERAL DESCRIPTION OF SERVICES AND OBLIGATIONS <br /> Kainos, under the eneral direction of the Housing Coordinator or his /her <br /> 9 9 <br /> authorized representative, shall perform services as described in the "Program <br /> Services," attached hereto as Exhibit B, in consideration of the payments set forth in the <br /> "Method of Payment," attached hereto as Exhibit C and the "Declaration of Affordability <br /> Covenants" substantially in the form attached hereto as Exhibit D. The Declaration of <br /> Affordability Covenants shall run with the Property and remain in full force and effect <br /> through and including the date which is fifty -five (55) years following the date of <br /> recordation of the Declaration of Affordability Covenants. <br /> In order to ensure Kainos' continuous and faithful performance of its obligations <br /> under this Agreement, Kainos agrees to execute and deliver to City a promissory note in <br /> the form attached hereto as Exhibit E ( "City Note "), which shall be secured by a deed of <br /> trust and addendum thereto substantially in the form attached hereto as Exhibit F <br /> ( "Deed of Trust "). The Declaration of Affordability Covenants and Deed of Trust shall be <br /> recorded against the Property through escrow for Kainos' purchase of the Property and <br /> shall have priority over any and all other liens other than the lien for current, unpaid <br /> property taxes. In the event of Kainos' default under this Agreement following the <br /> expiration of all applicable notice and cure periods, Kainos shall immediately repay to <br /> City all amounts owning under the City Note and Deed of Trust. <br /> 2. PAYMENTS <br /> a. Maximum Amount. In consideration of Kainos' performance of all the <br /> obligations and requirements under this Agreement, City shall pay Kainos <br /> from its HOME and CDBG program funds Four Hundred Thousand Dollars <br /> ($ 400,000.00) ( "City Funds "). The City Funds are being provided to Kainos <br /> in the form of a forgivable loan which shall only be repayable in accordance <br /> with the City Note upon an Event of Default hereunder or if City consents to <br /> Kainos' sale of the Property conditioned upon repayment of the City Note as <br /> set forth in Paragraph 11 hereof. <br /> ATTY /AGRJ2010.083 2 <br /> 091610 <br />