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HomeMy WebLinkAboutPR 19519: DEEDS OF TRUST AND LOAN AGREEMENTS, 2 HOMEOWNERS, REHABILITATION AND RECONSTRUCTION FEDERAL PROGRAM INTEROFFICE MEMORANDUM HOUSING ASSISTANCE PROGRAMS To: Brian McDougal, City Manager From: Beverly Freeman, Director of Housing and Neighborhood Revitalization Date: September 8, 2016 Re: P.R. 19519 Nature of Request: The Housing Division recommends City Council adopt Proposed Resolution No. 19519 authorizing the City Manager to execute the deeds of trust and loan agreements between the City and two (2) Homeowners that are certified to participate in the Rehabilitation and Reconstruction Federal Program. The Department of Housing and Urban Development (HUD) annually awards Community Development Block Grant (CDBG) and HOME Partnership Investment (HOME) funds to the City for the primary benefit of low and moderate income persons/families. The City is obligated to provide owner-occupied rehabilitation/reconstruction assistance to homeowners who are at 80% or below the Area Median Income with unmet housing needs to eliminate health and safety hazards and preserve and improve the community's housing stock. The City of Port Arthur acts as an indirect agent pursuant to the CDBG and HOME Program Guidelines. Budget Consideration: NA RECOMMENDATION: The Housing Division recommends City Council adopt Proposed Resolution No. 19519 authorizing the City Manager to execute the deeds of trust and loan agreements between the City and two (2) Homeowners that are certified to participate in the Rehabilitation and Reconstruction Federal Program. P. R. 19519 9/8/16 BF/DF RESOLUTION NUMBER A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE DEEDS OF TRUST AND LOAN AGREEMENTS BETWEEN THE CITY AND TWO (2) HOMEOWNERS THAT ARE CERTIFIED TO PARTICIPATE IN THE REHABILITATION AND RECONSTRUCTION FEDERAL PROGRAM. WHEREAS, the U.S. Department of Housing and Urban Development annually awards Community Development Block Grant (CDBG) Program and HOME Investment Partnership (HOME) Program funds to the City of Port Arthur for the primary benefit of low and moderate income persons/families in accordance with 24 Code of Federal Regulations Part 92 and Part 570; and, WHEREAS, the City Council, by its adoption of Resolution Number 16-105 (authorizing submission of the 2016 Action Plan) has obligated itself to provide owner occupied rehabilitation and reconstruction housing assistance to low and moderate income persons/families; and, WHEREAS, it is deemed in the best interest of the City of Port Arthur to authorize the City Manager to execute the Deeds of Trust and Loan Agreements between the City and two (2) homeowners for compliance measures, site preparation, and reconstruction of the two (2) homes in substantially the same form as attached hereto as Exhibit"A", "A-1", "B", "B-1". NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. THAT the facts and opinions in the preamble are true and correct. Section 2. THAT the City Council hereby authorizes the City Manager to execute the Deeds of Trust and Loan Agreements between the City and two (2) homeowners for compliance measures, site preparation, and reconstruction of two (2) homes in substantially the same form as attached hereto as Exhibit "A", "A-1", "B", "B-1". Section 3. THAT a copy of the caption of this Resolution be spread upon the minutes of the City Council. READ, ADOPTED AND APPROVED this day of, A.D.,2016 at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: MAYOR COUNCILMEMBERS NOES: DERRICK FREEMAN, MAYOR ATTEST: SHERRI BELLARD, CITY SECRETARY APPROVED AS TO FORM: I / VAL TIZE ri, TTORNEY APPROVED FOR ADMINISTRATION: BRIAN MCDOUGAL, CITY MANAGER 4 -*1\9Jt/YN9-) BEVERLY FREE AN, DIRECTOR OF HOUSING : NEIGHBORHOOD REVITALIZATION EXHIBIT "A" A Deferred Loan Agreement Between the City of Port Arthur and Kim Nguyet Tran for the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program STATE OF TEXAS § JEFFERSON COUNTY § PROJECT NO: H16-1240 CITY OF PORT ARTHUR § This Agreement is made and entered into by and between City of Port Arthur, Jefferson County, Texas, and the Homeowner, Kim Nguyet Tran, a municipal corporation located in Jefferson County, Texas (the City). The current residence and the future residence ("Property") are located at: 2721 5th Street in Port Arthur, Texas, 77642-2941; being more particularly described by its legal description as follows: Lot Nine (9) Block One Hundred Ninety Three (193), City of Port Arthur, Texas, as the same appears upon the map or plat thereof,on file and of record in the Office of County Clerk of Jefferson County, Texas. (Also known as 2721 5th Street) The start date of the specified work will initiate within 10 days from the issuance of a notice to proceed and approval of all insurance and bonding requirements as delineated in Section "G" of this AGREEMENT AND CONTRACT, and furthermore, diligently pursue same until satisfactorily completed on or before September 25, 2016,time being of the essence. DISBURSEMENT OF FUNDS: Pursuant to Resolution No. 16-151, the City entered into an agreement with Imani Quality Concepts, LLC, for the reconstruction of a home located at 2721 5th Street. These costs were deemed eligible costs incurred under this contract in the amount of One Hundred Seven Thousand Three Hundred Fifty Eight Dollars and 23/100 ($107,358.23) in accordance with the requirements as delineated in the HOME Program Regulations 24 Code of Federal Regulations Part 92, and 24 Code of Federal Regulations Parts 85.36 and 85.37. It is expressly understood and agreed by the parties hereto that any right or remedy provided for in this Section or in any other provision of this contract shall not preclude the exercise of any other right or remedy under this contract or under any provision of law, nor shall any action taken in the exercise of any right or remedy be deemed a waiver of any other rights or remedies. Failure to exercise any right or remedy hereunder shall not constitute a waiver of the right to exercise that or any other right or remedy at any time. I. HOMEOWNER'S DUTIES AND RESPONSIBILITIES In consideration of the remodeling and structural rehabilitation improvements more specifically described as follows: LOT NINE (9) AND BLOCK ONE HUNDRED NINETY THREE (193) OF THE CITY OF PORT ARTHUR, TEXAS, AS THE SAME APPEARS UPON THE MAP OR PLAT THEREOF, ON FILE AND OF RECORD IN THE OFFICE OF COUNTY CLERK OF JEFFERSON COUNTY, TEXAS. (ALSO KNOWN AS 2721 5TH STREET) which will be improved at no cost to the Homeowner pursuant to means from award of HOME Investment Partnership (HOME) Program funding to the City of Port Arthur, by the Department of Housing and Urban Development (HUD) from the City of Port Arthur, Homeowner hereby agree as follows: 1.1 The Homeowner shall not transfer, assign, encumber or sell the home or an interest herein for a period of fifteen (15) years from the date of the final acceptance of all work required under the Contract. Further, the Homeowner shall not sell, assign, encumber or transfer any of his/her rights or obligations contained herein in whole or in part without the previous written consent of the City. In the event that (I) the Homeowner sells, assigns, encumbers or transfers the property or (ii) the Homeowner dies prior to the expiration of the aforementioned fifteen (15) year period, the Homeowner hereby agrees and understands that his/her estate, whichever is applicable, shall be liable to the City of Port Arthur for the amount of costs expended in the rehabilitation based upon the following schedule in accordance with 24 Code of Federal Regulations Part 92.254: • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies within the first twelve (12) months following the date of final completion of the rehabilitation, the Homeowner or his/her estate, as applicable, must repay one hundred percent (100%) of the amount funded by the City of Port Arthur's HOME Program in accordance with 24 Code of Federal Regulations Part 92 for the rehabilitation of the home: • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies at any time during years 2 — 5, the Homeowner or his/her estate, as applicable, are responsible to reimburse eighty percent (80%) of the amount spent on the rehabilitation. • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies at any time during years 6 — 9, the Homeowner or his/her estate, as applicable, is responsible to reimburse sixty percent (60%) of the amount spent on rehabilitation. • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies at any time during years 10 — 13, the Homeowner or his/her estate, as applicable, is responsible to reimburse forty percent (40%) of the amount spent on rehabilitation. • If the property is sold, assigned transferred or encumbered or if the Homeowner dies at any time during years 14 — 15, the Homeowner or his/her estate, as applicable, is responsible to reimburse twenty percent(20%) of the amount spent on rehabilitation. Such amounts shall be due and owing on the date the property is sold, assigned, transferred or otherwise encumbered. Failure to remit the appropriate amount owed to the City of Port Arthur in a timely manner shall result not only in interest calculated in accordance with Chapter 2251 of the Texas Government Code, but also in the Homeowner or his/her estate, as applicable, being obligated to pay court costs and all attorneys' fees expended by the City in order to collect the amount owed to the City. 1.2 The Homeowner agrees not to make side contracts or any other agreement for additional work on the premises, unless the same is approved by the City of Port Arthur in writing and duly incorporated into the City of Port Arthur's Standard Form of Agreement for the HOME Program between Homeowner and Contractor applicable to the property (as identified in the Construction Contracts)prior to such work being performed. 1.3 The Homeowner further agrees to cooperate with the Contractor in a reasonable manner so as not to interfere with his performance under the Construction Contract, including, but not limited to, the abandonment of limited areas of the property for reasonable period of time as necessary for the satisfactory completion of the work required under the Construction Contract. 1.4 The Homeowner will make existing household utilities available to the Contractor without charge. Such available utilities shall include 110-volt electric power, gas, water and local telephone calls, if such utilities exist on the premises currently. 1.5 The Homeowner hereby agrees that throughout the term of this contract and during all warranty applicable to the work performed under this contract, the Homeowner shall take all necessary precautions to ensure: 1.5.1 the property is clear of debris so as not to constitute a public nuisance pursuant to Chapter 33 of the Code of Ordinances of the City of Port Arthur; 1.5.2 the property remains clear of all junked and abandoned vehicles in accordance with Chapter 28 of the Code of Ordinances of the City of Port Arthur; 1.5.3 all buildings, other than residences, on the property shall be secure in compliance with Chapter 33 of the Code of Ordinances of the City of Port Arthur; and 1.5.4 the property is free of all objects or conditions that constitute a possible and probable medium of transmission of disease to or between human beings in accordance with Chapter 15 of the Code of Ordinances of the City of Port Arthur. II. INDEMNITY IN CONSIDERATION OF THE REMODELING AND REHABILITATION IMPROVEMENTS OF THE HOMEOWNER'S PROPERTY AS DESCRIBED HEREIN ABOVE, THE HOMEOWNER AGREES TO AND SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICER, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITY OF ANY KIND, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES FOR INJURY TO OR DEATH OF ANY PERSON, OR FOR DAMAGE TO ANY PROPERTY ARISING OUT OF OR IN CONNECTION WITH THE WORK DONE BY THE CONTRACTOR UNDER THE CONSTRUCTION CONTRACT, THE WORK AND/OR SERVICES PERFORMED BY THE CITY IN ANY WAY CONCERNING THE PROJECT AND/OR THE HOMEOWNER PARTICIPATION IN THE CITY'S HOMEOWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM, WHEN SUCH INJURIES, DEATH OR DAMAGES ARE CAUSED BY (I) THE CITY'S SOLE NEGLIGENCE OR THE JOINT NEGLIGENCE OF THE CITY AND ANY OTHER PERSON OR ENTITY AND/OR (II) THE JOINT OR SOLE NEGLIGENCE OF THE HOMEOWNER. IT IS THE EXPRESSED INTENTION OF THE PARTIES HERETO, BOTH THE HOMEOWNER AND THE CITY, THAT THE INDEMNITY PROVIDED IN THIS PARAGRAPH IS INDEMNITY BY HOMEOWNER TO INDEMNIFY AND PROTECT THE CITY, ITS OFFICERS, AGENTS AND/OR EMPLOYEES OF THE CONSEQUENCES OF (I) THE CITY'S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE AND/OR (II) THE HOMEOWNER OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE. IN THE EVENT THAT ANY ACTION OR PROCEEDING IS BROUGHT AGAINST THE CITY BY REASON OF ANY OF THE ABOVE, THE HOMEOWNER FURTHER AGREES AND COVENANTS TO DEFEND THE ACTION OR PROCEEDING BY LEGAL COUNSEL ACCEPTABLE TO THE CITY. III. CREATION AND TRANSFER OF LIEN 3.1 To secure the prompt payment of the cost of the rehabilitation work, the Contractor's mechanic and material-man's lien is hereby granted and created for the benefit of the Contractor and the City of Port Arthur upon the above-described real property, and all improvements, additions, fixtures, and appurtenances now thereon or hereafter to be placed thereon in accordance with this Agreement and the Construction Contract and as evidenced by the Housing Rehabilitation and Reconstruction Lien signed by Homeowner and dated 17th day of June, 2016, which by this reference number is incorporated herein for all intents and purposes. In the event any portion of the funding is not or cannot be lawfully secured by the lien given upon the herein described property, it is agreed that any payment shall be applied first to the discharge of that portion of the funds advanced which are not secured thereby. 3.2 The Homeowner hereby warrants and represents to the City that this Agreement is being executed and delivered before the labor or materials for the erection and construction of improvements have been furnished or delivered. IV. APPOINTMENT OF HOMEOWNER'S REPRESENTATIVE The Homeowner hereby appoints the City of Port Arthur's City Manager or his/her designee as representative to make all decisions concerning the rehabilitation and/or demolition and reconstruction of the property pursuant to the Construction Contract, including, but not limited to, the following: 4.1 To prepare a Work Write-up Agreement with the Contractor specifying the work to be performed pursuant to the City of Port Arthur's Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program; 4.2 To seek and obtain bids from contractors for the work specified in the Work Write-up Agreement; 4.3 To review all bids received and select the responsible contractor deemed by the City of Port Arthur to have presented the lowest bid; 4.4 To award, with approval of the City Council of the City of Port Arthur, a Construction Contract for the repairs and rehabilitation to the above-described property; 4.5 To supervise the Contractor in carrying out the work specified in the Work Write-up Agreement; 4.6 To make changes, additions and/or deletions to the Work Write-up Agreement as necessary to carry out the intentions of the Work Write-up Agreement which are to repair and rehabilitate the above-described property so that the structure meets the applicable codes of the City of Port Arthur; and 4.7 To resolve all disputes arising between Homeowner and the Contractor in carrying out the work specified in the Work Write-up Agreement. V. CITY'S OBLIGATION 5.1 The City reserves the right to inspect the work of the Contractor, at a time chosen by the City. 5.2 The City reserves the right to approve cost, approve the work order and any subsequent changes and to disburse funds for the remodeling, rehabilitation and demolition and reconstruction of the premises as set forth above through the Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program of single-family, Homeowner-occupied structures. 5.3 The Homeowner understands that funds hereunder are from the United States Department of Housing and Urban Development and are for the purpose of aiding persons of low to moderate income in having, safe, decent, sanitary and affordable housing. The Homeowner understands and agrees that he/she is subject to all provisions and regulations of the United States Department of Housing and Urban Development in accordance to 24 Code of Federal Regulations Part 92, Part 570 and 24 Code of Federal Regulations Parts 85.36 and 85.37 pertaining to expenditures of funds for this purpose. VI. CONTRACTOR'S OBLIGATION Contractor responsibilities include: 6.1 Rehabilitation, demolition and reconstruction work to follow work write up, and rehabilitation standards, performance standards, construction specification, zoning ordinances, all applicable local, Federal and State codes and ordinances; 6.2 To only make changes to the specified work with written approval from the City, through the City Manager; 6.3 To be on the above stated scheduled and budget; and 6.4 To release liens. VII. AMENDMENTS This Contract represents the entire agreement of the parties hereto and may only be amended or supplemented by mutual agreement of the parties hereto in writing. VIII.VENUE AND CHOICE OF LAW This Contract shall be performable in Port Arthur, Jefferson County, Texas. This Contract shall be governed by and construed in accordance with the laws of the State of Texas. IX. NOTICE All notices required to be given hereunder shall be given in writing by tele-copier, overnight, or facsimile transmission, certified or registered mail or by hand delivery at the respective addresses of the parties set forth herein or at such other address as may be designated in writing by either party. Notice given by mail shall be deemed given three (3) days after the date of mailing thereof to the following address, as appropriate: HOMEOWNER: CITY: Kim Nguyet Tran City of Port Arthur 2721 5th Street Attn: City Manager Port Arthur, Texas 77640 P. O. Box 1089 Telephone: 409.540.1598 Port Arthur, TX 77641 Fax: NA Telephone: (409) 983-8101 Fax: (409) 983-6743 X. TERM Unless sooner terminated in accordance with the applicable provisions hereof, or extended by mutual agreement approved by the City, the terms of this Contract shall be from the date hereof until the expiration of the fifteenth (15th) year after final completion of the Project; however, it is expressly understood and agreed that the provisions of Article II hereof shall survive the termination of this Agreement and shall not expire. Other Project-related claims or disputes will be included in the terms of Additional Services. XI. CORRECTNESS OF INFORMATION SUBMITTED IN ELIGIBILITY APPLICATION Homeowner covenants and represents to the City that the Homeowner has examined the eligibility requirements of the City's Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program that is designed in accordance with and based upon 24 Code of Federal Regulations Part 92 and Part 570, and has submitted his/her application dated the which by this reference is incorporated herein for all intents and purposes, for participation in such program after certifying that all of the information so submitted is true and correct. It is expressly understood and agreed among the parties hereto that should it be determined at any time by the City that the application of the Homeowner contains incorrect or incomplete information, the Homeowner shall be disqualified from the program and shall be required to repay the City for all expenses incurred in accordance with 24 Code of Federal Regulations Part 92, 570 and 24 Code of Federal Regulations Part 85.36 and 85.37 as a result of the work on the Project. XII. GUIDELINES INCORPORATED BY REFERENCE The Homeowner agrees to abide by all of the terms and conditions contained in the City of Port Arthur's Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines for Home Homeowners which was adopted by the City Council in accordance with 24 Code of Federal Regulations Part 92, 570 and 24 Code of Federal Regulations Parts 85.36 and 85.37 on the 12th day of May, 2015,via Resolution No. 15-183, and is incorporated herein by this reference for all intent and purposes. XIII. FIXTURES REMOVED DURING PROJECT The Homeowner fully understands and agrees that all building materials, plumbing or electrical fixtures that are removed by the Contractor and are not to be reinstalled in accordance with the Work Write-up Agreement become the property of the Contractor, who may dispose of the property as he may wish. XIV. ADDITIONAL TERMS 14.1 The Homeowner and the City expressly agree and understand that this Agreement shall not create a partnership or joint venture between the Homeowner and the City. 14.2 Time is of the essence in this contract. 14.3 Notwithstanding anything to the contrary contained in this Agreement,the Homeowner and the City hereby agree that no claim or dispute between the Homeowner and the City arising out of or relating to this Agreement shall be decided by any arbitration proceeding including, without limitation, any proceeding under the Federal Arbitration Act(9 U.S.C. Section 1 - 14), or any applicable State arbitration statue, including, but not limited to, the Texas General Arbitration Act,provided that in the event that the City is subjected to an arbitration proceeding notwithstanding this provision,the Homeowner consents to be joined in the arbitration proceeding if the Homeowner's presence is required or requested by the City of complete relief to be recorded in the arbitration proceeding. 14.4 Failure of either party hereto to insist on the strict performance of any of the agreements contained herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. 14.5 Should any of the provisions contained in any of the Contract Documents as defined in the Construction Agreement be in conflict or inconsistent with each other, such conflict or inconsistency shall be construed in favor of the City. Furthermore, both parties expressly agree that the City, acting through the City Manager or the City Manager's appointee, shall be the sole and final decision-maker should any conflict arise hereunder. 14.6 In the event of any ambiguity in any of the terms of this contract, such ambiguity shall not be construed for or against any party hereto on the basis that such party did or did not author the same. 14.7 All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Agreement, which shall continue in full force and effect. All parties share responsibility for approving changes to work write up, and approving additional cost. 14.8 The persons executing this Agreement on behalf of the parties hereby represent that such persons have full authority to execute this Agreement and to bind the party he/she represents. IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple copies, each of which shall be deemed to be an original, but all of which shall constitute but one and the same Agreement on the day of , 2016 the date of execution by the City Manager of the City of Port Arthur. CITY: City of Port Arthur Brian McDougal, City Manager Date: ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: Valecia Tizeno, City Attorney HOMEOWNER: Kim Nguyet Tran, Homeowner Date: STATE OF TEXAS § JEFFERSON COUNTY § CITY OF PORT ARTHUR § Before me the undersigned notary public, on this day personally appeared Kim Nguyet Tran, HOMEOWNER, the owner of the structure to be rehabilitated, known to me (or proved to me on oath through her current Identification Card {description of identification card or other document issued by federal government or any state government that contains this photograph and signature of the knowledging person} to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed. SUBSCRIBED AND SWORN before me this day of , 2016 Notary Public in and for the State of Texas My commission expires: EXHIBIT" A- 1 " NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVERS LICENSE NUMBER. DEED OF TRUST CITY OF PORT ARTHUR OWNER OCCUPIED HOUSING REHABILITATION AND RECONSTRUCTION PROGRAM DEFERRED LOAN AGREEMENT THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF JEFFERSON § THAT, Kim Nguyet Tran, hereinafter referred to as "Grantor" for the purpose of securing the Deferred Payment Loan hereinafter described, and in consideration of the sum of Ten Dollars ($10.00)to us in hand paid by the Trustee hereinafter named, the receipt of which is hereby acknowledged, and for the further consideration•of the used, purposes and trusts hereinafter set forth, have granted, sold and conveyed, and by these presents do grant, sell and convey unto Brian McDougal, City Manager,Trustee,whose address is P.O. Box 1089, Port Arthur, Jefferson County, Texas 77641, and his substitutes or successors, the following described property,to-wit: Legal description: Lot Nine (9) and Block One Hundred Ninety Three (193) of the City of Port Arthur, Texas, as the same appears upon the map or plat thereof, on file and of record in the Office of County Clerk of Jefferson County, Texas. (Also known as 2721 5th Street) The conveyance evidenced by this instrument is made subject to any and all easements, restrictions, covenants, conditions and reservations of record, if any, applicable to all or any portion of the property. TO HAVE AND TO HOLD the above described property, together with the rights, privileges and appurtenances thereto belonging unto the said Trustee and to his substitutes or successors forever. And Grantor does hereby bind Grantors heirs, executors, administrators and assigns to warrant and forever defend the said premises unto the said Trustee, his substitute or successors and assigns forever, against the claim, or claims, of all persons claiming or to claim the same or any part thereof. This conveyance, however, is made in Trust to secure the performance of the obligations of Grantor herein, Grantors successors, assigns, heirs, devisees, administrators and executors, as set forth in Deferred Payment Loan (hereinafter "the Agreement") dated of even date herewith between Kim Nguyet Tran and City of Port Arthur(hereinafter"Beneficiary"), a copy of which is attached hereto as Exhibit"A". The lien hereof and any and all liens securing the Agreement secured hereby shall be and remain subordinate to the liens, as renewed, extended, re-amortized, or otherwise adjusted from time to time, securing that certain note in the original principal amount of One Hund red Seven Thousand Three Hundred Fifty Eight Dollars and 23/100 ($107,358.23) dated September , 2016 executed by Kim Nguyet Tran, payable to the order of the City of Port Arthur,and filed for record under County Clerk of the Official Public Records of Real Property of Jefferson County,Texas. Should Grantor do and perform all of the covenants and agreements herein contained and comply with all terms of the Agreement,then this conveyance shall become null and void and of no further force and effect, and shall be released at the expense of Grantor, by the holder thereof, hereinafter called"Beneficiary"(whether one or more). GRANTOR COVENANTS AND AGREES AS FOLLOWS: To notify Beneficiary of change of address. That Grantor is lawfully seized of said property, and has the right to convey the same; that said property is free from all liens and encumbrances,except as herein provided. To protect the title from possession of said property and to pay when due all taxes and assessments now existing or hereafter levied or assesses upon said property, to the interest therein created by this Deed of Trust, and to preserve and maintain the lien hereby created as a first and prior lien on said property including any improvements hereafter made a part of the realty. To keep the improvements on said property in good repair and condition, and not to permit or commit any waste thereof;to keep said buildings occupied so as not to impair the insurance carried thereon. To maintain a standard mortgage clause in insurance policy that has a one(1) per cent deductible;to insure and keep insured all improvements now or hereafter created upon said property against loss or damage by fire and windstorm, and flood at any time the property is in a flood hazard area, and any other hazard or hazards as may be reasonably required from time to time by Beneficiary during the term of the Agreement hereby secured, to the extent required by Beneficiary, or to the extent of the full insurable value of said improvements, whichever is lesser, in such form and with such insurance company or companies as may be approved by Beneficiary and to deliver to Beneficiary the policies of such insurance having attached to said policies such mortgage indemnity clause as Beneficiary shall direct; to deliver renewals of such policies to Beneficiary at least ten (15) days before any such insurance policies shall expire; and any proceeds which Beneficiary may receive under any such policy or policies, may be applied by Beneficiary, to comply with the terms of the Agreement in such manner as Beneficiary may elect, or Beneficiary may permit Grantor to use said proceeds to repair or replace all improvements damaged or destroyed and covered by said policy. In the event Grantor shall fail to keep the improvements on the property hereby conveyed in good repair and condition, or to pay promptly when due all taxes and assessments, as aforesaid, to preserve the prior lien of this Deed of Trust on said property, or to keep the buildings and improvements insured, as aforesaid, then Beneficiary; may make such repairs,pay such taxes and assessments,purchase any tax title thereon,remove any prior liens, and to prosecute or defend any suits in relations to the preservation of the prior lien of this Deed of Trust on said property, or insure and keep insured the improvements thereon in an amount not to exceed that above stipulated; that any sums which may be so paid out by Beneficiary and all sums paid for insurance premiums, as aforesaid, including the costs, expenses and attorney's fees paid in any suit affecting said property when necessary to protect the lien hereof shall be paid by Grantor to Beneficiary upon demand, at such place as may be designated in writing by Beneficiary, shall be deemed a part of the Agreement hereby secured and recoverable as such in all respects. Any application or insurance proceeds under this Agreement shall be subject and subordinate to the terms of the first lien Deed of Trust. In the event on default in the performance of the Agreement hereby secured, in accordance with the terms thereof or of a breach of any of the covenants herein contained to be performed by Grantor, or in the event Grantor fails to pay any sums due or to become due on any indebtedness secured by prior liens on the property herein conveyed, or fails in the performance of any conditions, agreements or covenants contained in the prior lien security instrument, then and in any such events Beneficiary may elect, Grantor hereby expressly waiving presentment and demand, to declare default on the performance of the Agreement; thereupon, or at any time thereafter, it shall be the duty of the Trustee, or his successor or substitute as hereafter provided, at the request of Beneficiary (which request is hereby conclusively presumed), to enforce this trust; and after advertising the time, place and terms of the sale of the above described and conveyed property, then subject to the lien hereof, and mailing and filing notices, as required by Section 51.002, Texas Property Code, as then amended and otherwise complying with that statute, the Trustee shall sell the above described property, then subject to the lien hereof, at public auction in accordance with such notices on the first Tuesday in any month between the hours of ten o'clock A.M. and four o'clock P.M. to the highest bidder for cash, selling all of the property as an entirety or in such parcels as the Trustee acting may elect, and make due conveyance to the Purchaser or Purchasers, with general warranty binding Grantor, Grantors executors, administrators, heirs, successors an assigns; and out of the money arising from such sale, the Trustee acting shall pay first, all the expenses of advertising the sale and making the conveyance, including a commission of five percent (5%) to Trustee, and then to Beneficiary the full amount due under the Agreement, attorney's fees and other charges due and unpaid under said Agreement secured hereby, rendering the balance of the sales price, if any, to Grantor, Grantor's heirs, executors,administrators, successors or assigns; and the recitals in the conveyance to Purchaser or Purchasers shall be full and conclusive evidence of the truth of the matter therein stated, and all prerequisites to said sale shall be presumed to have been performed, and such sale and conveyance shall be conclusive against Grantor, Grantor's heirs,executors,administrators, successors or assigns. In the event a foreclosure hereunder should be commenced by the Trustee, or his substitute or successor, Beneficiary may at any time before the sale of said property direct the said Trustee to abandon the sale, and may then institute suit for performance of said agreement, and for the foreclosure of this Deed of Trust Lien; it is further agreed that if Beneficiary should institute a suit for the enforcement thereof, and a foreclosure of this Deed of Trust Lien, that Beneficiary may at any time before the entry of a final judgment in said suit dismiss the same, and require the Trustee, Trustee's substitute or successor to sell the property in accordance with the provisions of this Deed of Trust or fulfill all rights or responsibilities of the Trustee. In the event of a foreclosure or deed in lieu of foreclosure of the first lien deed of trust, any provisions herein or any provisions in any other collateral agreement restricting the use of the property to low or moderate income households or otherwise restricting the Grantor's ability to sell the Property shall have no effect on subsequent owners or purchasers of the Property. Any person, including his successors or assigns (other than the Grantor or a related entity of the Grantor), receiving title to the Property through a foreclosure or deed in lieu of foreclosure of the first lien deed of trust shall receive title to the Property free and clear from such restrictions. Beneficiary, if Beneficiary is the highest bidder, shall have the right to purchase at any sale of the property, and to have the amount for which such property is sold credited on the Agreement. Beneficiary in any event is hereby authorized to appoint a substitute trustee,to act instead of the Trustee named herein without other formality than the designation in writing of a substitute or successor trustee; and the authority hereby conferred shall extend to the appointment of other successor or substitute trustees successively until the Agreement hereby secured has been fully satisfied, or until said property is sold hereunder, and each substitute trustee shall succeed to all of the rights and power of the original trustee named herein. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or to repair or replace damaged or destroyed improvements covered by the policy. If the Property is grantor's primary residence and beneficiary reasonably determines that repairs to the improvements are economically feasible, beneficiary will make the insurance proceeds available to grantor for repairs. Notwithstanding the terms of the Note to the contrary, and unless applicable law prohibits, all payments received by beneficiary from grantor with respect to the Note or this deed of trust may, at beneficiary's discretion, be applied first to amounts payable under this deed of trust and then to amounts due and payable to beneficiary with respect to the Note,to be applied to late charges, principal, or interest in the order beneficiary in its discretion determines. In the event any sale is made of the above-described property, or any portion hereof, under the terms of this Deed of Trust,Grantor,Grantor's heirs, executors,administrators, successors and/or assigns, shall forthwith upon the making of such sale surrender and deliver possession of the property so sold to the Purchaser at such sale, and in the event of their failure to do so they shall thereupon from and after making such sale be and continue as tenants at sufferance of such Purchaser, and in the event of their failure to surrender possession of said property upon demand, the Purchaser, Purchaser's Heirs or assigns, shall be entitled to institute and maintain an action for forcible detainer of said property in the Justice of the Peace Court in the Justice Precinct in which such property,or any part thereof, is situated. Nothing herein or in said Agreement shall ever entitle Beneficiary, upon the arising of any contingency whatsoever, to receive or collect interest in excess of the highest rate allowed by the laws of the State of Texas on any money obligation hereunder and in no event Grantor shall be obligated to pay interest thereon in excess of such rate. This Deed of Trust shall be binding upon and inure to the benefit of not only said parties respectively but also their respective heirs, executors,administrators grantees, successors or assigns. Should Grantor transfer, assign, convey, hypothecate or otherwise encumber the property described herein, or any interest therein, either legal or equitable, without the prior written consent of Beneficiary, such transfer, hypothecation or encumbrance, without Beneficiary's prior written consent, shall be an element of default hereunder and shall enable Beneficiary to exercise any and all remedies herein. As a condition to such consent, however, Beneficiary shall have the right to approve any assignee or purchaser of any interest in the property herein described. Grantor shall provide to Beneficiary, on or before January 31 of each year during the term of the Agreement secured hereby, written evidence that all as valorem taxes and other assessments against the property have been paid in full. The funds due Beneficiary under the terms of the Agreement represent a repayment for funds advanced by Beneficiary as part of the purchase price of the property and Grantor hereby confirms Beneficiary shall also be secured by an equitable vendor's lien on the property to the extent that such funds were used as purchase money. Any such vendor's lien shall be second and inferior to the lien of NONE , together with all renewals, extensions, and modifications thereof, as such NONE Lien is previously described herein. EXECUTED this day of ,2016 . Grantor Kim Nguyet Tran 2721 5th Street THE STATE OF TEXAS § COUNTY OF JEFFERSON § This instrument was acknowledged before me on this_day of ,2016. NOTARY PUBLIC, STATE OF TEXAS PRINTED NAME OF NOTARY MY COMMISSION EXPIRES: AFTER RECORDING RETURN TO: CITY OF PORT ARTHUR Housing Division P.O. Box 1089 Port Arthur, Texas 77640 Exhibit " B" A Deferred Loan Agreement Between the City of Port Arthur and Pearce and Lorraine Pegross for the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program STATE OF TEXAS § JEFFERSON COUNTY § § PROJECT NO: H16-2927 CITY OF PORT ARTHUR § This Agreement is made and entered into by and between Pearce and Lorraine Pegross of Port Arthur, Jefferson County, Texas, (the Homeowners) and the City of Port Arthur, a municipal corporation located in Jefferson County, Texas (the City). The current residence and the future residence ("Property") are located at: 3238 13th Street Street in Port Arthur, Texas, 77642; being more particularly described by its legal description as follows: Lot Three (3) Block Seventeen (17), Lambert Addition, City of Port Arthur, Jefferson County, Texas, as the same appears upon the map or plat thereof on file and record in the Office of the County Clerk of Jefferson County, Texas. The start date of the specified work will initiate within 10 days from the issuance of a notice to proceed and approval of all insurance and bonding requirements as delineated in Section "G" of this AGREEMENT AND CONTRACT, and furthermore, diligently pursue same until satisfactorily completed on or before September 25,2016 time being of the essence. DISBURSEMENT OF FUNDS: Pursuant to Resolution No. 16-151, the City entered into an agreement with Pearce and Lorraine Pegross for the reconstruction of a home located at 3238 13th Street, Port Arthur, Texas 77642. These costs were deemed eligible costs incurred under this contract in the amount of One Hundred Seven Thousand Three Hundred Fifty Eight Dollars & 23/100 ($107,358.23) in accordance with the requirements as delineated in the HOME Program Regulations 24 Code of Federal Regulations Part 92, and 24 Code of Federal Regulations Parts 85.36 and 85.37. It is expressly understood and agreed by the parties hereto that any right or remedy provided for in this Section or in any other provision of this contract shall not preclude the exercise of any other right or remedy under this contract or under any provision of law, nor shall any action taken in the exercise of any right or remedy be deemed a waiver of any other rights or remedies. Failure to exercise any right or remedy hereunder shall not constitute a waiver of the right to exercise that or any other right or remedy at any time. I. HOMEOWNER'S DUTIES AND RESPONSIBILITIES In consideration of the remodeling and structural rehabilitation improvements more specifically described as follows: Lot Three (3) Block Seventeen (17) Lambert Addition, City of Port Arthur, Jefferson County, Texas, as the same appears upon the map or plat thereof on file and record in the Office of the County Clerk of Jefferson County, Texas. (Also known as 3238 13th Street) which will be which will be improved at no cost to the Homeowner pursuant to means from award of HOME Investment Partnership (HOME) Program funding to the City of Port Arthur, by the Department of Housing and Urban Development (HUD) from the City of Port Arthur, Homeowner hereby agree as follows: 1.1 The Homeowner shall not transfer, assign, encumber or sell the home or an interest herein for a period of fifteen (15)years from the date of the final acceptance of all work required under the Contract. Further, the Homeowner shall not sell, assign, encumber or transfer any of his/her rights or obligations contained herein in whole or in part without the previous written consent of the City. In the event that (I) the Homeowner sells, assigns, encumbers or transfers the property or (ii) the Homeowner dies prior to the expiration of the aforementioned fifteen (15) year period, the Homeowner hereby agrees and understands that his/her estate, whichever is applicable, shall be liable to the City of Port Arthur for the amount of costs expended in the rehabilitation based upon the following schedule in accordance with 24 Code of Federal Regulations Part 92.254: • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies within the first twelve (12) months following the date of final completion of the rehabilitation, the Homeowner or his/her estate, as applicable, must repay one hundred percent (100%) of the amount funded by the City of Port Arthur's HOME Program in accordance with 24 Code of Federal Regulations Part 92 for the rehabilitation of the home: • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies at any time during years 2 — 5, the Homeowner or his/her estate, as applicable, are responsible to reimburse eighty percent (80%) of the amount spent on the rehabilitation. • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies at any time during years 6 — 9, the Homeowner or his/her estate, as applicable, is responsible to reimburse sixty percent(60%) of the amount spent on rehabilitation. • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies at any time during years 10 — 13, the Homeowner or his/her estate, as applicable, is responsible to reimburse forty percent(40%) of the amount spent on rehabilitation. • If the property is sold, assigned transferred or encumbered or if the Homeowner dies at any time during years 14 — 15, the Homeowner or his/her estate, as applicable, is responsible to reimburse twenty percent(20%) of the amount spent on rehabilitation. Such amounts shall be due and owing on the date the property is sold, assigned, transferred or otherwise encumbered. Failure to remit the appropriate amount owed to the City of Port Arthur in a timely manner shall result not only in interest calculated in accordance with Chapter 2251 of the Texas Government Code, but also in the Homeowner or his/her estate, as applicable, being obligated to pay court costs and all attorneys' fees expended by the City in order to collect the amount owed to the City. 1.2 The Homeowner agrees not to make side contracts or any other agreement for additional work on the premises, unless the same is approved by the City of Port Arthur in writing and duly incorporated into the City of Port Arthur's Standard Form of Agreement for the HOME Program between Homeowner and Contractor applicable to the property (as identified in the Construction Contracts)prior to such work being performed. 1.3 The Homeowner further agrees to cooperate with the Contractor in a reasonable manner so as not to interfere with his performance under the Construction Contract, including, but not limited to, the abandonment of limited areas of the property for reasonable period of time as necessary for the satisfactory completion of the work required under the Construction Contract. 1.4 The Homeowner will make existing household utilities available to the Contractor without charge. Such available utilities shall include 110-volt electric power, gas, water and local telephone calls, if such utilities exist on the premises currently. 1.5 The Homeowner hereby agrees that throughout the term of this contract and during all warranty applicable to the work performed under this contract, the Homeowner shall take all necessary precautions to ensure: 1.6 The property is clear of debris so as not to constitute a public nuisance pursuant to Chapter 33 of the Code of Ordinances of the City of Port Arthur; 1.7 The property remains clear of all junked and abandoned vehicles in accordance with Chapter 28 of the Code of Ordinances of the City of Port Arthur; 1.8 All buildings, other than residences, on the property shall be secure in compliance with Chapter 33 of the Code of Ordinances of the City of Port Arthur; and 1.9 The property is free of all objects or conditions that constitute a possible and probable medium of transmission of disease to or between human beings in accordance with Chapter 15 of the Code of Ordinances of the City of Port Arthur. II. INDEMNITY IN CONSIDERATION OF THE REMODELING AND REHABILITATION IMPROVEMENTS OF THE HOMEOWNER'S PROPERTY AS DESCRIBED HEREIN ABOVE, THE HOMEOWNER AGREES TO AND SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICER, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITY OF ANY KIND, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES FOR INJURY TO OR DEATH OF ANY PERSON, OR FOR DAMAGE TO ANY PROPERTY ARISING OUT OF OR IN CONNECTION WITH THE WORK DONE BY THE CONTRACTOR UNDER THE CONSTRUCTION CONTRACT, THE WORK AND/OR SERVICES PERFORMED BY THE CITY IN ANY WAY CONCERNING THE PROJECT AND/OR THE HOMEOWNER PARTICIPATION IN THE CITY'S HOMEOWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM, WHEN SUCH INJURIES, DEATH OR DAMAGES ARE CAUSED BY (I) THE CITY'S SOLE NEGLIGENCE OR THE JOINT NEGLIGENCE OF THE CITY AND ANY OTHER PERSON OR ENTITY AND/OR (II) THE JOINT OR SOLE NEGLIGENCE OF THE HOMEOWNER. IT IS THE EXPRESSED INTENTION OF THE PARTIES HERETO, BOTH THE HOMEOWNER AND THE CITY, THAT THE INDEMNITY PROVIDED IN THIS PARAGRAPH IS INDEMNITY BY HOMEOWNER TO INDEMNIFY AND PROTECT THE CITY, ITS OFFICERS, AGENTS AND/OR EMPLOYEES OF THE CONSEQUENCES OF (I) THE CITY'S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE AND/OR (II) THE HOMEOWNER OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE. IN THE EVENT THAT ANY ACTION OR PROCEEDING IS BROUGHT AGAINST THE CITY BY REASON OF ANY OF THE ABOVE, THE HOMEOWNER FURTHER AGREES AND COVENANTS TO DEFEND THE ACTION OR PROCEEDING BY LEGAL COUNSEL ACCEPTABLE TO THE CITY. III. CREATION AND TRANSFER OF LIEN 3.1 To secure the prompt payment of the cost of the rehabilitation work, the Contractor's mechanic and material-man's lien is hereby granted and created for the benefit of the Contractor and the City of Port Arthur upon the above-described real property, and all improvements, additions, fixtures, and appurtenances now thereon or hereafter to be placed thereon in accordance with this Agreement and the Construction Contract and as evidenced by the Housing Rehabilitation and Reconstruction Lien signed by Homeowner and dated the 17th day of June, 2016, which by this reference number is incorporated herein for all intents and purposes. In the event any portion of the funding is not or cannot be lawfully secured by the lien given upon the herein described property, it is agreed that any payment shall be applied first to the discharge of that portion of the funds advanced which are not secured thereby. 3.2 The Homeowner hereby warrants and represents to the City that this Agreement is being executed and delivered before the labor or materials for the erection and construction of improvements have been furnished or delivered. IV. APPOINTMENT OF HOMEOWNER'S REPRESENTATIVE The Homeowner hereby appoints the City of Port Arthur's City Manager or his/her designee as representative to make all decisions concerning the rehabilitation and/or demolition and reconstruction of the property pursuant to the Construction Contract, including, but not limited to, the following: 4.1 To prepare a Work Write-up Agreement with the Contractor specifying the work to be performed pursuant to the City of Port Arthur's Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program; 4.2 To seek and obtain bids from contractors for the work specified in the Work Write-up Agreement; 4.3 To review all bids received and select the responsible contractor deemed by the City of Port Arthur to have presented the lowest bid; 4.4 To award, with approval of the City Council of the City of Port Arthur, a Construction Contract for the repairs and rehabilitation to the above-described property; 4.5 To supervise the Contractor in carrying out the work specified in the Work Write-up Agreement; 4.6 To make changes, additions and/or deletions to the Work Write-up Agreement as necessary to carry out the intentions of the Work Write-up Agreement which are to repair and rehabilitate the above-described property so that the structure meets the applicable codes of the City of Port Arthur; and 4.7 To resolve all disputes arising between Homeowner and the Contractor in carrying out the work specified in the Work Write-up Agreement. V. CITY'S OBLIGATION 5.1 The City reserves the right to inspect the work of the Contractor, at a time chosen by the City. 5.2 The City reserves the right to approve cost, approve the work order and any subsequent changes and to disburse funds for the remodeling, rehabilitation and demolition and reconstruction of the premises as set forth above through the Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program of single-family, Homeowner-occupied structures. 5.3 The Homeowner understands that funds hereunder are from the United States Department of Housing and Urban Development and are for the purpose of aiding persons of low to moderate income in having, safe, decent, sanitary and affordable housing. The Homeowner understands and agrees that he/she is subject to all provisions and regulations of the United States Department of Housing and Urban Development in accordance to 24 Code of Federal Regulations Part 92, Part 570 and 24 Code of Federal Regulations Parts 85.36 and 85.37 pertaining to expenditures of funds for this purpose. VI. CONTRACTOR'S OBLIGATION Contractor responsibilities include: 6.1 Rehabilitation, demolition and reconstruction work to follow work write up, and rehabilitation standards, performance standards, construction specification, zoning ordinances, all applicable local, Federal and State codes and ordinances; 6.2 To only make changes to the specified work with written approval from the City, through the City Manager; 6.3 To be on the above stated scheduled and budget; and 6.4 To release liens. VII. AMENDMENTS This Contract represents the entire agreement of the parties hereto and may only be amended or supplemented by mutual agreement of the parties hereto in writing. VIII. VENUE AND CHOICE OF LAW This Contract shall be performable in Port Arthur, Jefferson County, Texas. This Contract shall be governed by and construed in accordance with the laws of the State of Texas. IX. NOTICE All notices required to be given hereunder shall be given in writing by tele-copier, overnight, or facsimile transmission, certified or registered mail or by hand delivery at the respective addresses of the parties set forth herein or at such other address as may be designated in writing by either party. Notice given by mail shall be deemed given three (3) days after the date of mailing thereof to the following address, as appropriate: HOMEOWNER: CITY: Pearce and Lorraine Pegross City of Port Arthur 3238 13t"Street Attn: City Manager Port Arthur, Texas 77642 P. O. Box 1089 Telephone: 409.543.5212 Port Arthur, TX 77641 Fax: NA Telephone: (409) 983-8101 Fax: (409) 983-6743 X. TERM Unless sooner terminated in accordance with the applicable provisions hereof, or extended by mutual agreement approved by the City, the terms of this Contract shall be from the date hereof until the expiration of the fifteenth (15th) year after final completion of the Project; however, it is expressly understood and agreed that the provisions of Article II hereof shall survive the termination of this Agreement and shall not expire. Other Project-related claims or disputes will be included in the terms of Additional Services. XI. CORRECTNESS OF INFORMATION SUBMITTED IN ELIGIBILITY APPLICATION Homeowner covenants and represents to the City that the Homeowner has examined the eligibility requirements of the City's Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program that is designed in accordance with and based upon 24 Code of Federal Regulations Part 92 and Part 570, and has submitted his/her application dated the 13th day of December, 2012, which by this reference is incorporated herein for all intents and purposes, for participation in such program after certifying that all of the information so submitted is true and correct. It is expressly understood and agreed among the parties hereto that should it be determined at any time by the City that the application of the Homeowner contains incorrect or incomplete information, the Homeowner shall be disqualified from the program and shall be required to repay the City for all expenses incurred in accordance with 24 Code of Federal Regulations Part 92, 570 and 24 Code of Federal Regulations Part 85.36 and 85.37 as a result of the work on the Project. XII. GUIDELINES INCORPORATED BY REFERENCE The Homeowner agrees to abide by all of the terms and conditions contained in the City of Port Arthur's Homeowner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines for Home Homeowners which was adopted by the City Council in accordance with 24 Code of Federal Regulations Part 92, 570 and 24 Code of Federal Regulations Parts 85.36 and 85.37 on the 12th day of May, 2015,via Resolution No. 15-183 and is incorporated herein by this reference for all intent and purposes. XIII. FIXTURES REMOVED DURING PROJECT The Homeowner fully understands and agrees that all building materials, plumbing or electrical fixtures that are removed by the Contractor and are not to be reinstalled in accordance with the Work Write-up Agreement become the property of the Contractor, who may dispose of the property as he may wish. XIV. ADDITIONAL TERMS 14.1 The Homeowner and the City expressly agree and understand that this Agreement shall not create a partnership or joint venture between the Homeowner and the City. 14.2 Time is of the essence in this contract. 14.3 Notwithstanding anything to the contrary contained in this Agreement, the Homeowner and the City hereby agree that no claim or dispute between the Homeowner and the City arising out of or relating to this Agreement shall be decided by any arbitration proceeding including, without limitation, any proceeding under the Federal Arbitration Act (9 U.S.C. Section 1 - 14), or any applicable State arbitration statue, including, but not limited to, the Texas General Arbitration Act, provided that in the event that the City is subjected to an arbitration proceeding notwithstanding this provision,the Homeowner consents to be joined in the arbitration proceeding if the Homeowner's presence is required or requested by the City of complete relief to be recorded in the arbitration proceeding. 14.4 Failure of either party hereto to insist on the strict performance of any of the agreements contained herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. 14.5 Should any of the provisions contained in any of the Contract Documents as defined in the Construction Agreement be in conflict or inconsistent with each other, such conflict or inconsistency shall be construed in favor of the City. Furthermore, both parties expressly agree that the City, acting through the City Manager or the City Manager's appointee, shall be the sole and final decision-maker should any conflict arise hereunder. 14.6 In the event of any ambiguity in any of the terms of this contract, such ambiguity shall not be construed for or against any party hereto on the basis that such party did or did not author the same. 14.7 All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Agreement, which shall continue in full force and effect. All parties share responsibility for approving changes to work write up, and approving additional cost. 14.8 The persons executing this Agreement on behalf of the parties hereby represent that such persons have full authority to execute this Agreement and to bind the party he/she represents. IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple copies, each of which shall be deemed to be an original, but all of which shall constitute but one and the same Agreement on the day of , 2016, the date of execution by the City Manager of the City of Port Arthur. CITY: City of Port Arthur Brian McDougal, City Manager Date: ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: Valecia Tizeno, City Attorney HOMEOWNER: Pearce Pegross, Homeowner Lorraine Pegross, Homeowner Date: STATE OF TEXAS § JEFFERSON COUNTY § Before me the undersigned notary public, on this day personally appeared Pearce Pegross and Lorraine Pegross,HOMEOWNERS, the owners of the structure to be rehabilitated, known to me (or proved to me through his/her current driver's license {description of identification card or other document issued by federal government or any state government that contains this photograph and signature of the knowledging person} to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed. SUBSCRIBED AND SWORN before me this day , 2016. Notary Public in and for the State of Texas EXHIBIT " B- 1 " NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. DEED OF TRUST CITY OF PORT ARTHUR OWNER OCCUPIED HOUSING REHABILITATION AND RECONSTRUCTION PROGRAM DEFERRED LOAN AGREEMENT THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF JEFFERSON § THAT, Pearce and Lorraine Pegross, hereinafter referred to as "Grantors" for the purpose of securing the Deferred Payment Loan hereinafter described, and in consideration of the sum of Ten Dollars ($10.00)to us in hand paid by the Trustee hereinafter named, the receipt of which is hereby acknowledged,and for the further consideration of the used, purposes and trusts hereinafter set forth, have granted, sold and conveyed, and by these presents do grant, sell and convey unto Brian McDougal, (City Manager) Trustee, whose address is P.O. Box 1089, Port Arthur, Jefferson County, Texas 77741, and his substitutes or successors, the following described property,to-wit: Legal description: Lot Three (3) Block Seventeen (17), Lambert Addition, City of Port Arthur, Texas, as the same appears upon the map or plat thereof, on file and of record in the Office of County Clerk of Jefferson County, Texas at Beaumont. (Also known as 3238 13th Street) The conveyance evidenced by this instrument is made subject to any and all easements, restrictions, covenants, conditions and reservations of record, if any, applicable to all or any portion of the property. TO HAVE AND TO HOLD the above described property, together with the rights, privileges and appurtenances thereto belonging unto the said Trustee and to his substitutes or successors forever. And Grantor does hereby bind Grantors heirs, executors, administrators and assigns to warrant and forever defend the said premises unto the said Trustee, his substitute or successors and assigns forever, against the claim, or claims, of all persons claiming or to claim the same or any part thereof. This conveyance, however, is made in Trust to secure the performance of the obligations of Grantor herein, Grantors successors, assigns, heirs, devisees, administrators and executors, as set forth in Deferred Payment Loan (hereinafter "the Agreement") dated of even date herewith between Pearce and Lorraine Pegross and City of Port Arthur(hereinafter"Beneficiary"). The lien hereof and any and all liens securing the Agreement secured hereby shall be and remain subordinate to the liens, as renewed, extended, re-amortized, or otherwise adjusted from time to time, securing that certain note in the original principal amount of One Hundred Seven Thousand Three Hundred Fifty Eight Dollars & 23/100 ($107,358.23)dated September ,2016, executed by Pearce and Lorraine Pegross, payable to the order of City of Port Arthur, and filed for record under County Clerk of the Official Public Records of Real Property of Jefferson County, Texas. Should Grantor do and perform all of the covenants and agreements herein contained and comply with all terms of the Agreement,then this conveyance shall become null and void and of no further force and effect, and shall be released at the expense of Grantor, by the holder thereof, hereinafter called "Beneficiary" (whether one or more). GRANTOR COVENANTS AND AGREES AS FOLLOWS: To notify Beneficiary of change of address. That Grantor is lawfully seized of said property, and has the right to convey the same; that said property is free from all liens and encumbrances,except as herein provided. To protect the title from possession of said property and to pay when due all taxes and assessments now existing or hereafter levied or assesses upon said property, to the interest therein created by this Deed of Trust, and to preserve and maintain the lien hereby created as a first and prior lien on said property including any improvements hereafter made a part of the realty. To keep the improvements on said property in good repair and condition, and not to permit or commit any waste thereof;to keep said buildings occupied so as not to impair the insurance carried thereon. To maintain a standard mortgage clause in insurance policy that has a one(1) per cent deductible; to insure and keep insured all improvements now or hereafter created upon said property against loss or damage by fire and windstorm, and flood at any time the property is in a flood hazard area, and any other hazard or hazards as may be reasonably required from time to time by Beneficiary during the term of the Agreement hereby secured, to the extent required by Beneficiary, or to the extent of the full insurable value of said improvements, whichever is lesser, in such form and with such insurance company or companies as may be approved by Beneficiary and to deliver to Beneficiary the policies of such insurance having attached to said policies such mortgage indemnity clause as Beneficiary shall direct; to deliver renewals of such policies to Beneficiary at least ten (15) days before any such insurance policies shall expire; and any proceeds which Beneficiary may receive under any such policy or policies, may be applied by Beneficiary, to comply with the terms of the Agreement in such manner as Beneficiary may elect, or Beneficiary may permit Grantor to use said proceeds to repair or replace all improvements damaged or destroyed and covered by said policy. In the event Grantor shall fail to keep the improvements on the property hereby conveyed in good repair and condition, or to pay promptly when due all taxes and assessments, as aforesaid, to preserve the prior lien of this Deed of Trust on said property, or to keep the buildings and improvements insured, as aforesaid, then Beneficiary; may make such repairs, pay such taxes and assessments, purchase any tax title thereon, remove any prior liens, and to prosecute or defend any suits in relations to the preservation of the prior lien of this Deed of Trust on said property, or insure and keep insured the improvements thereon in an amount not to exceed that above stipulated; that any sums which may be so paid out by Beneficiary and all sums paid for insurance premiums, as aforesaid, including the costs, expenses and attorney's fees paid in any suit affecting said property when necessary to protect the lien hereof shall be paid by Grantor to Beneficiary upon demand, at such place as may be designated in writing by Beneficiary, shall be deemed a part of the Agreement hereby secured and recoverable as such in all respects. Any application or insurance proceeds under this Agreement shall be subject and subordinate to the terms of the first lien Deed of Trust. In the event on default in the performance of the Agreement hereby secured, in accordance with the terms thereof or of a breach of any of the covenants herein contained to be performed by Grantor, or in the event Grantor fails to pay any sums due or to become due on any indebtedness secured by prior liens on the property herein conveyed, or fails in the performance of any conditions, agreements or covenants contained in the prior lien security instrument, then and in any such events Beneficiary may elect, Grantor hereby expressly waiving presentment and demand, to declare default on the performance of the Agreement; thereupon, or at any time thereafter, it shall be the duty of the Trustee, or his successor or substitute as hereafter provided, at the request of Beneficiary (which request is hereby conclusively presumed), to enforce this trust; and after advertising the time, place and terms of the sale of the above described and conveyed property, then subject to the lien hereof, and mailing and filing notices, as required by Section 51.002, Texas Property Code, as then amended and otherwise complying with that statute, the Trustee shall sell the above described property, then subject to the lien hereof, at public auction in accordance with such notices on the first Tuesday in any month between the hours of ten o'clock A.M. and four o'clock P.M. to the highest bidder for cash, selling all of the property as an entirety or in such parcels as the Trustee acting may elect, and make due conveyance to the Purchaser or Purchasers, with general warranty binding Grantor, Grantors executors, administrators, heirs, successors an assigns; and out of the money arising from such sale, the Trustee acting shall pay first, all the expenses of advertising the sale and making the conveyance, including a commission of five percent (5%) to Trustee, and then to Beneficiary the full amount due under the Agreement, attorney's fees and other charges due and unpaid under said Agreement secured hereby, rendering the balance of the sales price, if any, to Grantor, Grantor's heirs, executors, administrators, successors or assigns; and the recitals in the conveyance to Purchaser or Purchasers shall be full and conclusive evidence of the truth of the matter therein stated, and all prerequisites to said sale shall be presumed to have been performed, and such sale and conveyance shall be conclusive against Grantor, Grantor's heirs, executors, administrators, successors or assigns. In the event a foreclosure hereunder should be commenced by the Trustee, or his substitute or successor, Beneficiary may at any time before the sale of said property direct the said Trustee to abandon the sale, and may then institute suit for performance of said agreement, and for the foreclosure of this Deed of Trust Lien; it is further agreed that if Beneficiary should institute a suit for the enforcement thereof, and a foreclosure of this Deed of Trust Lien, that Beneficiary may at any time before the entry of a final judgment in said suit dismiss the same, and require the Trustee, Trustee's substitute or successor to sell the property in accordance with the provisions of this Deed of Trust or fulfill all rights or responsibilities of the Trustee. In the event of a foreclosure or deed in lieu of foreclosure of the first lien deed of trust, any provisions herein or any provisions in any other collateral agreement restricting the use of the property to low or moderate income households or otherwise restricting the Grantor's ability to sell the Property shall have no effect on subsequent owners or purchasers of the Property. Any person, including his successors or assigns (other than the Grantor or a related entity of the Grantor), receiving title to the Property through a foreclosure or deed in lieu of foreclosure of the first lien deed of trust shall receive title to the Property free and clear from such restrictions. Beneficiary, if Beneficiary is the highest bidder, shall have the right to purchase at any sale of the property, and to have the amount for which such property is sold credited on the Agreement. Beneficiary in any event is hereby authorized to appoint a substitute trustee,to act instead of the Trustee named herein without other formality than the designation in writing of a substitute or successor trustee; and the authority hereby conferred shall extend to the appointment of other successor or substitute trustees successively until the Agreement hereby secured has been fully satisfied, or until said property is sold hereunder, and each substitute trustee shall succeed to all of the rights and power of the original trustee named herein. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or to repair or replace damaged or destroyed improvements covered by the policy. If the Property is grantor's primary residence and beneficiary reasonably determines that repairs to the improvements are economically feasible, beneficiary will make the insurance proceeds available to grantor for repairs. Notwithstanding the terms of the Note to the contrary, and unless applicable law prohibits, all payments received by beneficiary from grantor with respect to the Note or this deed of trust may, at beneficiary's discretion, be applied first to amounts payable under this deed of trust and then to amounts due and payable to beneficiary with respect to the Note,to be applied to late charges,principal,or interest in the order beneficiary in its discretion determines. In the event any sale is made of the above-described property, or any portion hereof, under the terms of this Deed of Trust, Grantor,Grantor's heirs, executors,administrators, successors and/or assigns, shall forthwith upon the making of such sale surrender and deliver possession of the property so sold to the Purchaser at such sale, and in the event of their failure to do so they shall thereupon from and after making such sale be and continue as tenants at sufferance of such Purchaser, and in the event of their failure to surrender possession of said property upon demand, the Purchaser, Purchaser's Heirs or assigns, shall be entitled to institute and maintain an action for forcible detainer of said property in the Justice of the Peace Court in the Justice Precinct in which such property,or any part thereof, is situated. Nothing herein or in said Agreement shall ever entitle Beneficiary, upon the arising of any contingency whatsoever, to receive or collect interest in excess of the highest rate allowed by the laws of the State of Texas on any money obligation hereunder and in no event shall Grantor be obligated to pay interest thereon in excess of such rate. This Deed of Trust shall be binding upon and inure to the benefit of not only said parties respectively but also their respective heirs, executors,administrators grantees, successors or assigns. Should Grantor transfer, assign, convey, hypothecate or otherwise encumber the property described herein, or any interest therein, either legal or equitable, without the prior written consent of Beneficiary, such transfer, hypothecation or encumbrance, without Beneficiary's prior written consent, shall be an element of default hereunder and shall enable Beneficiary to exercise any and all remedies herein. As a condition to such consent, however, Beneficiary shall have the right to approve any assignee or purchaser of any interest in the property herein described. Grantor shall provide to Beneficiary, on or before January 31 of each year during the term of the Agreement secured hereby, written evidence that all as valorem taxes and other assessments against the property have been paid in full. The funds due Beneficiary under the terms of the Agreement represent a repayment for funds advanced by Beneficiary as part of the purchase price of the property and Grantor hereby confirms Beneficiary shall also be secured by an equitable vendor's lien on the property to the extent that such funds were used as purchase money. Any such vendor's lien shall be second and inferior to the lien of NONE , together with all renewals, extensions, and modifications thereof, as such NONE Lien is previously described herein. EXECUTED this day of ,2016 . Grantor Pearce Pegross,Homeowner Lorraine Pegross,Homeowner THE STATE OF TEXAS § COUNTY OF JEFFERSON § This instrument was acknowledged before me on this day of ,2016 by . NOTARY PUBLIC, STATE OF TEXAS PRINTED NAME OF NOTARY MY COMMISSION EXPIRES: AFTER RECORDING RETURN TO: CITY OF PORT ARTHUR Housing Division P.O. Box 1089 Port Arthur, Texas 77641