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HomeMy WebLinkAbout25-123.00HabitatforHumanitySpokanePermanentlyAffordableHomeownershipHousing25-123.00 CITY OF SPOKANE VALLEY GRANT AGREEMENT Grant Recipient: Habitat for Humanity - Spokane Project: Permanently Affordable Homeownership Housing — Surplus City Property Property: 228 South Carnahan Road & 4908 E. First Avenue Contract#: 25-123.00 Term Period: Effective Date To December 31, 2035 THIS AGREEMENT is a grant agreement ("Agreement") entered into between Habitat for Humanity — Spokane, a Washington nonprofit corporation (the "Grant Recipient") and the City of Spokane Valley, a municipal corporation of the State of Washington (the "City") (collectively the "Parties") for the purpose of developing, constructing, and providing permanently affordable housing at Parcel # 35232.1509 & 35232.1503 & Parcel # 35232.1304 (the "Property"). RECITALS WHEREAS, pursuant to RCW 39.33.015, the City may transfer surplus property to an entity to develop and provide affordable housing consistent with the terms of the state statute; and WHEREAS, pursuant to the requirement of RCW 39.33.015(3), the City Council previously adopted SVMC 3.49.030, which regulates the grant or transfer of surplus real property for affordable housing purposes; and WHEREAS, RCW 39.33.015 states that the "transfer at no cost, lease, or other disposal of surplus real property for public benefit purposes is deemed a lawful purpose of any state agency, municipality, or political subdivision...."; and WHEREAS, pursuant to RCW 39.33.015 and SVMC 3.49.030 "public benefit" is defined as "rental housing or permanently affordable homeownership for low-income and very low- income households as defined in RCW 43.63A.510, and related facilities that support the goals of affordable housing development in providing economic and social stability for low-income persons;" and WHEREAS, pursuant to RCW 39.33.015 and SVMC 3.49.030(B)(1)(b), affordable housing, for permanently affordable homeownership, means that no more than 38 percent of the household's monthly income goes towards mortgage principal, interest, property taxes, homeowner's insurance, homeowner's association fees, and land lease fees, where the total household debt is no more than 45 percent of the monthly household income; and WHEREAS, the City previously determined the Property to be surplus; and 1 of 17 25-123.00 WHEREAS, the City issued a Request for Proposals ("RFP") seeking affordable housing proposals for the Property consistent with SVMC 3.49.030(C)(6); and WHEREAS, on April 22, 2025, the City Council evaluated the responses and voted to authorize the City Manager to enter into an agreement with Habitat for Humanity — Spokane, and carry out the terms of that agreement once executed; and WHEREAS, the planned use of the surplus real property is consistent with existing locally adopted zoning codes and the comprehensive plan; and WHEREAS, Habitat for Humanity — Spokane shall utilize the Property to develop 24 tri- plex units and one single family home on the Property with a 99-year resale restriction ensuring the homes remain affordable for families earning 80% AMI or below; and WHEREAS, the City and the Grant Recipient desire to enter into this Agreement to establish terms upon which the transfer of property will be made and to ensure that the Property is guaranteed to be used for affordable homeownership for multiple generations. NOW THEREFORE, in consideration of the promises, covenants, and other provisions set forth in this Agreement, the Parties agree as follows: GRANT AWARD TERMS AND CONDITIONS DEFINITIONS 1.1 Project. The term "Project" means Permanently Affordable Homeownership Housing Project described in Exhibit A to this Agreement. The Project includes developing housing for Permanently Affordable Homeownership. 1.2 Permanently Affordable Homeownership. The term Permanently Affordable Homeownership means construction and sale of individual homeownership units that are sold to buyers whose household income is no more than 80% of the median income in the area where the housing is located and who will occupy the unit, and are sold at prices such that (1) the sum of the monthly mortgage principal, interest, property taxes, homeowner's insurance, homeowner's association fees, and land lease fees, as applicable, do not exceed 38 percent of the purchasing household's monthly income; and (2) does not cause the household's monthly debt to exceed 45 percent of the monthly household income. 1.3 Propegy The term "Property" means both Parcel # 35232.1509 & 35232.1503 & Parcel # 35232.1304 , Spokane Valley, WA 99212, unless specifically referenced separately. 1.4 Administrator. The City Manager or designee shall administer and be the primary contact for Grant Recipient throughout the term of this Agreement. 2of17 25-123.00 2. EFFECTIVE DATE The Agreement shall be effective upon signature by both Parties ("Effective Date") TERM The term ("Term") of this Agreement shall begin on the Effective Date and terminate on December 31, 2035. Notwithstanding the foregoing, the terms identified in paragraphs 7.5.1, 7.8, 7.10, 15, 16, 24-27, 29, and 30 shall survive the termination of the Agreement. 4. AMENDMENTS This Agreement together with the attached exhibits is the whole Agreement between the Parties. This Agreement may be amended only in writing, duly executed by the Parties. 5. NOTICES Unless otherwise specified in the Agreement, all notices or documentation required or provided pursuant to this Agreement shall be in electronic form and shall be deemed duly given when received at the addresses below via electronic mail. THE CITY OF SPOKANE VALLEY HABITAT FOR HUMANITY - SPOKANE City Clerk Michelle Girardot, Chief Executive Officer 10210 East Sprague Avenue P.O. Box 4130 Spokane Valley, WA 99206 Spokane, WA 99220 509) 720-5000 509 534-2552 mpatterson@spokanevalleywa.gov m irardot habitat-s okane.or Either Party may, at any time, by giving ten (10) days written notice to the other Party to designate any other notice address. 6. CONVEYANCE OF PROPERTY 6.1 Within 30 days of execution of this Agreement, the City shall execute deeds in substantially the form attached hereto as Exhibit B. 6.2 Title shall not transfer to the Grant Recipient unless and until the Grant Recipient pays all necessary costs for transferring the property, which include but are not limited to any applicable appraisal costs, debt service, all closing costs, and any other liabilities of the City related to the transfer of the Property. The deeds shall not be recorded until all costs have been paid. Should the Grant Recipient fail to pay any of the costs, the deed by the City of the Property shall be considered null and void. For the avoidance of doubt, should the Grant Recipient fail to pay any of the costs associated with the transfer of the Property the Grant Recipient shall execute deeds transferring the Property back to the City on a form agreeable to the City. Notwithstanding the foregoing, the Grant Recipient shall not be responsible for indirect or administrative costs except those expressly referenced herein or otherwise agreed to in writing in advance. 3of17 25-123.00 7. GRANT RECIPIENT OBLIGATIONS 7.1 The transfer of the Property, and Grant Recipient's (its, theirs and successors) continued ownership thereof, is conditioned on the Grant Recipient utilizing the Property for the sole purpose of providing Permanent Affordable Homeownership consistent with the Project identified herein and as described in Exhibit A, and the Grant Recipient delivering said Project in compliance with the terms and conditions of this Agreement and the Deed Restrictions contained in the deed documents attached hereto as Exhibit B. 7.2 Grant Recipient shall be solely responsible for any and all costs associated with ownership, including but not limited to taxes, insurance, or any other costs, for which an owner in fee is responsible. 7.3 Grant Recipient shall be solely responsible for ensuring the Property is sufficient for the purposes of completing the Project as defined herein, including without limitation performing all necessary environmental, biological, archaeological and wildlife studies, surveys, feasibility studies, and engineering and architectural reviews. 7.4 The City makes the conveyance without any warranties of any nature. 7.5 In addition to the restricted use identified in paragraph 7.1 herein, the Grant Recipient agrees to the following: 7.5.1 Grant Recipient shall develop the Property and construct housing as outlined in the Exhibit A for the sole and exclusive purpose of providing Permanent Affordable Homeownership, and shall continuously maintain that use of the Property for a period of at least 99 years. 7.5.2 The development and construction of the affordable housing for the purposes of providing Permanent Affordable Homeownership shall be completed on the following schedule: 7.5.2.1 Site Plan Approval: February 1, 2026. For the purposes herein, Site Plan Approval means the plan has been reviewed and approved under the City's site plan review process. 7.5.2.2 Construction Begins: September 1, 2026 (Phase I), May 1, 2027 (Phase II) 7.5.2.3 First home Certificate of Occupancy issued: July 1, 2027, (Phase 1), December 1, 2027 (Phase II) For the purposes herein, Certificate of Occupancy means an official certificate issued by the building official that indicates conformance with building requirements and zoning regulations and authorizes legal use of the premises for which it is issued. 7.5.2.4 Last home Certificate of Occupancy issued: December 1, 2027 (Phase I), October 1, 2028 (Phase 1I). For the purposes herein, Certificate of Occupancy means an official certificate issued by the building official that indicates conformance with building requirements and zoning regulations and authorizes legal use of the premises for which it is issued. 4of17 25-123.00 7.6 Grant Recipient shall report in writing to the City no later than 30 days prior to any such milestone in section 7.5 above, or as amended, to confirm its ability to meet such milestones by the dates listed, or request an extension of the milestone dates. One extension of up to six months for each milestone over the course of this Agreement may be granted in writing by the City Manager or designee. The City Manager or designee shall not unreasonably withhold approval of such six month extension. Additional extensions may be granted upon mutual agreement of the Parties, and require a formal modification of this Agreement. 7.7 The following procedures in this section 7.7 apply to any failure of the Grant Recipient to complete the Project milestones by any of the dates outlined in section 7.5 above, or as amended. These procedures, and not the procedures outlined in section 13 related to corrective actions, shall be utilized for such breach. The Parties agree that failure to adhere to the timelines established in section 7.5 or any extension provided for in section 7.6 shall be deemed to be a failure to develop, construct, or provide Permanently Affordable Homeownership at the Property, in which case the Parties will not dispute the City's claim to title of the Property pursuant to its reverter interest reserved within the recorded deed documents. However, for purposes of clarifying title, within 30 days, or another reasonable amount of time determined in the sole discretion of the City, of notice sent by the City to the Grant Recipient of failure to meet the milestones in section 7.5, or as amended, the Grant Recipient shall record a deed transferring the Property back to the City on a form agreeable to the City. Should the Grant Recipient fail to record such deed within 30 days, the Parties agree that the City, in addition to any other rights, shall have a viable cause of action in superior court for breach of contract, the remedy of which shall include but not be limited to the ordered recording of documents deemed appropriate by the City to recognize, acknowledge and effectuate transfer of the Property from the Grant Recipient to the City. 7.8 The following procedures in this section 7.8 apply to any failure of the Grant Recipient to remove, revoke, invalidate, or otherwise extinguish a transfer, lease, or any encumbrance deemed in the City's sole discretion to not serve the purpose of providing Permanent Affordable Homeownership. These procedures, and not the procedures outlined in section 13 related to corrective actions, shall be utilized for such breach. Grant Recipient shall not transfer, lease, or otherwise encumber the Property except for the purpose of providing Permanent Affordable Homeownership. Grant Recipient shall notify the City of any transfer, lease, or encumbrance on the Property at least 30 days prior to allowing the transfer, lease, or encumbrance to occur. Should the City in its sole discretion determine that the transfer, lease or encumbrance does not serve the purpose of providing Permanent Affordable Homeownership, the City may provide written notice to the Grant Recipient, in which case the Grant Recipient shall not allow the transfer, lease, or encumbrance to take effect. If Grant Recipient allows a transfer, lease, or encumbrance on the Property to occur without the City's advance written permission, and the City does not afterward approve of the same, then (1) the City shall provide written notice thereof to Grant Recipient, and (2) the Grant Recipient shall have a cure period of 30 days, another reasonable amount of time determined at the sole discretion of the City or as required by law for the particular situation, to remove, revoke, or remedy any 5of17 25-123.00 transfer, lease, or encumbrance. If such transfer, lease, or encumbrance is not removed or otherwise extinguished within the cure period established herein, the Grant Recipient shall transfer the Property back to the City within 30 days of expiration of the cure period. Should the Grant Recipient fail to transfer the Property back to the City within 30 days of expiration of the cure period, the Parties agree that the City shall have a viable cause of action in superior court for breach of contract, the remedy of which shall include but not be limited to the ordered transfer of the Property from the Grant Recipient to the City. Nothing in this section shall be construed to prohibit the use of standard affordable housing or community land trust instruments — including ground leases, resale formulas, shared equity mortgages, or other tools consistent with the purpose of this Agreement, which is to provide Permanent Affordable Homeownership; provided however, use of such instruments do not materially violate the affordability criteria required by this Agreement. 7.9 Reporting. Grant Recipient shall provide a quarterly report to the City's finance department with the following information: 7.9.1 Permits applied for and permits issued. 7.9.2 Construction progress and estimated timetables for occupancy. 7.9.3 Number of homes sold and owner -occupied to date, and status of any homes not yet sold or occupied. 7.9.4 Aggregate number of people served. 7.9.5 Demographic information of households served, including but not limited to whether households are seniors, persons with disabilities, families with children, race and ethnicity (as voluntarily self -identified), and the area median income (AMI) category at initial purchase and at any subsequent resale. 7.9.6 Sales price of each home at initial sale and at any subsequent resale, including a description of how each price complies with the affordability requirements defined in this Agreement. 7.10 Nothing in this Agreement shall be construed to limit the City's possibility of reverter interest in the Property identified in Exhibit B. The possibility of reverter shall remain on the Property for 99 years, or until such time the City determines to release said interest in writing. COMMUNICATION AND THE CITY OF SPOKANE VALLEY MILESTONE NOTIFICATION 8.1 Grant Recipient shall recognize City as having provided the Property for the Project in the following manner: 8.1.1 Events: Grant Recipient shall invite and recognize "The City of Spokane Valley" at all events promoting the Project. 6of17 25-123.00 8.1.2 Community Relations: Grant Recipient shall recognize "The City of Spokane Valley" and the City as a partner in all social media, websites, brochures, banners, posters, press releases, and other promotional material related to the Project. 8.1.3 The City of Spokane Valley Notification: Grant Recipient shall notify the City Manager or designee 30 days prior to breaking ground on the Property. 8.1.4 Sim: Grant Recipient shall recognize "The City of Spokane Valley" on any signage as a partner of the Project. Grant Recipient is required to obtain approval from the City to use the City logo on any signage and communications. If approved, the appropriate City logo will be provided by the City. 9. INSURANCE REQUIREMENTS. Grant Recipient shall maintain, and require its contractor(s) and subcontractors to maintain, the minimum scope and limits of insurance as required in Exhibit C — Insurance Requirements. 10. PROPERTY DEVELOPMENT 10.1 Capital Improvements. Grant Recipient shall design the Project, features, and amenities in accordance with all applicable design(s), timelines, restrictions, environmental considerations, permitting determinations, neighborhood impact mitigations, and all other legal requirements. All contracted work by Grant Recipient, its agents, representatives, or subcontractors, shall be bonded and properly insured to ensure the complete and safe design and construction of all facilities, features, and amenities. 10.2 Warranties. With respect to all warranties, express or implied, for work performed or materials supplied in connection with the Project, Grant Recipient shall: • Obtain all warranties, express or implied, that would be given in normal commercial practice from suppliers, manufacturers, contractors or installers; • Require all warranties be executed, in writing; • Be responsible to enforce any warranty of a contractor, subcontractor, manufacturer, or supplier. If, within an applicable warranty period, any part of the Project or work performed to construct the Project is found not to conform to specifications, permit requirements, or industry standard, Grant Recipient shall correct it promptly. 10.3 Right to Inspect Construction. City personnel or agents may inspect the Project work at any time provided that such persons observe due regard for workplace safety and security. 10.4 Development and Construction Fees and Expenses. Grant Recipient shall be responsible for all costs for obtaining any and all necessary permits, approvals, and endorsements for the Project. 10.5 Public Works Laws. The City is providing the Property pursuant to RCW 39.33.015 for the purposes of providing Permanent Affordable Homeownership as defined herein. Grant Recipient (and not the City) is responsible for design, development and construction of the Project and for all construction costs and risks, including all construction cost overruns. In no event shall the City be responsible for any costs 7of17 25-123.00 associated with the construction of the Project. As owner of the property, Grant Recipient bears all ownership risks and responsibilities. The Grant Recipient certifies that all contractors and subcontractors performing work on the Project shall be paid prevailing wages in compliance with state Prevailing Wages on Public Works, Chapter 39.12 RCW, as applicable to the Project, and shall complete and submit Exhibit D. Grant Recipient will indemnify and defend the City should it be sued or made the subject of an administrative investigation or hearing for a violation of such laws, regulations, and ordinances in connection with the Project. 11. MAINTENANCE OF RECORDS 11.1 Grant Recipient shall establish and maintain a system of accounting and internal controls sufficient to comply, and demonstrate compliance, with all financial, reporting, record keeping and other requirements under this Agreement. Grant Recipient shall maintain accounts and records, including personnel, property, financial, Project records, and Agreement deliverables, to ensure proper accounting for all Grant Award Funds and compliance with this Agreement. 11.2 These records shall be maintained for six (6) years after the expiration or earlier termination of this Agreement. 11.3 Right to inspect. The City reserves the right to review the performance of Grant Recipient with regard to this Agreement, and, at its sole discretion, to inspect or audit the Grant Recipient's records regarding this Agreement and the Project upon seventy-two (72) hours' notice during normal business hours. 12. BREACH & CORRECTIVE ACTION Except as delineated in section 7.7 and 7.8 of this Agreement, the following procedures shall be utilized for breach of terms of this Agreement by Grant Recipient: 13.1 If the City determines that a breach of any term of this Agreement has occurred or finds Grant Recipient's performance to be contrary to the terms of this Agreement, the City shall give the Grant Recipient written notification of such breach or unsatisfactory performance as the case may be. Grant Recipient shall take corrective action to cure said breach or unsatisfactory performance within 30 days or other reasonable period of time as defined by the City in its sole discretion within its written notification to Grant Recipient. 13.2 Should the City, in its sole discretion, determine that the corrective action was not adequately completed within 30 days or other cure period provided for in its written notice to Grant Recipient, the City, in addition to any other remedy provided for within this Agreement or allowed by law, may file an action in Spokane County Superior Court. The City shall be entitled to any remedy available at law, including but not be limited to the ordered transfer of the Property from the Grant Recipient to the City. 13. TERMINATION In addition to any other remedies or processes provided herein or as allowed by law, the City may terminate this Agreement by 30 days written notice upon material breach of the Grant Recipient. Material breach includes, but is not limited to, failing to meet the milestones listed in section 7, failure to adhere to the Deed Restrictions in the associated 8of17 25-123.00 deeds, or failure to cure as denoted in section 13 herein. Termination shall not be deemed to relieve the Grant Recipient of its duty to transfer the Property back to the City pursuant to sections 7.7, 7.8, or 13, or as otherwise required by this Agreement. Termination shall also not be deemed to limit the City's rightful ownership of the Property pursuant to its possibility of reverter interest reserved in the deeds. 14. FUTURE SUPPORT; UTILITIES AND SERVICE The City makes no commitment to support the Project contracted for herein and assumes no obligation for future support of the Project contracted for herein except with the transfer of the Property as expressly delineated herein. Grant Recipient understands, acknowledges, and agrees that the City shall not be liable to pay for or to provide any utilities, services, or any other support in connection with the Project contemplated herein. 15. HOLD HARMLESS AND INDEMNIFICATION Grant Recipient shall, at its sole expense, defend, indemnify, and hold harmless City and its officers, agents, and employees, from any and all claims, actions, suits, liability, loss, costs, attorney's fees, costs of litigation, expenses, injuries, and damages of any nature whatsoever relating to or arising out of the wrongful or negligent acts, errors, or omissions in the services provided by Grant Recipient, its agents, subcontractors, subconsultants, and employees to the fullest extent permitted by law, subject only to the limitations provided below. However, should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of Grant Recipient and the City, its officers, officials, employees, and volunteers, Grant Recipient's liability, including the duty and cost to defend, hereunder shall be only to the extent of Grant Recipient's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes Grant Recipient's waiver of immunity under Industrial Insurance, Title 51, RCW, solely for the purpose of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. Grant Recipient shall include the two paragraphs above in any contracts with any and all contractor(s) or subcontractor(s) for the Project, indemnifying and holding harmless the City, substituting references to Grant Recipient with references to the contractor or subcontractor as the case may be. 16. NONDISCRIMINATION In all hiring or employment made possible or resulting from this Agreement, there shall be no discrimination against any employee or applicant for employment because of sex, race, color, marital status, national origin, religious affiliation, disability, sexual orientation, gender identity or expression or age except minimum age and retirement provisions, unless based upon a bona fide occupational qualification. 17. CONFLICT OF INTEREST Grant Recipient shall take appropriate steps to ensure that neither the Grant Recipient nor any Grant Recipient staff is placed in a position where, in the reasonable opinion of the 9of17 25-123.00 City, there is or may be an actual conflict, or a potential conflict, between the pecuniary or personal interests of the Grant Recipient and the duties owed to the City under the provisions of the Agreement. Grant Recipient will notify the City without delay giving full particulars of any such conflict of interest which may arise. 18. POLITICAL ACTIVITY PROHIBITED No funds, materials, property, or services provided directly or indirectly under this Agreement shall be used for any partisan political activity or to further the election or defeat of any candidate for public office. 19. PROJECT MAINTENANCE-, EQUIPMENT PURCHASE, MAINTENANCE, AND OWNERSHIP A. Grant Recipient shall be responsible for completing the Project at its own sole expense and risk. Grant Recipient shall maintain the Project and the associated buildings in good working condition consistent with applicable standards and guidelines. Grant Recipient understands, acknowledges, and agrees that the City is not responsible to operate or to maintain any building in any way. B. Grant Recipient shall be responsible for all property purchased pursuant to this Agreement, including the proper care and maintenance of any equipment. C. Grant Recipient shall establish and maintain inventory records and transaction documents (purchase requisitions, packing slips, invoices, receipts) of equipment and materials so purchased. 20. ASSIGNMENT Grant Recipient shall not assign any portion of rights and obligations under this Agreement or transfer or assign any claim arising pursuant to this Agreement without the written consent of the City. Grant Recipient must seek such consent in writing not less than fifteen (15) days prior to the date of any proposed assignment. Notwithstanding the foregoing, the transfer of any dwelling unit located on the Property shall only require verification by Grant Recipient that the future homeowners meet the requirements for the provision of Permanent Affordable Homeownership as outlined herein. 21. WAIVER OF BREACH OR DEFAULT Waiver of breach of any provision in this Agreement shall not be deemed to be a waiver of any subsequent breach and shall not be construed to be a modification of the terms of the Agreement unless stated to be such through written approval by the City, which shall be attached to the original Agreement. Waiver of any default shall not be deemed to be a waiver of any subsequent defaults. 22. TAXES Grant Recipient agrees to pay on a current basis all taxes or assessments levied on its activities and property, including, without limitation, any leasehold excise tax due under RCW Chapter 82.29A; PROVIDED, however, that nothing contained herein will modify the right of the Grant Recipient to contest any such tax, and Grant Recipient shall not be deemed to be in default as long as it will, in good faith, be contesting the validity or amount of any such taxes. 10of17 25-123.00 23. WASHINGTON LAW CONTROLLING; WHERE ACTIONS BROUGHT This Agreement is entered into in Spokane County, Washington. Any court action filed by the City or Grant Recipient shall be resolved in the Superior Court of the State of Washington in Spokane County. Notwithstanding the foregoing, Grant Recipient agrees that it may, at City's request, be joined as a party in any arbitration proceeding between City and any third party that includes a claim or claims that arise out of, or that are related to Grant Recipient's services or other actions under this Agreement. Grant Recipient further agrees that the Arbitrator(s)' decision therein shall be final and binding on Grant Recipient and that judgment may be entered upon it in any court having jurisdiction thereof. 24. The prevailing party in any litigation or arbitration arising out of this Agreement shall be entitled to its attorney's fees and costs of such litigation (including expert witness fees). 25. PUBLIC DOCUMENT This Agreement will be considered a public document and will be available for inspection and copying by the public. 26. LEGAL RELATIONS Nothing contained herein will make, or be deemed to make, City and Grant Recipient a partner of one another, and this Agreement will not be construed as creating a partnership or joint venture. Nothing in this Agreement will create, or be deemed to create, any right, duty or obligation in any person or entity not a party to it. It is understood and agreed that (a) Grant Recipient is not and shall not be considered to be an agent, employee, or independent contractor of City, (b) City is interested in only the results to be achieved, and (c) the right to control the particular manner, method, scope, and means in which the services are performed is solely within the sole and absolute discretion of Grant Recipient. Any and all Grant Recipient agents, employees, and independent contractors who provide services to Grant Recipient under this Agreement shall be deemed employees solely of Grant Recipient. As between the City and Grant Recipient, Grant Recipient shall be solely responsible for the conduct and actions of all its employees, and independent contractors under this Agreement and any liability that may attach thereto. 27. COMPLIANCE WITH ALL LAWS AND REGULATIONS, PERMITS AND LICENSES Grant Recipient shall complete the Project in accordance with all applicable local, state and federal laws and regulatory requirements including environmental considerations, permitting determinations, and other legal requirements. All activities shall be performed by Grant Recipient at its sole expense and liability. Grant Recipient shall, at its sole cost and expense, apply for, obtain and comply with all necessary permits, licenses and approvals required for the Project. The Grant Recipient shall indemnify and defend the City should it be sued or made the subject of an administrative investigation or hearing for a violation of such laws related to this Agreement. 28. INTERPRETATION OF CITY RULES AND REGULATIONS If there is any question regarding the interpretation of any City rule or regulation, the City decision will govern and will be binding upon the Grant Recipient. 29. PUBLIC RECORDS. The Parties agree that all records of Grant Recipient prepared 11 of 17 25-123.00 pursuant to this Agreement, and which are owned, used, or retained by the City, are public records under the Public Records Act (chapter 42.56 RCW) and may be subject to disclosure unless a statutory exemption applies. The City agrees not to intentionally waive any statutory exemptions from disclosure available for such records under the Public Records Act. The City shall, if possible, notify Grant Recipient before any disclosure, and provide Grant Recipient an opportunity to intervene through judicial process to resist release of such records. The City agrees not to object to Grant Recipient intervention in any judicial proceeding in which Grant Recipient resists release of the records. The City shall have no duty to resist release of any public records created pursuant to this Agreement, except to provide notice to Grant Recipient of the request for and disclosure of such records as previously described. All annual reports and other related documents identified in this Agreement prepared by Grant Recipient pursuant to this Agreement and provided to the City are and shall be the property of City and may be subject to disclosure pursuant to chapter 42.56 RCW or other applicable public record laws. The written, graphic, mapped, photographic, or visual documents prepared by Grant Recipient pursuant to this Agreement and provided to the City shall, unless otherwise provided, be deemed the property of City. City shall be permitted to retain these documents, including reproducible camera-ready originals of reports, reproduction quality mylars of maps, and copies in the form of computer files, for the City's use. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, in whole or in part, any reports, data, drawings, images, or other material prepared pursuant to this Agreement for the City, provided that Grant Recipient shall have no liability for the use of Grant Recipient's work product outside of the scope of its intended purpose. Grant Recipient may, from time -to -time, receive information which is deemed by City to be confidential. Grant Recipient shall not disclose such information without the prior express written consent of City or upon order of a court of competent jurisdiction. 30. BUSINESS REGISTRATION Grant Recipient shall register with the City as a business prior to commencement of work under this Agreement if it has not already done so. 31. ENTIRE AGREEMENT This Agreement, including its attachments, constitutes the entire Agreement between the City and Grant Recipient. It supersedes all other agreements and understandings between them, whether written, oral or otherwise. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the first date written. The City of Spokane Valley Habitat for Hurnan,Lty Spokane By /�lJle' By - Title C-.+y Ala -AA ter- Title c_/_� Date � I �� Date Z�/ 2_5— 12 of 17 25-123.00 Exhibit A - Proiect On file with City Clerk. 13 of 17 25-123.00 Exhibit B- Form Deeds 14of17 08/01/2025 02:25:02 PM 7432144 Recording Fee $305.50 Page 1 of 3 Quit Claim Deed CITY OF SPOKANE VALLEY I CITY CLERK Spokane County Washington I1111111111111111111111111111111111 IN 111111111111111111111111111111111111111111111111III After recording return document to: City of Spokane Valley Attn: City Clerk 10210 East Sprague Avenue Spokane Valley, WA 99206 Document Title: Quitclaim Deed Grantor: City of Spokane Valley Grantee: Habitat for Humanity - Spokane Abbreviated Legal Description: Lt 4, B-13, Sprague Street Addition Assessor's Tax Parcel Number: 35232.1304 QUITCLAIM DEED h� CD The Grantor, CITY OF SPOKANE VALLEY, a municipal corporation of the State m of Washington, for and in consideration of the sum of ten dollars ($10.00), and other good and valuable consideration, hereby conveys and quitclaims to Habitat for Humanity - Spokane, a nonprofit organization of the State of Washington, the Grantee, the following described real ra property situated in Spokane County, in the State of Washington: LM 0 co LOT 4, BLOCK 13, SPRAGUE STREET ADDITION, ACCORDING °-� TO PLAT RECORDED IN VOLUME `B" OF PLATS, PAGE 82, IN THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY, WASHINGTON in fee simple, so long as Grantee continuously utilizes the property to develop, construct, and provide permanently affordable housing in accordance with each and every one of the Deed Restrictions outlined below on page 2 of this deed (hereinafter "Deed Restrictions") for 99 years after the date the City executes this Quitclaim Deed. During such 99 years, if and when the property is no longer utilized to develop, construct, and provide permanently affordable housing in accordance with the Deed Restrictions, then the land shall revert back to Grantor. The Deed Restrictions are incorporated herein and made a part of this quitclaim conveyance. Pagel of 3 Deed Restrictions The below Deed Restrictions are incorporated by reference into the granting language of this quitclaim deed and shall run with the land: 1) The real property conveyed hereby to Grantee shall only be used to develop, construct, and provide permanently affordable housing: (a) for persons whose costs of mortgage principal, interest, property taxes, homeowner's insurance, homeowner's association fees, and land lease fees, as applicable do not exceed 38 percent of the persons' household's monthly income; (b) where the persons' household debt is no more than 45 percent of the monthly household income; and (c) where the household of the persons living together have an income that is at or below 80 percent of the median income, adjusted for household size, for the county in which the property is located. IN WITNESS WHEREOF, the undersigned have caused this instrument to be executed on this 3i s"-day of f,/Ly , 2025. Grantors: City of Spokane Valley By: 1� Its: C , ry Grantee: "1 By: Its: [Signature notary verification on following page] Page 2 of 3 STATE OF WASHINGTON ) )Ss. County of Spokane ) On this *� L day of 2025 before me, the undersigned, a Notary Public in and for the State of ashin n, duly commissioned and sworn, personally appeared John Hohman to me known to be the City Manager of the City of Spokane Valley, the municipal corporation that executed the foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of the corporation, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the instrument. written. WITNESS my hand and official seal hereto affixed the day and year in this certificate above DENISE MICHELLE MCLAIN Notary Public State of Washington Commission # 23023251 My Comm. Expires Aug 26, 2027 STATE OF WASHINGTON ) ss. County of Spokane ) 40fARY PUBLIC, in and for the State of Washington, residing a May commission expires7111A.0'. 9A Z* Printed Name On this _aL day of 2025 before me, the undersigned, a Notary Public in and for the State Washi m gton, duly commissioned and sworn, personally appeared t to me known to be the CC C) of the nonprofit organization that executed the foregoing instrument, and acknowledged the instr ent to be the free and voluntary act and deed of the corporation, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the instrument. written. WITNESS my hand and official seal hereto affixed the day and year in this certificate above DENISE MICHELLE MCLAIN Notary Public State of Washington N Y PUBLIC, in and for the State/of Washington, residing at V (' My commission expires: Commission # 23023251 AC My Comm. Expires Aug 26, 2027 Printed Name Page 3 of 3 08/01/2025 02:25:02 PM 7432143 Recording Fee $306.50 Page 1 of 4 Quit Claim Deed GOVERNMENT, CITY OF SPOKANE VALLEY / CITY CLEF Spokane County Washington After recording return document to: City of Spokane Valley Attn: City Clerk 10210 East Sprague Avenue Spokane Valley, WA 99206 Document Title: Quitclaim Deed Grantor: City of Spokane Valley Grantee: Habitat for Humanity - Spokane Abbreviated Legal Description: Ptn L 5 B 15 Sprague Street Addition & L 1-4 & L 9- 12 B 15 Sprague Street Addition �. Assessor's Tax Parcel Number: 35232.1503 & 35232.1509 0 QUITCLAIM DEED .k Ca N) The Grantor, CITY OF SPOKANE VALLEY, a municipal corporation of the State of Washington, for and in consideration of the sum of ten dollars ($10.00), and other good and ro valuable consideration, hereby conveys and quitclaims to Habitat for Humanity - Spokane, a 0 nonprofit organization of the State of Washington, the Grantee, the following described real w �+ property situated in Spokane County, in the State of Washington: 0 For complete legal description, see Exhibit A attached hereto and made a part hereof, in fee simple, so long as Grantee continuously utilizes the property to develop, construct, and provide permanently affordable housing in accordance with each and every one of the Deed Restrictions outlined below on page 2 of this deed (hereinafter "Deed Restrictions") for 99 years after the date the City executes this Quitclaim Deed. During such 99 years, if and when the property is no longer utilized to develop, construct, and provide permanently affordable housing in accordance with the Deed Restrictions, then the land shall revert back to Grantor. The Deed Restrictions are incorporated herein and made a part of this quitclaim conveyance. Page 1 of 4 Deed Restrictions The below Deed Restrictions are incorporated by reference into the granting language of this quitclaim deed and shall run with the land: 1) The real property described in Exhibit A shall only be used to develop, construct, and provide permanently affordable housing: (a) for persons whose costs of mortgage principal, interest, property taxes, homeowner's insurance, homeowner's association fees, and land lease fees, as applicable do not exceed 38 percent of the persons' household's monthly income; (b) where the persons' household debt is no more than 45 percent of the monthly household income; and (c) where the household of the persons living together have an income that is at or below 80 percent of the median income, adjusted for household size, for the county in which the property is located. IN WITNESS WHEREOF, the undersigned have caused this instrument to be executed on this _:I!L day of -�Tuj , 2025. Grantors: City of Spokane Valley By: r Its: 4 c e z Grantee: By: Its: C-670 [Signature notary verification on following page] Page 2 of 4 STATE OF WASHINGTON ) ss. County of Spokane ) On this day of ( 10 11� 2025 before me, the undersigned, a Notary Public in and for the State of WAAingtonouly commissioned and sworn, personally appeared Jon Hohman to me known to be the City Manager of the City of Spokane Valley, the municipal corporation that executed the foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of the corporation, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the instrument. WITNESS my hand and official seal hereto affixed the day and year in this certificate above written. DENISE MICHELLE MCLAIN Notary Public State of Washington Commission # 23023251 My Comm. Expires Aug 26, 2027 STATE OF WASHINGTON ) ) ss. County of Spokane ) ARY PUBLIC, in and for the Stayt f Washington, residing at VQ My commission expires: UA rinted Name On this y' % day of�,�. 2025 before me, the undersigned, a Notary Public in and for the State of W&hingtonOduly commissioned and sworn, personally appeared CEO o me known to be the CeD of Ir , the nonprofit organization that executed the foregoing instrument, and acknowledged the instrumerito be the free and voluntary act and deed of the corporation, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the instrument. WITNESS my hand and official seal hereto affixed the day and year in this certificate above written. OT RY PUBLIC, in and for the Statq of DENISE MICHELLE MCLAIN Washington, residing at cvwln Notary Public My commission expires: State of Washington Commission # 23023251 My Comm. Expires Aug 26, 2027 Printed Name Page 3 of 4 EXHIBIT "A" The North 97.5 feet of Lot 5, Block 15, Sprague Street Addition, according to plat recorded in Volume "B" of Plats, page 82; Situate in the City of Spokane Valley, County of Spokane, State of Washington. And Lots 1, 2, 3, 4, 9, 10, 11 and 12, Block 15, Sprague Street Addition, according to plat recorded in Volume "B" of Plats, page 82; Situate in the City of Spokane Valley, County of Spokane, State of Washington. Tax Parcel Nos.: 35232.1503 & 35232.1509 Page 4 of 4 25-123.00 Exhibit C - Insurance Requirements Grant Recipient and any contractor or subcontractor shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by Grant Recipient, its agents, representatives, employees, or subcontractors. A. Minimum Scope of Insurance. Grant Recipient's and any contractor's or subcontractor's required insurance shall be of the types and coverages as stated below: i. Automobile liability insurance covering all owned, non -owned, hired, and leased vehicles. Coverage shall be at least as broad as Insurance Services Office (ISO) form CA 00 01. ii. Commercial general liability insurance shall be at least as broad as ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, stop -gap independent contractors and personal injury, and advertising injury. City shall be named as an additional insured under Grant Recipient's, contractor's and subcontractor's commercial general liability insurance policy with respect to the work performed for the City using an additional insured endorsement at least as broad as ISO CG 20 26. iii. Workers' compensation coverage as required by the industrial insurance laws of the State of Washington. iv. Professional liability insurance appropriate to Grant Recipient's or its contractor's and subcontractor's profession. B. Minimum Amounts of Insurance. Grant Recipient and its contractors and subcontractors shall maintain the following insurance limits: i. Automobile liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. ii. Commercial general liability insurance shall be written with limits no less than $2,000,000 each occurrence, and $2,000,000 general aggregate. iii. Professional liability insurance shall be written with limits no less than $2,000,000 per claim and $2,000,000 policy aggregate limit. C. Other Insurance Provisions. Grant Recipient's policies are to contain, or be endorsed to contain, the following provisions for automobile liability and commercial general liability insurance: i. Grant Recipient's and any contractor's or subcontractor's insurance coverage shall be primary insurance with respect to the City. Any insurance, self-insurance, 15 of 17 25-123.00 or self -insured pool coverage maintained by City shall be in excess of Grant Recipient's, or any contractor's or subcontractor's insurance and shall not contribute with it. ii. Grant Recipient shall provide City and all additional insured for this work with written notice of any policy cancellation within two business days of their receipt of such notice. iii. If Grant Recipient, or any contractor or subcontractor maintains higher insurance limits than the minimums shown above, City shall be insured for the full available limits of commercial general and excess or umbrella liability so maintained, irrespective of whether such limits maintained by Grant Recipient, its contractors, or subcontractors are greater than those required by this Agreement or whether any certificate of insurance furnished to the City evidences limits of liability lower than those maintained by Grant Recipient, its contractors or subcontractors. iv. Failure on the part of Grant Recipient, its contractors or subcontractors to maintain the insurance as required shall constitute a material breach of the Agreement, upon which the City may, after giving at least five business days' notice to Grant Recipient to correct the breach, immediately demand transfer of the Property back to the City, or at its sole discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to City on demand, or at the sole discretion of the City. Should the Grant Recipient fail to transfer the Property back to the City within 30 days of the City's notice of breach for failure to maintain the requisite insurance, the Parties agree that the City shall have a viable cause of action in superior court for breach of contract, the remedy of which shall include but not be limited to the ordered transfer of the Property from the Grant Recipient to the City. D. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than ANII. E. Evidence of Coverage. As evidence of the insurance coverages required by this Agreement, Grant Recipient shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Agreement before commencement of the work. 16 of 17 25-123.00 EXHIBIT D PREVAILING WAGE CERTIFICATION The GRANT RECIPIENT, by its signature, certifies that all contractors and subcontractors performing work on the Project shall comply with prevailing wage laws set forth in Chapter 39.12 RCW, as applicable to the Project, including but not limited to the filing of the "Statement of Intent to Pay Prevailing Wages" and "Affidavit of Wages Paid" as required by RCW 39.12.040. The GRANT RECIPIENT shall maintain records sufficient to evidence compliance with Chapter 39.12 RCW, and shall make such records available for the City of Spokane Valley's review upon request. The following information is provided pursuant to RCW 39.12.030: A. State of Washington prevailing wage rates applicable to this public works project, published by L&I, are located at the L&I website address: https:Hlni wa gov/licensing-permits/public-works-projects/prevailing-wa egg rates/ B. This Project is located in Spokane County. C. The effective prevailing wage date is the same date as the bid due date as referenced in the original request for bids and as may be revised by addenda. For any funds are used by the GRANT RECIPIENT for the purpose of construction, applicable State Prevailing Wages must be paid. The GRANT RECIPIENT, by its signature, certifies that the declaration set forth above has been reviewed and approved by the GRANT RECIPIENT's governing body as of the date and year written below. DATE: y �J2! 5 — 17 of 17 AC"J?"' CERTIFICATE OF LIABILITY INSURANCE DATE (MMIDD/YYYY) �_ 07/22/2025 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTNAME Lockton Lockton Affinity, LLC Lockton Affinity, LLC PHCNNc .888-553-9002 pjC No:913-652-3967 E-MAIL P. O. Box 873401 ADDRESS:_. Kansas City, MO 64187-3401 INSURERS AFFORDING COVERAGE NAIC9 INSURER A: Ace American Insurance Company 22667 INSURED INSURER 8:ACE Property 6 Casualty Insurance Co. 20699 Habitat for Humanity - Spokane INSURERC:Aw Property and Casualty 20699 INSURERD: PO BOX 4130 INSURERS: Spokane, WA 99220-0130 INSURER F COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL 3UBR POLICY NUMBER POLICY EFF I MM/DD/YYY POLICY EXP MWDD/YYY LIMITS A X COMMERCIALGENERALLIABILITY X GL1065890-25 04/01/2025 04/01/2026 EACH OCCURRENCE $1,000,000 CLAIMS -MADE OCCUR $1,000,000 PREMISESCEa occurrence X Hired 6 Non -Owned MED EXP (Any one person) $ 0 Auto Liability PERSONAL & ADV INJURY $1,000,000 GEML AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2 , 000 , 000 X POPRO- LICY JECT LOC PRODUCTS - COMP/OP AGG $ 2 , 000 , 000 $ OTHER: H AUTOMOBILE LIABILITY H08787505-12 04/01/2025 04/01/2026 COMBINED SINGLE LIMI Ea accident $1,000,000 BODILY INJURY (Per person) $ ANY AUTO BODILY INJURY (Per accident) $ ALL OWNED X SCHEDULED AUTOS AUTOS NON OWNED HIRED AUTOS ALTOS PROPERTY DAMAGE Per accident $ $ C X UMBRELLA LIAB X OCCUR UM1065890-25 04/01/2025 04/01/2026 EACH OCCURRENCE $1,000,000 AGGREGATE EXCESS LIAR CLAIMS -MADE $1,000,000 DED I X I RETENTION $ 10,000 $ WORKERS COMPENSATION AND EMPLOYERS LIABILITY Y / N ANY PROPRIETOR/PARTNER/EXECUTIVE PER OTH- STATUTE ER E.L. EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED? ❑ (Mandatory in NH) N R A $ E.L. DISEASE - EA EMPLOY E.L. DISEASE - POLICY LIMIT $ If yes describe under DESCRIPTION OF OPERATIONS below A Social Services G24962842 013 04/01/2025 04/01/2026 Each Occurrence $1,000,000 Professional Liability Aggregate $2,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Insurer A: Stop Gap Employers Liability - Washington, policy #GL1065890-25, Eff 04/01/2025-04/01/2026 Limit $1,000,000 Each Accident / $1,000,000 Each Employee / $1,000,000 Aggregate Certificate Holder is listed as Additional Insured. CERTIFICATE HOLDER CANCELLATION THE CITY OF SPOKANE VALLEY Attn: City Clerk 10210 East Sprague Avenue Spokane Valley, WA 99206 ACORD 25 (2014/01) 54082077 1065890 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORI�r/RIES NTATI� © 1988-2014 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 1065890 SOCIAL SERVICE PROFESSIONAL LIABILITY COVERAGE ENDORSEMENT Named Insured Endorsement Number Habitat For Humanity Purchasing Group, Inc. Policy Symbol Policy Number Policy Period Effective Date of Endorsement G24962842 013 4/1/2025 to 4/1/2026 04/01/2024 Issued By (Name of Insurance Company) ACE American Insurance Company THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM The policy is amended as follows: Except for the limited Social Service Professional Liability Coverage provided by this endorsement, this insurance does not apply to any damages, loss, cost or expense arising out of: A. The rendering of or failure to render any professional service, advice or instruction whether or not such service, advice or instruction is ordinary to any insured' s profession; and B. The hiring or providing of any person whose conduct would be excluded by subparagraph A, above. This exclusion applies whether or not a claim or " suit" is brought be any client or any pther person or organization. However, this exclusion does not apply to services within construction means, methods, techniques, sequences and procedures employed by you in connection with your operations in your capacity as a construction contractor. Social Service Professional Liability Coverage is added to the policy as follows: SECTION I - COVERAGE Coverage A, of the Commercial General Liability Coverage Form, is extended to provide Social Service Professional Liability Coverage, subject to the following: A. Insuring Agreement 1. We will pay those sums that the insured becomes legally obligated to pay as " damages" arising out of a " professional occurrence" in the course of performing professional services for, or on behalf of, your social services organization to which this insurance applies. We have the right and duty to defend any " suit" seeking those " damages" . We may, at our discretion, investigate and settle any professional occurrence" claim or" suit" . But: a. The amount we will pay for " damages" is limited as described in SECTION III — LIMITS OF INSURANCE; and b. Our right and duty to defend ends when we have used up our applicable limit of insurance in the payment of judgments or settlements. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under SUPPLEMENTARY PAYMENTS set forth below. 2. This insurance applies to " damages" only if: a. The " damages" result from a " professional occurrence" that takes place in the " coverage territory" ; and b. The " professional occurrence" occurs during the policy period. B. Exclusions MS-19841 (02/13) Page 1 of 5 This insurance does not apply to any injury or damage: 1. Expected or intended from the standpoint of the insured. 2. For any actual or alleged breach of contract or agreement. This exclusion does not apply to liability for " damages" that the insured would have in the absence of the contract or agreement. 3. Arising out of the operation of any hospital, sanatorium, " medical clinic" , pharmacy, or any other medical facility or laboratory. 4. Arising out of the ownership, maintenance, use or entrustment to others of any aircraft, " auto" , or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and " loading or unloading" . 5. Arising out of the prescription, utilization, furnishing, or dispensing of drugs or medicine, dental or nursing supplies or appliances, except as directed by a physician, physician assistant, nurse, or a psychologist as permitted under state law, and in the normal practice as a social services organization provider. 6. Arising out of the professional services of any psychiatrist. 7. Arising out of the furnishing or failure to furnish professional services by an attorney, architect, engineer, construction manager, mortgage broker, accountant, real estate or investment manager, physician, physician assistant, dentist, pharmacist, anesthesiologist, nurse anesthetist, nurse midwife, x-ray therapist, radiologist, chiropodist, chiropractor, optometrist or veterinarian. 8. Arising out of membership in a formal accreditation or similar professional board or committee or any hospital or professional society. 9. Arising out of injury to any insured, or any consequential injury to the spouse, child, parent, brother or sister of that insured. This exclusion applies: a. Whether the insured maybe liable as an employer or in any other capacity; and b. To any obligation to share " damages" with or repay someone else who must pay " damages" because of the injury. 10. Arising out of any obligation of the insured under a workers compensation, disability benefits or unemployment compensation law or any similar law. 11. Arising out of any claim made by: a. A person because of any: i. Refusal to employ that person; ii. Termination of that person' s employment; or iii. Employment -related practices, policies, acts or omissions, such as coercion, demotion, failure to promote, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or b. The spouse, child, parent, brother or sister of that person as a consequence of any " damages" or injury to that person at whom any of the employment -related practices described in paragraphs (1), (2) or (3) above is directed. This exclusion applies: i. Whether the insured may be liable as an employer or in any other capacity; and ii. To any obligation to share " damages" with or repay someone else who must pay " damages". 12. Arising out of " personal and advertising injury" . However, this exclusion does not apply to " personal injury" when the offense is directly resulting from a " professional occurrence" and the " personal injury" does not arise out of: a. Oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity; b. Oral or written publication of material, whose first publication took place before the beginning of the policy period; or c. The willful violation of a penal statute or ordinance committed by or with the consent of the insured. 13. Arising out of " property damage" to property: a. Owned, occupied or used by any insured; b. Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by any insured; c. Which is or was in the possession of any insured or any person acting on behalf of any insured; or MS-19841 (02/13) Page 2 of 5 d. That is real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are or were performing operations. 14. Arising out of and which would not have occurred but for: a. The actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time. b. This insurance also does not apply to any loss, cost or expense arising out of any: i. Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants"; or ii. Claim or " suit' by or on behalf of a governmental authority because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". 15. Arising out of actual or alleged wrongful or illegal discrimination. 16. Arising out of unfair competition or violation of any anti-trust laws. 17. Arising out of the inability or failure of the insured or others to collect or pay money. 18. Arising out of an insured gaining any personal profit or advantage to which they are not legally entitled. 19. Arising out of liability under the Employment Retirement Income Security Act of 1974 and any amendments to that law, or any similar federal or state law. 20. Arising out of any criminal, dishonest, fraudulent or malicious act or omission. This exclusion does not apply to any insured who did not: a. Personally participate in committing any such act; or b. Remain passive after having personal knowledge of any such act or omission. 21. Arising out of any claim made or " suit' brought against an insured by another insured. 22. Arising out of acts, errors or omissions in providing managerial or administrative services other than the providing of professional services to individuals in your capacity as a social services organization. 23. Arising out of: a. The actual or threatened physical or sexual abuse or molestation by anyone of any person while that person is in the care, custody or control of any insured; or b. The negligent: i. employment; ii. investigation; iii. supervision; iv. reporting to the proper authorities, or failure to so report; or v. retention of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded by a. above; or c. The negligent failure to provide professional services in connection with or to neglect the therapeutic needs of a client, patient, or other person because of the conduct which would be excluded by paragraph a. above. 24. Arising out of the furnishing or failing to furnish managed health care services when you are appointed or contracted by another party as a Managed Care Organization, Gatekeeper or similar organization where your duties for such other party are to reduce unnecessary health care costs through a variety of mechanisms, including but not limited to: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high -cost health care services. 25. Arising out of and which would not have occurred but for the existence of any nuclear reactor or device, nuclear waste storage or disposal site or any other nuclear facility, or the transportation of nuclear material, or the hazardous properties of nuclear material. 26. Arising out of and which would not have occurred but for: a. The exposure to or the existence of lead, paint containing lead, or any other material or substance containing lead; or b. The manufacture, distribution, sale, resale, rebranding, installation, repair, removal, encapsulation, abatement, replacement, or handling of lead, paint containing lead, or any other material or substance containing lead; whether or not the lead is or was at MS-19841 (02/13) Page 3 of 5 any time airborne as a particulate, contained in a product ingested, inhaled, transmitted in any faction, or found in any form whatsoever. 27. Arising out of and which would not have occurred but for: a. the actual exposure or threat of exposure to the harmful properties of " asbestos" ; or b. the presence of " asbestos" in any place, whether or not within a building or structure; or c. asbestosis, mesothelioma, other cancers or any other diseases associated with the harmful effects of " asbestos" . This insurance also does not apply to any cost or expense associated, in any way, with the abatement, mitigation, remediation, containment, detoxification, neutralization, monitoring, removal, disposal or any obligation to investigate or assess the presence or effects of " asbestos" . SUPPLEMENTARY PAYMENTS The Social Service Professional Liability Coverage is subject to the SUPPLEMENTARY PAYMENTS section of the Commercial General Liability Coverage Form. SECTION II — WHO IS AN INSURED The Social Service Professional Liability Coverage is subject to SECTION II — WHO IS AN INSURED of the Commercial General Liability Coverage Form. SECTION III — LIMITS OF INSURANCE The Social Service Professional Liability Coverage is included as part of Coverage A in Section III - LIMITS OF INSURANCE of the Commercial General Liability Coverage Form. A separate limit of insurance is not provided for Professional Liability Coverage. In addition, it is agreed that: A. All Social Service Professional Liability Coverage claims will be combined with all other claims subject to the GENERAL AGGREGATE LIMIT and the combination will be subject to the GENERAL AGGREGATE LIMIT. B. With respect to the Social Service Professional Liability Coverage, a " Professional occurrence" shall be considered an " occurrence" and is subject to the EACH OCCURRENCE LIMIT. SECTION IV —CONDITIONS The Social Service Professional Liability Coverage is subject to SECTION IV — COMMERCIAL GENERAL LIABILITY CONDITIONS of the Commercial General Liability Coverage Form. In addition, it is agreed that: A. Under Section IV paragraph 2., Duties In The Event of Occurrence, Offense, Claim Or Suit, a " professional occurrence" will be subject to the same requirements as an " occurrence" . B. Under Section IV paragraph 4., Other Insurance, subsection b., Excess Insurance, the following is added to the first paragraph: (e) If the coverage is provided under this policy by the Social Services Professional Liability Coverage Endorsement. C. The following condition is added to Section IV. Two or more coverage forms or policies issued by us. It is our stated intention that the various coverage parts or policies issued to you by us, or any company affiliated with us, do not provide any duplication or overlap of coverage for the same claim or" suit" . We have exercised diligence to draft our coverage parts or policies to reflect this intention, but should the circumstances of any claim or "suit" give rise to such duplication or overlap of coverage then, notwithstanding the other insurance provision, if this policy and any other coverage part or policy issued to you by us, or any company affiliated with us, apply to the same error or omission, occurrence, offense, wrongful act, accident or loss, the maximum Limit of Insurance under all such coverage parts or policies combined shall not exceed the highest applicable Limit of Insurance under any one coverage part or policy. This condition does not apply to any Excess or Umbrella Policy issued by us specifically to apply as excess insurance over this policy. MS-19841 (02/13) Page 4 of 5 SECTION V— DEFINITIONS The Social Service Professional Liability Coverage is subject to SECTION V - DEFINITIONS of the Commercial General Liability Coverage Form. In addition, it is agreed that: A. With respect to the Social Service Professional Liability Coverage, The definition of " suit' is amended as follows: " Suit' means a civil proceeding in which " damages" to which this insurance applies are alleged. " Suit' includes: a. An arbitration proceeding in which such " damages" are claimed and to which you must submit or do submit with our consent; or b. Any other alternative dispute resolution proceeding in which such " damages" are claimed and to which you submit with our consent. B. The following definitions are added: "Damages" means a monetary: 1. Judgment; 2. Award; or 3. Settlement, but does not include fines, sanctions, penalties, punitive or exemplary damages or the multiple portion of any damages. This definition applies only to the coverage provided by this endorsement and is not intended to alter or amend the same undefined word in the policy. " Asbestos" means the mineral in any form, including but not limited to fibers and dust. " Disciplinary proceedings" means any proceeding brought against you by a state regulatory or disciplinary official or agency to investigate charges alleging professional misconduct. " Medical clinic" means any medical facility open to the general public. A medical clinic does not include facilities operated solely for the treatment of your consumers, for whom you provide professional services. " Professional occurrence" means any actual or alleged negligent act, error or omission in the furnishing or failing to furnish professional services to others in your capacity as a social services organization including, but not limited to, counseling services and the furnishing of food, beverages, medications or appliances in connection with your professional services. Any or all " professional occurrences" arising from interrelated or a series of acts, errors or omissions shall be deemed to be one " professional occurrence" taking place at the time of the earliest " professional occurrence" . All other terms conditions remain unchanged. Authorized Representative MS-19841 (02/13) Page 5 of 5