PREBLECOUNTY

BOARD OF MENTAL RETARDATION & DEVELOPMENTAL DISABILITIES

HOUSING AGREEMENT

This Housing Agreement (hereinafter referred to as this “Contract”) is entered into on this 11th day of March 2008 by and between PREBLE COUNTY BOARD OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES, located at 201 East Lexington Road, Eaton, Ohio 45320 (hereinafter referred to as the “Board”), and FOUNDATION FOR THE CHALLENGED, located at 5970 Wilcox Place, Suite E, Dublin, Ohio 43016(hereinafter referred to as the “Foundation”), for the purpose of developing, acquiring and managing, or locating housing by the Foundation for individuals with mental retardation/developmental disabilities.

WHEREAS, pursuant to O.R.C. Chapter 5126.051(A), the Board shall, to the extent that resources are available, provide for or arrange residential services and supported living for individuals with mental retardation and/or developmental disabilities and may acquire, convey, lease or sell property for residential services and supported living and enter into loan agreements, including mortgages for the acquisition of such property; and

WHEREAS, pursuant to O.R.C. Chapter 5126.05(C), the Board may, upon such terms as may be agreeable, enter into contracts with public or private, nonprofit or profit making agencies or organizations of the same or another county, to provide the facilities, programs and services authorized or required in accordance with O.R.C. Chapter 5126; and

WHEREAS, both the Board and the Foundation seek to facilitate individual choices in selection of housing which enables Preble County persons with mental retardation and/or developmental disabilities to be integrated in the Preble County, Ohio community with persons who do not have disabilities; and

WHEREAS, through state community assistance funds and other available resources as determined by the Board, and in compliance with supported living sections as contained in Chapter 5126 of the Ohio Revised Code as well as other applicable laws and regulations of the State of Ohio and the United States Government, the Board has means to provide support for this endeavor;

NOW, THEREFORE, the Board and the Foundation for adequate and sufficient consideration, and intending to be legally bound, hereby agree as follows:

ARTICLE 1: TERM OF AGREEMENT

The provisions of this Contract shall become effective on March 11, 2008 and shall remain in force for a period of one year after the effective date of this Agreement above. This Contract is renewable on an annual basis for a period of four (4) additional years, as the parties shall agree.

ARTICLE 2: Properties Purchased/Funded with

ODMR/DD COMMUNITY CAPITAL ASSISTANCE FUNDS

  1. To the extent funds are available, the Board shall make reasonable efforts to partner with and support the Foundation in applications and use of state community capital assistance funds (“State Capital Funds”). The State Capital Funds are to be used by the Foundation to acquire or renovate single-family residential properties (“Homes”) to be used exclusively for the provision of housing for individuals with mental retardation and/or developmental disabilities who are residents of PrebleCounty (“Residents”).
  1. Prior to the purchase of a Home using State Capital Funds provided by the Board, the Foundation shall undertake a due diligence process with respect to such Home to ensure that such Home shall reasonable serve the needs of the Residents who will be living in such Home. Furthermore, prior to closing on the Home the Foundation must provide the Board with a written notice that details the specific economic terms of such proposed purchase in substantially the form of Schedule 1 attached to this Contract. Such notice must also delineate the amount of support that will be requested by the Foundation through the Individual Support Plan (“ISP”) process for the Residents who will be living in such Home in order to purchase such Home.
  1. As a condition of the receipt of the State Capital Funds, and to ensure that State Capital Funds are used exclusively to provide housing for the Residents, the Foundation agrees to the following restrictions concerning its ability to dispose of Homes acquired, in whole or in part, with State CapitalFunds:
  1. No such Home, nor any interest in any such Home, shall be sold, transferred, conveyed, mortgaged, pledged or otherwise disposed of or encumbered, without the Board’s express written consent. Any funds realized by the Foundation from any such transaction shall either be, as mutually agreed upon,either (i) repaid to the Board as provided herein, or (ii) used by the Foundation to acquire a Home exclusively for the provision of housing for Residents who are referred to the Foundation by the Board.
  1. In the event of the sale, transfer, conveyance or other disposition of any such Home and the proceeds are not used by the Foundation to acquire another Home as provided in 3.a above, the Foundation shall repay to the Board a pro-rated portion of the State Capital Funds used to purchase such Home, plus interest on the amount of the State Capital Fund used for such Home at the rate of 10 percent per annum. However, if such sale, transfer, conveyance or other disposition of a Home is pursuant to a request of the Board, then no interest shall be charged on the amount of the State Capital Fund used for such Home. The grant amount and interest, if applicable, is referred to as the “Repayment Obligation”. The amount of the Repayment Obligation determined above is reduced based on the number of full years the Home had been owned by the Foundation using the State Capital Funds. The amount of the reduction is 5 percent of the original Repayment Obligation for each full year for the first ten years and 10 percentfor each full year for the next five years. If the Home is sold after fifteen years from the date of receiving the State Capital Fund, the Foundation has no obligation to pay a Repayment Obligation to the Board from the sale of such Home.
  1. To secure the Repayment Obligation for the State Capital Funds used by the Board as described above, the Foundation agrees to grant the Board a security interest in each Home it purchases, in whole or in part, with any State Capital Funds provided by Board pursuant to this Contract.
  1. At the time of the closing of the purchase of such Home using State Capital Funds, the Foundation shall deliver to the Board a properly executed and recordable mortgage deed to perfect Board’s security interest.
  1. To the extent that State Capital Funds or other public monies are provided by the Board for use by the Foundation to acquire a Home, Board shall maintain a legal interest in each such acquired Home in accordance with the terms and conditions of the revenues used to acquire the Home and in accordance with the provisions of the "Project Agreement, Supported Living Housing Program" between the Board and the Ohio Department of Mental Retardation and Developmental Disabilities (“Department”). The Board shall maintain its interest through a note and mortgage on each such Home. The mortgage on the Home must secure an amount equal to the amount of State Capital Funds given by the Board to the Foundation for the acquisition of the Home.
  2. The Foundation agrees to grant the Board a security interest in any Home it purchases with State Capital Funds provided by the Board, as well as equipment purchased with other funds granted by the Board. The Foundation acknowledges that, in the event of default under this Contract by the Foundation, then any Home wherein the Board has a security interest, the Board, or another nonprofit corporation designated by the Board, may be substituted for the original title holder and title to the Home shall be transferred to the Board, or the designated nonprofit corporation, should the Board so require. In the event the Board requires the Foundation to transfer title of the Home to the Board, or to another nonprofit corporation, as provided herein, the Board, or designated nonprofit corporation must (A) repay the Foundation for any cash contribution made by the Foundation to acquire and/or renovate the Home; and (B) assume responsibility for any mortgage indebtedness then existing on the Home at the time of the transfer of title. Furthermore, with respect to any security interest held by the Board, upon such transfer the Foundation’s responsibility for the indebtedness secured by such security interest shall then cease.
  3. In the event of the Foundation’s default on any mortgage on any Home which is superior to the Board’s security interest, or to otherwise comply with the terms and conditions of this Contract, the Board shall have the right, upon three days written notice to the Foundation, to enter upon the Home and to take control thereof by notifying all Residents to pay rents to the Board, subject to any limitations imposed by the superior security interest. In such event, Board shall use any such rents, and any other funds receipt on account of such Residents, solely for the purpose of payment of mortgage payments, taxes, insurance premiums, utility bills, maintenance and repair expenses, or other obligations connected with such Home. The Board shall, upon request, provide the Foundation with an accounting of the receipt and disbursement of funds connected with such Home.
  4. In the event of the Foundation’s material failure to comply with the terms and conditions of the Board’s security interest, or any requirement of this Contract, the Board shall begin the process outlined in Article 6 to terminate thisContract. If the Board and the Foundation cannot resolve the dispute, at the request of the Board the Foundation shall transfer title to any Homes acquired by the Foundation pursuant to this Contract to the Board or to a substitute nonprofit corporation designated by Board. Upon such transfer, the Board, or designated nonprofit corporation, shall (A) accept and thereafter assumes and agrees to comply with all obligations and payments due under all notes, mortgages and affordable housing grants on the Homes; (B) hold the Foundation harmless from such liabilities; and (C) assume and agree to pay and be responsible for the obligations of the Foundation under all leases with Residents for such Homes and any other contracts or agreements with regard to the purchase and financing of such Homes that were undertaken by the Foundation under the terms of this Contract. In the event of any transfer made pursuant to this paragraph, the Board is not obligated to repay the Foundation for any cash contribution made by the Foundation to acquire and/or renovate the Homes. Furthermore in the event of any transfer made pursuant to this paragraph, the Board is not obligated to assume any contracts or other agreements of the Foundation related to the maintenance and management of the Homes.
  5. In the event that the value of any Home acquired by the Foundation pursuant to this Contract must be determined under this Agreement, the parties agree to have the Home appraised as provided in this paragraph. In such situation, each party selects one qualified appraiser and then those two appraisers select a third qualified appraiser. The fair market value of the Home shall then be based on the average of the three appraised values determined by the three appraisers, which fair market value is binding on the parties.
  1. As to each Home acquired by the Foundation, in whole or in part, with State Capital Funds from the Board, the Foundation shall provide to the Board, within forty-five (45) days of closing, a copy of the final closing statement, the deed, and any notes and mortgages concerning the Home acquired by the Foundation.
  1. If the amount of the State Capital Funds provided by the Board is less than the amount needed to purchase the Home, the Board acknowledges that the Foundation must either (a) incur other indebtedness or (b) obtain affordable housing grants to acquire and/or renovate such Home. In such situation, the Board agrees to subordinate its security interest to the security interest held by the lender and/or grant funder (“First Mortgage”) providing the additional funds to the Foundation to acquire and/or renovate such Home. The Foundation may re-finance the First Mortgage at any time upon written notice to the Board; provided, however, the amount of the indebtedness secured by the First Mortgage may not be increased without the written consent of the Board, which may not be unreasonably withheld. Except for the First Mortgage, the Foundation may not grant any further security interest in the Home without the written consent of the Board, which may not be unreasonably withheld.
  1. The only assets and funds of the Foundation subject to the terms of this Contract are those assets and funds in which the Board has a security interest arising out of this Contract or other agreements between the Board and the Foundation that are entered into pursuant to the terms of this Contract with respect to any State Capital Funds used by the Foundation to acquire Homes. All other assets and funds of the Foundation are free and clear of any claim of the Board. Any real estate titled in the name of the Foundation that is not subject to a security interest held by the Board under the terms of this Contract or other agreements with the Board is free and clear of any claim of the Board.

ARTICLE 3: SPECIALIZED HOUSING

  1. The Foundation shall collaborate with the Board to plan new types and locations of housingthat meet the ongoing and future needs of individuals served by the Board. Additional costs for any specialized development shall be negotiated with the Board when a special development is approved.
  1. The Foundation shall continue to collaborate with the Board and other organizations and entities to find, develop and initiate funding for individual rent needs and further housing development and renovation.

ARTICLE 4: OBLIGATIONS OF THE FOUNDATION

  1. Foundation shall consider individuals referred and screened by Board who wish to reside in Preble County Homes owned by Foundation, and who are approved by Board for supportive services necessary for the persons to reside in such Homes. The Foundation agrees to accept such referrals from the Board provided that the Foundation is able to obtain affordable housing for such Residents. The Foundation agrees to allow the Residents the opportunity to actively participate in the selection of the Home in which they will be living.
  1. The Foundation’s responsibility with regard to the Residents of the Homes referred to the Foundation by the Board shall be solely that of a landlord as more specifically defined by the lease with each referred Resident and by applicable laws. The Foundation assumes no responsibility with regard to the provision of support services and/or oversight of said persons referred by the Board while they remain tenants of the Foundation.
  1. The Foundation shall not discriminate against any person, deny residences to, or deny the delivery of services on the basis of age (40 years or more), sex, race, color, creed, national origin, religion, ancestry, disability, political affiliation, except where discrimination is a bona fide occupational qualification (BFOQ).
  1. The Foundation agrees to maintain confidentiality regarding all information, recordsand data that it receives concerning the Residents. A release of information detailing the specific information to be released and the party to whom it will be released shall be required for all requests for information.
  1. The Foundation agrees to abide by all state statutes, rules and regulations pertaining to the use of State Capital Funds for the purchase, acquisition, sale and maintenance of housing for individuals in supported living and also shall abide by all applicable state and federal rules and regulations. The Foundation agrees to timely submit the annual “Community Capital Assistance Housing Survey” required by the Department for any Home acquired using State Capital Funds and to provide a copy to the Board.
  1. The Foundation agrees to acquire, manage and maintain in good repair the Homes provided pursuant to this Contract, including those purchased and/or renovated with State Capital Funds so as to protect the Board’s security interest in such Home. The Foundation agrees to comply with all applicable laws, ordinances, rules and regulations relating to health, safety, building construction, zoning, and maintenance. The Foundation agrees to complete annual safety inspections, including fire, as required by the regulations and/or rules of the Department or the Board for any Home acquired by the Foundation pursuant to this Contract. The Foundation agrees to provide a copy of the inspection report to the Board for its review within 30 days of completion of the inspection.
  1. Prior to the Foundation undertaking any structural repairs or modifications to a Home acquired by the Foundation under this Contract, the Foundation agrees to notify the Board in advance. If such structural repairs or modifications for a Home will increase the rent charged to the Residents or will request funding by State Capital Funds, the Board must approve the structural repairs or modifications before they are undertaken by the Foundation. Furthermore, in the event the ISP for a Resident in a Home acquired by the Foundation pursuant to this Contract determines that structural repairs or modifications to the Home are needed, the Foundation agrees to seek State Capital Funds for such structural repairs or modifications. The Foundation agrees to abide by all state statutes, rules and regulations and any Board policies pertaining to the use of State Capital Funds for undertaking structural repairs or modifications to a Home.
  1. The Foundation agrees, no less frequently than every six months, to provide to the Board (through its Finance Director) with a statement of the revenues and expenses related to each Home acquired by the Foundation pursuant to this Contract. The Board has the right, upon notice to the Foundation, to review the Foundation’s books and records related to each Home acquired by the Foundation pursuant to this Contract
  1. The Foundation shall have an annual review of its financial affairs undertaken by an independent accounting firm licensed to do business in Ohio. The Foundation shall provide the Board with a copy of the financial review within 30 days of its receipt by the Foundation. The Board agrees to keep such financial review confidentialto the extent permissible by law.

ARTICLE 5: OBLIGATION OF THE BOARD