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EXHIBIT E
<br /> Form of
<br /> USE RESTRICTION COVENANT AGREEMENT
<br /> This Use Restriction Covenant Agreement (the "Covenant Agreement") by and between
<br /> COCOON HOUSE, a Washington non-profit corporation, (the "Grantor" or the "Owner") and the
<br /> City of Everett (the "Grantee" or the "City"), a municipal corporation of the State of Washington,
<br /> is part of the consideration for the financial assistance provided by the City pursuant to the HOME
<br /> Loan Agreement (the "Loan Agreement") entered into by the City and the Owner, dated
<br /> , 2018, and as may be amended,for the development and construction of a portion
<br /> of certain real property legally described on Attachment 1 attached hereto ("the "Property"),
<br /> together with all tenements, privileges, reversions, remainders, irrigation and water rights, and
<br /> stock, oil and gas rights, royalties, minerals and mineral rights, hereditaments and appurtenances
<br /> belonging or in any way pertaining to the Property, and the rents, issues, and profits thereof.
<br /> This Covenant Agreement will be filed and recorded in the official public land records of
<br /> Snohomish County, Washington, and shall constitute a restriction upon the use of the Property
<br /> described herein, subject to and in accordance with the terms of this Covenant Agreement, for
<br /> forty (40) years from the latter of the date of project completion, or June 1, 2059, the End Date.
<br /> The covenants contained herein are to be taken and construed as covenants running with the
<br /> land and shall pass to and be binding upon the Owner, its successors and assigns, heirs,
<br /> grantees, or lessees of the Property, beginning on the date of this Covenant Agreement. Each
<br /> and every contract, deed, or other instrument covering or conveying the Property, or any portion
<br /> thereof, shall be conclusively held to have been executed, delivered, and accepted subject to
<br /> such covenants, regardless of whether such covenants are set forth in such contract, deed, or
<br /> other instrument.
<br /> This Covenant Agreement shall survive any payment, release, satisfaction or cancellation of the
<br /> Note, the Loan or the Deed of Trust occurring prior to the expiration of the term of the Covenant.
<br /> The covenants herein are independent of and in addition to the covenants in the Deed of Trust
<br /> and Loan Agreement. No transfer of the Property shall operate to relieve Grantor or any successor
<br /> of its obligations hereunder unless expressly so agreed in writing by the City.
<br /> NOW, THEREFORE, it is hereby covenanted as follows:
<br /> 1. The Owner shall operate the Property with residential units remaining affordable to Extremely
<br /> Low-Income affordability levels as specified in the Loan Agreement for forty (40) years, until
<br /> the End Date, as specified in Section I.G, and Section III of the Loan Agreement, and in Exhibit
<br /> A. The determination of Extremely Low-Income units shall be made by application of the
<br /> income limits set and revised periodically by the U.S. Department of Housing and Urban
<br /> Development ("HUD") based upon median incomes in the Seattle-Bellevue, WA HUD Metro
<br /> Fair Market Rents ("FMR") area and adjusted for household size. If at any time HUD no longer
<br /> estimates median income, the income standard shall be based on a program selected by the
<br /> City. The Owner shall verify Property residents' income only in accordance with methods
<br /> prescribed by or agreed to by the City.
<br /> Exhibit D
<br /> Cocoon House
<br /> Page 9 of 8
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